x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
|
333-141568
|
|
20-8468508
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(Commission
File No.)
|
|
(IRS
Employee Identification
No.)
|
Item
1.
|
Financial
Statements
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
Item
4T.
|
Control
and Procedures
|
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.
|
Submission
of Matters to a Vote of Security Holders
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
and Reports on Form 8-K
|
|
|
CONSOLIDATED
BALANCE SHEETS AS OF SEPTEMBER 30, 2008 (UNAUDITED) AND AS OF JUNE
30,
2008 (AUDITED).
|
3
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2008 AND
2007 (UNAUDITED).
|
4
|
|
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2008 (UNAUDITED).
|
5
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2008 AND
2007 (UNAUDITED).
|
6
|
|
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).
|
7-31
|
|
September
30, 2008
|
June
30, 2008
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
|
$
|
5,083,962
|
1,910,495
|
||||
Restricted
cash
|
888,802
|
913,092
|
|||||
Marketable
securities
|
48,604
|
61,767
|
|||||
Accounts
receivable, net of allowance for doubtful accounts of $254,037
and $224,924 as of September 30, 2008 and June 30, 2008,
respectively
|
9,337,189
|
9,365,486
|
|||||
Inventories
|
671,604
|
237,836
|
|||||
Other
receivables
|
206,535
|
505,968
|
|||||
Prepayment
|
3,981,480
|
3,240,394
|
|||||
Total
current assets
|
20,218,176
|
16,235,038
|
|||||
PLANT
AND EQUIPMENT, net
|
16,262,344
|
16,730,220
|
|||||
OTHER
ASSETS:
|
|||||||
Financing
cost
|
511,506
|
586,818
|
|||||
Account
receivable (non-current), net of allowance for doubtful accounts
of
$471,783 and $411,061 as of September 30, 2008 and June 30, 2008,
respectively
|
4,692,723
|
4,753,006
|
|||||
Total
other assets
|
5,204,229
|
5,339,824
|
|||||
Total
assets
|
$
|
41,684,749
|
38,305,082
|
||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable
|
$
|
4,075,106
|
6,293,553
|
||||
Customer
deposits
|
138,618
|
165,434
|
|||||
Short
term loans
|
7,811,689
|
4,271,222
|
|||||
Other
payables
|
214,163
|
254,259
|
|||||
Other
payables - shareholder
|
794,152
|
880,302
|
|||||
Accrued
liabilities
|
337,267
|
145,207
|
|||||
Taxes
payable
|
1,655,565
|
1,073,237
|
|||||
Interest
payable
|
158,795
|
-
|
|||||
Total
current liabilities
|
15,185,355
|
13,083,214
|
|||||
REDEEMABLE
PREFERRED STOCK ($0.001 par value, 875,000 shares issued) net of
discount
of $1,018,306 and $1,168,548 at September 30 and June 30, 2008,
respectively
|
5,981,694
|
5,831,452
|
|||||
Total
liabilities
|
21,167,049
|
18,914,666
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
-
|
-
|
|||||
SHAREHOLDERS'
EQUITY:
|
|||||||
Preferred
stock $0.001 par value, 1,000,000 shares authorized, 875,000 redeemable
preferred shares issued and outstanding in 2008, and reported in
liability
above
|
-
|
-
|
|||||
Common
Stock, $0.001 par value, 74,000,000 shares authorized, 10,525,000
shares issued and outstanding, respectively
|
10,525
|
10,525
|
|||||
Paid-in-capital
|
13,469,168
|
13,494,105
|
|||||
Contribution
receivable
|
(1,210,000
|
)
|
(1,210,000
|
)
|
|||
Retained
earnings
|
3,983,045
|
3,072,249
|
|||||
Statutory
reserves
|
1,616,413
|
1,452,779
|
|||||
Accumulated
other comprehensive income
|
2,648,549
|
2,598,466
|
|||||
Deferred
compensation
|
-
|
(27,708
|
)
|
||||
