Nevada
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001-34591
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90-0648920
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(State or other jurisdiction of
incorporation or organization)
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(Commission File No.)
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(IRS Employee Identification No.)
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99.1
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Press release issued on March 31, 2014 relating to its financial results for the quarter and year ended December 31, 2013.
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99.2
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Press release issued on March 27, 2014 relating to the conference call.
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Date: March 31, 2014
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Cleantech Solutions International, Inc.
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By:
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/s/ Adam Wasserman
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Adam Wasserman
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Chief Financial Officer
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● Full year 2013 revenues rose 26% to $72.1 million
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● Full year 2013 net income increased 95% to $8.2 million, or $2.55 per diluted share
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·
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Revenue from the dyeing and finishing equipment segment increased 34.2% to $12.5 million, compared to $9.3 million for the fourth quarter of 2012.
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·
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Revenue from the sale of forged rolled rings to other industries rose 120.1% to $6.0 million, compared with $2.7 million for the comparable period of the prior year.
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·
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Revenue from the sale of forged rolled rings for the wind power industry declined 23.0% to $4.3 million, compared to $5.6 million for the comparable period last year.
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CLEANTECH SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
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For the Quarters Ended
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For the Years Ended
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|||||||||||||||
December 31,
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December 31,
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|||||||||||||||
2013
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2012
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2013
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2012
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|||||||||||||
REVENUES
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$ | 22,800,321 | $ | 17,613,406 | $ | 72,112,662 | $ | 57,199,221 | ||||||||
COST OF REVENUES
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16,873,793 | 13,373,200 | 54,446,324 | 44,062,636 | ||||||||||||
GROSS PROFIT
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5,926,528 | 4,240,206 | 17,666,338 | 13,136,585 | ||||||||||||
OPERATING EXPENSES:
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||||||||||||||||
Depreciation
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111,551 | 413,283 | 573,090 | 1,535,715 | ||||||||||||
Impairment loss
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2,573,256 | 2,206,253 | 2,573,256 | 2,206,253 | ||||||||||||
Selling, general and administrative
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451,916 | 893,858 | 3,126,992 | 3,050,911 | ||||||||||||
Total Operating Expenses
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3,136,723 | 3,513,394 | 6,273,338 | 6,792,879 | ||||||||||||
INCOME FROM OPERATIONS
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2,789,805 | 726,812 | 11,393,000 | 6,343,706 | ||||||||||||
OTHER INCOME (EXPENSE):
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||||||||||||||||
Interest income
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6,278 | 465 | 22,287 | 11,384 | ||||||||||||
Interest expense
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(56,090 | ) | (60,974 | ) | (300,381 | ) | (305,659 | ) | ||||||||
Foreign currency gain (loss)
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43,486 | (6,485 | ) | 27,686 | 157 | |||||||||||
Warrant modification expense
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- | - | - | (235,133 | ) | |||||||||||
Other (expense) income
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(235 | ) | 20,924 | 42,780 | 85,727 | |||||||||||
Total Other Income (Expense), net
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(6,561 | ) | (46,070 | ) | (207,628 | ) | (443,524 | ) | ||||||||
INCOME BEFORE INCOME TAXES
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2,783,244 | 680,742 | 11,185,372 | 5,900,182 | ||||||||||||
INCOME TAXES
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673,556 | 211,429 | 2,999,795 | 1,701,602 | ||||||||||||
NET INCOME
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$ | 2,109,688 | $ | 469,313 | $ | 8,185,577 | $ | 4,198,580 | ||||||||
COMPREHENSIVE INCOME:
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||||||||||||||||
NET INCOME
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$ | 2,109,688 | $ | 469,313 | $ | 8,185,577 | $ | 4,198,580 | ||||||||
OTHER COMPREHENSIVE INCOME:
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||||||||||||||||
Unrealized foreign currency translation gain
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590,131 | 201,400 | 2,751,842 | 543,415 | ||||||||||||
COMPREHENSIVE INCOME
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$ | 2,699,819 | $ | 670,713 | $ | 10,937,419 | $ | 4,741,995 | ||||||||
NET INCOME PER COMMON SHARE:
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||||||||||||||||
Basic
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$ | 0.60 | $ | 0.17 | $ | 2.55 | $ | 1.65 | ||||||||
Diluted
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$ | 0.60 | $ | 0.17 | $ | 2.55 | $ | 1.58 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
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Basic
