Spring Pharmaceutical Group Inc. Reports Financial Results for the Three and Six Months Ended September 30, 2018
JINING, China, Nov. 13, 2018 /PRNewswire/ -- Spring Pharmaceutical Group, Inc. (OTCQB: CYIG) (the "Company") today announced its financial results for the three and six months ended September 30, 2018.
Three Months Ended September 30, 2018 Financials and Recent Highlights
-- Total revenues increased by 34.7% to $18.68 million with growth in sales
across all three product categories. Sales of acer truncatum seed oil
were particularly strong, increasing by 215.2% to $4.70 million and
accounted for 25.2% of total revenues.
-- Overall gross margin increased by 6.7% to 43.2%, as a result of
increased contribution from the higher margin acer truncatum seed oil
and decreased raw material, packaging and manufacturing costs.
-- Net income attributable to the Company was $4.08 million, or $0.14 per
share, compared to $2.24 million, or $0.08 per share, for the same
period of the prior fiscal year.
-- On October 8, 2018, the Company held its Annual Meeting of Stockholders
(the "AGM") at our headquarter in Sishui County, China.
-- On August 31, 2018, the Company changed its name to "Spring
Pharmaceutical Group, Inc." from "China YCT Pharmaceutical Group, Inc."
as part of its plan to rebrand the Company. The Company's ticker symbol,
"CYIG", remains unchanged.
"We are pleased to report strong results that exceeded our expectations for the fiscal second quarter ended September 30, 2018. With revenues and net income attributable to the Company increasing by 34.7% and 82.4%, respectively, during our second quarter, thanks to growth across all three product categories as well as significant improvement in margins, we believe that our fiscal second quarter results highlight continuing strength in our business," said Mr. Tinghe Yan, Chairman and Chief Executive Officer of the Company.
"We are also making progress with our strategic plan and initiatives for fiscal year 2019 that include the change of our company's name in August to "Spring Pharmaceutical Group, Inc." ; and the successful convening in October of the first Annual Meeting of Stockholders in our history as a public company that attracted over 85 attendees.. We are optimistic about the prospect of our business and are committed to delivering consistent, profitable growth to return our investors," concluded Mr. Yan.
Three Months Ended September 30, 2018 Financial Results
For the Three Months Ended September 30,
($ millions, except per share data) 2018 2017
% Change
Revenues $18.68 $13.87 34.7%
Gross profit $8.07 $5.06 59.5%
Gross margin 43.2% 36.5%
6.7 pp
Operating income $5.57 $3.04 83.1%
Operating margin 29.8% 21.9%
7.9 pp
Net income attributable to CYIG $4.08 $2.24 82.4%
Earnings per share $0.14 $0.08 82.1%
Revenues
For the three months ended September 30, 2018, total revenues increased by $4.82 million, or 34.7%, to $18.68 million from $13.87 million for the same period of the prior fiscal year. The increase in total revenues was across the all three product categories with sales for acer truncatum seed oil was particularly strong. The increase in revenues in RMB was 38.7% which was partially offset by the RMB depreciation versus USD during the three months ended September 30, 2018.
Revenues from health care products increased by $1.40 million, or 25.3%, to $6.92 million for the three months ended September 30, 2018 from $5.52 million for the same period of the prior fiscal year. The increase in sales of the health care products was primarily due to the expansion of our customer base and the increase in online direct sales.
Revenues from Huoliyuan capsules increased by $0.21 million, or 3.1%, to $7.07 million for the three months ended September 30, 2018 from $6.86 million for the same period of the prior fiscal year. The increase in sales of Huoliyuan capsules was primarily due to the stabilization of market competition.
Revenues from acer truncatum seed oil increased by $3.21 million, or 215.2%, to $4.70 million for the three months ended September 30, 2018 from $1.49 million for the same period of the prior fiscal year. The increase in sales of acer truncatum seed oil was primarily due to the continuing promotions of acer truncatum seed oil at conferences highlighting features and benefits of the product to our distributors and customers. Since July 2015, the Company has produced and sold acer truncatum seed oil extracted from the acer truncatum pods purchased from third party vendors. We expect that approximately 10% of our self-grown acer truncatum pods will be ready for use in production during the last quarter of 2018, and the rest of the self-grown acer truncatum pods will be gradually ready for use in production during the next two to three years depending upon the timing of their harvest.
