Nevada
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001-33674
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20-2597168
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Ident. No.)
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Suite A1001-1002, Tower 16, Hengmao Int’l Center
Nanchang City, Jiangxi Province, China
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330003
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(Address of principal executive offices)
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(Zip Code)
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86-791-6669093
Registrant’s telephone number, including area code
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N/A
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(Former name or former address, if changed since last report.)
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AGFEED INDUSTRIES, INC.
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Dated: March 17, 2011
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By:
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/s/ Edward Pazdro
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Edward Pazdro
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Chief Financial Officer
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Exhibit Number
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Description
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99.1
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Press release, dated March 17, 2011, of AgFeed Industries, Inc.
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·
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Appointed John Stadler as the Company’s Chairman and Interim President and Chief Executive Officer;
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·
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Appointed Edward Pazdro as the Company’s Chief Financial Officer;
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·
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Appointed McGladrey & Pullen, LLP as the Company’s auditor;
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·
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Deployed managers and executives from its M2P2 subsidiary to lead the restructuring and return to profitability of the legacy Chinese hog production system;
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·
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Commenced the closing of eight legacy Chinese hog farms considered to be of a configuration and quality that they were deemed incapable of meeting AgFeed’s long-term operating benchmarks;
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·
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Reduced overall headcount from 1,843 to 1,673.
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Legacy Chinese
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Animal
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New Western-Style
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Corporate
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||
Farms
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Nutrition
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M2P2
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Chinese Farm
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Overhead
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Non-Cash Items:
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|||||
Goodwill
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($21,612,398)
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||||
Asset Write Down
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($9,021,583)
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Audit Adjustments:
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|||||
Legacy Chinese Farms
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($1,721,417)
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||||
Legacy Chinese Farms to be Closed
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($8,632,230)
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Other Legacy Chinese Farms
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($4,603,151)
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Non-Capitalized Investment in Western Style Chinese Farms
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($578,900)
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||||
Animal Nutrition
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$ 10,915,748
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||||
M2P2 (acquired 9/13/10)
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$1,657,490
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||||
Corporate Overhead
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($6,839,838)
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||||
Totals
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($45,590,779)
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$ 10,915,748
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$1,657,490
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($578,900)
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($6,839,838)
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2010
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2009
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|||||||
ASSETS
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||||||||
CURRENT ASSETS:
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||||||||
Cash and cash equivalents
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$ | 12,399,916 | $ | 37,580,154 | ||||
Accounts receivable, net of allowance for doubtful accounts of $707,968 and $415,765
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21,872,121 | 14,397,793 | ||||||
Advances to suppliers
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1,708,637 | 1,173,941 | ||||||
Other receivables
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- | 2,186,643 | ||||||
Inventory
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84,579,778 | 23,835,412 | ||||||
Prepaid expenses and other current assets
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2,251,181 | 1,359,856 | ||||||
Deferred tax asset
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83,685 | |||||||
Total current assets
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122,895,318 | 80,533,799 | ||||||
PROPERTY AND EQUIPMENT, net
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66,003,779 | 34,606,983 | ||||||
INTANGIBLE ASSETS, net
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5,785,471 | 1,064,252 | ||||||
GOODWILL
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22,365,414 | 42,744,247 | ||||||
DEFERRED TAX ASSET
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2,329,548 | - | ||||||
OTHER ASSETS
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4,115,132 | 3,998,739 | ||||||
TOTAL ASSETS
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$ | 223,494,662 | $ | 162,948,020 | ||||
LIABILITIES AND EQUITY
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||||||||
CURRENT LIABILITIES:
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||||||||
Short-term loan
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$ | 4,551,000 | $ | 4,401,000 | ||||
Accounts payable