Total
shareholders' equity
|
20,517,700
|
19,390,416
|
|||||
Total
liabilities and shareholders' equity
|
$
|
41,684,749
|
38,305,082
|
Three
months ended
|
|||||||
September
30,
|
|||||||
2008
|
2007
|
||||||
REVENUE:
|
|||||||
Sales
of concrete
|
$
|
1,867,687
|
$
|
5,981,669
|
|||
Manufacturing
services
|
1,925,543
|
-
|
|||||
Technical
services
|
616,797
|
-
|
|||||
Mixer
rental
|
656,814
|
-
|
|||||
Marketing
cooperation
|
69,905
|
-
|
|||||
Total
revenue
|
5,136,746
|
5,981,669
|
|||||
COST
OF REVENUE:
|
|||||||
Cost
of sales
|
1,560,307
|
4,950,871
|
|||||
Manufacturing
services
|
497,208
|
-
|
|||||
Technical
services
|
67,902
|
-
|
|||||
Mixer
rental
|
292,045
|
-
|
|||||
Marketing
cooperation
|
30,870
|
-
|
|||||
Total
cost of revenue
|
2,448,332
|
4,950,871
|
|||||
GROSS
PROFIT
|
2,688,414
|
1,030,798
|
|||||
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
|
657,109
|
298,975
|
|||||
INCOME
FROM OPERATIONS
|
2,031,305
|
731,823
|
|||||
OTHER
(EXPENSE) INCOME, NET
|
|||||||
Other
subsidy income
|
227,594
|
358,715
|
|||||
Non-operating
income (expense), net
|
2,107
|
(14,709
|
)
|
||||
Interest
income
|
1,434
|
1,196
|
|||||
Interest
expense
|
(613,183
|
)
|
(84,540
|
)
|
|||
Total
other (expense) income, net
|
(382,048
|
)
|
260,662
|
||||
INCOME
BEFORE PROVISION FOR INCOME TAXES
|
1,649,257
|
992,485
|
|||||
PROVISION
FOR INCOME TAXES
|
574,827
|
-
|
|||||
NET
INCOME
|
1,074,430
|
992,485
|
|||||
OTHER
COMPREHENSIVE INCOME:
|
|||||||
Unrealized
(loss) gain from marketable securities
|
(13,341
|
)
|
27,527
|
||||
Foreign
currency translation adjustment
|
63,424
|
172,815
|
|||||
COMPREHENSIVE
INCOME
|
$
|
1,124,513
|
$
|
1,192,827
|
|||
EARNING
PER SHARE
|
|||||||
Basic
|
|||||||
Weighted
average number of shares
|
10,525,000
|
8,809,583
|
|||||
Earning
per share
|
$
|
0.10
|
$
|
0.11
|
|||
Diluted
|
|||||||
Weighted
average number of shares
|
10,621,413
|
8,809,583
|
|||||
Earning
per share
|
$
|
0.10
|
$
|
0.11
|
Common
stock
|
Additional
|
Retained
earnings
|
Accumulated
|
|||||||||||||||||||||||||
Number
|
Par
|
Paid-in
|
Contribution
|
Deferred
|
Statutory
|
other
comprehensive
|
||||||||||||||||||||||
of
shares
|
value
|
capital
|
receivable
|
Compensation
|
Unrestricted
|
reserves
|
income
|
Total
|
||||||||||||||||||||
BALANCE,
June 30, 2007
|
|
8,809,583
|
$
|
8,810
|
$
|
12,091,290
|
$
|
(13,470,100
|
)
|
$
|
-
|
$
|
6,309,675
|
$
|
896,634
|
$
|
659,922
|
$
|
6,496,231
|
|||||||||
Net
income
|
992,485
|
992,485
|
||||||||||||||||||||||||||
Adjustment
to statutory reserve
|
(99,249
|
)
|
99,249
|
-
|
||||||||||||||||||||||||
Unrealized
gain from marketable securities
|
27,527
|
27,527
|
||||||||||||||||||||||||||
Foreign
currency translation gain
|
172,815
|
172,815
|
||||||||||||||||||||||||||
BALANCE,
September 30, 2007 (unaudited)
|
8,809,583
|
$
|
8,810
|
$
|
12,091,290
|
$
|
(13,470,100
|
)
|
$
|
-
|
$
|
7,202,911
|
$
|
995,883
|
$
|
860,264
|
$
|
7,689,058
|
||||||||||
Shares
issued due to reorganization
|
1,690,417
|
1,690.00
|
(1,690
|
)
|
-
|
|||||||||||||||||||||||
Shares
issued for services
|
25,000
|
25.00
|
33,225
|
(27,708
|
)
|
5,542
|
||||||||||||||||||||||
Warrants
issued for services
|
169,345
|
169,345
|
||||||||||||||||||||||||||
Contribution
receivable offset with distribution owed
|
7,260,000
|
(7,627,051
|
)
|
367,051
|
- | |||||||||||||||||||||||
Capital
contribution received
