TIANJIN, China, Nov. 26, 2010 /PRNewswire-Asia-FirstCall/ --
China New Energy Group Company (OTC Bulletin Board: CNER) ("China
New Energy" or the "Company"), a natural gas network developer and
distributor of natural gas to residential, industrial, and
commercial users in small and medium sized cities in China, today announced its third quarter
financial results ended September 30,
2010.
Third Quarter 2010 Results
For the third quarter ended September 30,
2010, revenues were $162,066
compared to $1.1 million in the same
quarter last year. The decrease was due to a decline in
number of connection households. Revenues from connection
fees were $124,803 compared to
$1.1 million in the same period last
year. Revenues from natural gas sales were $37,263 compared to $42,427 for the third quarter of last year.
Gross loss was $33,339 compared to
a gross profit of $0.8 million from
the third quarter of 2009. Operating expenses were
$1.4 million compared to $1.3 million for the third quarter of last year.
This increase was primarily due to the fact that the Company
is expanding by adding more resources in areas like business
development, outside consultants, and the hiring of additional
staff to help strengthen the Company's internal controls. Operating
loss was $1.4 million, compared to an
operating loss of $513,842 for the
same period last year.
The Company's third quarter 2010 and third quarter 2009
financial statements include the non-cash impact from the change in
fair value of derivative financial instruments of ($8.3) million and $6.0
million, respectively.
Net loss from continuing operations was $10.9 million compared to net income from
continuing operations of $5.4
million, or $0.06 per diluted
share, in the same period last year. Excluding the non-cash
impact from the change in fair value of derivative financial
instruments, the Company's adjusted net loss from continuing
operations was $2.6 million, compared
to an adjusted net loss from continuing operations of $0.7 million for the third quarter of last year.
(*)
In March 2010, the Company sold
its subsidiary, Yingkou Zhongneng Gas Development Co., Ltd., for
RMB 21.9 million (approximately
$3.2 million). In December 2009, the Company sold its Acheng
Division for RMB 40 million
(approximately $6 million). The
results of Yingkou Zhongneng and Acheng Division are classified as
discontinued operations on the Company's financial statements.
Net loss attributable to common shareholders was $17.3 million compared to net income attributable
to common shareholders of $5.9
million, or $0.03 per diluted
share, in the same period last year. Adjusted net loss attributable
to common shareholders, which excludes the non-cash impact of the
change in fair value of derivative financial instruments, was
$9.0 million, compared to an adjusted
net loss of $130,557 for the third
quarter of last year (*)
(*) See table at the end of this press release for a
reconciliation of income from continuing operations to exclude the
non-cash impact from the change in fair value of derivative
financial instruments and for a reconciliation of net income
attributable to common shareholders to exclude the non-cash impact
from the change in fair value of derivative financial instruments.
First Nine Months of FY2010
Results
For the nine months ended September 30,
2010, revenues were $2.6
million compared to $1.8
million in the same period last year, an increase of 39.9%.
Revenues from connection services fees were $2.5 million compared to $1.7 million in the same period last year, an
increase of 41.9%. Sales of natural gas were relatively flat
at $84,165. Gross profit was
$1.7 million compared to $1.2 million in the same period last year, an
increase of 46.7%. Gross margin was 67.2% compared to 64.1% last
year. Operating loss was $2.3
million compared to $1.4
million in the prior year period, an increase of 62.7%.
Net loss from continuing operations was $11.9 million compared to net income from
continuing operations of $6.4 million
for the nine months ended September 30,
2009. Adjusted net loss from continuing operations, which
excludes the non-cash impact of the change in fair value of
derivative financial instruments, was $3.9
million compared with an adjusted net loss from continuing
operations of $1.6 million, for the
first nine months of 2009.
Net loss attributable to common shareholders was $18.8 million compared to net income attributable
to common shareholders of $8.9
million, or $0.05 per diluted
share, in the first nine months of 2009. Adjusted net loss
attributable to common shareholders, which excludes the non-cash
impact of the change in fair value of derivative financial
instruments, was $10.8 million,
compared to an adjusted net income of $837,686 for the first nine months of 2009.
