UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
Washington, D.C. 20549
|
Form 10-Q
|
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
CD INTERNATIONAL ENTERPRISES, INC.
|
(Exact name of registrant as specified in its charter)
|
Florida
|
13-3876100
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
431 Fairway Drive, Suite 200, Deerfield Beach, Florida
|
33441
|
(Address of principal executive offices)
|
(Zip Code)
|
954-363-7333
|
|
(Registrant’s telephone number, including area code)
|
|
Not Applicable
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[ü]
|
PART I. - FINANCIAL INFORMATION
|
Page No.
|
||
Item 1.
|
Financial Statements.
|
||
Consolidated Statement of Operations and Comprehensive Income (unaudited)
Three and nine months ended June 30, 2012 and 2011
|
1 | ||
Consolidated Balance Sheets
As of June 30, 2012 (unaudited) and September 30, 2011
|
2 | ||
Consolidated Statement of Cash Flows (unaudited)
Nine months ended June 30, 2012 and 2011
|
3 | ||
Notes to Consolidated Financial Statements
|
4 | ||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
23 | |
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
36 | |
Item 4.
|
Controls and Procedures.
|
36 | |
PART II - OTHER INFORMATION
|
|||
Item 1.
|
Legal Proceedings.
|
37 | |
Item 1A.
|
Risk Factors.
|
38 | |
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
39 | |
Item 3.
|
Defaults Upon Senior Securities.
|
39 | |
Item 4.
|
Mine Safety Disclosures.
|
39 | |
Item 5.
|
Other Information.
|
39 | |
Item 6.
|
Exhibits.
|
40 | |
Signatures
|
44 |
•
|
Delisting of our common stock by The NASDAQ Stock Market.
|
||
•
|
Continued global economic weakness is expected to reduce demand for our products in each of our segments.
|
||
•
|
Fluctuations in the pricing and availability of magnesium and in levels of customer demand.
|
||
•
|
Changes in the prices of magnesium and magnesium-related products.
|
||
•
|
Our ability to implement our expansion plans for growing our business through increased magnesium production capacity and acquisitions and development of our commodity trading business.
|
||
•
|
Fluctuations in the cost or availability of coke gas and coal.
|
||
•
|
Loss of orders from any of our major customers.
|
||
|
•
|
The value of the equity securities we accept as compensation is subject to adjustment which could result in losses to us in future periods.
|
|
•
|
Our ability to effectively integrate our acquisitions and to manage our growth and our inability to fully realize any anticipated benefits of acquired business.
|
||
•
|
Our need for additional financing which we may not be able to obtain on acceptable terms, the dilutive effect additional capital raising efforts in future periods may have on our current shareholders and the increased interest expense in future periods related to additional debt financing.
Adverse outcome of the bankruptcy of CDII Trading
|
||
•
|
Our dependence on certain key personnel.
|
||
•
|
Difficulties we have in establishing adequate management, cash, legal and financial controls in the PRC.
|
||
•
|
Our ability to maintain an effective system of internal control over financial reporting.
|
||
•
|
The lack various legal protections in certain agreements to which we are a party and which are material to our operations which are customarily contained in similar contracts prepared in the United States.
|
||
•
|
Potential impact of PRC regulations on our intercompany loans.
|
||
•
|
Our ability to assure that related party transactions are fair to our company.
|
||
•
|
Yuwei Huang, our executive vice president – magnesium, director and an officer of several of our magnesium subsidiaries and his daughter Lifei Huang is also an owner and executive officer of several companies which directly compete with our magnesium business.
|
||
•
|
The impact of a loss of our land use rights.
|
||
•
|
Our ability to comply with the United States Foreign Corrupt Practices Act which could subject us to penalties and other adverse consequences.
|
||
•
|
Limits under the Investment Company Act of 1940 on the value of securities we can accept as payment for our business consulting services.
|
||
•
|
Our acquisition efforts in future periods may be dilutive to our then current shareholders.
|
||
•
|
The risks and hazards inherent in the mining industry on the operations of our basic materials segment.
|
||
•
|
Our inability to enforce our rights due to policies regarding the regulation of foreign investments in the PRC.
|
||
•
|
The impact of environmental and safety regulations, which may increase our compliance costs and reduce our overall profitability.
|
||
•
|
The effect of changes resulting from the political and economic policies of the Chinese government on our assets and operations located in the PRC.
|
||
•
|
The impact of Chinese economic reform policies.
|
||
•
|
The influence of the Chinese government over the manner in which our Chinese subsidiaries must conduct our business activities.
|
•
|
The impact on future inflation in the PRC on economic activity in the PRC.
|
||
•
|
The impact of any natural disasters and health epidemics in China.
|
||
•
|
The impact of labor laws in the PRC may adversely affect our results of operations.
|
||
•
|
The limitation on our ability to receive and use our revenues effectively as a result of restrictions on currency exchange in the PRC.
|
||
•
|
Fluctuations in the value of the RMB may have a material adverse effect on your investment.
|
||
•
|
The market price for shares of our common stock has been and may continue to be highly volatile and subject to wide fluctuations.
|
•
|
“fiscal 2012” — October 1, 2011 through September 30, 2012.
|
||
•
|
“fiscal 2011” — October 1, 2010 through September 30, 2011.
|
•
|
"CD International”, "we”, "us” or “our” refers to CD International Enterprises, Inc., a Florida corporation formerly known as China Direct Industries, Inc., and our subsidiaries;
|
||
•
|
“CDI China”, refers to CDI China, Inc., a Florida corporation, and a wholly owned subsidiary of CD International; and
|
||
•
|
“PRC” refers to the People’s Republic of China.
|
•
|
“Chang Magnesium", refers to Taiyuan Changxin Magnesium Co., Ltd., a company organized under the laws of the PRC and a 51% owned subsidiary of CDI China;
|
||
•
|
“Chang Trading”, refers to Taiyuan Changxin YiWei Trading Co., Ltd., a company organized under the laws of the PRC and a wholly owned subsidiary of Chang Magnesium;
|
||
•
|
“Asia Magnesium”, refers to Asia Magnesium Corporation Limited, a company organized under the laws of Hong Kong and a wholly owned subsidiary of Capital One Resource;
|
||
•
|
“Golden Magnesium" refers to Shanxi Gu County Golden Magnesium Co., Ltd., a company organized under the laws of the PRC and a 100% owned subsidiary of CDI China;
|
||
•
|
“Baotou Changxin Magnesium”, refers to Baotou Changxin Magnesium Co., Ltd., a company organized under the laws of the PRC, a 51% owned subsidiary of CDI China;
|
||
•
|
“IMG” or “International Magnesium Group”, refers to International Magnesium Group, Inc., a Florida corporation and a 100% owned subsidiary of CD International Industries;
|
||
•
|
“IMTC” or “International Magnesium Trading”, refers to International Magnesium Trading Corp., a company organized under the laws of Brunei and a 100% owned subsidiary of IMG;
|
||
•
|
“Ruiming Magnesium”, refers to Taiyuan Ruiming Yiwei Magnesium Co., Ltd., a company organized under the laws of the PRC and an 80% majority owned subsidiary of CDI China;
|
||
•
|
“Beauty East”,refers to Beauty East International, Ltd., a Hong Kong company and a wholly owned subsidiary of CDI China.
|
||
•
|
“Marvelous Honor”,refers to Marvelous Honor Holdings Inc., a Brunei company and a wholly owned subsidiary of CDI China.
|
||
•
|
“Golden Trust”,refers to Golden Trust Magnesium Industry Co., Ltd.,a company organized under the laws of
the PRC and a wholly owned subsidiary of CDI China; and
|
||
•
|
“Lingshi Magnesium”,refers to Lingshi Xinghai Magnesium Industry Co., Ltd.,a company organized under the
laws of the PRC and a wholly owned subsidiary of Ruiming Magnesium.
|
•
|
“Lang Chemical”, refers to Shanghai Lang Chemical Co., Ltd. a company organized under the laws of the PRC and a 51% owned subsidiary of CDI China;
|
||
•
|
“CDI Jingkun Zinc”, refers to CDI Jingkun Zinc Industry Co., Ltd., a company organized under the laws of the PRC and a 95% owned subsidiary of CDI Shanghai Management;
|
||
•
|
“CDI Jixiang Metal”, refers to CDI Jixiang Metal Co., Ltd., a company organized under the laws of the PRC and a wholly owned subsidiary of CDI China;
|
||
•
|
“CDI Metal”, refers to Shanghai CDI Metal Material Co., Ltd. (a/k/a Shanghai CDI Metal Recycling Co., Ltd.), a company organized under the laws of the PRC and a wholly owned subsidiary of CDI Shanghai Management; and
|
||
•
|
“CDI Beijing” refers to CDI (Beijing) International Trading Co., Ltd., a company organized under the laws of the PRC and a 51% owned subsidiary of CDI Shanghai Management.
|
||
•
|
“CDII Trading” refers to CDII Trading, Inc., a Florida corporation and a 100% owned subsidiary of CD International Industries.
|
•
|
“China Direct Investments”, refers to China Direct Investments, Inc., a Florida corporation, and a wholly owned subsidiary of CD International;
|
||
•
|
“CDI Shanghai Management”, refers to CDI Shanghai Management Co., Ltd., a company organized under the laws of the PRC and a wholly owned subsidiary of CDI China; and
|
||
•
|
“Capital One Resource”, refers to Capital One Resource Co., Ltd., a Brunei company, and a wholly owned subsidiary of CDI Shanghai Management.