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3,503,502 | 2,742,040 | 3,210,791 | 2,538,246 | ||||||||||||
Diluted
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3,503,502 | 2,742,040 | 3,210,791 | 2,649,043 |
CLEANTECH SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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December 31,
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||||||||
2013
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2012
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 1,114,873 | $ | 1,445,728 | ||||
Restricted cash
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687,353 | - | ||||||
Notes receivable
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703,718 | 88,029 | ||||||
Accounts receivable, net of allowance for doubtful accounts
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15,234,863 | 10,078,623 | ||||||
Inventories, net of reserve for obsolete inventory
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4,733,558 | 5,897,555 | ||||||
Advances to suppliers
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695,254 | 593,104 | ||||||
Prepaid VAT on purchases
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489,302 | 542,032 | ||||||
Deferred tax assets - current portion
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253,173 | - | ||||||
Prepaid expenses and other
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74,030 | 428,326 | ||||||
Total Current Assets
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23,986,124 | 19,073,397 | ||||||
PROPERTY AND EQUIPMENT - net
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70,595,138 | 59,436,100 | ||||||
OTHER ASSETS:
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Deferred tax assets - net of current portion
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1,222,216 | 551,890 | ||||||
Equipment held for operating lease
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4,751,206 | 7,118,555 | ||||||
Land use rights, net
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3,786,051 | 3,756,342 | ||||||
Total Assets
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$ | 104,340,735 | $ | 89,936,284 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Short-term bank loans
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$ | 3,109,453 | $ | 2,216,558 | ||||
Bank acceptance notes payable
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687,353 | - | ||||||
Accounts payable
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4,961,555 | 5,474,479 | ||||||
Accrued expenses
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899,816 | 986,824 | ||||||
Capital lease obligation - current portion
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- | 251,413 | ||||||
Advances from customers
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1,455,740 | 1,851,987 | ||||||
VAT and service taxes payable
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126,349 | 206,527 | ||||||
Income taxes payable
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1,623,603 | 822,082 | ||||||
Total Current Liabilities
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12,863,869 | 11,809,870 | ||||||
OTHER LIABILITIES:
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Capital lease obligation - net of current portion
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- | 132,756 | ||||||
Total Liabilities
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12,863,869 | 11,942,626 | ||||||
STOCKHOLDERS' EQUITY:
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Preferred stock ($0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2013 and 2012, respectively)
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- | - | ||||||
Common stock ($0.001 par value; 50,000,000 shares authorized;3,503,502 and 2,894,586 shares issued and outstanding at December 31, 2013 and 2012, respectively)
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3,503 | 2,894 | ||||||
Additional paid-in capital
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31,532,308 | 28,987,128 | ||||||
Retained earnings
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46,322,329 | 38,401,734 | ||||||
Statutory reserve
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2,744,720 | 2,479,738 | ||||||
Accumulated other comprehensive gain - foreign currency translation adjustment
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10,874,006 | 8,122,164 | ||||||
Total Stockholders' Equity
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91,476,866 | 77,993,658 | ||||||
Total Liabilities and Stockholders' Equity
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$ | 104,340,735 | $ | 89,936,284 |
CLEANTECH SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the Years Ended
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December 31,
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2013
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2012
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income
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$ | 8,185,577 | $ | 4,198,580 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities:
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Depreciation
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6,704,386 | 6,519,394 | ||||||
Amortization of land use rights
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95,491 | 93,537 | ||||||
Increase (decrease) in inventory reserve
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41,381 | (37,882 | ) | |||||
Decrease in allowance for doubtful accounts
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(628,188 | ) | (46,672 | ) | ||||
Loss on impairment of equipment held for operating lease
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2,573,256 | 2,206,253 | ||||||
Loss on disposal of fixed assets
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11,391 | - | ||||||
Warrant modification expense
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- | 235,133 | ||||||
Stock-based compensation expense
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423,112 | 167,714 | ||||||
Changes in operating assets and liabilities:
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Notes receivable
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(604,798 | ) | (34,178 | ) | ||||
Accounts receivable
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(4,126,440 | ) | (2,887,716 | ) | ||||
Inventories
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1,303,519 | (1,549,740 | ) | |||||