|
5,000,100
|
5,000,100
|
||||||||||||||||||||||||||
Fair
value of warrants issued with preferred stock
|
1,201,935
|
1,201,935 | ||||||||||||||||||||||||||
Adjustment
to statutory reserve
|
(456,896
|
)
|
456,896
|
-
|
||||||||||||||||||||||||
Net
income
|
3,953,285
|
3,953,285
|
||||||||||||||||||||||||||
Unrealized
loss on marketable securities
|
(40,009
|
)
|
(40,009
|
)
|
||||||||||||||||||||||||
Foreign
currency translation gain
|
1,411,160
|
1,411,160
|
||||||||||||||||||||||||||
BALANCE,
June 30, 2008
|
10,525,000
|
$
|
10,525
|
$
|
13,494,105
|
$
|
(1,210,000
|
)
|
$
|
(27,708
|
)
|
$
|
3,072,249
|
$
|
1,452,779
|
$
|
2,598,466
|
$
|
19,390,416
|
|||||||||
Stock
based compensation
|
2,771
|
2,771
|
||||||||||||||||||||||||||
Forfeited
stock compensation
|
(24,937
|
)
|
24,937
|
-
|
||||||||||||||||||||||||
Net
income
|
1,074,430
|
1,074,430
|
||||||||||||||||||||||||||
Adjustment
to statutory reserve
|
(163,634
|
)
|
163,634
|
-
|
||||||||||||||||||||||||
Unrealized
loss on marketable securities
|
(13,341
|
)
|
(13,341
|
)
|
||||||||||||||||||||||||
Foreign
currency translation gain
|
63,424
|
63,424
|
||||||||||||||||||||||||||
BALANCE,
September 30, 2008 (unaudited)
|
10,525,000
|
$
|
10,525
|
$
|
13,469,168
|
$
|
(1,210,000
|
)
|
$
|
-
|
$
|
3,983,045
|
$
|
1,616,413
|
$
|
2,648,549
|
$
|
20,517,700
|
||||||||||
2008
|
2007
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income
|
$
|
1,074,430
|
$
|
992,485
|
|||
Adjustments
to reconcile net income to cash (used in) provided by operating
activities:
|
|||||||
Depreciation
|
533,125
|
282,942
|
|||||
Amortization
of financing cost
|
75,312
|
-
|
|||||
Amortization
of discount on convertible perferred stock
|
150,242
|
-
|
|||||
Amortization
of deferred compensation expense
|
2,771
|
-
|
|||||
Bad
debt expense
|
88,144
|
-
|
|||||
Change
in operating assets and liabilities
|
|||||||
Accounts
receivable
|
(4,797,624
|
)
|
(1,967,122
|
)
|
|||
Inventories
|
(433,383
|
)
|
60,639
|
||||
Other
receivables
|
301,005
|
629,600
|
|||||
Prepayment
|
1,012,365
|
(43,248
|
)
|
||||
Accounts
payable
|
854,631
|
1,787,444
|
|||||
Other
payables
|
(40,636
|
)
|
94,679
|
||||
Other
payables - shareholders
|
(86,558
|
)
|
-
|
||||
Accrued
liabilities
|
350,573
|
(39,163
|
)
|
||||
Customer
deposit
|
(27,286
|
)
|
-
|
||||
Taxes
payable
|
579,742
|
6,965
|
|||||
Net
cash (used in) provided by operating activities
|
(363,147
|
)
|
1,805,221
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchase
of property, plant and equipment
|
(19,067
|
)
|
(6,173
|
)
|
|||
Net
cash used in investing activities
|
(19,067
|
)
|
(6,173
|
)
|
|||
CASH
FLOWS FINANCING ACTIVITIES:
|
|||||||
Payments
of short term loan
|
(3,821,544
|
)
|
(3,031,400
|
)
|
|||
Proceeds
from short term loan
|
7,354,278
|
646,405
|
|||||
Restricted
cash
|
24,290
|
-
|
|||||
Net
cash provided by (used in) financing activities
|
3,557,024
|
(2,384,995
|
)
|
||||
EFFECTS
OF EXCHANGE RATE CHANGE IN CASH
|
(1,343
|
)
|
1,144
|
||||
INCREASE
(DECREASE) IN CASH
|
3,173,467
|
(584,803
|
)
|
||||
CASH,
beginning of period
|
1,910,495
|
1,424,883
|
|||||
CASH,
end of period
|
$
|
5,083,962
|
$
|
840,080
|
|||
· |
Exclusive
Technical Consulting and Services Agreement, through which China-ACMH
will
provide exclusive technical consulting and services to Xin Ao for
an
annual fee in the amount of Xin Ao’s yearly net income after tax.