|
For three months ended
|
For nine months ended
|
|||||||||||||||
June 30, 2012
|
June 30, 2011
|
June 30, 2012
|
June 30, 2011
|
|||||||||||||
Revenues
|
$
|
37,138,265
|
$
|
55,154,956
|
$
|
115,421,066
|
$
|
141,588,028
|
||||||||
Revenues-related parties
|
136,377
|
1,860,644
|
707,376
|
3,465,187
|
||||||||||||
Total revenues
|
37,274,642
|
57,015,600
|
116,128,442
|
145,053,215
|
||||||||||||
Cost of revenues
|
36,160,662
|
49,457,823
|
102,861,674
|
127,739,204
|
||||||||||||
Gross profit
|
1,113,980
|
7,557,777
|
13,266,768
|
17,314,011
|
||||||||||||
Operating (expenses) income:
|
||||||||||||||||
Selling, general, and administrative
|
|
(3,435,013
|
)
|
|
(3,006,256
|
)
|
|
(9,590,595
|
)
|
|
(9,821,167
|
)
|
||||
Other operating (expense) income-related party
|
-
|
|
(248,407
|
)
|
-
|
106,791
|
||||||||||
Other operating income
|
-
|
251,146
|
-
|
354,018
|
||||||||||||
Total operating expenses
|
|
(3,435,013
|
)
|
|
(3,003,517
|
)
|
|
(9,590,595
|
)
|
|
(9,360,358
|
)
|
||||
Operating (loss) income
|
|
(2,321,033
|
)
|
4,554,260
|
3,676,173
|
7,953,653
|
||||||||||
Other (expenses) income:
|
||||||||||||||||
Other income (expense)
|
325,316
|
|
(178,469
|
)
|
592,117
|
86,892
|
||||||||||
Interest expense
|
|
(437,152
|
)
|
|
(119,025
|
)
|
|
(357,140
|
)
|
|
(186,069
|
)
|
||||
Realized loss on available-for-sale securities
|
|
(13,912
|
)
|
-
|
|
(30,974
|
)
|
|
(379,969
|
)
|
||||||
Total other (expenses) income
|
|
(125,748
|
)
|
|
(297,494
|
)
|
204,003
|
|
(479,146
|
)
|
||||||
(Loss) income before income taxes
|
|
(2,446,781
|
)
|
4,256,766
|
3,880,176
|
7,474,507
|
||||||||||
Income tax (benefit) expense
|
(692,644
|
)
|
53,078
|
930,665
|
120,719
|
|||||||||||
Net (loss) income
|
|
(1,754,137
|
)
|
4,203,688
|
2,949,511
|
7,353,788
|
||||||||||
Net loss to noncontrolling interests
|
392,205
|
102,870
|
828,851
|
424,981
|
||||||||||||
Net (loss) income to CD International
|
$
|
(1,361,932
|
)
|
$
|
4,306,558
|
$
|
3,778,362
|
$
|
7,778,769
|
|||||||
Deduct dividends on Series A Preferred Stock:
|
||||||||||||||||
Preferred stock dividend
|
|
(20,130
|
)
|
|
(20,130
|
)
|
|
(60,390
|
)
|
|
(60,390
|
)
|
||||
Net (loss) income to common stockholders
|
$
|
(1,382,062
|
)
|
$
|
4,286,428
|
$
|
3,717,972
|
$
|
7,718,379
|
|||||||
COMPREHENSIVE (LOSS) INCOME :
|
||||||||||||||||
Net (loss) income
|
$
|
(1,754,137
|
)
|
$
|
4,203,688
|
$
|
2,949,511
|
$
|
7,353,788
|
|||||||
Foreign currency translation adjustments
|
361,053
|
|
(100,000
|
)
|
476,683
|
1,743,945
|
||||||||||
Unrealized (loss) gains on available-for-sale securities
|
|
(3,113,830
|
)
|
6,444,495
|
|
(1,877,459
|
)
|
10,770,761
|
||||||||
|
||||||||||||||||
Comprehensive (Loss) income
|
$
|
(4,506,914
|
)
|
$
|
10,548,183
|
$
|
1,548,735
|
$
|
19,868,494
|
|||||||
Net loss to noncontrolling interests
|
392,205
|
102,870
|
828,851
|
424,981
|
||||||||||||
Foreign currency translation adjustments - noncontrolling interests
|
|
(105,199
|
)
|
|
(87,504
|
)
|
|
(15,655
|
)
|
|
(394,943
|
)
|
||||
Comprehensive (loss) income to CD International
|
$
|
(4,219,908
|
)
|
$
|
10,563,549
|
$
|
2,361,931
|
$
|
19,898,532
|
|||||||
Preferred stock dividend
|
|
(20,130
|
)
|
|
(20,130
|
)
|
|
(60,390
|
)
|
|
(60,390
|
)
|
||||
Comprehensive (loss) income to common stockholders
|
$
|
(4,240,038
|
)
|
$
|
10,543,419
|
$
|
2,301,541
|
$
|
19,838,142
|
|||||||
Basic and diluted (loss) income per common share:
|
||||||||||||||||
Basic
|
$
|
(0.03
|
)
|
$
|
0.11
|
$
|
0.09
|
$
|
0.22
|
|||||||
Diluted
|
$
|
(0.03
|
)
|
$
|
0.11
|
$
|
0.08
|
$
|
0.22
|
|||||||
Basic weighted average common shares outstanding
|
48,111,759
|
37,567,331
|
43,380,118
|
34,694,215
|
||||||||||||
Diluted weighted average common shares outstanding
|
48,111,759
|
38,250,045
|
47,383,843
|
34,818,040
|
June 30,
2012
|
September 30,
2011
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
4,137,934
|
$
|
12,563,126
|
||||
Available-for-sale Marketable securities (Note 5)
|
13,103,813
|
8,292,837
|
||||||
Available- for- sale-Marketable securities-related parties (Note 5)
|
212,238
|
542,386
|
||||||
Accounts and notes receivables, net of allowance of $267,910 and $276,069, respectively (Note 6)
|
20,350,307
|
20,428,217
|
||||||
Accounts, loans and other receivables, and prepaid expenses - related parties (Note 11)
|
1,682,013
|
9,598,583
|
||||||
Inventories, net (Note 7)
|
19,382,493
|
9,625,774
|
||||||
Prepaid expenses and other current assets, net (Note 8)
|
21,233,429
|
14,389,065
|
||||||
Restricted cash, current
|
2,132,840
|
1,547,159
|
||||||
Total current assets
|
82,235,067
|
76,987,147
|
||||||
Property, plant and equipment, net (Note 9)
|
62,543,351
|
36,873,988
|
||||||
Intangible assets
|
138,134
|
163,447
|
||||||
Property use rights, net
|
4,219,871
|
2,252,445
|
||||||
Other long-term assets
|
427,593
|
58,192
|
||||||
Total assets
|
$
|
149,564,016
|
$
|
116,335,219
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Loans payable-short term (Note 10)
|
$
|
3,523,172
|
$
|
2,657,091
|
||||
Accounts payable and accrued expenses
|
12,906,885
|
15,468,902
|
||||||
Accounts and other payables-related parties (Note11)
|
19,085,323
|
4,590,045
|
||||||
Advances from customers and deferred revenue
|
2,999,786
|
3,821,208
|
||||||
Other liabilities (Note 12)
|
11,865,251
|
4,315,858
|
||||||
Taxes payable
|
1,305,006
|
1,349,611
|
||||||
Total current liabilities
|
51,685,423
|
32,202,715
|
||||||
Long-term liabilities
|
13,990
|
107,231
|
||||||
Total Liabilities
|
51,699,413
|
32,309,946
|
||||||
TOTAL EQUITY
|
||||||||
Series A Convertible Preferred Stock: $.0001 par value, stated value $1,000 per share; 10,000,000 authorized, 1,006 shares issued and outstanding at June 30, 2012 and September 30, 2011 (Note 13)
|
1,006,250
|
1,006,250
|
||||||
Common Stock: $.0001 par value; 1,000,000,000 authorized; 48,218,090 and 40,353,828 issued and outstanding as of June 30, 2012 and September 30, 2011, respectively. (Note 13)
|
4,821
|
4,035
|
||||||
Additional paid-in capital
|
83,177,643
|
75,279,087
|
||||||
Accumulated other comprehensive income (Note 14)
|
|
(1,287,489
|
)
|
128,943
|
||||
Accumulated deficit
|
|
(4,391,590
|
)
|
(8,111,323
|
)
|
|||
Total CD International stockholders' equity
|
78,509,635
|
68,306,992
|
||||||
Non-controlling interests (Note 15)
|
19,354,968
|
15,718,281
|
||||||
Total equity
|
97,864,603
|
84,025,273
|
||||||
Total liabilities and equity
|
$
|
149,564,016
|
$
|
116,335,219
|
For nine months ended
|
||||||||
June 30, 2012
|
June 30, 2011
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
2,949,511
|
$
|
7,353,788
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
2,197,073
|
2,934,788
|
||||||
Allowance for bad debt
|
8,159
|
25,868
|
||||||
Stock based compensation
|
813,930
|
410,267
|
||||||
Realized loss on investments in marketable securities
|
30,974
|
379,969
|
||||||
Gain on derivative liabilities revaluation
|
|
(93,241
|
)
|
|
(159,467
|
)
|
||
Fair value of marketable securities received for services
|
|
(10,737,043
|
)
|
|
(18,157,734
|
)
|
||
Fair value of marketable securities paid for services
|
338,976
|
6,370,148
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
|
(4,850,908
|
)
|
|
(3,978,520
|
)
|
||
Accounts receivable and other assets-related parties
|
10,174,416
|
|
(1,369,314
|
)
|
||||
Inventories
|
|
(3,617,562
|
)
|
|
(5,764,814
|
)
|
||
Accounts receivable
|
2,170,191
|
897,777
|
||||||
Accounts payable and accrued expenses
|
|
(4,853,956
|
)
|
3,216,591
|
||||
Accounts and other payable - related parties
|
|
(3,422,962
|
)
|
1,108,942
|
||||
Advances from customers
|
|
(1,230,771
|
)
|
|
(120,011
|
)
|
||
Other payables
|
2,983,348
|
1,022,466
|
||||||
NET CASH USED IN OPERATING ACTIVITIES
|
|
(7,139,865
|
)
|
|
(5,829,256
|
)
|
||
INVESTING ACTIVITIES:
|
||||||||
Cash acquired from acquisition
|
1,808,881
|
-
|
||||||
Cash paid for acquisition
|
|
(4,454,487
|
)
|
-
|
||||
Gross Proceeds from the sale of marketable securities available for sale
|
893,176
|
818,456
|
||||||
Purchases of property, plant and equipment
|
|
(1,506,124
|
)
|
|
(2,501,259
|
)
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
|
(3,258,554
|
)
|
|
(1,682,803
|
)
|
||
FINANCING ACTIVITIES:
|
||||||||
(Increase) decrease in restricted cash
|
|
(585,681
|
)
|
3,961,441
|
||||
Loans payable
|
866,081
|
|
(2,931,883
|
)
|
||||
Gross proceeds from sale of stock and exercise of warrants/options
|
-
|
3,874,702
|
||||||
Cash dividend payment to preferred stockholders
|
|
(20,130
|
)
|
-
|
||||
Capital contribution from noncontrolling interest owners
|
214,348
|
1,710,909
|
||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
474,618
|
6,615,169
|
||||||
EFFECT OF EXCHANGE RATE ON CASH
|
1,498,609
|
1,049,859
|
||||||
Net (decrease) increase in cash
|
|
(8,425,192
|
)
|
152,969
|
||||
Cash and cash equivalents, beginning of the period
|
12,563,126
|
10,110,818
|
||||||
Cash and cash equivalents, end of the period
|
$
|
4,137,934
|
$
|
10,263,787
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Preferred dividend paid in our common stock
|
$
|
40,260
|
$
|
60,390
|
June 30,
2012
|
September 30,
2011
|
June 30,
2011
|
||||||||||
Period end RMB: U.S. dollar exchange rate
|
6.3089
|
6.3885
|
6.4630
|
|||||||||
Average fiscal-year-to-date RMB: U.S. dollar exchange rate
|
6.3197
|
6.5287
|
6.5710
|
a.