Financial Condition
As of September 30, 2010, the
Company had cash and cash equivalents of $0.6 million. The Company has no long term
debt. Shareholders' equity was negative $27.9 million as of September30, 2010.
During the first nine months of 2010, operating cash flow was
negative $0.5 million versus negative
cash from operations of $0.9 million
in the prior year period. Capital expenditures for the nine months
ended September 30, 2010 were
approximately $38.4 million, which
was primarily for the construction of gas pipelines and
stations.
Recent Developments
In September 2010, the Company's
wholly-owned PRC subsidiary, China New Energy Investment Co., Ltd,
entered into certain equity transfer agreements with Beijing
Fengyin Xianghe Scientific Technology Co., Ltd. a PRC company
controlled by Mr. Tang Zhixiang, to acquire 70% equity interests in
Beijing Century Dadi Gas Engineering Co., Ltd. and Zhoulu Dadi Gas
Co. Ltd. (collectively, "Dadi Gas") for a total purchase price of
RMB 270 million (approximately
$40 million).
Business Outlook
Mr. Chong concluded, "We believe that we remain on track to
complete three significant acquisitions by year end—Dadi Gas,
Fuzhou Zhongran and Lean Longran. These firms can add
tremendously to our business prospects, since they are all players
in under-penetrated, fast-growing small- and medium-sized cities.
The efforts of the Company's management are very much focused
on closing the acquisitions and positioning China New Energy to
execute on its business plan once the deals are concluded. We
anticipate that the acquisitions will bring about substantial
synergies, including guaranteed and steady supply of gas from
upstream suppliers; better pricing for gas, related products and
other purchases; lower transportation costs; lower operating
expenses; and flexible mobilization and placement of professional
and technical staff. In addition, we expect the acquisitions to
improve our cash flow and overall financial position, creating
great opportunities for revenue, profit growth, and an increase in
shareholder value."
Use of Non-GAAP Financial Information
GAAP results for three and nine month periods ended September 30, 2010 and 2009 include the
significant non-cash charges which do not relate to the operation
of the business including non-cash expenses related to the change
in fair value of derivative financial instruments. These are
non-cash events which do not affect the Company's operations. To
supplement the Company's consolidated financial statements
presented on a GAAP basis, the Company has provided non-GAAP
financial information excluding the impact of these items in this
release, which are adjusted net income from continuing operations,
adjusted diluted earnings per share from continuing operations,
adjusted net income attributable to common shareholders and
adjusted earnings per share attributable to common shareholders.
The Company's management believes that these non-GAAP measures
provide investors with a better understanding of how the results
relate to the Company's historical performance. The additional
adjusted information is not meant to be considered in isolation or
as a substitute for GAAP financials. The adjusted financial
information that the Company provides also may differ from the
adjusted information provided by other companies. Management
believes that these adjusted financial measures are useful to
investors because they exclude non-cash expenses that management
excludes when it internally evaluates the performance of the
Company's business and makes operating decisions as these measures
provide a consistent method of comparison to historical periods. As
a result, the provision of these adjusted measures allows investors
to evaluate the Company's performance using the same methodology
and information as that used by the Company's management. Moreover,
management believes that these adjusted measures reflect the
essential operating activities of the Company. Adjusted measures
are subject to inherent limitations because they do not include all
of the expenses included under GAAP and because they involve the
exercise of judgment of which charges are excluded from the
adjusted financial measure. However, the Company's management
compensates for these limitations by providing the relevant
disclosure of the items excluded. A reconciliation of each adjusted
measure to the nearest GAAP measure appears in the table at the end
of this release.
About China New Energy Group Company
China New Energy Group Company ("China New Energy" or the
"Company") is a vertically integrated natural gas company engaged
in the development of natural gas distribution networks, and the
distribution of natural gas to residential, industrial, and
commercial users in small and medium sized cities in China. The Company generates revenues
primarily from the connection fees it charges its customers for
interconnecting to pipelines in its natural gas distribution
networks, and fees for natural gas usage. For more information,
please visit http://www.cnegc.com.
