Review & Extracts of the Form10-Q as required by the Securities & Exchange Commission
Bodisen Biotech, Inc. (the “Company”) (OTC Pink Sheets: BBCZ; London AIM: BODI; website: www.bodisen.com ) recently announced its first quarter unaudited results for the period ended March 31, 2011 which are extracted from the Company's Form 10-Q filed with the SEC.
Results of Operations
Three months ended March 31, 2011 compared to Three months ended March 31, 2010.
Revenue . The Company generated revenue of $1,024,677 for the three months ended March 31, 2011, a decrease of $513,665 or 33%, compared to $1,538,342 for the three months ended March 31, 2010. The decrease in revenue is primarily attributable to the severe inflation which caused purchasing from the farmers to decrease.
Gross Profit (Loss) . Bodisen achieved a gross profit of $545,460 for the three months ended March 31, 2011, a decrease of $182,999 or 25%, compared to 728,459 for the three months ended March 31, 2010. Gross margin (gross profit as a percentage of revenue), was 53.2% for the three months ended March 31, 2011, compared to 47.4% for the three months ended March 31, 2010. The increase in the gross margin percentage was primarily attributable to the higher profit margins which are earned on the new products.
Selling Expenses . A ggregated selling expenses accounted for $683,897 of our operating expenses for the three months ended March 31, 2011, an increase of $542,483 or 384%, compared to $141,414 for the three months ended March 31, 2010. The increase in our aggregated selling expenses is primarily attributable to an increase in marketing promotion and advertising programs.
General and Administrative Expenses. General and administrative expenses accounted for $516,610 of our operating expenses for the three months ended March 31, 2011, a decrease of $231,374 or 31%, compared to $747,984 for the three months ended March 31, 2010. The decrease is principally due to a decrease in our bad debt expense.
Non Operating Income and Expenses. We had total non-operating income of $13,688 for the three months ended March 31, 2011, a change of $11,794 compared to income of $1,894 for the three months ended March 31, 2010. Other income (expense) was $(229) for the three months ended March 31, 2011 compared to $(614) for the three months ended March 31, 2010. During the three months ended March 31, 2011 and 2010, we did not incur any gains or losses related to equity income in investment.
Liquidity and Capital Resources. We are primarily a parent holding company for the operations carried out by our indirect operating subsidiary, Yang Ling, which carries out its activities in the People's Republic of China . Because of our holding company structure, our ability to meet our cash requirements apart from our financing activities, including payment of dividends on our common stock, if any, substantially depends upon the receipt of dividends from our subsidiaries, particularly Yang Ling.
As of March 31, 2011, we had $1,739,699 of cash and cash equivalents compared to $3,675,209 as of December 31, 2010.
Cash Flows
Operating: We used $1,952,514 of cash for operating activities for the three months ended March 31, 2011 compared to $527,351 of cash used in operating activities for the three months ended March 31, 2010. The cash used in operating consisted of a net loss of $1.4 million offset by non cash expenses of depreciation and amortization of $432,138. In preparation for greater sales, we increased inventory by $504,557 our advances to suppliers increased $304,849. Deferred revenues and other payables were paid down resulting in a decrease in cash of $369,258 and $645,968, respectively.
Investing: Our investing activities used $525 of cash for the three months ended March 31, 2011, compared to $3,267 of cash used investing activities for the three months ended March 31, 2010. The decrease is immaterial.
Contractual Commitments
In August 2006, we entered into a 30-year land-lease arrangement with the government of the People's Republic of China , under which we pre-paid $2,529,818 upon execution of the contract of lease expense for the next 15 years. We agreed to make a prepayment for the next eight years in November 2021, and will make a final pre-payment in November 2029 for the remaining seven years. The annual lease expense amounts to approximately $169,580. Our land-lease arrangement is currently our only material on- and off-balance sheet expected or contractually committed future obligation.
Off-Balance Sheet Arrangements
We currently do not have any material off-balance sheet arrangements except for the remaining pre-payments under the land-lease arrangement described
above.
About Bodisen Biotech, Inc.