The sales of health care products, Huoliyuan capsules, and acer truncatum seed oil accounted for 37.0%, 37.8%, and 25.2%, respectively, of total revenues for the three months ended September 30, 2018, compared to 39.8%, 49.4%, and 10.8%, respectively, for the same period of the prior fiscal year.
The following table summarizes revenues and gross profit by products for the three months ended September 30, 2018 and 2017, respectively:
For the Three Months Ended September 30,
2018 2017
Revenues Gross Gross Revenues Gross Gross
($M) Profit Margin ($M) Profit Margin
($M) (%) ($M) (%)
Health care supplements 6.92 3.07 44.3% 5.52 2.46 44.5%
Drugs (Huoliyuan capsule) 7.07 2.13 30.2% 6.86 1.97 28.7%
Acer truncatum oil 4.70 2.87 61.0% 1.49 0.63 42.1%
Total 18.68 8.07 43.2% 13.87 5.06 36.5%
Cost of Goods Sold
Cost of goods sold comprised primarily the cost of finished goods purchased from Shandong Yongchuntang, raw materials purchased from third party vendors, and the manufacturing cost of acer truncatum seed oil and Huoliyuan capsules. For the three months ended September 30, 2018, total cost of goods sold increased by $1.81 million, or 20.5%, to $10.62 million from $8.81 million for the same period of the prior fiscal year. As a percentage of revenues, total cost of goods sold was 56.8% for the three months ended September 30, 2018, compared to 63.5% for the same period of the prior fiscal year. The decrease was primarily due to the decreased raw material, packaging and manufacturing costs for acer truncatum seed oil.
Cost of goods sold for health care products, Huoliyuan capsules, and acer truncatum seed oil were $3.85 million, $4.94 million and $1.83 million, respectively for the three months ended September 30, 2018, compared to $3.06 million, $4.89 million, and $0.86 million, respectively, for the same period of the prior fiscal year.
Gross Profit
Gross profit increased by $3.01 million, or 59.5%, to $8.07 million for the three months ended September 30, 2018, from $5.06 million for the same period of the prior fiscal year. Gross profit for health care products, Huoliyuan capsules, and acer truncatum seed oil were $3.07 million, $2.13 million, and $2.87 million, respectively, for the three months ended September 30, 2018, compared to $2.46 million, $1.97 million, and $0.63 million, respectively, for the same period of the prior fiscal year.
Overall gross margin was 43.2%, with gross margins for health care products, Huoliyuan capsules, and acer truncatum seed oil being 44.3%, 30.2%, and 61.0%, respectively, for the three months ended September 30, 2018. Overall gross margin was 36.5%, and gross margins for health care products, Huoliyuan capsules, and acer truncatum seed oil were 44.5%, 28.7%, and 42.1%, respectively, for the same period of the prior fiscal year. The increase in overall gross margin was mainly due to the increased contribution from the higher margin acer truncatum seed oil.
Operating Expenses
Selling expenses consist primarily of sales commissions, advertising and promotion, freight charges, and related compensation. For the three months ended September 30, 2018, selling expenses increased by $0.23 million, or 21.3%, to $1.31 million, from $1.08 million for the same period of the prior fiscal year. The increase in selling expenses was primarily due to the increases in shipping cost and sales commission from increased sales and salary expense.
General and administrative expenses increased by $0.24 million, or 28.0%, to $1.11 million for the three months ended September 30, 2018 from $0.87 million for the same period of the prior fiscal year. The increase in general and administrative expenses was primarily due to the costs associated with our efforts to up-list our common stock to the Nasdaq Capital Market.
Research and development expenses were $0.07 million for the three months ended September 30, 2018, compared to $0.06 million for the same period of the prior fiscal year. Our long-term goal is to utilize advanced biological technology to refine and extract the beneficial compounds in plants that have traditionally been known to have medicinal benefits, primarily gingko and acer truncatum bunge plants. As of September 30, 2018, the Company had a staff of 27 in its R&D department.
As a result of the foregoing, total operating expenses increased by $0.48 million, or 23.8%, to $2.49 million for the three months ended September 30, 2018, from $2.01 million for the same period of the prior fiscal year.
Operating Income
Total operating income increased by $2.53 million, or 83.1%, to $5.57 million for the three months ended September 30, 2018, from $3.04 million for the same period of the prior fiscal year. The increase in total operating income was mainly a result of increased gross profit, partially offset by increased operating expenses. Operating margin was 29.8% for the three months ended September 30, 2018, compared to 21.9% for the same period of the prior fiscal year.