|
Information available before the financial statements are issued or are available to be issued indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements.
|
b.
|
The amount of the loss can be reasonably estimated.
|
For three months ended June 30,
|
For nine months ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net (Loss) income to common stockholders
|
$
|
(1,382,062
|
)
|
$
|
4,286,428
|
$
|
3,717,972
|
$
|
7,718,379
|
|||||||
Plus: preferred stock dividends
|
-
|
20,130
|
60,390
|
60,390
|
||||||||||||
Net (Loss) income to common stockholders plus assumed conversions
|
$
|
(1,382,062
|
)
|
$
|
4,306,558
|
$
|
3,778,362
|
$
|
7,778,769
|
|||||||
Basic weighted average common shares outstanding
|
48,111,759
|
37,567,331
|
43,380,118
|
34,694,215
|
||||||||||||
Plus: incremental shares from assumed conversions (1)
|
||||||||||||||||
Convertible preferred stock
|
-
|
558,889
|
558,889
|
-
|
||||||||||||
Unvested stock-based compensation
|
-
|
123,825
|
25,477
|
123,825
|
||||||||||||
Shares subscribed for acquisition
|
-
|
-
|
3,419,359
|
-
|
||||||||||||
Dilutive potential common shares
|
-
|
682,714
|
4,003,725
|
123,825
|
||||||||||||
Diluted weighted-average common shares outstanding
|
48,111,759
|
38,250,045
|
47,383,843
|
34,818,040
|
||||||||||||
Net (Loss) income per common share – basic :
|
$
|
(0.03
|
)
|
$
|
0.11
|
$
|
0.09
|
$
|
0.22
|
(2)
|
||||||
Net (Loss) income per common share – diluted:
|
$
|
(0.03
|
)
|
$
|
0.11
|
$
|
0.08
|
$
|
0.22
|
(2)
|
For three months ended
June 30, 2012
|
For nine months ended
June 30, 2012
|
|||||||||||||||
As reported
|
Straight- line
|
As reported
|
Straight- line
|
|||||||||||||
Revenues
|
$
|
37,274,642
|
$
|
37,274,642
|
$
|
116,128,442
|
$
|
116,128,442
|
||||||||
Cost of revenues
|
$
|
36,160,662
|
$
|
36,502,957
|
$
|
102,861,674
|
$
|
103,955,820
|
||||||||
Gross profit
|
$
|
1,113,980
|
$
|
771,685
|
$
|
13,266,768
|
$
|
12,172,622
|
||||||||
Operating (Loss) income
|
$
|
(2,321,033
|
)
|
$
|
(2,663,329
|
)
|
$
|
3,676,173
|
$
|
2,582,027
|
||||||
Net (Loss) income
|
$
|
(1,754,137
|
)
|
$
|
(2,663,327
|
)
|
$
|
2,949,511
|
$
|
1,855,366
|
||||||
Net (Loss) income to common stockholders
|
$
|
(1,382,062
|
)
|
$
|
(1,724,356
|
)
|
$
|
3,717,972
|
$
|
2,623,827
|
||||||
Basic and diluted (loss) income per common share:
|
||||||||||||||||
Basic
|
$
|
(0.03
|
)
|
$
|
(0.04
|
)
|
$
|
0.09
|
$
|
0.06
|
||||||
Diluted
|
$
|
(0.03
|
)
|
$
|
(0.04
|
)
|
$
|
0.08
|
$
|
0.06
|
||||||
Basic weighted average common shares outstanding
|
48,111,759
|
48,111,759
|
43,380,118
|
43,380,118
|
||||||||||||
Diluted weighted average common shares outstanding
|
48,111,759
|
48,111,759
|
47,383,843
|
47,383,843
|
For three months ended
June 30, 2011
|
For nine months ended
June 30, 2011
|
|||||||||||||||
Units of production
|
As reported
(straight-line)
|
Units of production
|
As reported
(straight-line)
|
|||||||||||||
Revenues
|
$
|
57,015,600
|
$
|
57,015,600
|
$
|
145,053,215
|
$
|
145,053,215
|
||||||||
Cost of revenues
|
$
|
49,008,965
|
$
|
49,457,823
|
$
|
126,434,415
|
$
|
127,739,204
|
||||||||
Gross profit
|
$
|
8,006,635
|
$
|
7,557,777
|
$
|
18,618,800
|
$
|
17,314,011
|
||||||||
Operating income
|
$
|
5,003,118
|
$
|
4,554,260
|
$
|
9,258,442
|
$
|
7,953,653
|
||||||||
Net income
|
$
|
4,652,546
|
$
|
4,203,558
|
$
|
8,658,577
|
$
|
7,353,788
|
||||||||
Net income to common stockholders
|
$
|
4,735,286
|
$
|
4,286,428
|
$
|
9,023,168
|
$
|
7,718,379
|
||||||||
Basic and diluted income per common share:
|
||||||||||||||||
Basic
|
$
|
0.13
|
$
|
0.11
|
$
|
0.26
|
$
|
0.22
|
||||||||
Diluted
|
$
|
0.12
|
$
|
0.11
|
$
|
0.26
|
$
|
0.22
|
||||||||
Basic weighted average common shares outstanding
|
37,567,331
|
37,567,331
|
34,694,215
|
34,694,215
|
||||||||||||
Diluted weighted average common shares outstanding
|
38,250,045
|
38,250,045
|
34,818,040
|
34,818,040
|
•
|
$6,493,047 in proceeds from repayment of our intercompany loans,
|
•
|
$15,515,938 in shares of our common stock, with approximately $6,652,823 paid within 15 business days following the closing of the acquisitions and the balance $8,863,115 payable within 15 business days following satisfaction of certain post closing conditions which include the delivery of technical information, financial statements and other information. The value of these shares which are payable following the satisfaction of the post-closing conditions, which had not been met at June 30, 2012, are included in other payables – related parties (See Note 11) in the amount of $8,266,058 and $597,057 included in Other Liabilities (See Note 12); and
|
•
|
$4,696,085 by way of assignment of our interest in our subsidiary Excel Rise.
|
Lingshi Xinghai
|
Golden Trust
|
|||||||
Current assets
|
$
|
4,779,690
|
$
|
6,358,048
|
||||
Property, plant and equipment and other long term assets
|
16,755,467
|
11,833,150
|
||||||
Total identifiable assets
|
21,535,157
|
18,191,198
|
||||||
Current liabilities
|
3,554,969
|
5,511,768
|
||||||
Total identifiable liabilities
|
3,554,969
|
5,511,768
|
||||||
Total identifiable net assets
|
$
|
17,980,188
|
$
|
12,679,430
|
||||
Net assets acquired (A)
|
$
|
14,384,150
|
$
|
12,679,430
|
||||
Acquisition of
|
||||||||||||||||||||
CD International
(excluding acquisitions)
|
Lingshi Xinghai
|
Golden Trust
|
Pro Forma Adjustments
|
Pro Forma
(Consolidated)
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||
Total revenues
|
$
|
28,491,925
|
$
|
3,015,289
|
$
|
6,738,804
|
$
|
(971,376
|
)
|
A
|
$
|
37,274,642
|
||||||||
Cost of revenues
|
27,893,800
|
2,960,229
|
6,278,009
|
|
(971,376
|
)
|
36,160,662
|
|||||||||||||
Gross profit
|
$
|
598,125
|
$
|
55,060
|
$
|
460,795
|
$
|
-
|
$
|
1,113,980
|
||||||||||
Operating (loss) income
|
$
|
(2,455,629
|
)
|
$
|
(86,613
|
)
|
$
|
221,209
|
$
|
-
|
$
|
(2,321,033
|
)
|
|||||||
Net (loss) income
|
$
|
(1,839,115
|
)
|
$
|
(90,382
|
)
|
$
|
175,361
|
$
|
-
|
$
|
(1,754,137
|
)
|
|||||||
Net (loss) income to common stockholders
|
$
|
(1,475,826
|
)
|
$
|
(72,306
|
)
|
$
|
166,069
|
$
|
-
|
$
|
(1,382,062
|
)
|
|||||||
Basic and diluted loss per common share: | ||||||||||||||||||||
Basic
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
||||||||||||||
Diluted
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
||||||||||||||
Basic weighted average common shares outstanding
|
48,111,759
|
9,369,043
|
57,480,802
|
|||||||||||||||||
Diluted weighted average common shares outstanding
|
48,111,759
|
9,369,043
|
57,480,802
|
Acquisition of
|
||||||||||||||||||||
CD International
(excluding acquisitions)
|
Lingshi Xinghai
|
Golden Trust
|
Pro Forma Adjustments
|
Pro Forma
(Consolidated)
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||
Total revenues
|
$
|
103,067,795
|
$
|
8,349,627
|
$
|
17,523,829
|
$
|
(3,465,432
|
)
|
(A)
|
$
|
125,475,819
|
||||||||
Cost of revenues
|
90,418,336
|
8,123,742
|
16,785,356
|
(3,465,432
|
)
|
(A)
|
111,862,002
|
|||||||||||||
Gross profit
|
$
|
12,649,459
|
$
|
225,885
|
$
|
738,473
|
$
|
-
|
$
|
13,613,817
|
||||||||||
Operating income (loss)
|
$
|
3,548,023
|
$
|
(46,954
|
)
|
$
|
138,470
|
|
$
|
-
|
$
|
3,639,539
|
||||||||
Net income
|
$
|
2,865,746
|
$
|
(43,796
|
)
|
$
|
179,456
|
$
|
-
|
$
|
3,001,406
|
|||||||||
Net income (loss) to common stockholders
|
$
|
3,678,650
|
$
|
(35,037
|
)
|
$
|
170,164
|
$
|
-
|
$
|
3,813,777
|
|||||||||
Basic and diluted income per common share: | ||||||||||||||||||||
Basic
|
$
|
0.08
|
$
|
0.07
|
||||||||||||||||
Diluted
|
$
|
0.08
|
$
|
0.07
|
||||||||||||||||
Basic weighted average common shares outstanding
|
43,380,118
|
9,369,043
|
52,749,161
|
|||||||||||||||||
Diluted weighted average common shares outstanding
|
43,964,484
|
9,369,043
|
56,752,886
|
Acquisition of
|
||||||||||||||||||||
CD International
(excluding acquisitions)
|
Lingshi Xinghai
|
Golden Trust
|
Pro Forma Adjustments
|
Pro Forma Consolidated)
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||
Total revenues
|
$
|
57,015,600
|
$
|
4,820,986
|
$
|
6,987,260
|
$
|
(1,771,237
|
)
|
(A)
|
$
|
67,052,610
|
||||||||
Net income
|
$
|
4,203,688
|
$
|
6,909
|
$
|
127,375
|
$
|
4,337,972
|
Acquisition of
|
||||||||||||||||||||
CD International
(excluding acquisitions)
|
Lingshi Xinghai
|
Golden Trust
|
Pro Forma Adjustments
|
Pro Forma
(Consolidated)
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||
Total revenues
|
$
|
145,053,215
|
$
|
10,828,382
|
$
|
19,233,731
|
$
|
(4,509,317
|
)
|
(A)
|
$
|
170,606,011
|
||||||||
Net income
|
$
|
7,353,788
|
$
|
74,869
|
$
|
192,171
|
$
|
7,620,828
|
Company
|
June 30,
2012
|
% of Total
|
September 30,
2011
|
% of Total
|
||||||||||||
(unaudited)
|
||||||||||||||||
Ziyang Ceramics Corp. (1 )
|
$
|
3,768,591
|
28
|
%
|
$
|
426,791
|
5
|
%
|
||||||||
China Logistics Group, Inc.
