SEC Filings

Form 10-Q - Ended September 30,2011
Author:Aoxin Tianli Date:Nov/15/2011

10-Q 1 e609059_10q-tianli.htm

 
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 September 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 November 11, 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
 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
2
PART I    FINANCIAL INFORMATION
3
Item 1.
Financial Statements.
3
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
31
Item 3.
Quantitative and Qualitative Disclosures about Market Risk.
42
Item 4.
Controls and Procedures
42
PART II    OTHER INFORMATION
43
Item 1A.   
Risk Factors
43
Item 6.
Exhibits
43
 
 
1

 
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 as 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)
 
(Unaudited)
 
   
September 30, 2011
   
December 31, 2010
 
             
ASSETS
           
Current Assets:
           
Cash and cash equivalents
  $ 7,534,515     $ 7,983,793  
Accounts receivable
    802,736       -  
Inventories
    8,797,547       4,819,805  
Advances
    95,736       1,036,765  
Acquisition deposits
    -       530,303  
Prepaid expenses
    214,925       83,832  
Loan to An Puluo
    1,101,512       -  
Other receivables
    213,246       330,744  
Total Current Assets
    18,760,217       14,785,242  
Plant and equipment, net
    16,992,145       13,354,379  
Deposits for purchase of equipment
    157,359       -  
Construction advance
    -       272,727  
Construction in progress
    1,233,269       -  
Biological assets, net
    4,498,193       3,440,253  
Long-term prepaid expenses
    1,815,619       -  
Land use rights, net
    1,534,968       742,954  
Total Assets
  $ 44,991,770     $ 32,595,555  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current Liabilities:
               
Short-term loans
  $ 3,902,500     $ 728,266  
Accounts payable and accrued liabilities
    535,744       136,536  
Due to An Puluo
    759,034       -  
Deposits received
    395,018       -  
Acquisition payables
    -       921,212  
Due to related party
    122,968       -  
Total Liabilities
    5,715,264       1,786,014  
                 
Stockholders’ Equity:
               
Common stock ($0.001 par value, 50,000,000 shares authorized, 10,135,000 and 10,125,000 shares issued and outstanding on September 30, 2011 and December 31, 2010)
    10,135       10,125  
Additional paid in capital
    13,514,933       13,445,712  
Statutory surplus reserves
    2,320,091       1,510,423  
Retained earnings
    21,056,487       14,605,162  
Accumulated other comprehensive income
    2,374,860       1,238,119  
Total Stockholders’ Equity
    39,276,506       30,809,541  
 Total Liabilities and Stockholders’ Equity
  $ 44,991,770     $ 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 September 30,
   
For the Nine Months Ended
September 30,
 
   
2011
   
2010
   
2011
   
2010
 
Revenue
  $ 9,169,325     $ 5,544,643     $ 22,746,720     $ 15,462,902  
Cost of goods sold
    5,302,383       3,095,571       13,198,826       8,764,143  
    Gross profit
    3,866,942       2,449,072       9,547,894       6,698,759  
                                 
General and administrative expenses
    612,006       336,455       1,992,963       755,722  
Selling expenses
    251,580       15,419       313,890       40,184  
Income from operations
    3,003,356       2,097,198       7,241,041       5,902,853  
                                 
Other income (expense):
                               
Interest expenses and bank charges
    (77,334 )     (15,488 )     (186,307 )     (44,711 )
Subsidy income
    9,142       132,035       222,409       132,035  
Other income (expense)
    9,209       (757 )     (16,150 )     8,344  
Total other income (expense)
    (58,983 )     115,790       19,952       95,668  
                                 
Income before income taxes
    2,944,373       2,212,988       7,260,993       5,998,521  
Income taxes
    -       -       -       -  
Net income
  $ 2,944,373     $ 2,212,988     $ 7,260,993     $ 5,998,521  
                                 
Basic and diluted weighted average shares
    10,135,000       9,733,696       10,128,382       8,667,125  
Basic and diluted earnings per share
  $ 0.29     $ 0.23     $ 0.72     $ 0.69  
                                 
Comprehensive income:
                               
Net income
  $ 2,944,373     $ 2,212,988     $ 7,260,993     $ 5,998,521  
Unrealized foreign currency translation adjustment
    675,322       350,735       1,136,741       417,956  
Comprehensive income
  $ 3,619,695     $ 2,563,723     $ 8,397,734     $ 6,416,477  
 
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 Nine Months Ended September 30,
 
   
2011
   
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net income
  $ 7,260,993     $ 5,998,521  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    1,641,170       758,181  
Gain on disposal of biological assets
    (209,502 )     -  
Provision for doubtful accounts
    112,640       -  
Impairment on inventories
    -       101,010  
Stock-based compensation
    237,926       -  
Changes in operating assets and liabilities:
               
Accounts receivable
    (800,332 )     -  
Inventories
    (3,717,789 )     (190,178 )
Advances
    (30,332 )     (21,667 )
Prepaid expenses
    (130,548 )     -  
Other receivables
    71,187       (53,652 )
Due to An Puluo
    742,376       -  
Accounts payable and accrued liabilities
    63,886       (192,243 )
Deposits received
    386,349       -  
Net cash provided by operating activities
    5,628,024       6,399,972  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Advance to An Puluo
    (1,077,337 )     (400,000 )
Purchase of plant and equipment
    (4,828,899 )     (4,369,845 )
Deposits for purchase of equipment
    (153,905 )     -  
Addition to construction in progress
    (1,206,203 )     -  
Purchase of biological assets
    (1,678,342 )     (2,246,493 )
Proceeds from disposal of biological assets
    134,156       -  
Payments for long-term prepaid expenses
    (87,398 )     -  
Purchase of intangible assets
    (780,135     -  
Net cash used in investing activities
    (9,678,063 )     (7,016,338 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Net proceeds from initial public offering
    -       10,592,344  
Offering expense of initial public offering
    -       (1,180,784 )
Due to related party
    -       26,715  
Proceeds from short-term loans
    3,078,107       -  
Net cash provided by financing activities
    3,078,107       9,438,275  
                 
NET (DECREASE) INCREASE IN CASH
    (971,932 )     8,821,909  
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    522,654       75,319  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    7,983,793       2,022,295  
CASH AND CASH EQUIVALENTS, END OF PERIOD
  $ 7,534,515     $ 10,919,523  
                 
SUPPLEMENTAL DISCLOSURES:
               
Cash paid during the period for:
               
Interest expense paid
  $ 117,332     $ 18,310  
Income tax paid
  $ -     $ -  
 
See accompanying notes to condensed consolidated financial statements.
 
 
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