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995: Any statements set forth above that are not
historical facts are forward-looking statements that involve risks
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Such
factors include, but are not limited to, the Company's ability to
access natural gas for distribution, and ability to identify and
develop operational locations under favorable terms, changes in
natural gas pricing mechanism imposed by the Chinese government,
changes in the regulatory environment and future national or
regional economic and competitive conditions, and other factors
detailed from time to time in the Company's filings with the United
States Securities and Exchange Commission and other regulatory
authorities. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
-FINANCIAL TABLES FOLLOW-
|
CHINA NEW
ENERGY GROUP COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
-
(UNAUDITED)
|
|
|
For the
three months ended
|
For the nine
months ended
|
|
|
September
30,
|
September
30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Connection services
|
$ 124,803
|
$ 1,095,454
|
$ 2,479,344
|
$ 1,747,312
|
|
|
Natural gas
|
37,263
|
42,427
|
84,165
|
84,670
|
|
|
162,066
|
1,137,881
|
2,563,509
|
1,831,982
|
|
|
Cost of Sales:
|
|
|
|
|
|
|
Connection services
|
145,435
|
329,665
|
717,113
|
551,248
|
|
|
Natural gas
|
49,970
|
48,202
|
123,555
|
106,619
|
|
|
195,405
|
377,867
|
840,668
|
657,867
|
|
|
Gross (Loss) Profit
|
(33,339)
|
760,014
|
1,722,841
|
1,174,115
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
General and administrative
expenses
|
1,312,808
|
853,577
|
3,797,133
|
1,625,875
|
|
|
Selling expenses
|
65,509
|
42,279
|
217,145
|
128,881
|
|
|
Registration right
liabilities
|
-
|
378,000
|
-
|
828,000
|
|
|
Total operating
expenses
|
1,378,317
|
1,273,856
|
4,014,278
|
2,582,756
|
|
|
|
|
|
|
|
|
Operating loss
|
(1,411,656)
|
(513,842)
|
(2,291,437)
|
(1,408,641)
|
|
|
|
|
|
|
|
|
Other Income
(Expenses):
|
|
|
|
|
|
|
Change in fair value of
derivative
|
|
|
|
|
|
|
financial instruments -
warrants
|
1,654,806
|
6,041,231
|
1,946,842
|
8,017,275
|
|
|
Change in fair value of
derivative
|
|
|
|
|
|
|
financial instruments - put
options of
|
|
|
|
|
|
|
backstop agreements and
obligation to
|
|
|
|
|
|
|
issuance of common stock
relating to
|
|
|
|
|
|
|
Series D preferred
stock
|
(9,975,502)
|
-
|
(9,975,502)
|
-
|
|
|
Interest income
|
11,916
|
5,520
|
14,466
|
7,754
|
|
|
Interest expense
|
(1,035,478)
|
(1,113)
|
(1,039,843)
|
(4,123)
|
|
|
Other income
|
14,476
|
3,307
|
27,566
|
3,400
|
|
|
Other expenses
|
(190,016)
|
-
|
(190,016)
|
-
|
|
|
|
|
|
|
|
|
Total other income
(expenses)
|
(9,519,798)
|
6,048,945
|
(9,216,487)
|
8,024,306
|
|
|
|
|
|
|
|
|
(Loss) Income From
continuing
|
|
|
|
|
|
|
operations, Before Income
Tax
|
(10,931,454)
|
5,535,103
|
(11,507,924)
|
6,615,665
|
|
|
|
|
|
|
|
|
Income Tax
|
2,238
|
181,885
|
384,835
|
187,993
|
|
|
|
|
|
|
|
|
(Loss) Income From
continuing
|
|
|
|
|
|
|
operations, net of Income
Tax
|
(10,933,692)
|
5,353,218
|
(11,892,759)
|
6,427,672
|