|
· |
Equity
Pledge Agreement. Xin Ao’s shareholders pledged their rights, title and
equity interest in Xin Ao as security for China-ACMH to collect technical
consulting and services fees provided to
China-ACMH.
|
· |
Operating
Agreement, through which China-ACMH has exclusive authority of all
decision-making of ongoing major operations, including establishing
compensation levels and hiring and firing of key personnel. In order
to
ensure Xin Ao’s normal operation, China-ACMH agrees to act as the
guarantor and provide full guarantee for Xin Ao in entering and performing
contracts, agreements or transactions in association with Xin Ao’s
operation between Xin Ao and any other third parties. As a counter
guarantee, Xin Ao agrees to mortgage all of its assets including
receivables which have not been mortgaged to any third parties at
the
execution date of this agreement to
China-ACMH.
|
· |
Power
of Attorney, signed by Xin Ao’s 100% shareholders Mr. Han Xianfu and Mr.
He Weili, which authorize the individuals appointed by China-ACMH
to
exercise all of their respective voting rights as a shareholder at
Xin
Ao’s shareholder meetings.
|
· |
Option
Agreement, through which Xin Ao’s shareholders granted China-ACMH the
exclusive right and option to acquire all of their equity interests
in Xin
Ao.
|
· |
Persuasive
evidence of an arrangement exists (the Company considers its sales
contracts and technical service agreements to be pervasive evidence
of an
arrangement);
|
· |
Delivery
has occurred or services have been rendered;
|
· |
The
seller’s price to the buyer is fixed or determinable; and
|
· |
Collectability
of payment is reasonably assured.
|
· |
Level
1 inputs
to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active
markets.
|
· |
Level
2 inputs
to the valuation methodology include quoted prices for similar assets
and
liabilities in active markets, and inputs that are observable for
the
asset or liability, either directly or indirectly, for substantially
the
full term of the financial
instrument.
|
· |
Level
3 inputs
to the valuation methodology are unobservable and significant to
the fair
value measurement.
|
· |
Cash
- Cash includes cash on hand and demand deposits in accounts maintained
with state owned banks within the People’s Republic of China. The
Company considers all highly liquid instruments purchased with original
maturities of three months or less, and money market account, to
be cash
equivalents. Total cash in these banks at September 30, 2008 and
June 30,
2008 amounted to $4,962,477 and $1,795,388, respectively, of which
no
deposits were covered by insurance. Also, as of September 30, 2008,
the
Company held $888,802 in restricted cash in a corporate legal counsel’s
trust account, in accordance with an agreement with investors for
the
restricted use of preferred stock dividend and investor relation
related
expenses. Nonperformance by these institutions could expose the Company
to
losses not covered by insurance. The Company has not experienced,
nor dose
it anticipate, nonperformance by the institutions.
|
· |
Major
customers and suppliers - For the three
months ended September 30, 2008, two customer accounted for approximately
37.3% of the Company's sales and 9.3% of the Company’s accounts receivable
as of September 30, 2008. For the three months ended September 30,
2007,
one customer accounted for approximately 24% of the September 30,
2007.
For the three months ended September 30, 2008, two suppliers accounted
for
approximately 51.8% of the Company’s purchase and approximately 4.4% to
this supplier as of September 30, 2008. For the three months ended
September 30, 2007, three suppliers accounted for approximately 37.4%
of
the Company's purchases. These three suppliers represent approximately
12%
of the Company's total accounts payable balance as of September 30,
2007.
|
· |
Political
and economic risks
-
The Company's operations are carried out in the PRC. Accordingly,
the
Company's business, financial condition, and results of operations
may be
influenced by the political, economic, and legal environments in
the PRC,
and by the general state of the PRC's economy. The Company's operations
in
the PRC are subject to specific considerations and significant risks
not
typically associated with companies in North America and Western
Europe.
These include risks associated with, among others, the political,
economic, and legal environments, and foreign currency exchange.