Income before Income Taxes
Interest income was $34,972 for the three months ended September 30, 2018, compared to $31,199 for the same period of the prior fiscal year.
Income before income tax provisions increased by $2.53 million, or 82.4%, to $5.61 million for the three months ended September 30, 2018, from $3.07 million for the same period of the prior fiscal year.
Net Income
Provision for income tax increased by $0.63 million, or 82.4%, to $1.40 million for the three months ended September 30, 2018, from $0.77 million for the same period of the prior fiscal year.
Net income increased by $1.90 million, or 82.4%, to $4.21 million for the three months ended September 30, 2018, from $2.31 million for the same period of the prior fiscal year.
After the deduction of non-controlling interest, net income attributable to the Company was $4.08 million, or $0.14 per basic and diluted share for the three months ended September 30, 2018, compared to $2.24 million, or $0.08 per basic and diluted share, for the same period of the prior fiscal year.
Six Months Ended September 30, 2018 Financial Results
For the Six Months Ended September 30,
($ millions, except per share data) 2018 2017 % Change
Revenues $39.57 $31.00 27.7%
Gross profit $16.99 $11.90 42.7%
Gross margin 42.9% 38.4%
4.5 pp
Operating income $11.70 $7.68 52.3%
Operating margin 29.6% 24.8%
4.8 pp
Net income attributable to CYIG $8.57 $6.05 41.7%
Earnings per share $0.29 $0.20 41.5%
-- Total revenues increased by 27.7% to $39.57 million with growth in sales
across all three product categories. Sales of acer truncatum seed oil
were particularly strong, increasing by 126.8% to $9.95 million and
accounted for 25.1% of total revenues.
-- Overall gross margin increased by 4.5% to 42.9%, benefitting from
increased contribution from the higher margin acer truncatum seed oil
and decreases in raw material, packaging and manufacturing costs.
-- Net income attributable to the Company was $8.57 million, or $0.29 per
share, compared to $6.05 million, or $0.20 per share, for the same
period of the prior fiscal year.
Revenues
For the six months ended September 30, 2018, total revenues increased by $8.57 million, or 27.7%, to $39.57 million from $31.00 million for the same period of the prior fiscal year. The increase in total revenues was across the all three product categories with sales for acer truncatum seed oil particularly strong. The increase in revenues in RMB was 24.6%. RMB appreciation versus USD contributed to 3.1% of the increase in revenues for the six months ended September 30, 2018.
Revenues from health care products increased by $1.56 million, or 11.7%, to $14.93 million for the six months ended September 30, 2018 from $13.36 million for the same period of the prior fiscal year. The increase in sales of the health care products was primarily due to the expansion of our customer base and the increase in online direct sales.
Revenues from Huoliyuan capsules increased by $1.45 million, or 10.9%, to $14.70 million for the six months ended September 30, 2018 from $13.25 million for the same period of the prior fiscal year. The increase in sales of Huoliyuan capsules was primarily due to the stabilization of market competition.
Revenues from acer truncatum seed oil increased by $5.56 million, or 126.8%, to $9.95 million for the six months ended September 30, 2018 from $4.39 million for the same period of the prior fiscal year. The increase in sales of acer truncatum seed oil was primarily due to the continuing promotions of acer truncatum seed oil at conferences highlighting features and benefits of the product to our distributors and customers. Since July 2015, the Company has produced and sold acer truncatum seed oil extracted from the acer truncatum pods purchased from third party vendors. We expect that approximately 10% of our self-grown acer truncatum pods will be ready for use in production during the last quarter of 2018, and the rest of the self-grown acer truncatum pods will be gradually ready for use in production during the next two to three years depending upon the timing of their harvest.
The sales of health care products, Huoliyuan capsules, and acer truncatum seed oil accounted for 37.7%, 37.1%, and 25.1%, respectively, of total revenues for the six months ended September 30, 2018, compared to 43.1%, 42.7%, and 14.1%, respectively, for the same period of the prior fiscal year.