|
112,610
|
1
|
%
|
196,208
|
2
|
%
|
||||||||||
Dragon International Group Corp.
|
22,816
|
0
|
%
|
22,816
|
0
|
%
|
||||||||||
Decor Products International, Inc.
|
35,625
|
0
|
%
|
-
|
0
|
%
|
||||||||||
Sunwin Stevia International Inc. (2)
|
-
|
0
|
%
|
361,000
|
4
|
%
|
||||||||||
Dragon Capital Group Corp.
|
212,238
|
2
|
%
|
542,386
|
6
|
%
|
||||||||||
China Education International, Inc.
|
8,742,479
|
66
|
%
|
7,286,022
|
83
|
%
|
||||||||||
Linkwell Corporation
|
240,000
|
2
|
%
|
-
|
0
|
%
|
||||||||||
Others
|
181,692
|
1
|
%
|
-
|
0
|
%
|
||||||||||
Marketable securities available for sale
|
$
|
13,316,051
|
100
|
%
|
$
|
8,835,223
|
100
|
%
|
Accounts and notes receivable
|
June 30,
2012
|
% of Total
|
September 30,
2011
|
% of Total
|
||||||||||||
(Unaudited)
|
||||||||||||||||
Available-for-sale securities receivable
|
$
|
5,763,351
|
28
|
%
|
$
|
3,691,735
|
18
|
%
|
||||||||
Notes receivable
|
940,413
|
4
|
%
|
364,718
|
2
|
%
|
||||||||||
Other trade receivables
|
13,914,453
|
68
|
%
|
16,647,833
|
80
|
%
|
||||||||||
Total accounts and notes receivable
|
$
|
20,618,217
|
100
|
%
|
$
|
20,704,286
|
100
|
%
|
||||||||
Allowance for uncollectible accounts
|
|
(267,910
|
)
|
(276,069
|
)
|
|||||||||||
Net accounts and notes receivable
|
$
|
20,350,307
|
$
|
20,428,217
|
June 30,
2012
|
September 30,
2011
|
|||||||
(Unaudited)
|
||||||||
Raw materials
|
$
|
4,827,669
|
$
|
3,061,481
|
||||
Finished goods
|
14,554,824
|
6,564,293
|
||||||
Total Inventory
|
$
|
19,382,493
|
$
|
9,625,774
|
Description
|
June 30,
2012
|
September 30,
2011
|
||||||
(Unaudited)
|
||||||||
Prepayments to vendors for merchandise that had not yet been shipped or services that had not been performed
|
$
|
10,200,682
|
$
|
6,519,123
|
||||
Prepaid expenses
|
3,927,729
|
2,448,248
|
||||||
Other receivables
|
6,511,269
|
3,865,525
|
||||||
Loans receivable
|
575,000
|
1,537,420
|
||||||
Security deposits
|
18,749
|
18,749
|
||||||
Total
|
$
|
21,233,429
|
$
|
14,389,065
|
Property, Plant and Equipment
|
||||||||
Description
|
Useful Life
|
June 30,
2012
|
September 30,
2011
|
|||||
(unaudited)
|
||||||||
Building
|
10-40 years
|
$
|
23,932,087
|
$
|
14,260,280
|
|||
Manufacturing equipment
|
5-10 year
|
38,526,750
|
21,535,796
|
|||||
Office equipment and furniture
|
3-5 year
|
714,343
|
646,244
|
|||||
Autos and trucks
|
5 year
|
1,291,612
|
1,187,281
|
|||||
Construction in progress
|
N/A
|
9,199,403
|
8,295,743
|
|||||
Total
|
73,664,195
|
45,925,344
|
||||||
Less: accumulated depreciation
|
|
(11,120,844
|
)
|
(9,051,356
|
)
|
|||
Property, Plant and Equipment, Net
|
$
|
62,543,351
|
$
|
36,873,988
|
Description
|
June 30,
2012
|
September 30,
2011
|
||||||
(unaudited)
|
||||||||
CDI China loan from Sunwin Tech Group, Inc. Due on December 31, 2012. 3% annual interest rate. Secured by pledge of CDI China assets.
|
$
|
194,541
|
$
|
450,000
|
||||
Lang Chemical loan from China Mingsheng Bank. Due on May 16, 2012. 6.941% annual interest rate. Guaranteed by Zhu Qian and Chen Jingdong.
|
-
|
720,044
|
||||||
Lang Chemical loan from Bank of Shanghai. Due on March 22, 2012. 6.666% annual interest rate. Guaranteed by China Investment Guarantor Co. Ltd. and Zhu Qian.
|
-
|
547,859
|
||||||
CDI Beijing loan from Bank of Hangzhou. Due on October 21, 2011. 6.672% annual interest rate. Guaranteed by Chi Chen
|
-
|
939,188
|
||||||
Lang Chemical loan from China Merchants Bank. Due on October 20, 2012. 8.590% annual interest rate. Guaranteed by Zhu Qian.
|
1,268,050
|
-
|
||||||
Lang Chemical loan from China Merchants Bank. Due on May 10, 2013. 8.659% annual interest rate. Guaranteed by Zhu Qian.
|
317,012
|
-
|
||||||
Lang Chemical loan from Mingsheng Bank. Due on May 07, 2013. 8.528% annual interest rate. Guaranteed by Zhu Qian.
|
1,268,050
|
-
|
||||||
Lang Chemical loan from Shanghai Bank. Due on May 20, 2013. 6.56% annual interest rate. Guaranteed by Zhu Qian.
|
475,519
|
-
|
||||||
Total
|
$
|
3,523,172
|
$
|
2,657,091
|
||||
Less: Current Portion
|
(3,523,172
|
)
|
(2,657,091
|
)
|
||||
Loans payable, long-term
|
$
|
-
|
$
|
-
|
●
|
Yuwei Huang, our executive vice president of our Magnesium segment, and a member of our board of directors, is chairman of YiWei Magnesium, and chief executive officer and vice chairman of Golden Magnesium;
|
●
|
Taiyuan Yiwei Magnesium Industry Co., Ltd., a company organized under the laws of the PRC (“Yiwei Magnesium”), is a minority interest owner in Chang Magnesium;
|
●
|
Lifei Huang, is the daughter of Yuwei Huang;
|
●
|
Lifei Huang, is a registered representative of Pine Capital Enterprises Inc., a company organized under the laws of the Cayman Islands (“Pine Capital”);
|
●
|
Lifei Huang, is a registered representative of Wheaton Group Corp., a company organized under the laws of Brunei Darussalam (“Wheaton”);
Shuihuan Huang, is the sister of Yuwei Huang;
Kong Tung, a member of the board of directors, and chairman of Golden Magnesium, Beauty East, and Golden Trust;
|
●
|
LingShi County Yihong Magnesium Co., Ltd., a company organized under the laws of the PRC (“Yihong Magnesium”), is legally represented by an officer of Chang Magnesium;
|
●
|
Excel RiseTechnology Co., Ltd., a company organized under the laws of Brunei Darussalam (“Excel Rise”), is owned by Yiwei Magnesium Industry Co., Ltd. (Yiwei Magnesium”), an entity owned or controlled by Mr. Huang;
|
●
|
Lucheng Haixu Magnesium Co., Ltd., a company organized under the laws of the PRC (“Haixu Magnesium”), is legally represented by an officer of Chang Magnesium;
|
●
|
NanTong Langyuan Chemical Co., Ltd., a company organized under the laws of the PRC (“NanTong Chemical”), is owned by Jingdong Chen and Qian Zhu, the minority interest owners of Lang Chemical;
|
●
|
Jingdong Chen, is vice president of our Basic Materials segment and chief executive officer of Lang Chemical;
|
●
|
Chi Chen is vice president of our Basic Materials Segment and minority interest owner of CDI Beijing;
|
●
|
Zhongmen International Investments Co., Ltd., a company organized under the laws of the PRC (“Zhongmen International”), is legally represented by an officer of CDI Beijing;
|
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
Baotou Changxin Magnesium
|
Yiwei Magnesium
|
$ | - | $ | 364,705 | |||||
Chang Trading
|
Wheaton
|
4,921 | 4,860 | |||||||
Chang Magnesium
|
Yiwei Magnesium
|
- | 296,156 | |||||||
Ruiming Magnesium
|
Yihong Magnesium
|
- | 545,358 | |||||||
Total Accounts Receivable-related parties
|
$ | 4,921 | $ | 1,211,079 |
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
Ruiming Magnesium
|
Yiwei Magnesium
|
$ | 34,716 | $ | 33,544 | |||||
Chang Trading
|
Xinghai Magnesium
|
156,842 | 2,654,384 | |||||||
Total Prepaid Expenses-related parties
|
$ | 191,558 | $ | 2,687,928 |
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
Lang Chemical
|
Nantong Chemical
|
$ | - | $ | 1,320,324 | |||||
Total Loans Receivable-related parties
|
$ | - | $ | 1,320,324 |
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
Baotou Changxin Magnesium
|
Yihong Magnesium
|
$ | - | $ | 118,954 | |||||
Baotou Changxin Magnesium
|
Yiwei Magnesium
|
- | 78,266 | |||||||
Chang Magnesium
|
Yiwei Magnesium
|
252,369 | 3,850,151 | |||||||
Chang Magnesium
|
Shuihuan Huang
|
- | 3,130 | |||||||
IMTC
|
Yuwei Huang
|
- | 12,000 | |||||||
Ruiming Magnesium
|
Yiwei Magnesium
|
44,382 | 42,263 | |||||||
Ruiming Magnesium
|
Yihong Magnesium
|
62,508 | 200,924 | |||||||
CDI Shanghai
|
Yiwei Magnesium
|
- | 10,951 | |||||||
CDI Beijing
|
Zhongmen International