The
Company's results may be adversely affected by changes in governmental
policies with respect to laws and regulations, anti-inflationary
measures,
currency conversion and remittance abroad, and rates and methods
of
taxation, among others.
|
Useful
Life
|
|
Transportation
equipment
|
10
years
|
Plant
machinery
|
10
years
|
Office
equipment
|
5
years
|
2008
|
2007
|
||||||
U.S.
statutory rates
|
34.0
|
%
|
34.0
|
%
|
|||
Foreign
income not recognized in U.S.
|
(34.0
|
)
|
(34.0
|
)
|
|||
China
income taxes
|
25.0
|
33.0
|
|||||
China
income tax exemption
|
-
|
(33.0
|
)
|
||||
Effective
income tax rates
|
25.0
|
%
|
-
|
%
|
September
30, 2008
(Unaudited)
|
June
30, 2008
|
||||||
Accounts
receivable, current
|
$
|
9,591,226
|
$
|
9,590,410
|
|||
Less:
allowance for doubtful accounts, current
|
(254,037
|
)
|
(224,924
|
)
|
|||
Net
accounts receivable, current
|
9,337,189
|
9,365,486
|
|||||
Accounts
receivable, non-current
|
5,164,506
|
5,164,067
|
|||||
Less:
allowance for doubtful accounts, non-current
|
(471,783
|
)
|
(411,061
|
)
|
|||
Net
accounts receivable, non-current
|
4,692,723
|
4,753,006
|
|||||
Total
accounts receivable, net
|
$
|
14,029,912
|
$
|
14,118,492
|
September
30, 2008
(Unaudited)
|
June
30, 2008
|
||||||
Transportation
equipment
|
$
|
20,342,484
|
$
|
20,286,866
|
|||
Plant
machinery
|
2,214,676
|
1,894,585
|
|||||
Office
equipment
|
43,175
|
43,057
|
|||||
Construction-
in-progress
|
-
|
295,033
|
|||||
Total
|
22,600,335
|
22,519,541
|
|||||
Less:
accumulated depreciation
|
(6,337,991
|
)
|
(5,789,321
|
)
|
|||
Plant
and equipments, net
|
$
|
16,262,344
|
$
|
16,730,220
|
September
30,
|
June
30,
|
||||||
2008
(Unaudited)
|
2008
|
||||||
Loan
from Huaxia Bank, with effective annual interest rate of 7.5555%,
due
November 16, 2008, guaranteed by the Company’s shareholder, Mr. Han
Xianfu
|
$
|
2,926,000
|
$
|
2,918,000
|
|||
Loan
from Beijing International Trust Co, Ltd. with effective annual interest
rate of 15%, due July 15, 2009, guaranteed by Rayland Credit Guarantee
Co.
Ltd
|
4,389,000
|
-
|
|||||
Loan
from unrelated company Beijing Hengxin Huaxing Auto Accessories Company,
with no interest, fully paid..
|
-
|
379,340
|
|||||
Loan
from unrelated company Beijing Hongda Huaxin Wujinjidian Company,
with no
interest, fully paid.
|
-
|
204,260
|
|||||
Loan
from unrelated company, Beijing Sigi Qingbaosan Cement Company, with
no
interest, fully paid.
|
-
|
116,720
|
|||||
Loan
from unrelated individual Xia Hua Qing, with no interest, fully
paid.
|
-
|
128,392
|
|||||
Loan
from various employees, with effective annual interest rate of 20%,
due
upon demand, unsecured.
