SEC Filings

Form 10-Q - Ended June 30, 2011
Author:Aoxin Tianli Date:Aug/18/2011

10-Q 1 e608760_10q-tianli.htm FORM 10-Q

 
UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 

 
FORM 10-Q
 

 
x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended June 30, 2011
 
o
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from                      to                     .
 
Commission File Number 001-34799
 

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

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

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes  x  No  o  
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  o   No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
 Large accelerated filer o Accelerated filer o
 Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of August 10, 2011, the Registrant had outstanding 10,135,000 shares of common stock, par value $0.001 per share.
 
 
 

 
 
Table of Contents
 
TIANLI AGRITECH, INC.
FORM 10-Q
 
INDEX
 
  
2
PART I    FINANCIAL INFORMATION
  
3
      Item 1.
  
  
3
      Item 2.
  
  
26
      Item 3.
  
  
35
      Item 4.
  
  
35
  
36
      Item 1A.
  
  
36
      Item 6.
  
  
36
 
 
 

 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This document contains certain statements of a forward-looking nature. Such forward-looking statements, including but not limited to projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond the control of the Company. Forward-looking statements typically are identified by the use of terms such as “look,” “may,” “should,” “might,” “believe,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including but not limited to those set forth herein and in our Annual Report on Form 10-K for the fiscal year ended  December 31, 2010 filed on March 17, 2011.
 
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except required by the federal securities laws the Company undertakes no obligation to update forward-looking information. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
 
 
2

 
PART I     FINANCIAL INFORMATION
 
Item 1.
Financial Statements.
 
TIANLI AGRITECH, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(AMOUNTS EXPRESSED IN US DOLLARS)
 
   
June 30, 2011
   
December 31, 2010
 
   
(Unaudited)
       
ASSETS
           
Current Assets:
           
Cash and cash equivalents
  $ 6,249,514     $ 7,983,793  
Restricted cash
    309,043       -  
Accounts receivable
    68,519       -  
Inventories
    7,258,060       4,819,805  
Advances
    147,525       1,036,765  
Acquisition deposits
    -       530,303  
Prepaid expenses
    4,814       83,832  
Other receivables
    1,382,582       330,744  
Total Current Assets
    15,420,057       14,785,242  
Plant and equipment, net
    15,147,037       13,354,379  
Construction advance
    -       272,727  
Construction in progress
    2,222,542       -  
Biological assets, net
    4,511,895       3,440,253  
Long-term prepaid expenses
    1,806,271       -  
Intangible assets, net
    1,252,089       742,954  
Total Assets
  $ 40,359,891     $ 32,595,555  
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current Liabilities:
               
Short-term loans
  $ 3,832,128     $ 728,266  
Accounts payable and accrued liabilities
    390,998       136,536  
Acquisition payables
    417,207       921,212  
Due to related party
    121,291       -  
Total Liabilities
    4,761,624       1,786,014  
Stockholders’ Equity:
               
Common stock ($0.001 par value, 50,000,000 shares
               
    authorized, 10,125,000 issued and outstanding on
               
    June 30, 2011 and December 31, 2010)
    10,125       10,125  
Additional paid in capital
    13,456,399       13,445,712  
Statutory surplus reserves
    2,002,849       1,510,423  
Retained earnings
    18,429,356       14,605,162  
Accumulated other comprehensive income
    1,699,538       1,238,119  
    Total Stockholders’ Equity
    35,598,267       30,809,541  
        Total Liabilities and Stockholders’ Equity
  $ 40,359,891     $ 32,595,555  
 
See accompanying notes to condensed consolidated financial statements. 
 