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
(Loss) Income from
discontinued
|
|
|
|
|
|
|
operations, net of income
tax
|
(231)
|
809,506
|
(85,877)
|
1,894,543
|
|
|
|
|
|
|
|
|
(Loss) Income from
discontinued
|
|
|
|
|
|
|
operations, net of Income
Tax
|
(231)
|
809,506
|
(85,877)
|
1,894,543
|
|
|
|
|
|
|
|
|
Net (Loss) Income
|
(10,933,923)
|
6,162,724
|
(11,978,636)
|
8,322,215
|
|
|
|
|
|
|
|
|
Net Loss (Income) attributable
to
|
|
|
|
|
|
|
Non-controlling
Interest
|
4,597
|
(25,104)
|
1,876
|
(18,200)
|
|
|
|
|
|
|
|
|
Net (Loss) Income attributable
to China
|
|
|
|
|
|
|
New Energy Group
|
(10,929,326)
|
6,137,620
|
(11,976,760)
|
8,304,015
|
|
|
|
|
|
|
|
|
Dividend and Deemed Dividend
on
|
|
|
|
|
|
|
Preferred Stock
|
(6,378,098)
|
(226,946)
|
(6,851,248)
|
550,946
|
|
|
|
|
|
|
|
|
Net (Loss) Income attributable
to China
|
|
|
|
|
|
|
New Energy Group Common
Stockholders
|
(17,307,424)
|
5,910,674
|
(18,829,008)
|
8,854,961
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income:
|
|
|
|
|
|
|
Net (Loss) Income
|
(10,933,923)
|
6,162,724
|
(11,978,636)
|
8,322,215
|
|
|
Foreign currency translation
loss
|
(557,564)
|
(13,763)
|
(710,103)
|
(24,442)
|
|
|
Comprehensive Income
attributable to
|
|
|
|
|
|
|
Non-controlling
interest
|
-
|
(17,052)
|
-
|
(12,026)
|
|
|
Comprehensive (loss)
income
|
$ (11,491,487)
|
$ 6,131,909
|
$(12,688,739)
|
$ 8,285,747
|
|
|
|
|
|
|
|
|
(Loss) Income per share -
Basic
|
|
|
|
|
|
|
(Loss) Income from continuing
operations
|
$ (0.16)
|
$ 0.06
|
$ (0.18)
|
$ 0.05
|
|
|
(Loss) Income from
discontinued
|
|
|
|
|
|
|
operations
|
$ (0.00)
|
$ 0.01
|
$ (0.00)
|
$ 0.02
|
|
|
Total (loss) income per
share
|
$ (0.16)
|
$ 0.07
|
$ (0.18)
|
$ 0.07
|
|
|
|
|
|
|
|
|
(Loss) Income per share -
Diluted
|
|
|
|
|
|
|
(Loss) Income from continuing
operations
|
$ (0.16)
|
0.03
|
(0.18)
|
0.04
|
|
|
(Loss) Income from
discontinued
|
|
|
|
|
|
|
operations
|
$ (0.00)
|
$ -
|
$ (0.00)
|
$ 0.01
|
|
|
Total (loss) income per
share
|
$ (0.16)
|
$ 0.03
|
$ (0.18)
|
$ 0.05
|
|
|
|
|
|
|
|
|
Weighted average common
shares
|
|
|
|
|
|
|
outstanding
|
|
|
|
|
|
|
Basic
|
106,687,887
|
100,000,041
|
102,488,123
|
100,000,041
|
|
|
Diluted
|
252,046,676
|
217,949,744
|
234,554,522
|
199,844,225
|
|
|
|
|
|
|
|
CHINA NEW
ENERGY GROUP COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
September 30,
|
December 31,
|
|
|
2010
|
2009
|
|
|
ASSETS
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$ 580,731
|
$ 2,672,884
|
|
|
Restricted cash
|
39,691
|
180,352
|
|
|
Accounts receivable, net of
allowance for doubtful accounts
|
|
|
|
|
of $219,842 and $-
|
3,306,894
|
4,619,232
|
|
|
Receivable from sale of a
subsidiary
|
3,368,119
|
5,119,055
|
|
|
Inventories, net
|
338,008
|
271,104
|
|
|
Prepaid expenses
|
197,389
|
179,011
|
|
|
Deemed receivable from former
shareholders of subsidiaries
|
|
|
|
|
acquired for settlement of
certain liabilities
|
1,250,976
|
1,983,782
|
|
|
Current assets held for
sale
|
1,430,758
|
1,768,278
|
|
|
NET CURRENT ASSETS
|
10,512,566
|
16,793,698
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
10,472,634
|
8,000,069