|
496,689
|
524,510
|
|||||
Total
short term loans
|
$
|
7,811,689
|
$
|
4,271,222
|
September
30, 2008
(Unaudited)
|
June
30, 2008
|
||||||
Han
Xianfu, shareholder
|
$
|
450,540
|
$
|
450,550
|
|||
He
Weili, shareholder
|
343,612
|
429,752
|
|||||
Total
other payable - shareholder
|
$
|
794,152
|
$
|
880,302
|
September
30, 2008
(Unaudited)
|
June
30, 2008
|
||||||
Income
taxes payable
|
$
|
1,650,162
|
$
|
1,072,747
|
|||
Other
|
5,403
|
490
|
|||||
Total
taxes payable
|
$
|
1,655,565
|
$
|
1,073,237
|
Outstanding
Warrants
|
||||
Exercise
Price
|
Number
|
Average
Remaining Contractual Life
|
||
$2.40
|
875,000
|
4.69
years
|
||
$2.40
|
122,500
|
4.69
years
|
||
Total
|
997,500
|
Outstanding
as of June 30, 2007
|
-
|
|||
Granted
|
997,500
|
|||
Forfeited
|
-
|
|||
Exercised
|
-
|
|||
Outstanding
as of June 30, 2008
|
997,500
|
|||
Granted
|
||||
Forfeited
|
||||
Exercised
|
||||
Outstanding
as of September 30, 2008
|
997,500
|
Xin
Ao
|
CHINA-ACMH
|
BVI-ACM
|
Total
|
||||||||||
Balance,
June 30, 2007
|
$
|
8,470,000
|
$
|
5,000,000
|
$
|
100
|
$
|
13,470,100
|
|||||
Less:
contribution received
|
(7,260,000
|
)
|
(5,000,000
|
)
|
(100
|
)
|
(12,260,100
|
)
|
|||||
Balance,
June 30, 2008
|
$
|
1,210,000
|
$
|
-
|
$
|
-
|
$
|
1,210,000
|
|||||
Less:
contribution received
|
-
|
-
|
-
|
-
|
|||||||||
Balance,
September 30, 2008
|
$
|
1,210,000
|
$
|
-
|
$
|
-
|
$
|
1,210,000
|
Basic
earning per share
|
2008
|
2007
|
|||||
Net
income
|
$
|
1,074,430
|
992,485
|
||||
Weighted
shares outstanding-Basic
|
10,525,000
|
8,809,583
|
|||||
Earnings
per share-Basic
|
$
|
0.10
|
0.11
|
||||
Diluted
earning per share
|
|||||||
Net
income for diluted EPS
|
$
|
1,074,430
|
993,586
|
||||
Weighted
shares outstanding-Basic
|
10,525,000
|
8,809,583
|
|||||
Effect
of diluted securities-Warrants
|
96,413
|
-
|
|||||
Weighted
shares outstanding-Diluted
|
10,621,413
|
8,809,583
|
|||||
Earning
per share-Diluted
|
$
|
0.10
|
0.11
|
Year
ended June 30,
|
Amount
|
|||
2009
|
$
|
278,829
|
||
2010
|
197,124
|
|||
2011
|
49,281
|
|||
Thereafter
|
-
|
|
Three
Months Ended
September 30, |
||||||
|
2008
|
2007
|
|||||
(Unaudited)
|
(Unaudited)
|
||||||
Revenue
|
|||||||
Sales
of concrete
|
$
|
1,867,687
|
$
|
5,981,669
|
|||
Manufacturing
services
|
1,925,543
|
-
|
|||||
Technical
services
|
616,797
|
-
|
|||||
Mixer
rental
|
656,814
|
-
|
|||||
Marketing
cooperation
|
69,905
|
-
|
|||||
Total
revenue
|
5,136,746
|
5,981,669
|
|||||
Cost
of revenue
|
|||||||
Cost
of sales
|
1,560,307
|
4,950,871
|
|||||
Manufacturing
services
|
497,208
|
-
|
|||||
Technical
services
|
67,902
|
-
|
|||||
Mixer
rental
|
292,045
|
-
|
|||||
Marketing
cooperation
|
30,870
|
-
|
|||||
Total
cost of revenue
|
2,448,332
|
4,950,871
|
|||||
|
|||||||
Gross
profit
|
2,688,414
|
1,030,798
|
|||||
|
|||||||
Selling,
general and administrative expenses
|
657,109
|
298,975
|
|||||
Other
(expense) income, net
|
(382,048
|
)
|
260,662
|
||||
Income
before provision for income taxes
|
1,649,257
|
992,485
|
|||||
Income
taxes
|
574,827
|
-
|
|||||
|
|||||||
Net
income
|
$
|
1,074,430
|
$
|
992,485
|
Three
Months Ended September 30,
|
|||||||
As a percentage of Revenue |
2008
|
|
|
2007
|
|||
Revenue | |||||||
Sales
of concrete
|
36.4
|
%
|
100.0
|
%
|
|||
Manufacturing
services
|
37.5
|
%
|
-
|
||||
Technical
services
|
12.0
|
%
|
-
|
||||
Mixer
rental
|
12.8
|
%
|
-
|
||||
