CHINA LOGISTICS GROUP, INC.
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(Exact name of registrant as specified in its charter)
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Florida
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0-31497
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65-1001686
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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23F. Gutai Beach Building No. 969, Zhongshan Road (South), Shanghai, China
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200011
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code
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86-21-63355100
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N/A
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(Former name or former address, if changed since last report)
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CHINA LOGISTICS GROUP, INC.
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||
Date: November 15, 2011
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By:
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/s/ Wei Chen
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Wei Chen,
Chairman and Chief Executive Officer
(principal executive officer)
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CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES
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||||||||
CONSOLIDATED BALANCE SHEETS
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||||||||
September 30
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December 31
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|||||||
2011
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2010
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|||||||
(unaudited)
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||||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash
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$
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1,443,975
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$
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1,309,848
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||||
Accounts receivable, net
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4,382,306
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3,104,526
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||||||
Other Receivables
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402,680
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1,017,706
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||||||
Advance to vendors and other prepaid expenses
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565,049
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347,409
|
||||||
Due from related parties
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600,917
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638,420
|
||||||
Total current assets
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7,394,927
|
6,417,909
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||||||
Property and equipment, net
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28,218
|
35,124
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||||||
Total assets
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$
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7,423,145
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$
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6,453,033
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||||
LIABILITIES AND SHAREHOLDERS' EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable – trade
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$
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2,306,140
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$
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2,658,710
|
||||
Accrued expenses and other current liabilities
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937,312
|
693,565
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||||||
Advances from customers
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1,520,003
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466,056
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||||||
Due to related parties
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1,237,923
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1,438,667
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||||||
Foreign tax payable
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9,873
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15,153
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||||||
Total current liabilities
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6,011,251
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5,272,151
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||||||
Shareholders’ equity:
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||||||||
China Logistics Group, Inc. shareholders' equity:
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||||||||
Preferred stock - $0.001 par value, 10,000,000 shares authorized
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||||||||
Series B convertible preferred stock - 450,000 issued and
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||||||||
Outstanding
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450
|
450
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||||||
Common stock, $.001 par value, 500,000,000 shares authorized; 41,508,203 shares
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||||||||
issued and outstanding at September 30, 2011
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41,508
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41,508
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||||||
Additional paid-in capital
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20,636,980
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20,636,980
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||||||
Accumulated deficit
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(19,467,935
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)
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(19,505,982
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)
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||||
Accumulated other comprehensive loss
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(82,411
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)
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(131,527
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)
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||||
Total China Logistics Group, Inc. shareholders' equity
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1,128,592
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1,041,429
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||||||
Noncontrolling interest
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283,302
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139,454
|
||||||
Total equity
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1,411,894
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1,180,882
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||||||
Total liabilities and shareholders' equity
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742,3145
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6,453,033
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||||||
CHINA LOGISTICS GROUP, INC. AND SUBSIDIARIES
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||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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||||||||||||||||
For the Three Months Ended September 30
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For the Nine Months Ended September 30
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Sales
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$
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6,944,879
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$
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6,931,542
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$
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17,618,543
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$
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18,144,298
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||||||||
Cost of sales
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6,662,172
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6,621,608
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16,571,363
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17,390,586
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||||||||||||
Gross profit
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282,707
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309,934
|
1,047,180
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753,712
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||||||||||||
Operating expenses:
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||||||||||||||||
Selling, general and administrative
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206,992
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293,155
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734,693
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1,168,114
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||||||||||||
Depreciation and amortization
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2,727
|
3,489
|
14,634
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8,635
|
||||||||||||
Bad debt expense
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63,985
|
(350
|
)
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63,985
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(350
|
)
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||||||||||
Total operating expenses
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273,704
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296,294
|
813,312
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1,176,399
|
||||||||||||
Income (loss) from operations
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9,003
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13,640
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233,868
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(422,687
|
)
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|||||||||||
Other income (expenses):
|
||||||||||||||||
Other income (expense)
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(59,304
|
)
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64,260
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(74,300
|
)
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(3,892
|
)
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|||||||||
Extinguishment of registration rights liability
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(5,859
|
)
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1,597,000
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(5,859
|
)
|
1,597,000
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||||||||||
Change in fair value of derivative liability
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-
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-
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(447,059
|
)
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||||||||||||
Interest income (expense)
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(3,616
|
)
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(2,674
|
)
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(5,169
|
)
|
(5,956
|
)
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||||||||
Total other income (expenses)
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(68,779
|
)
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1,658,586
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(85,328
|
)
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1,140,093
|
||||||||||
Income (loss) before income taxes
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(59,776
|
)
|
1,672,226
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148,540
|
717,406
|
|||||||||||
Foreign taxes
|
8,218
|
10,538
|
13,836
|
21,346
|
||||||||||||
Net Income (loss)
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(67,994
|
)
|
1,661,688
|
134,704
|
696,060
|
|||||||||||
Less: Net income (loss) attributable to the noncontrolling interest
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(28,252
|
)
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(29,527
|
)
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96,659
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(44,740
|
)
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|||||||||
Net income (loss) attributable to China Logistics Group, Inc.
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(39,742
|
)
|
1,632,161
|
38,045
|
651,320
|
|||||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustments
|
45,624
|
24,320
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49,116
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33,310
|
||||||||||||
Comprehensive income
|
$
|
5,882
|
$
|
1,656,481
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$
|
87,162
|
$
|
684,630
|
||||||||
Earnings (loss) per common share:
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||||||||||||||||
Basic
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$
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(0.00
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)
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$
|
0.04
|
$
|
0.00
|
$
|
0.02
|
|||||||
Diluted
|
$
|
(0.00
|
)
|
$
|
0.04
|
$
|
0.00
|
$
|
0.02
|
|||||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
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41,508,203
|
39,508,203
|
41,508,203
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37,629,082
|
||||||||||||
Diluted
|
46,008,203
|
39,508,203
|
46,008,203
|
37,629,082
|
||||||||||||
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·
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Intense competition in the freight forwarding and logistics industries;
|
|
·
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The loss of the services of any of our executive officers or the loss of services of any of our key persons responsible for the management, sales, marketing and operations efforts of our subsidiaries;
|
|
·
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Continuing material weaknesses in our disclosure controls and procedures and internal control over financial reporting which may lead to additional restatements of our financial statements;
|
|
·
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Our dependence upon advisory services provided by a U.S. company due to our management's location in the PRC;
|
|
·
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Our reliance on overseas cargo agents to provide services to us and to our customers;
|
|
·
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Significant credit risks in the operation of our business;
|
|
·
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Difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws;
|
|
·
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Fluctuation in the value of the renminbi (RMB);
|
|
·
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Substantially all of our assets and all of our operations are located in the PRC and are subject to changes resulting from the political and economic policies of the Chinese government;
|
|
·
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A slowdown in the Chinese economy or an increase in its inflation rate;
|
|
·
|
Chinese laws and regulations governing our business operations are sometimes vague and uncertain and the effects of any changes in such laws and regulations;
|
|
·
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Our ability to enforce our rights due to policies regarding the regulation of foreign investments in the PRC; and
|
|
·
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Our lack of various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.
|