|
67,207 | 62,613 | |||||||
Xinghai Magnesium
|
Yiwei Magnesium
|
761,939 | - | |||||||
Xinghai Magnesium
|
Yihong Magnesium
|
- | - | |||||||
Lang Chemical
|
Nantong Chemical
|
297,129 | - | |||||||
Total Other Receivable-related parties
|
$ | 1,485,534 | $ | 4,379,252 |
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
IMTC
|
Pine Capital
|
$ | - | $ | 754,399 | |||||
Baotou Magnesium
|
Yiwei Magnesium
|
36,702 | - | |||||||
Baotou Magnesium
|
Haixu Magnesium
|
16,069 | - | |||||||
Golden Magnesium
|
Yiwei Magnesium
|
141,175 | 142,479 | |||||||
IMTC
|
Wheaton
|
1,458,433 | - | |||||||
Lingshi Xinghai Magnesium
|
Yihong Magnesium
|
36,157 | - | |||||||
Baotou Magnesium
|
Yihong Magnesium
|
38,052 | - | |||||||
Total Accounts Payable-related parties
|
$ | 1,726,588 | $ | 896,878 |
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
Chang Trading
|
Pine Capital
|
$ | 49,390 | $ | - | |||||
Total Advance from Customers-related parties
|
$ | 49,390 | $ | - |
CD International Subsidiary
|
Related Party
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||||
Beauty East
|
Kung Tong
|
$ | - | $ | 97,089 | |||||
CDI Beijing
|
Chi Chen
|
400,704 | 399,781 | |||||||
Chang Magnesium
|
Yuwei Huang
|
- | 9,953 | |||||||
CDII
|
Yiwei Magnesium
|
8,266,058 | 3,176,659 | |||||||
Baotou Magnesium
|
Excel Rise
|
4,661,041 | - | |||||||
Chang Trading
|
Yiwei Magnesium
|
60,232 | - | |||||||
Chang Magnesium
|
Excel Rise
|
961,122 | - | |||||||
IMTC
|
Pine Capital
|
1,713,162 | - | |||||||
IMTC
|
Yiwei Magnesium
|
1,003,170 | - | |||||||
Beauty East
|
Kong Tung
|
97,089 | - | |||||||
Beauty East
|
Pine Capital
|
146,767 | - | |||||||
- | - | |||||||||
Total Other Payables-related parties
|
$ | 17,309,345 | $ | 3,683,482 |
Account
|
June 30,
2012
|
September 30,
2011
|
||||||
(unaudited)
|
||||||||
Other short-term loans
|
$
|
8,525,261
|
$
|
4,208,627
|
||||
Payables for acquisitions
|
2,287,572
|
-
|
||||||
Accrued salary payable
|
1,018,298
|
-
|
||||||
Derivative liabilities | 13,990 | 107,231 | ||||||
Accrued dividend payable
|
20,130
|
-
|
||||||
Total other liabilities
|
$
|
11,865,251
|
$
|
4,315,858
|
June 30,
2012
|
September 30,
2011
|
|||||||
Inputs for conversion option valuation – covered call
|
||||||||
Asset price on valuation date
|
$
|
0.32
|
$
|
1.01
|
||||
Exercise price
|
$
|
9.80
|
$
|
9.80
|
||||
Estimated years to exercise
|
5.67
|
6.5
|
||||||
Expected volatility factor
|
99
|
%
|
93
|
%
|
||||
Risk free rate
|
0.92
|
%
|
1.31
|
%
|
||||
Inputs for conversion option valuation – short call
|
||||||||
Asset price on valuation date
|
$
|
0.32
|
$
|
1.01
|
||||
Exercise price
|
$
|
1.80
|
$
|
1.80
|
||||
Estimated years to exercise
|
5.67
|
6.5
|
||||||
Expected volatility factor
|
99
|
%
|
93
|
%
|
||||
Risk free rate
|
0.92
|
%
|
1.31
|
%
|
||||
Inputs for warrant valuation
|
||||||||
Asset price on valuation date
|
$
|
0.32
|
$
|
1.01
|
||||
Exercise price
|
$
|
1.80
|
$
|
1.80
|
||||
Estimated years to exercise
|
0.62
|
1.5
|
||||||
Expected volatility factor
|
135
|
%
|
93
|
%
|
||||
Risk free rate
|
0.16
|
%
|
0.19
|
%
|
Description
|
Shares underlying options
|
Weighted average exercise price
|
||||||
Outstanding and exercisable at September 30, 2011
|
2,142,980
|
$
|
15.90
|
|||||
Expired
|
(120,000)
|
2.00
|
||||||
Outstanding and Exercisable at June 30, 2012
|
2,022,980
|
$
|
16.73
|
Number of Options outstanding and exercisable
|
Exercise Price
|
Remaining contractual life (Years)
|
||||||||
400
|
$
|
2.25
|
2.31
|
|||||||
637,000
|
$
|
7.50
|
0.50
|
|||||||
625,000
|
$
|
10.00
|
1.51
|
|||||||
500
|
$
|
15.00
|
0.94
|
|||||||
760,000
|
$
|
30.00
|
0.58
|
|||||||
80
|
$
|
56.25
|
2.42
|
|||||||
2,022,980
|
$
|
16.73
|
0.84
|
Shares underlying warrants
|
Exercise price
|
|||||||
Outstanding and exercisable at September 30, 2011
|
4,229,130
|
|||||||
Expired
|
(50,000)
|
$
|
2.50
|
|||||
Outstanding and exercisable at June 30, 2012
|
4,179,130
|
$
|
4.83
|
Number of Warrants outstanding and exercisable
|
Exercise Price
|
Remaining contractual life (Years)
|
||||||||
143,750
|
$
|
1.80
|
0.62
|
|||||||
777,778
|
$
|
2.00
|
4.01
|
|||||||
1,351,352
|
$
|
2.31
|
2.46
|
|||||||
1,906,250
|
$
|
8.00
|
0.62
|
|||||||
4,179,130
|
$
|
4.83
|
1.85
|
Foreign Currency
Translation
Adjustments
|
Unrealized Gains (Losses) on
Available for Sale
Securities
|
Accumulated Other
Comprehensive
Income
|
||||||||||
Balance at September 30, 2011
|
$
|
5,238,089
|
$
|
(5,109,146
|
)
|
$
|
128,943
|
|||||
Current-period change (Unaudited)
|
461,028
|
(1,877,460
|
)
|
(1,416,432
|
)
|
|||||||
Balance at June 30, 2012
|
$
|
5,699,117
|
$
|
(6,986,606
|
)
|
$
|
(1,287,489
|
)
|
Segment
|
June 30,
2012
|
September 30,
2011
|
||||||
(unaudited)
|
||||||||
Magnesium Segment
|
$
|
15,496,794
|
$
|
12,002,000
|
||||
Basic Materials Segment
|
3,858,174
|
3,716,281
|
||||||
Total
|
$
|
19,354,968
|
$
|
15,718,281
|
For three months ended June 30,
|
For nine months ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Magnesium (1)
|
$
|
26,539,758
|
$
|
25,022,544
|
$
|
70,388,045
|
$
|
70,574,101
|
||||||||
Basic Materials
|
10,649,100
|
20,187,730
|
34,873,984
|
55,780,579
|
||||||||||||
Consulting
|
85,784
|
11,805,326
|
10,866,413
|
18,698,535
|
||||||||||||
Total revenue
|
$
|
37,274,642
|
$
|
57,015,600
|
$
|
116,128,442
|
$
|
145,053,215
|
For three months ended June 30,
|
For nine months ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Magnesium
|
$
|
(754,045
|
)
|
$
|
(70,823
|
)
|
$
|
(1,754,099
|
)
|
$
|
(812,725
|
)
|
||||
Basic Materials
|
(394,467
|
)
|
(16,249)
|
(889,159
|
)
|
211,603
|
||||||||||
Consulting
|
(213,420
|
)
|
4,393,630
|
6,421,620
|
8,379,891
|
|||||||||||
Net (loss) income attributable to
CD International
|
$
|
(1,361,932
|
)
|
$
|
4,306,558
|
$
|
3,778,362
|
$
|
7,778,769
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||
Magnesium
|
$
|
96,792,470
|
$
|
65,321,257
|
||||
Basic Materials
|
27,071,591
|
31,286,610
|
||||||
Consulting
|
25,699,955
|
19,727,352
|
||||||
Total assets
|
$
|
149,564,016
|
$
|
116,335,219
|
For three months ended June 30,
|
For nine months ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
People's Republic of China
|
$
|
24,363,498
|
$
|
26,691,315
|
$
|
62,972,247
|
$
|
77,282,386
|
||||||||
Other Asian countries
|
11,350,366
|
9,947,431
|
18,894,716
|
13,281,852
|
||||||||||||
Australia
|
-
|
-
|
4,457,149
|
7,696,883
|
||||||||||||
Europe
|
-
|
-
|
4,827,085
|
3,572,610
|
||||||||||||
North America
|
1,560,778
|
19,691,922
|
19,678,128
|
40,459,678
|
||||||||||||
South America
|
-
|
684,932
|
5,299,117
|
2,759,806
|
||||||||||||
Total Revenues
|
$
|
37,274,642
|
$
|
57,015,600
|
$
|
116,128,442
|
$
|
145,053,215
|
June 30,
2012
|
September 30,
2011
|
|||||||
(unaudited)
|
||||||||
People's Republic of China
|
$ | 67,169,143 | $ | 39,219,251 | ||||
South America
|
23,375 | 34,166 | ||||||
United States of America
|
136,431 | 94,654 | ||||||
Total
|
$ | 67,328,949 | $ | 39,348,071 |
Description
|
June 30, 2012
|
June 30, 2011
|
||||||
U.S. Operations
|
$
|
4,968,826
|
$
|
2,997,604
|
||||
China Operations
|
|
(2,651,655
|
)
|
|
(1,749,557
|
)
|
||
Brunei Operations
|
1,562,955
|
6,226,460
|
||||||
Total income before income taxes
|
$
|
3,880,176
|
$
|
7,474,507
|
Description
|
June 30, 2012
|
June 30, 2011
|
||||||
Current:
|
||||||||
Federal
|
$
|
828,000
|
48,978
|
|||||
State
|
80,000
|
-
|
||||||
Chinese Operations
|
22,665
|
71,741
|
||||||
Total income tax expense
|
930,665
|
120,719
|
||||||
Deferred:
|
||||||||