Marketing
cooperation
|
1.4
|
%
|
-
|
||||
Total
revenue
|
100.0
|
%
|
100.0
|
%
|
|||
Cost
of revenue
|
|||||||
Cost
of sales
|
30.4
|
%
|
83
|
%
|
|||
Manufacturing
services
|
9.7
|
%
|
-
|
||||
Technical
services
|
1.3
|
%
|
-
|
||||
Mixer
rental
|
5.7
|
%
|
-
|
||||
Marketing
cooperation
|
0.6
|
%
|
-
|
||||
Total
cost of revenue
|
47.7
|
%
|
-
|
||||
Gross
profit
|
52.3
|
%
|
17.2
|
%
|
|||
|
|||||||
Selling,
general and administrative expenses
|
12.8
|
%
|
5.0
|
%
|
|||
Other
(expense) income, net
|
(7.4
|
)%
|
4.4
|
%
|
|||
Income
before provision for income taxes
|
32.1
|
%
|
16.6
|
%
|
|||
Income
taxes
|
11.2
|
%
|
-
|
%
|
|||
|
|||||||
Net
income
|
20.9
|
%
|
16.6
|
%
|
|
Three
Months Ended September 30,
|
||||||
|
2008
|
2007
|
|||||
(Unaudited)
|
(Unaudited)
|
||||||
Net
cash (used in) provided by operating activities
|
$
|
(363,147
|
)
|
$
|
1,805,221
|
||
Net
cash used in investing activities
|
(19,067
|
)
|
(6,173
|
)
|
|||
Net
cash provided by (used in) financing activities
|
3,557,024
|
(2,384,995
|
)
|
||||
Effect
of foreign currency translation on cash and cash
equivalents
|
(1,343
|
)
|
1,144
|
||||
Net
cash Flow
|
$
|
3,173,467
|
$
|
(584,803
|
)
|
September
30,
|
June
30,
|
||||||
2008
|
2008
|
||||||
(Unaudited)
|
|||||||
Loan
from Huaxia Bank, with effective annual interest rate of 7.5555%,
due
November 16, 2008, guaranteed by the Company’s shareholder, Mr. Han
Xianfu
|
$
|
2,926,000
|
$
|
2,918,000
|
|||
Loan
from Beijing International Trust Co, Ltd. with effective annual interest
rate of 15%, due July 15, 2009, guaranteed by Rayland Credit Guarantee
Co.
Ltd
|
4,389,000
|
-
|
|||||
Loan
from unrelated company Beijing Hengxin Huaxing Auto Accessories Company,
with no interest, fully paid.
|
-
|
379,340
|
|||||
Loan
from unrelated company Beijing Hongda Huaxin Wujinjidian Company,
with no
interest, fully paid.
|
-
|
204,260
|
|||||
Loan
from unrelated company, Beijing Sigi Qingbaosan Cement Company, with
no
interest, fully paid.
|
-
|
116,720
|
|||||
Loan
from unrelated individual Xia Hua Qing, with no interest, fully
paid.
|
-
|
128,392
|
|||||
Loan
from various employees, with effective annual interest rate of 20%,
due
upon demand, unsecured.
|
496,689
|
524,510
|
|||||
Total
short term loans
|
$
|
7,811,689
|
$
|
4,271,222
|
|
|
Payment due in
year ended June 30,
|
||||||||||||||
|
Total
|
2009
|
2010
|
2011
|
Thereafter
|
|||||||||||
Long
term debt obligations
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Capital
commitment
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Operating
lease obligations
|
$
|
525,234
|
$
|
278,829
|
$
|
197,124
|
$
|
49,281
|
$
|
-
|
||||||
Purchase
obligations
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Total
|
$
|
525,234
|
$
|
278,829
|
$
|
197,124
|
$
|
49,281
|
$
|
-
|
· |
Persuasive
evidence of an arrangement exists (the Company considers its sales
contracts and technical service agreements to be pervasive evidence
of an
arrangement);
|
· |
Delivery
has occurred or services have been rendered;
|
· |
The
seller’s price to the buyer is fixed or determinable; and
|
· |
Collectability
of payment is reasonably assured.
|
|
|
CHINA
ADVANCED CONSTRUCTION MATERIALS GROUP, INC.
|
|
|
Registrant
|
By:
|
/s/
Xianfu Han
|
|
|
Xianfu
Han
Prinicipal
Executive Officer and
Principal
Financial and Accounting
Officer
|
Date:
November __, 2008
|
|