Prepaid value-added taxes on purchases
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70,059 | 981,236 | ||||||
Prepaid and other current assets
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91,666 | (43,513 | ) | |||||
Advances to suppliers
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(81,120 | ) | (371,849 | ) | ||||
Accounts payable
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(1,809,914 | ) | 438,945 | |||||
Accrued expenses
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(112,797 | ) | 209,831 | |||||
VAT and service taxes payable
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(86,004 | ) | 206,405 | |||||
Income taxes payable
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(129,378 | ) | (326,373 | ) | ||||
Advances from customers
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(452,658 | ) | 675,667 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
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11,468,541 | 10,634,772 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of property and equipment
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(14,633,745 | ) | (10,744,247 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES
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(14,633,745 | ) | (10,744,247 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
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Principal payments on capital lease
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(391,963 | ) | (246,485 | ) | ||||
Proceeds from bank loans
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5,653,824 | 3,481,101 | ||||||
Repayments of bank loans
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(4,846,135 | ) | (3,639,333 | ) | ||||
(Increase) decrease in restricted cash
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(678,459 | ) | 316,464 | |||||
Increase (decrease) in bank acceptance notes payable
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678,459 | (316,464 | ) | |||||
Net proceeds from sale of common stock
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2,388,589 | - | ||||||
Proceeds from sale of common stock - related parties
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- | 612,903 | ||||||
Proceeds from exercise of warrants
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- | 198,142 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
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2,804,315 | 406,328 | ||||||
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS
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30,034 | (3,732 | ) | |||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
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(330,855 | ) | 293,121 | |||||
CASH AND CASH EQUIVALENTS - beginning of year
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1,445,728 | 1,152,607 | ||||||
CASH AND CASH EQUIVALENTS - end of year
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$ | 1,114,873 | $ | 1,445,728 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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Cash paid for:
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Interest
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$ | 300,381 | 305,659 | |||||
Income taxes
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$ | 3,129,174 | 2,027,976 | |||||
NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Property and equipment acquired on credit as payable
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$ | 1,121,719 | $ | - | ||||
Series A preferred converted to common shares
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$ | - | $ | 13,198 | ||||
Common stock issued for future service
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$ | - | $ | 281,265 |
Reconciliation of Net Income to EBITDA
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(Amounts expressed in US$)
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For the Three Months Ended
December 31,
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For the Years Ended
December 31,
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2013
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2012
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2013
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2012
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Net income
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$ | 2,109,688 | $ | 469,313 | $ | 8,185,577 | $ | 4,198,580 | ||||||||
Add: income tax
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673,556 | 211,429 | 2,999,795 | 1,701,602 | ||||||||||||
Add: interest expense
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56,090 | 60,974 | 300,381 | 305,659 | ||||||||||||
Add: warrant modification expense
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- | - | - | 235,133 | ||||||||||||
Add: impairment loss
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2,573,256 | 2,206,253 | 2,573,256 | 2,206,253 | ||||||||||||
Add: depreciation and amortization
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1,845,717 | 1,823,094 | 6,799,877 | 6,612,931 | ||||||||||||
Adjusted EBITDA
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$ | 7,258,307 | $ | 4,771,063 | $ | 20,858,886 | $ | 15,260,158 |
Reconciliation of Non GAAP Net Income and EPS
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(Amounts expressed in US$)
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For the Three Months Ended
December 31,
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For the Years Ended
December 31,
|
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income
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$ | 2,109,688 | $ | 469,313 | $ | 8,185,577 | $ | 4,198,580 | ||||||||
Add: impairment loss
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$ | 2,573,256 | $ | 2,206,253 | $ | 2,573,256 | $ | 2,206,253 | ||||||||
Add: warrant modification expense
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- | - | - | $ | 235,133 | |||||||||||
Adjusted net income
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$ | 4,682,944 | $ | 2,675,566 | $ | 10,758,833 | $ | 6,639,966 | ||||||||
Weighted average shares - diluted
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3,503,502 | 2,742,040 | 3,210,791 | 2,649,043 | ||||||||||||
Adjusted diluted EPS
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$ | 1.34 | $ | 0.98 | $ | 3.35 | $ | 2.51 |