Federal
|
-
|
-
|
||||||
State
|
-
|
-
|
||||||
Provision for income tax expense
|
$
|
930,665
|
$
|
120,719
|
Description
|
2012
|
2011
|
||||||||
Income tax expense (benefit) provision at Federal statutory rate
|
35.0
|
%
|
35.0
|
% | ||||||
State income tax expense (benefit), net of Federal income tax expense (benefit)
|
3.6
|
% |
3.6
|
% | ||||||
Effect of reduced foreign income tax rates
|
10.8
|
% |
(23.1
|
)
|
% | |||||
Reduction of net operating loss carry forward
|
(25.4
|
) | % |
(13.9
|
)
|
% | ||||
Effective income tax rate
|
|
24.0
|
% |
1.6
|
% |
Three Months Ended June 30,
|
||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||
(Dollars in thousands)
|
Amount
|
% of
Revenues
|
Amount
|
% of
Revenues
|
% Increase (Decrease)
|
|||||||||||||||
Magnesium segment
|
$
|
26,540
|
71%
|
$
|
25,023
|
44%
|
6%
|
|||||||||||||
Basic Materials segment
|
10,649
|
29%
|
20,188
|
35%
|
(47%)
|
|||||||||||||||
Consulting segment
|
86
|
0%
|
11,805
|
21%
|
(99%)
|
|||||||||||||||
Consolidated Revenues
|
$
|
37,275
|
100%
|
$
|
57,016
|
100%
|
(35%)
|
|||||||||||||
Cost of revenues
|
36,161
|
97%
|
49,458
|
87%
|
(27%)
|
|||||||||||||||
Gross profit
|
1,114
|
3%
|
7,558
|
13%
|
(85%)
|
|||||||||||||||
Total operating expenses
|
3,435
|
9%
|
3,004
|
5%
|
14%
|
|||||||||||||||
Total operating (loss) income
|
$
|
(2,321)
|
(6%)
|
$
|
4,554
|
8%
|
(151%)
|
Nine Months Ended June 30,
|
||||||||||||||||||||
2012
|
2011
|
|||||||||||||||||||
(Dollars in thousands)
|
Amount
|
% of
Revenues
|
Amount
|
% of
Revenues
|
% Increase (Decrease)
|
|||||||||||||||
Magnesium segment
|
$
|
70,388
|
61%
|
$
|
70,574
|
49%
|
0%
|
|||||||||||||
Basic Materials segment
|
34,874
|
30%
|
55,781
|
38%
|
(37%)
|
|||||||||||||||
Consulting segment
|
10,866
|
9%
|
18,698
|
13%
|
(42%)
|
|||||||||||||||
Consolidated Revenues
|
$
|
116,128
|
100%
|
$
|
145,053
|
100%
|
(20%)
|
|||||||||||||
Cost of revenues
|
102,862
|
89%
|
127,739
|
88%
|
(19%)
|
|||||||||||||||
Gross profit
|
13,266
|
11%
|
17,314
|
12%
|
(23%)
|
|||||||||||||||
Other operating income
|
-
|
-
|
-
|
-
|
||||||||||||||||
Total operating expenses
|
9,591
|
8%
|
9,360
|
7%
|
2%
|
|||||||||||||||
Total operating income
|
$
|
3,675
|
3%
|
$
|
7,954
|
5%
|
(54%)
|
Magnesium Segment
|
Three months ended
June 30,
|
Increase
(Decrease)
|
||||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||||||
Total revenues
|
$
|
26,540
|
$
|
25,023
|
$
|
1,517
|
||||||
Cost of revenues
|
25,705
|
24,395
|
1,310
|
|||||||||
Gross profit
|
835
|
628
|
207
|
|||||||||
Total operating expenses
|
1,524
|
752
|
772
|
|||||||||
Operating (loss)
|
$
|
(689)
|
$
|
(124)
|
$
|
(565)
|
||||||
Magnesium Segment
|
Nine months ended
June 30,
|
Increase
(Decrease)
|
||||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||||||
Total revenues
|
$
|
70,388
|
$
|
70,574
|
$
|
(186)
|
||||||
Cost of revenues
|
68,732
|
68,914
|
(182)
|
|||||||||
Gross profit
|
1,656
|
1,660
|
(4)
|
|||||||||
Total operating expenses
|
3,363
|
2,803
|
560
|
|||||||||
Operating (loss)
|
$
|
(1,707)
|
$
|
(1,143)
|
$
|
(564)
|
Basic Materials Segment
|
Three months ended
June 30,
|
Increase
(Decrease)
|
||||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||||||
Total revenues
|
$
|
10,649
|
$
|
20,188
|
$
|
(9,539)
|
||||||
Cost of revenues
|
10,181
|
18,972
|
(8,791)
|
|||||||||
Gross profit
|
468
|
1,216
|
(748)
|
|||||||||
Total operating expenses
|
489
|
1,001
|
(512)
|
|||||||||
Operating (loss) income
|
$
|
(21)
|
$
|
215
|
$
|
(236)
|
Basic Materials Segment
|
Nine months ended
June 30,
|
Increase
(Decrease)
|
||||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||||||
Total revenues
|
$
|
34,874
|
$
|
55,781
|
$
|
(20,907)
|
||||||
Cost of revenues
|
33,490
|
52,344
|
(18,854)
|
|||||||||
Gross profit
|
1,384
|
3,437
|
(2,053)
|
|||||||||
Total operating expenses
|
1,646
|
2,681
|
(1,035)
|
|||||||||
Operating (loss) income
|
$
|
(262)
|
$
|
756
|
$
|
(1,018)
|
Consulting Segment
|
Three months ended
June 30,
|
Increase
(Decrease)
|
||||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||||||
Total revenues
|
$
|
86
|
$
|
11,805
|
$
|
(11,719)
|
||||||
Cost of revenues
|
275
|
6,091
|
(5,816)
|
|||||||||
Gross profit
|
(189)
|
5,714
|
(5,903)
|
|||||||||
Total operating expenses
|
1,423
|
1,251
|
172
|
|||||||||
Operating (loss) income
|
$
|
(1,612)
|
$
|
4,463
|
$
|
(6,075)
|
Consulting Segment
|
Nine Months ended
June 30,
|
Increase
(Decrease)
|
||||||||||
(Dollars in thousands)
|
2012
|
2011
|
||||||||||
Total revenues
|
$
|
10,866
|
$
|
18,698
|
$
|
(7,832)
|
||||||
Cost of revenues
|
640
|
6,481
|
(5,841)
|
|||||||||
Gross profit
|
10,226
|
12,217
|
(1,991)
|
|||||||||
Total operating expenses
|
4,582
|
3,876
|
706
|
|||||||||
Operating income
|
$
|
5,644
|
$
|
8,341
|
$
|
(2,697)
|
Three Months Ended June 30,
|
||||||||||||||||
(Dollars in thousands)
|
2012
|
2011
|
Increase
(Decrease)
|
% change
|
||||||||||||
Net (loss) income from operations
|
$
|
(1,754)
|
$
|
4,204
|
$
|
(5,958)
|
(142%)
|
|||||||||
Interest expense, net
|
437
|
119
|
318
|
267%
|
||||||||||||
Income tax (benefit) expense
|
(693)
|
53
|
(746)
|
n/m
|
||||||||||||
Depreciation
|
677
|
990
|
(313)
|
(32%)
|
||||||||||||
Amortization
|
-
|
86
|
(86)
|
(100%)
|
||||||||||||
EBITDA from operations
|
$
|
(1,333)
|
$
|
5,452
|
$
|
(6,785)
|
||||||||||
By Segment:
|
||||||||||||||||
Magnesium
|
$
|
(384)
|
$
|
204
|
$
|
(588)
|
(289%)
|
|||||||||
Basic Materials
|
(300)
|
839
|
(1,139)
|
(177%)
|
||||||||||||
Consulting
|
(649)
|
4,409
|
(5,058)
|
(115%)
|
||||||||||||
EBITDA from operations
|
$
|
(1,333)
|
$
|
5,452
|
$
|
(6,785)
|
Nine Months Ended June 30,
|
||||||||||||||||
(Dollars in thousands)
|
2012
|
2011
|
Increase
(Decrease)
|
% change
|
||||||||||||
Net income from operations
|
$
|
2,949
|
$
|
7,354
|
$
|
(4,405)
|
(60%)
|
|||||||||
Interest expense, net
|
357
|
186
|
171
|
92%
|
||||||||||||
Income tax expense
|
931
|
121
|
810
|
n/m
|
||||||||||||
Depreciation
|
2,063
|
2,850
|
(787)
|
(28%)
|
||||||||||||
Amortization
|
157
|
132
|
25
|
19%
|
||||||||||||
EBITDA from operations
|
$
|
6,457
|
$
|
10,643
|
$
|
(4,186)
|
||||||||||
By Segment:
|
||||||||||||||||
Magnesium
|
$
|
(302)
|
$
|
1,500
|
$
|
(1,802)
|
(120%)
|
|||||||||
Basic Materials
|
(749)
|
676
|
(1,425)
|
(211%)
|
||||||||||||
Consulting
|
7,508
|
8,467
|
(959)
|
(11%)
|
||||||||||||
EBITDA from operations
|
$
|
6,457
|
$
|
10,643
|
$
|
(4,186)
|
Country
|
June 30, 2012
|
September 30, 2011
|
||||||||||||||
United States
|
$
|
0.551
|
13.3%
|
$
|
3,909
|
31.1%
|
||||||||||
China
|
3.587
|
86.7%
|
8,654
|
68.9%
|
||||||||||||
Total cash and cash equivalents
|
$
|
4.138
|
100.0%
|
$
|
12,563
|
100.0%
|
•
|
Any obligation under certain guarantee contracts,
|
||
•
|
Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets,
|
||
•
|
Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in stockholder’s equity in our statement of financial position, and
|
||
•
|
Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
•
|
A lack of a fully integrated corporate-wide financial accounting system,
|
|
•
|
A lack of qualified accounting personnel who have sufficient knowledge in dealing with the complex U.S. GAAP accounting and financial issues in our cross border operations.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
Exhibit No
|
Description
|
||
3.2
|
Bylaws, as amended (incorporated herein by reference to Exhibit 3.2 filed as a part of the Company’s Form 10-Q filed with the Commission on August 8, 2008 (Commission File No. 001-33694)).