 
3

 
TIANLI AGRITECH, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
(AMOUNTS EXPRESSED IN US DOLLARS)
 
(Unaudited)
 
   
For the Three Months Ended
June 30,
   
For the Six Months Ended
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Revenue
  $ 7,670,429     $ 5,448,315     $ 13,577,395     $ 9,918,259  
Cost of goods sold
    4,452,623       3,064,619       7,896,443       5,668,572  
    Gross profit
    3,217,806       2,383,696       5,680,952       4,249,687  
General and administrative expenses
    610,983       250,921       1,380,957       419,267  
Selling expenses
    25,128       13,026       62,310       24,765  
Income from operations
    2,581,695       2,119,749       4,237,685       3,805,655  
Other income (expense):
                               
Interest and bank charges
    (98,700 )     (11,642 )     (108,973 )     (29,223 )
Subsidy income
    22,970       -       213,267       -  
Other income (expense)
    (26,814 )     3,748       (25,359 )     9,101  
Total other income (expense)
    (102,544 )     (7,894 )     78,935       (20,122 )
Income before income taxes
    2,479,151       2,111,855       4,316,620       3,785,533  
Income taxes
    -       -       -       -  
Net income
  $ 2,479,151     $ 2,111,855     $ 4,316,620     $ 3,785,533  
Basic and diluted weighted average shares
    10,125,000       8,125,000       10,125,000       8,125,000  
Basic and diluted earnings per share
  $ 0.24     $ 0.26     $ 0.43     $ 0.47  
Comprehensive income:
                               
Net income
  $ 2,479,151     $ 2,111,855     $ 4,316,620     $ 3,785,533  
Unrealized foreign currency
                               
  translation adjustment
    273,638       65,219       461,419       67,221  
Comprehensive income
  $ 2,752,789     $ 2,177,074     $ 4,778,039     $ 3,852,754  
 
See accompanying notes to condensed consolidated financial statements. 
 
 
4

 
TIANLI AGRITECH, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(AMOUNTS EXPRESSED IN US DOLLARS)
 
(Unaudited)
 
   
For the Six Months Ended June 30,
 
   
2011
   
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net income
  $ 4,316,620     $ 3,785,533  
Adjustments to reconcile net income to net cash
               
 provided by operating activities:
               
Depreciation and amortization
    979,443       487,301  
Gain on disposal of biological assets
    (168,710 )     -  
Impairment on other receivables
    104,245       -  
Impairment on inventories
    -       59,303  
Stock-based compensation
    173,581       -  
Changes in operating assets and liabilities:
               
Accounts receivable
    (67,791 )     -  
Inventories
    (2,324,369 )     117,578  
Advances
    707,637       1,849  
Prepaid expenses
    79,307       (169,522 )
Other receivables
    (1,088,237)       9,459  
Accounts payable and accrued liabilities
    42,602       (13,039 )
Net cash provided by operating activities
    2,754,328       4,278,462  
CASH FLOWS FROM INVESTING ACTIVITIES
               
Purchase of plant and equipment
    (1,693,392 )     -  
Addition to construction in progress
    (2,198,927 )     (1,517,980 )
Purchase of biological assets
    (1,515,063 )     (1,485,366 )
Proceeds from disposal of biological assets
    267,732       -  
Payments for long-term prepaid expenses
    (85,701 )     -  
Purchase of farms
    (2,152,543     (1,218,024 )
Net cash used in investing activities
    (7,377,894 )     (4,221,370 )
CASH FLOWS FROM FINANCING ACTIVITIES
               
Increase in restricted cash
    (305,759 )     -  
Proceeds from short-term loans
    3,057,590       -  
Net cash provided by financing activities
    2,751,831       -  
NET (DECREASE) INCREASE IN CASH
    (1,871,735 )     57,092  
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    137,456       15,494  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    7,983,793       2,022,295  
CASH AND CASH EQUIVALENTS, END OF PERIOD
  $ 6,249,514     $ 2,094,881  
SUPPLEMENTAL DISCLOSURES:
               
Cash paid during the period for:
               
Interest expense paid
  $ 36,075     $ 18,261  
Income tax paid
  $ -     $ -  
NON-CASH INVESTING AND FINANCING TRANSACTIONS
           
The Company purchased farm assets in 2010 and 2011 and with these acquisitions, the Company is obligated to make payments to sellers for these assets as follows:
 
Fair value of assets acquired
  $ 3,660,678     $ 1,793,921  
Cash paid in prior year
    (1,080,303 )     -  
Cash paid in current year
    (2,152,543 )     (1,218,024
Exchange realignment
    (10,625     2,859  
Acquisition payable as of period end
  $ 417,207     $ 578,756  

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