Bodisen Biotech, Inc. is a manufacturer of liquid and organic compound fertilizers, pesticides, insecticides and agricultural raw material certified by the Petroleum Chemical Industry Administrative office of China (Chemical Petroleum Production Administrative Bureau), Shaanxi provincial government and Chinese government. The company is headquartered in Shaanxi province and is a Delaware corporation. The company files annual and periodic reports with the U.S. Securities and Exchange Commission, which are accessible at www.sec.gov.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Bodisen Biotech, Inc. management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
Enquiries:
Charles Stanley Securities
(Nominated Adviser)
Russell Cook / Carl Holmes 020 7149 6000
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
|
|
Three Months Ended March 31, |
||
|
|
2011 |
|
2010 |
|
|
|
|
(unaudited) |
|
|
|
|
|
Net Revenue |
$ |
1,024,677 |
$ |
1,538,342 |
|
|
|
|
|
Cost of Revenue |
|
479,217 |
|
809,883 |
|
|
|
|
|
Gross profit |
|
545,460 |
|
728,459 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Selling expenses |
|
683,897 |
|
141,414 |
General and administrative expenses |
|
516,610 |
|
747,984 |
Total operating expenses |
|
1,200,507 |
|
889,398 |
|
|
|
|
|
Loss from operations |
|
(655,047) |
|
(160,939) |
|
|
|
|
|
Non-operating income/(expense): |
|
|
|
|
Other income/(expense) |
|
(229) |
|
(614) |
Interest income |
|
48,067 |
|
3,168 |
Interest expense |
|
(34,150) |
|
(660) |
Total non-operating income/(expense) |
|
13,688 |
|
1,894 |
|
|
|
|
|
Net loss |
|
(641,359) |
|
(159,045) |
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
Foreign currency translation gain (loss) |
|
222,439 |
|
(79) |
Unrealized loss on marketable equity security |
|
(4,743,687) |
|
(1,310,410) |
|
|
|
|
|
Comprehensive income/(loss) |
$ |
(4,521,248) |
$ |
(1,130,489) |
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
Basic |
|
21,510,250 |
|
18,710,250 |
Diluted |
|
21,510,250 |
|
18,710,250 |
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
$ |
(0.03) |
$ |
0.01 |
Diluted |
$ |
(0.03) |
$ |
0.01 |
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2011 AND DECEMBER 31, 2010
|
|
March 31, |
|
December 31, |
|
|
2011 |
|
2010 |
|
|
(unaudited) |
|
(audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
Cash & cash equivalents |
$ |
1,739,699 |
$ |
3,675,209 |
Accounts receivable and other receivable, net of allowance for doubtful accounts of $1,015,933 and $1,005,992 |
|
4,413,915 |
|
4,499,673 |
Other receivables |
|
23,151 |
|
9,185 |
Note receivable |
|
1,527,000 |
|
1,517,000 |
Inventory |
|
1,712,321 |
|
1,198,134 |
Advances to suppliers |
|
976,048 |
|
665,765 |
Prepaid expense and other current assets |
|
12,971 |
|
8,598 |
|
|
|
|
|
Total current assets |
|
10,405,105 |
|
11,573,564 |
|
|
|
|
|
PROPERTY AND EQUIPMENT, net |
|
22,633,610 |
|
22,870,340 |
MARKETABLE SECURITY, AVAILABLE-FOR-SALE |
|
4,037,180 |
|
8,780,867 |
INTANGIBLE ASSETS, net |
|
4,799,535 |
|
4,813,409 |
|
|
|
|
|
TOTAL ASSETS |
$ |
41,875,430 |
$ |
48,038,180 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
Accounts payable |
$ |
1,252,826 |
$ |
1,256,681 |
Accrued expenses |
|
164,766 |
|
811,181 |
Deferred revenue |
|
1,255,992 |
|
1,615,865 |
Note payable |
|
1,527,000 |
|
- |
|
|
|
|
|
Total current liabilities |
|
4,200,584 |
|
3,683,727 |
|
|
|
|
|
Long-term note payable |
|
- |
|
1,517,000 |
|
|
|
|
|
TOTAL LIABILITIES |
|
4,200,584 |
|
5,200,727 |
|
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
Preferred stock, $0.0001 per share; authorized 5,000,000 shares; nil issued and outstanding |
|
- |
|
- |
Common stock, $0.0001 per share; authorized 30,000,000 shares; issued and outstanding 21,510,250 |
|
2,151 |
|
2,151 |
Additional paid-in capital |
|
35,345,542 |
|
35,345,542 |
Accumulated other comprehensive income |
|
10,704,056 |
|
15,225,304 |
Statutory reserve |
|
4,314,488 |
|
4,314,488 |
Retained Earnings |
|
(12,691,391) |
|
(12,050,032) |
Total stockholders' equity |
|
37,674,846 |
|
42,837,453 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
41,875,430 |
$ |
48,038,180 |
|
|
|
|
|