The following table summarizes revenues and gross profit by products for the six months ended September 30, 2018 and 2017, respectively:
For the Six Months Ended September 30,
2018 2017
Revenues Gross Gross Revenues Gross Gross
($M) Profit Margin ($M) Profit Margin
($M) (%) ($M) (%)
Health care supplements 14.93 6.62 44.4% 13.36 5.96 44.6%
Drugs (Huoliyuan capsule) 14.70 4.32 29.4% 13.25 4.02 30.4%
Acer truncatum oil 9.95 6.04 60.7% 4.39 1.92 43.7%
Total 39.57 16.99 42.9% 31.00 11.90 38.4%
Cost of Goods Sold
Cost of goods sold was comprised primarily of the cost of finished goods purchased from Shandong Yongchuntang, raw materials purchased from third party vendors, and the manufacturing cost of acer truncatum seed oil and Huoliyuan capsules. For the six months ended September 30, 2018, total cost of goods sold increased by $3.49 million, or 18.3%, to $22.58 million from $19.10 million for the same period of the prior fiscal year. As a percentage of revenues, total cost of goods sold was 57.1% for the six months ended September 30, 2018, compared to 61.6% for the same period of the prior fiscal year. The decrease was primarily due to the decreased raw material, packaging and manufacturing costs for acer truncatum seed oil.
Cost of goods sold for health care products, Huoliyuan capsules, and acer truncatum seed oil were $8.31 million, $10.37 million and $3.91 million, respectively for the six months ended September 30, 2018, compared to $7.40 million, $9.23 million, and $2.47 million, respectively, for the same period of the prior fiscal year.
Gross Profit
Gross profit increased by $5.09 million, or 42.7%, to $16.99 million for the six months ended September 30, 2018, from $11.90 million for the same period of the prior fiscal year. Gross profit for health care products, Huoliyuan capsules, and acer truncatum seed oil were $6.62 million, $4.32 million, and $6.04 million, respectively, for the six months ended September 30, 2018, compared to $5.96 million, $4.02 million, and $1.92 million, respectively, for the same period of the prior fiscal year.
Overall gross margin was 42.9%, with gross margins for health care products, Huoliyuan capsules, and acer truncatum seed oil being 44.4%, 29.4%, and 60.7%, respectively, for the six months ended September 30, 2018. Overall gross margin was 38.4%, and gross margins for health care products, Huoliyuan capsules, and acer truncatum seed oil were 44.6%, 30.4%, and 43.7%, respectively, for the same period of the prior fiscal year. The increase in overall gross margin was mainly due to the increased contribution from the higher margin on acer truncatum seed oil.
Operating Expenses
Selling expenses consist primarily of sales commissions, advertising and promotion, freight charges, and related compensation. For the six months ended September 30, 2018, selling expenses increased by $0.39 million, or 16.7%, to $2.70 million, from $2.32 million for the same period of the prior fiscal year. The increase in selling expenses was primarily due to the increases in shipping cost and sales commission from increased sales and salary expense.
General and administrative expenses increased by $0.42 million, or 23.4%, to $2.19 million for the six months ended September 30, 2018 from $1.78 million for the same period of the prior fiscal year. The increase in general and administrative expenses was primarily due to the costs associated with our efforts to up-list our common stock to the Nasdaq Capital Market.
Research and development expenses were $0.39 million for the six months ended September 30, 2018, compared to $0.13 million for the same period of the prior fiscal year. The increase in research and development expenses was mainly due to the increased cost of the materials used by the R&D department. As of September 30, 2018, the Company had a staff of 27 in its R&D department.
As a result, total operating expenses increased by $1.07 million, or 25.3%, to $5.29 million for the six months ended September 30, 2018, from $4.22 million for the same period of the prior fiscal year.
Operating Income
Total operating income increased by $4.02 million, or 52.3%, to $11.70 million for the six months ended September 30, 2018, from $7.68 million for the same period of the prior fiscal year. The increase in total operating income was mainly a result of increased gross profit, partially offset by increased operating expenses. Operating margin was 29.6% for the six months ended September 30, 2018, compared to 24.8% for the same period of the prior fiscal year.
Income before Income Taxes
Interest income was $75,045 for the six months ended September 30, 2018, compared to $56,302 for the same period of the prior fiscal year. The Company also booked gain on disposal of acer truncatum bunge plants of $0.57 million for the six months ended September 30, 2018.
Income before income tax provisions increased by $3.47 million, or 41.7%, to $11.78 million for the six months ended September 30, 2018, from $8.31 million for the same period of the prior fiscal year.