|
|
|
Other receivables
|
1,546,130
|
2,091,092
|
|
|
Deposits for acquisitions of
subsidiaries
|
18,822,946
|
197,696
|
|
|
Intangible assets,
net
|
1,195,612
|
1,186,272
|
|
|
Deposits paid for acquisition of
long term assets
|
2,245,362
|
1,972,162
|
|
|
Goodwill
|
229,150
|
224,488
|
|
|
Non-current assets held for
sale
|
10,135,011
|
9,760,345
|
|
|
Derivative assets - put
options
|
1,598,093
|
-
|
|
|
|
|
|
|
TOTAL ASSETS
|
$ 56,757,504
|
$ 40,225,822
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
Accounts payable
|
$ 422,944
|
$ 614,642
|
|
|
Deposits receipt for
disposal
|
1,045,072
|
-
|
|
|
Accruals and other
payable
|
539,449
|
187,904
|
|
|
Acquisition consideration
payable
|
1,353,474
|
1,651,888
|
|
|
Short term bank loan
|
223,944
|
-
|
|
|
Tax payable
|
174,358
|
1,323,815
|
|
|
Registration rights penalties
payable
|
2,160,000
|
2,160,000
|
|
|
Related party
payables
|
99,926
|
97,893
|
|
|
Dividends payable on preferred
stock
|
249,411
|
509,381
|
|
|
Derivative financial instruments
- warrants
|
4,821,264
|
6,768,106
|
|
|
Derivative financial instruments
- call options related to
|
|
|
|
|
Series D Convertible Preferred
Stock
|
43,665,345
|
-
|
|
|
Liabilities to be settled by
former shareholders of
|
|
|
|
|
subsidiaries acquired
|
1,250,976
|
1,983,782
|
|
|
Convertible notes
|
4,034,315
|
-
|
|
|
Current liabilities held for
sale
|
437,761
|
548,832
|
|
|
TOTAL CURRENT
LIABILITIES
|
60,478,239
|
15,846,243
|
|
|
Preferred Stock : 10,000,000
shares authorized, $0.001 par value Series A Convertible Preferred
Stock : 2,098,918 and 2,098,918 shares issued and outstanding,
liquidation preference of $10,137,774 and $10,137,774 as of
September 30, 2010 and December 31, 2009
|
7,031,818
|
7,031,818
|
|
|
|
|
|
|
Series B Convertible Preferred
Stock: 1,116,388 and 1,116,388 shares issued and outstanding,
liquidation preference of $5,399,969 and $5,399,969 as of September
30, 2010 and December 31, 2009
|
2,153,307
|
2,153,307
|
|
|
|
|
|
|
Series C Convertible Preferred
Stock : 18.73 and 0 shares issued and outstanding, liquidation
preference of $15,000,000 and $0 as of September 30, 2010 and
December 31, 2009
|
15,000,000
|
-
|
|
|
|
|
|
|
CHINA NEW ENERGY'S STOCKHOLDERS'
EQUITY
|
|
|
|
|
Series D Convertible Preferred
Stock (see Derivative financial instruments - call options): 4 and
0 shares issued and outstanding, liquidation preference of $ 0 as
of both September 30, 2010 and December 31, 2009
|
-
|
-
|
|
|
|
|
|
|
Common Stock: 500,000,000 shares
authorized, $0.001 par value, 107,070,281 and 101,788,199 shares
issued and outstanding, respectively
|
107,070
|
101,788
|
|
|
|
|
|
|
Additional paid in
capital
|
(14,831,844)
|
10,152,971
|
|
|
(Accumulated deficit)/ Retained
earnings
|
(17,405,485)
|
1,423,523
|
|
|
Statutory surplus reserve
fund
|
1,746,890
|
1,746,890
|
|
|
Accumulated other comprehensive
income
|
2,311,044
|
1,600,941
|
|
|
TOTAL CHINA NEW ENERGY'S
STOCKHOLDERS' EQUITY (DEFICIT)
|
(28,072,325)
|
15,026,113
|
|
|
|
|
|
|
Non-controlling
interest
|
166,465
|
168,341
|
|
|
TOTAL EQUITY
(DEFICIT)
|
(27,905,860)
|
15,194,454