|
||
3.3
|
Certificate of Amendment to the Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 as part of the Company’s Current Report on Form 8-K filed with the Commission on August 17, 2006 (Commission File No. 000-26415)).
|
||
3.4
|
Certificate of Domestication of China Direct, Inc. (incorporated herein by reference to Exhibit 3.4 as part of the Company’s Current Report on Form 8-K filed with the Commission on June 27, 2007 (Commission File No. 000-26415)).
|
||
3.5
|
Form of Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.5 as part of the Company’s Current Report on Form 8-K filed with the Commission on February 12, 2008 (Commission File No. 001-33694)).
|
||
4.1
|
Form of common stock purchase warrant (incorporated herein by reference to Exhibit 4.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on February 12, 2008 (Commission File No. 001-33694)).
|
||
4.2
|
Form of common stock purchase warrant (incorporated herein by reference to Exhibit 10.2 as part of the Company’s Current Report on Form 8-K filed with the Commission on June 17, 2009 (Commission File No. 001-33694)).
|
||
4.3
|
Form of $2.00 Common Stock Purchase Warrant (incorporated herein by reference to Exhibit 4.3 as part of the Company’s Form 8-K as filed with the Commission on January 4, 2011 (Commission File No. 000-233694)).
|
||
10.1 +
|
Employment Agreement dated August 16, 2006 with Dr. Yuejian (James) Wang (incorporated herein by reference to Exhibit 10.9 as part of the Company’s Current Report on Form 8-K filed with the Commission on August 17, 2006 (Commission File No. 000-26415)).
|
||
10.2 +
|
2005 Equity Compensation Plan (incorporated herein by reference to Exhibit 99.1 as part of the Company’s Registration Statement on Form S-8 filed with the Commission on June 16, 2005 (Commission File No. 333-125871)).
|
||
10.3 +
|
2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.14 as part of the Company’s Current Report on Form 8-K filed with the Commission on August 17, 2006 (Commission File No. 000-26415)).
|
||
10.4 +
|
2006 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Registration Statement on Form S-8 filed with the Commission on October 30, 2006 (Commission File No. 333-138297)).
|
||
10.5
|
Contract for Sino-Foreign Equity Joint Venture between Asia Magnesium Co., Ltd., Shanxi Senrun Coal Chemistry Co., Ltd. and Taiyuan YiWei Magnesium Industry Co., Ltd. dated December 12, 2006 (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Quarterly Report on Form 10-QSB for the period ended June 30, 2007 filed with the Commission on August 8, 2007 (Commission File No. 000-26415)).
|
||
10.6
|
Asia Magnesium Ownership Transfer Agreement dated July 1, 2007 between Jiang Dong and Capital One Resource Co., Ltd. (incorporated herein by reference to Exhibit 10.2 as part of the Company’s Quarterly Report on Form 10-QSB for the period ended June 30, 2007 filed with the Commission on August 8, 2007 (Commission File No. 000-26415)).
|
10.7
|
Shangxi Gu County Golden Magnesium Co., Ltd. Investment Agreement Supplement dated May 30, 2007 among Taiyuan YiWei Magnesium Co., Ltd., Asia Magnesium Co., Ltd. and Shanxi Senrun Coal Chemistry Co. Ltd. (incorporated herein by reference to Exhibit 10.3 as part of the Company’s Quarterly Report on Form 10-QSB for the period ended June 30, 2007 filed with the Commission on August 8, 2007 (Commission File No. 000-26415)).
|
||
10.8
|
Stock Purchase Agreement dated August 24, 2007 between CDI China, Inc., China Direct, Inc. and Sense Holdings, Inc. (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on August 28, 2007 (Commission File No. 000-26415)).
|
||
10.9
|
Joint Venture Agreement dated September 28, 2007 among Shanxi Jinyang Coal And Coke Group Co., Ltd., Runlian Tian and CDI China, Inc. (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Quarterly Report on Form 10-QSB for the period ended September 30, 2007 filed with the Commission on November 14, 2007 (Commission File No. 000-26415)).
|
||
10.10
|
Securities Purchase Agreement dated February 11, 2008 (incorporated herein by reference to Exhibit 10.19 as part of the Company’s Current Report on Form 8-K filed with the Commission on February 12, 2008 (Commission File No. 001-33694)).
|
||
10.11
|
Registration Rights Agreement dated February 11, 2008 (incorporated herein by reference to Exhibit 10.20 as part of the Company’s Current Report on Form 8-K filed with the Commission on February 12, 2008 (Commission File No. 001-33694)).
|
10.12
|
+
|
Option Agreement dated August 16, 2006 between China Direct, Inc. and David Stein (incorporated herein by reference to Exhibit 10.3 filed as a part of the Company’s Form S-8 filed with the Commission on November 11, 2007 (Commission File No. 333-147603)).
|
|
10.13
|
+
|
Employment Agreement dated August 7, 2008 between China Direct, Inc. and Dr. Yuejian (James) Wang (incorporated herein by reference to Exhibit 10.22 filed as a part of the Company’s Form 10-Q filed with the Commission on August 8, 2008 (Commission File No. 001-33694)).
|
|
10.14
|
+
|
Form of Restricted Stock Agreement for Executive Officer awards under the Company’s 2008 Executive Stock Incentive Plan (incorporated herein by reference to Exhibit 10.25 filed as a part of the Company’s Form 10-Q filed with the Commission on August 8, 2008 (Commission File No. 001-33694)).
|
|
10.15
|
+
|
Form of Restricted Stock Agreement for Non-Executive Officer awards under the Company’s 2008 Non-Executive Stock Incentive Plan (incorporated herein by reference to Exhibit 10.26 filed as a part of the Company’s Form 10-Q filed with the Commission on August 8, 2008 (Commission File No. 001-33694)).
|
|
10.16
|
+
|
Form of Restricted Stock Agreement for awards to Directors under the Company’s 2008 Non-Executive Stock Incentive Plan (incorporated herein by reference to Exhibit 10.27 filed as a part of the Company’s Form 10-Q filed with the Commission on August 8, 2008 (Commission File No. 001-33694)).
|
|
10.17
|
Joint Venture Agreement entered into between CDI Shanghai Management Co., Ltd. and Chi Chen dated September 20, 2008 (incorporated herein by reference to Exhibit 10.28 filed as a part of the Company’s Form 10-Q filed with the Commission on August 8, 2008 (Commission File No. 001-33694)).
|
||
10.18
|
+
|
Form of November 13, 2008 Amendment to Employment Agreements dated August 7, 2008 between China Direct, Inc. and Dr. Yuejian (James) Wang, Marc Siegel and David Stein (incorporated herein by reference to Exhibit 10.29 filed as a part of the Company’s Current Report on Form 10-Q for the period ended September 30, 2008 filed with the Commission on November 13, 2008 (Commission File No. 001-33694)).
|
|
10.19
|
+
|
Option Agreement dated August 16, 2006 between China Direct, Inc. and Dr. Yuejian (James) Wang (incorporated herein by reference to Exhibit 10.1 filed as a part of the Company’s Form S-8 filed with the Commission on November 11, 2007 (Commission File No. 333-147603)).
|
|
10.20
|
Baotou Changxin Magnesium Co., Ltd. Investment Agreement dated February 20, 2008 among CDI China, Inc., Excel Rise Technology Co., Ltd. and Three Harmony (Australia) Pty, Ltd. (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on February 26, 2008 (Commission File No. 001-33694)).
|
||
10.21
|
Baotou Changxin Magnesium Co., Ltd. Articles of Association dated January 31, 2008 (incorporated herein by reference to Exhibit 3.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on February 26, 2008 (Commission File No. 001-33694)).
|
||
10.22
|
Investment Framework Agreement dated as of April 26, 2008 by and between Baotou Xinjin Magnesium Co., Ltd. and CDI China, Inc. (incorporated herein by reference to Exhibit 10.18 as part of the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2008 (Commission File No. 001-33694)).
|
||
10.23
|
Lease Agreement dated August 21, 2007 between 431 Fairway Associates, LLC and China Direct, Inc. (incorporated herein by reference to Exhibit 10.37 filed as a part of the Company’s Form 10-K filed with the Commission on March 31, 2009 (Commission File No. 001-33694)).
|
||
10.24
|
+
|
Consulting Agreement dated January 23, 2009 between China Direct, Inc. and Marc Siegel (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2009 (Commission File No. 001-33694)).
|
|
10.25
|
+
|
Separation and Severance Agreement dated January 23, 2009 between China Direct, Inc. and Marc Siegel (incorporated herein by reference to Exhibit 10.2 as part of the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2009 (Commission File No. 001-33694)).
|
|
10.26
|
Stock Purchase Agreement dated January 23, 2009 between China Direct, Inc. and Marc Siegel (incorporated herein by reference to Exhibit 10.3 as part of the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2009 (Commission File No. 001-33694)).
|
||
10.27
|
Lock-Up Agreement dated January 23, 2009 between China Direct, Inc. and Marc Siegel (incorporated herein by reference to Exhibit 10.4 as part of the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2009 (Commission File No. 001-33694)).
|
||
10.28
|
+
|
Compensation Arrangements with Philip Y. Shen, Ph.D. effective January 26, 2009 (incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2009 (Commission File No. 001-33694)).
|
|
10.29
|
+
|
Amendment dated January 23, 2009 to Yuejian (James) Wang, Ph.D.’s Employment Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the Commission on January 26, 2009 (Commission File No. 001-33694)).
|
10.30
|
+
|
Severance Agreement dated May 23, 2008 between China Direct, Inc. and Lazarus Rothstein (incorporated herein by reference to Exhibit 10.46 as part of the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 14, 2009 (Commission File No. 001-33694)).
|
|
10.31
|
Form of Securities Purchase Agreement dated as of March 23, 2009 between the Company and the Purchasers (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on June 17, 2009 (Commission File No. 001-33694)).
|
||
10.32
|
Continuous Offering Program Agreement dated October 14, 2009 between China Direct Industries, Inc. and Rodman & Renshaw, LLC (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on October 15, 2009 (Commission File No. 001-33694)).
|
||
10.33
|
+
|
Letter Agreement between China Direct Industries, Inc. and Andrew Wang dated as of December 23, 2009 (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on December 23, 2009 (Commission File No. 001-33694)).
|
|
10.34
|
+
|
Separation Agreement between China Direct Industries, Inc. and Andrew Wang dated as of December 23, 2009 (incorporated herein by reference to Exhibit 10.2 as part of the Company’s Current Report on Form 8-K filed with the Commission on December 23, 2009 (Commission File No. 001-33694)).