Net Income
Provision for income tax increased by $0.87 million, or 41.7%, to $2.94 million for the six months ended September 30, 2018, from $2.08 million for the same period of the prior fiscal year.
Net income increased by $2.60 million, or 41.7%, to $8.83 million for the six months ended September 30, 2018, from $6.23 million for the same period of the prior fiscal year.
After the deduction of non-controlling interest, net income attributable to the Company was $8.57 million, or $0.29 per basic and diluted share for the six months ended September 30, 2018, compared to $6.05 million, or $0.20 per basic and diluted share, for the same period of the prior fiscal year.
Liquidity and Capital Resources
As of September 30, 2018, the Company had cash and cash equivalents of $31.95 million, and inventories of $1.95 million, compared to $25.35 million, and $2.38 million, respectively, as of March 31, 2018. Total working capital was $33.96 million as of September 30, 2018, compared to $28.08 million as of March 31, 2018.
Net cash provided by operating activities was $9.94 million for the six months ended September 30, 2018, compared to $10.74 million for the same period of the prior fiscal year. Net cash used in investing activities was $0.78 million for the six months ended September 30, 2018, compared to $2.42 million for the same period of the prior fiscal year. Net cash provided by financing activities was $nil for the six months ended September 30, 2018 and 2017, respectively.
About Spring Pharmaceutical Group, Inc.
Based in Jining, Shandong Province and founded in January 1989, Spring Pharmaceutical Group, Inc., through its subsidiaries, engages in the business of (i) distributing health care supplement products manufactured by Shandong Yongchuntang Group Co., Ltd. in the PRC, (ii) developing, manufacturing, and selling Huoliyuan capsules, a prescription medicine, (iii) developing acer truncatum bunge planting bases, and manufacturing and selling acer truncatum bunge seed oil in the PRC. Acer truncatum bunge plants are a species of maple tree. For more information about the Company, please visit http://www.yctgroup.com/.
Forward-Looking Statements
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For more information, please contact:
At the Company:
Zecheng Shao, Vice President
Phone: +86-156-5377-2006
Email: zc_shao@126.com
Investor Relations:
Tony Tian, CFA
Weitian Group LLC
Phone: +1-732-910-9692
Email: ttian@weitianco.com
SPRING PHARMACEUTICAL GROUP, INC.
(FORMERLY KNOWN AS CHINA YCT INTERNATIONAL GROUP, INC.)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
SEPTEMBER 30, MARCH 31,
2018 2018
---
Assets
Current assets:
Cash and cash
equivalents $
31,948,886 $
25,353,360
Accounts receivable 122,093 174,558
Inventories 1,947,262 2,383,382
Purchase deposit to related
party 1,286,166 1,412,864
Prepaid leases - current portion 856,662 741,583
Total current assets 36,161,069 30,065,747
Prepaid leases 1,319,382 641,349
Development cost of acer
truncatum bunge planting 45,459,621 48,984,881
Plant, property, and equipment,
net 14,761,960 16,793,413
Intangible assets, net 10,225,176 11,862,017
Deferred tax assets 182,405 200,387
Security deposit to related
party 1,453,657 1,590,305
Total assets $
109,563,270 $
110,138,099
===
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and
other accrued
expenses $
107,582 $
372,782
Advance from customers 445,829
Taxes payable 2,089,423 1,164,198
Total current liabilities 2,197,005 1,982,809
Stockholders' Equity
Preferred stock, par value
$0.001 per share; 5,000,000
shares authorized, zero shares
issued and outstanding
12% Preferred stock, par value
$500 per share; 45 shares
authorized, issued and
outstanding 22,500 22,500
Common stock, par value $0.001
per share; 100,000,000 shares
authorized; 29,839,168 and
29,789,168 shares issued and
outstanding at September 30,
2018 and March 31, 2018,
respectively 29,839 29,789
Additional paid-in capital 4,363,788 4,322,838
Statutory reserve 1,828,504 1,828,504
Retained earnings 103,015,416 94,447,937
Accumulated other comprehensive
income (loss) (4,917,587) 4,455,017
Total stockholders' equity
attributable to the Company 104,342,460 105,106,585
Noncontrolling interest 3,023,805 3,048,705
Total stockholders' equity 107,366,265 108,155,290
Total liabilities and
stockholders' equity $
109,563,270 $
110,138,099
===
SPRING PHARMACEUTICAL GROUP, INC.