|
|
|
|
|
|
|
TOTAL LIABILITIES, REDEEMABLE
CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)
|
$ 56,757,504
|
$ 40,225,822
|
|
|
|
|
|
CHINA NEW
ENERGY GROUP COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS -
(UNAUDITED)
|
|
|
For The Nine
Months Ended
|
|
|
September
30,
|
|
|
2010
|
2009
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net (loss) income
|
$ (11,978,636)
|
$ 8,322,215
|
|
|
Net loss (income) from
discontinued operations
|
85,877
|
(1,894,543)
|
|
|
Net (loss) income from
continuing operations
|
$ (11,892,759)
|
$ 6,427,672
|
|
|
|
|
|
|
Adjustments to reconcile net
(loss) income to net cash used in operating activities
|
|
|
|
|
:
|
|
|
|
|
Change in fair value of
derivative financial instruments -
|
|
|
|
|
(1,946,842)
|
(8,017,275)
|
|
|
Change in fair value of
derivative financial instruments -
|
|
|
|
|
put options of backstop
agreements and obligation to issuance of common stock relating to
Series D preferred stock
|
9,975,502
|
-
|
|
|
|
|
|
|
Registration rights
penalties
|
-
|
828,000
|
|
|
Depreciation and
amortization
|
269,782
|
140,275
|
|
|
Non cash interest
|
1,034,314
|
-
|
|
|
|
|
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
Accounts receivable
|
1,383,826
|
(3,063,448)
|
|
|
Other receivables
|
578,176
|
183,628
|
|
|
Inventories
|
(60,210)
|
(37,228)
|
|
|
Prepayment
|
(14,544)
|
18,010
|
|
|
Other current assets
|
-
|
(87,610)
|
|
|
Accounts payable
|
(200,914)
|
(461,528)
|
|
|
Accruals and other
payables
|
1,370,634
|
(541,671)
|
|
|
Tax payable
|
(1,156,523)
|
(765,519)
|
|
|
Cash used in operating
activities - continuing operations
|
(659,558)
|
(5,376,694)
|
|
|
Cash provided by (used in)
operating activities -
|
|
|
|
|
discontinued
operations
|
172,504
|
4,461,586
|
|
|
|
|
|
|
Net cash used in operating
activities
|
(487,054)
|
(915,108)
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
Deposit paid for property, plant
and equipment
|
(2,749,365)
|
(1,108,880)
|
|
|
Deposits paid for acquisitions
of subsidiaries
|
(18,625,250)
|
-
|
|
|
Payment made to acquire
subsidiary - Chensheng
|
-
|
(1,838,946)
|
|
|
Proceeds from sale of
subsidiary
|
1,825,010
|
-
|
|
|
Acquisition consideration
payable
|
(313,949)
|
-
|
|
|
Cash provided by (used in)
investing activities-continuing operations
|
(19,863,554)
|
(2,947,826)
|
|
|
Cash used in investing
activities-discontinued operations
|
(179,733)
|
(2,083,662)
|
|
|
|
|
|
|
Net cash provided by (used in)
investing activities
|
(20,043,287)
|
(5,031,488)
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
Proceeds from convertible
loan
|
3,000,000
|
-
|
|
|
Proceeds from short term bank
loan
|
220,058
|
-
|
|
|
Change from restricted
cash
|
140,661
|
24,279
|
|
|
Proceeds from issuance of
preferred stock
|
15,000,000
|
4,752,140
|
|
|
Cash provided by financing
activities-continuing operations
|
18,360,719
|
4,776,419
|
|
|
Cash provided by financing
activities-discontinued operations
|
-
|
439,060
|
|
|
|
|
|
|
Net cash flows provided by
financing activities
|
18,360,719
|
5,215,479
|
|
|
|
|
|
|
Effect of exchange rate changes
in cash and cash equivalents