|
|
10.35
|
Equity Transfer Agreement dated July 13, 2010 entered into among CDI China, Inc., Pine Capital Enterprises, Inc., Taiyuan Yiwei Magnesium Industry Co., Ltd. and Taiyuan Ruiming Yiwei Magnesium Industry Co., Ltd. (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on July 15, 2010 (Commission File No. 001-33694)).
|
||
10.36
|
Amendment dated July 20, 2010 to Equity Transfer Agreement dated July 13, 2010 entered into among CDI China, Inc., Pine Capital Enterprises, Inc., Taiyuan Yiwei Magnesium Industry Co., Ltd. and Taiyuan Ruiming Yiwei Magnesium Industry Co., Ltd.
|
||
10.37
|
Amendment dated October 28, 2010 to Equity Transfer Agreement dated July 13, 2010 entered into among CDI China, Inc., Pine Capital Enterprises, Inc., Taiyuan Yiwei Magnesium Industry Co., Ltd. and Taiyuan Ruiming Yiwei Magnesium Industry Co., Ltd. (incorporated herein by reference to Exhibit 10.53 as part of the Company’s Form 10-K as filed with the Commission on December 23, 2010 (Commission File No. 001-33694)).
|
||
10.38
|
Engagement Letter dated December 30, 2010 between China Direct Industries, Inc. and Rodman & Renshaw, LLC (incorporated herein by reference to Exhibit 10.54 as part of the Company’s Form 8-K as filed with the Commission on January 4, 2011 (Commission File No. 001-33694)).
|
||
10.39
|
Form of Securities Purchase Agreement dated December 30, 2010 (incorporated herein by reference to Exhibit 10.55 as part of the Company’s Form 8-K as filed with the Commission on January 4, 2011 (Commission File No. 001-33694)).
|
||
10.40
|
“At-the-Market” Program Agreement between China Direct Industries, Inc. and Global Hunter Securities, LLC dated February 14, 2011.
|
||
10.41
|
Stock Transfer Agreement dated May 6, 2011 between CDI China, Inc. and Kong Tung and Hui Dong (Incorporated herein by reference to Exhibit 10,1 as part of the Company?痵 Form 8-K as filed with the Commission on May 12, 2011).
|
||
10.42
|
Stock Transfer Agreement dated March 7, 2011 between CDI China, Inc. and Bloomgain Investment Limited (Incorporated herein by reference to Exhibit 10.1 as part of the Company’s Form 8-K as filed with the Commission on August 11, 2011 (Commission File No. 001-33694)).
|
||
10.43
|
Amendment I dated March 7, 2011 to Stock Transfer Agreement between CDI China, Inc. and Bloomgain Investment Limited (Incorporated herein by reference to Exhibit 10.2 as part of the Company’s Form 8-K as filed with the Commission on August 11, 2011 (Commission File No. 001-33694)).
|
||
10.44
|
Amendment II dated March 7, 2011 to Stock Transfer Agreement between CDI China, Inc. and Bloomgain Investment Limited (Incorporated herein by reference to Exhibit 10.3 as part of the Company’s Form 8-K as filed with the Commission on August 11, 2011 (Commission File No. 001-33694)).
|
||
10.45
|
Amendment III dated June 23, 2011 to Stock Transfer Agreement between CDI China, Inc. and Bloomgain Investment Limited (Incorporated herein by reference to Exhibit 10.4 as part of the Company’s Form 8-K as filed with the Commission on August 11, 2011 (Commission File No. 001-33694)).
|
||
10.46
|
Amendment IV dated August 8, 2011 to Stock Transfer Agreement between CDI China, Inc. and Bloomgain Investment Limited (Incorporated herein by reference to Exhibit 10.5 as part of the Company’s Form 8-K as filed with the Commission on August 11, 2011 (Commission File No. 001-33694)).
|
||
10.47
|
Equity Transfer Contract dated August 30, 2011 among CDI China, Inc., Marvelous Honor Holding Inc., Lianling Dong, Ping Liu, Jianzhong Ju, Lifei Huang, Xumin Cui, Golden Trust Magnesium Industry Co. Ltd. and Kong Tung (Incorporated herein by reference to Exhibit 10.1 as part of the Company’s Form 8-K as filed with the Commission on September 6, 2011 (Commission File No. 001-33694)).
|
10.48
|
Equity Transfer Contract dated August 30, 2011 among CDI China, Inc.; Mr. Yuwei Huang, Mr. Xumin Cui; and Golden Trust Magnesium Industry Co. Ltd. (Incorporated herein by reference to Exhibit 10.2 as part of the Company’s Form 8-K as filed with the Commission on September 6, 2011 (Commission File No. 001-33694)).
|
||||
10.49
|
Equity Transfer Contract dated August 30, 2011 among Taiyuan Ruiming Yiwei Magnesium Industry Co. Ltd., Taiyuan Yiwei Magnesium Industry Co., Ltd., Lingshi Xinghai Magnesium Industry Co. Ltd., China Direct Industries, Inc., Pine Capital Enterprises, Inc. and Yuwei Huang (Incorporated herein by reference to Exhibit 10.3 as part of the Company’s Form 8-K as filed with the Commission on September 6, 2011 (Commission File No. 001-33694)).
|
||||
10.50
|
+
|
Management Agreement dated August 30, 2011 among China Direct Industries, Inc., CDI China Inc., Yuwei Huang and Kong Tung (Incorporated herein by reference to Exhibit 10.4 as part of the Company’s Form 8-K as filed with the Commission on September 6, 2011 (Commission File No. 001-33694)).
|
|||
10.51
|
Third Amendment to Lease between 431 Fairway Associates, LLC and China Direct Industries, Inc. dated November 29, 2011 (incorporate herein by reference to Exhibit 10.50 as part of the Company’s Annual Report on Form 10-K filed with the Commission on December 23, 2011).
|
||||
10.52
|
Equity Transfer Contract Amendment dated January 12, 2012 among CDI China, Inc., Marvelous Honor Holding Inc., Lianling Dong, Ping Liu, Jianzhong Ju, Lifei Huang, Xumin Cui, Golden Trust Magnesium Industry Co. Ltd. and Kong Tung (incorporated herein by reference to Exhibit 10.1 as part of the Company’s Current Report on Form 8-K filed with the Commission on January 13, 2012).
|
||||
10.53
|
Equity Transfer Contract Amendment dated January 12, 2012 among CDI China, Inc.; Mr. Yuwei Huang, Mr. Xumin Cui; and Golden Trust Magnesium Industry Co. Ltd. (incorporated herein by reference to Exhibit 10.2 as part of the Company?痵 Current Report on Form 8-K filed with the Commission on January 13, 2012).
|
||||
10.54
|
Equity Transfer Contract Amendment dated January 12, 2012 among Taiyuan Ruiming Yiwei Magnesium Industry Co. Ltd., Taiyuan Yiwei Magnesium Industry Co., Ltd., Lingshi Xinghai Magnesium Industry Co. Ltd., China Direct Industries, Inc., Pine Capital Enterprises, Inc. and Yuwei Huang. (incorporated herein by reference to Exhibit 10.3 as part of the Company’s Current Report on Form 8-K filed with the Commission on January 13, 2012).
|
||||
10.55
|
Equity Transfer Contract Amendment No. 2 dated June 30, 2012 among CDI China, Inc., Marvelous Honor Holding Inc., Lianling Dong, Ping Liu, Jianzhong Ju, Lifei Huang, Xumin Cui, Golden Trust Magnesium Industry Co. Ltd. and Kong Tung (incorporated by reference to Exhibit 10.1 of the Company’s Report of Form 8-K filed with the Commission on July 6, 2012).
|
||||
10.56
|
Equity Transfer Contract Amendment No. 2 dated June 30, 2012 among CDI China, Inc.; Mr. Yuwei Huang, Mr. Xumin Cui; Golden Trust Magnesium Industry Co. Ltd. and Baotou Changxin Magnesium Co., Ltd. (incorporated by reference to Exhibit 10.2 of the Company’s Report of Form 8-K filed with the Commission on July 6, 2012).
|
||||
10.57
|
Equity Transfer Contract Amendment No. 2 dated June 30, 2012 among Taiyuan Ruiming Yiwei Magnesium Industry Co. Ltd., Taiyuan Yiwei Magnesium Industry Co., Ltd., Lingshi Xinghai Magnesium Industry Co. Ltd., CD International Enterprises, Inc., Pine Capital Enterprises, Inc. and Yuwei Huang. (incorporated by reference to Exhibit 10.3 of the Company’s Report of Form 8-K filed with the Commission on July 6, 2012).
|
||||
10.58
|
+
|
CD International Enterprises, Inc. 2012 Compensation Plan (incorporated by reference to Exhibit 4.4 of the Company’s Report of Form 8-K filed with the Commission on July 20, 2012).
|
|||
10.59
|
+
|
CD International Enterprises, Inc. 2008 Executive Stock Incentive Plan, as Amended (incorporated by reference to Annex A of the Company’s Proxy Statement filed with the Commission on April 18, 2012).
|
|||
10.60
|
+
|
CD International Enterprises, Inc. 2008 Non-Executive Stock Incentive Plan, as Amended (incorporated by reference to Annex B of the Company’s Proxy Statement filed with the Commission on April 18, 2012).
|
|||
31.1
|
*
|
Section 302 Certificate of Chief Executive Officer.
|
|||
31.2
|
*
|
Section 302 Certificate of Principal Financial and Accounting Officer.
|
|||
32.1
|
*
|
Section 906 Certificate of Chief Executive Officer and Principal Financial and Accounting Officer.
|
|||
101.INS
|
**
|
XBRL INSTANCE DOCUMENT
|
|||
101.SCH
|
**
|
XBRL TAXONOMY EXTENSION SCHEMA
|
|||
101.CAL
|
**
|
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
|
|||
101.DEF
|
**
|
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
|
|||
101.LAB
|
**
|
XBRL TAXONOMY EXTENSION LABEL LINKBASE
|
|||
101.PRE
|
**
|
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
|
|||
+
|
Management contract or compensatory plan or arrangement.
|
||||
*
|
Filed herewith.
|
||||
**
|
In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.
|
CD INTERNATIONAL ENTERPRISES, INC.
|
||
Date: August 14, 2012
|
By: /s/ Yuejian (James) Wang
|
|
Yuejian (James) Wang,
|
||
Chairman and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: August 14, 2012
|
By: /s/ Hernan Grant Welch
|
|
Hernan Grant Welch
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|