(FORMERLY KNOWN AS CHINA YCT INTERNATIONAL GROUP, INC.)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---
2018 2017 2018 2017
---
Sales $
18,684,939 $
13,866,784 $
39,573,786 $
31,001,649
Cost of Goods Sold (including
$3,785,996 and $3,020,708 from a
related party for the three
months ended September 30, 2018
and 2017, respectively; including
$8,176,320 and $7,309,643 from a
related party for the six months
ended September 30, 2018 and
2017, respectively) 10,619,845 8,811,390 22,584,545 19,098,538
Gross profit 8,065,094 5,055,394 16,989,241 11,903,111
Operating expenses
Selling expenses 1,312,878 1,082,147 2,704,481 2,318,439
General and administrative
expenses 1,110,995 868,258 2,192,044 1,776,663
Research and development expenses 68,424 62,033 391,157 126,411
Total operating expenses 2,492,297 2,012,438 5,287,682 4,221,513
Income from operations 5,572,797 3,042,956 11,701,559 7,681,598
Gain on disposal of acer truncatum
bunge plants 573,092
Interest income 34,972 31,199 75,045 56,302
Income before income tax provision 5,607,769 3,074,155 11,776,604 8,310,992
Income tax provision 1,401,942 768,539 2,944,151 2,077,748
Net income 4,205,827 2,305,616 8,832,453 6,233,244
Less: Net income attributable to
noncontrolling interest 126,175 69,168 264,974 186,997
Net income attributable to the
Company 4,079,652 2,236,448 8,567,479 6,046,247
Other comprehensive income (loss):
Foreign currency translation
adjustment (4,125,116) 1,908,799 (9,662,478) 3,564,300
Comprehensive income (loss) 80,711 4,214,415 (830,025) 9,797,544
Less: Comprehensive income (loss)
attributable to noncontrolling
interest 2,422 126,432 (24,900) 292,747
Comprehensive income
(loss) attributable to
the Company $
78,289 $
4,087,983 $
(805,125) $
9,504,797
===
Earnings per common share
Basic and Diluted $
0.14 $
0.08 $
0.29 $
0.20
Weighted average number of common
shares outstanding
Basic and Diluted 29,839,168 29,789,168 29,821,682 29,789,168
SPRING PHARMACEUTICAL GROUP, INC.
(FORMERLY KNOWN AS CHINA YCT INTERNATIONAL GROUP, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
SEPTEMBER 30,
---
2018 2017
---
Cash Flows From Operating
Activities:
Net income $
8,832,453 $
6,233,244
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization
of plant, property and
equipment 682,403 615,112
Amortization of intangible
assets 644,301 628,768
Amortization of prepaid leases 446,857 431,644
Stock-based compensation
expenses 41,000
Deferred taxes 797 278,054
Gain on disposal of acer
truncatum bunge plants (573,092)
Changes in operating assets
and liabilities:
Purchase deposit to vendors 664,506
Inventory 241,332 3,230,636
Accounts receivable 39,087 1,158,886
Cash received from
cancellation of lease 56,732
Prepaid expenses (279,239)
Prepaid leases (1,398,241)
Taxes payable 1,069,603 (1,155,471)
Purchase deposit and accounts
payable to related party, net 5,526 (686,806)
Accounts payable and other
accrued expenses (243,253) 24,034
Advance from customers (425,147) 113,615
Net cash provided by operating
activities 9,936,718 10,740,623
Cash Flows From Investing
Activities:
Acquisition of property, plant
and equipment (68,483) (2,110,189)
Proceeds from disposal of acer
truncatum bunge plants 2,114,541
Development cost of acer
truncatum bunge planting (713,375) (2,420,741)
Net cash used in investing
activities (781,858) (2,416,389)
Effect of exchange rate
changes on cash and cash
equivalents (2,559,334) 558,074
Net increase in cash and cash
equivalents 6,595,526 8,882,308
Cash and cash equivalents at
beginning of period 25,353,360 10,308,622
Cash and cash
equivalents at end
of period $
31,948,886 $
19,190,930
===
Supplemental disclosures of
cash flow information:
Cash paid during the periods
for:
Interest
$
$ -
Income taxes $
1,966,462 $
2,790,002
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SOURCE Spring Pharmaceutical Group, Inc.