|
77,469
|
(2,488)
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
(2,092,153)
|
(733,605)
|
|
|
|
|
|
|
Cash and cash equivalents -
beginning of period
|
2,672,884
|
5,612,356
|
|
|
|
|
|
|
Cash and cash equivalents - end
of period
|
$ 580,731
|
$ 4,878,751
|
|
|
|
|
|
|
Supplemental disclosure of cash
flow information:
|
|
|
|
|
Cash paid for
interest
|
$ -
|
$ -
|
|
|
Cash paid for income
tax
|
$ 1,420,494
|
$ 448,252
|
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
Preferred stock dividends
payable
|
$ 260,872
|
$ 135,000
|
|
|
Preferred stock dividends paid
in common stock
|
$ 948,884
|
$ -
|
|
|
Registration rights
payable
|
$ 2,160,000
|
$ 900,000
|
|
|
Acquisition consideration
payable related to the acquisition of Wuyuan
|
$ 636,850
|
$ -
|
|
|
|
|
|
|
Acquisition consideration
payable related to the acquisition of Zhanhua Jiutai
|
$ 716,624
|
$ -
|
|
|
|
|
|
|
Receivable for disposal of
discontinued operations
|
$ 3,368,119
|
$ -
|
|
|
|
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
Adjusted Net Income (Loss) and
Diluted EPS From Continuing Operations
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) from
Continuing Operations
|
(10,933,692)
|
5,353,218
|
|
(11,892,759)
|
6,427,672
|
|
|
Less: Change in fair value of
derivative financial instruments - warrants
|
1,654,806
|
6,041,231
|
|
1,946,842
|
8,017,275
|
|
|
Less: Change in fair value of
derivative financial instruments - Options
|
(9,975,502)
|
-
|
|
(9,975,502)
|
-
|
|
|
Adjusted Amount Net Income from
Continuing Operations
|
(2,612,996)
|
(688,013)
|
|
(3,864,099)
|
(1,589,603)
|
|
|
Weighted average number of
shares - Diluted
|
252,046,676
|
217,949,744
|
|
234,554,522
|
199,844,225
|
|
|
Adjusted Diluted EPS from
Continuing Operations
|
(0.01)
|
(0.00)
|
|
(0.02)
|
(0.01)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
Adjusted Net Income (Loss) and
Diluted EPS Attributable to Common Shareholders
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) and
Attributable to Common Shareholders
|
(17,307,424)
|
5,910,674
|
|
(18,829,008)
|
8,854,961
|
|
|
Less: Change in fair value of
derivative financial instruments - warrants
|
1,654,806
|
6,041,231
|
|
1,946,842
|
8,017,275
|
|
|
Less: Change in fair value of
derivative financial instruments - Options
|
(9,975,502)
|
-
|
|
(9,975,502)
|
-
|
|
|
Adjusted Amount
|
($8,986,728)
|
($130,557)
|
|
($10,800,348)
|
$837,686
|
|
|
Weighted average number of
shares - Diluted
|
252,046,676
|
217,949,744
|
|
234,554,522
|
199,844,225
|
|
|
Adjusted Diluted EPS
Attributable to Common Shareholders
|
($0.04)
|
($0.00)
|
|
($0.05)
|
$0.00
|
|
|
|
|
|
|
|
|
Company
Contact:
|
|
|
Eric Yu, Chief Financial
Officer
|
|
|
Email:
ericyu@cnegc.com
|
|
|
Website:
www.cnegc.com
|
|
|
|
|
Investor
Relations Contact:
|
|
|
CCG Investor
Relations
|
|
|
Mr. Athan Dounis, Account
Manager
|
|
|
Phone:
+1-646-213-1916
|
|
|
Email:
athan.dounis@ccgir.com
|
|
|
|
|
Mr. Crocker Coulson,
President
|
|
|
Phone:
+1-646-213-1915
|
|
|
Email:
crocker.coulson@ccgir.com
|
|
|
Website:
www.ccgirasia.com
|
|
|
SOURCE China New Energy Group Company