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9,664,374 | 6,162,385 | ||||||
Other payables
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3,736,931 | 1,892,858 | ||||||
Unearned revenue
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542,856 | 582,266 | ||||||
Accrued expenses
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6,731,854 | 83,649 | ||||||
Accrued payroll
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1,209,120 | 975,485 | ||||||
Tax and welfare payable
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1,920,389 | 396,370 | ||||||
Interest payable
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121,392 | 120,419 | ||||||
Current portion of long-term debt
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1,703,658 | - | ||||||
Convertible notes, net of discount of $10,864
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989,136 | - | ||||||
Total current liabilities
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31,170,710 | 14,614,432 | ||||||
CONVERTIBLE NOTES, net of debt discount of $81,675
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- | 918,325 | ||||||
ACQUISITION NOTE PAYABLE
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9,621,434 | - | ||||||
LINE OF CREDIT
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42,231,176 | - | ||||||
LONG-TERM DEBT
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15,024,666 | - | ||||||
TOTAL LIABILITIES
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98,047,986 | 15,532,757 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 15)
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- | - | ||||||
EQUITY:
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||||||||
AgFeed stockholders' equity:
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Common stock, $0.001 per share; 75,000,000 shares authorized;
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||||||||
51,756,907 issued and 51,370,212 outstanding at December 31, 2010
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||||||||
44,510,558 issued and 44,143,263 outstanding at December 31, 2009
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51,758 | 44,511 | ||||||
Additional paid-in capital
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125,788,151 | 109,281,086 | ||||||
Accumulated other comprehensive income
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8,120,628 | 4,176,450 | ||||||
Statutory reserve
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5,621,937 | 4,685,115 | ||||||
Treasury stock (386,695 shares)
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(1,858,942 | ) | (1,811,746 | ) | ||||
Retained earnings (accumulated deficit)
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(12,430,229 | ) | 31,210,563 | |||||
Total AgFeed stockholders' equity
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125,293,303 | 147,585,979 | ||||||
Noncontrolling interest (deficit)
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153,373 | (170,716 | ) | |||||
Total equity
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125,446,676 | 147,415,263 | ||||||
TOTAL LIABILITIES AND EQUITY
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$ | 223,494,662 | $ | 162,948,020 |
2010
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2009
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2008
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||||||||||
Revenues
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$ | 243,614,119 | $ | 173,203,271 | $ | 143,661,485 | ||||||
Cost of goods sold
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228,942,742 | 146,660,232 | 109,269,960 | |||||||||
Gross profit
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14,671,377 | 26,543,039 | 34,391,525 | |||||||||
Operating expenses
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||||||||||||
Selling expenses
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4,386,259 | 3,934,047 | 3,941,247 | |||||||||
General and administrative expenses
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20,087,416 | 10,945,838 | 6,510,238 | |||||||||
Impairment of long-term assets
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9,021,583 | - | - | |||||||||
Impairment of goodwill
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21,612,398 | - | - | |||||||||
Total operating expenses
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55,107,656 | 14,879,885 | 10,451,485 | |||||||||
Income (loss) from operations
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(40,436,279 | ) | 11,663,154 | 23,940,040 | ||||||||
Non-operating income (expense):
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||||||||||||
Other income (expense)
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(75,551 | ) | 486,299 | 90,208 | ||||||||
Interest income
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117,457 | 213,018 | 190,965 | |||||||||
Interest and financing costs
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(1,364,706 | ) | (1,022,626 | ) | (5,704,358 | ) | ||||||
Foreign currency transaction loss
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(5,261 | ) | (17,943 | ) | (559,299 | ) | ||||||
Total non-operating income (expense)
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(1,328,061 | ) | (341,252 | ) | (5,982,484 | ) | ||||||
Income (loss) before income taxes
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(41,764,340 | ) | 11,321,902 | 17,957,556 | ||||||||
Income tax expense
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1,234,725 | 1,142,105 | 587,222 | |||||||||
Net income (loss)
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(42,999,065 | ) | 10,179,797 | 17,370,334 | ||||||||
Less: Net income (loss) attributed to noncontrolling interest
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(295,095 | ) | (168,569 | ) | 421,519 | |||||||
Net income attributed to AgFeed
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$ | (42,703,970 | ) | $ | 10,348,366 | $ | 16,948,815 | |||||
Comprehensive income (loss)
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||||||||||||
Net income (loss)
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$ | (42,999,065 | ) | $ | 10,179,797 | $ | 17,370,334 | |||||
Foreign currency translation gain
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3,956,321 | 7,935 | 3,476,562 | |||||||||
Comprehensive income (loss)
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$ | (39,042,744 | ) | $ | 10,187,732 | $ | 20,846,896 | |||||
Weighted average shares outstanding :
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||||||||||||
Basic
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47,458,026 | 40,978,457 | 31,557,742 | |||||||||
Diluted
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47,458,026 | 41,214,070 | 31,713,977 | |||||||||
Earnings per share attributed to AgFeed common stockholders:
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||||||||||||
Basic
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$ | (0.90 | ) | $ | 0.25 | $ | 0.54 | |||||
Diluted
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$ | (0.90 | ) | $ | 0.25 | $ | 0.53 |
2010
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2009
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2008
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income (loss)
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$ | (42,999,065 | ) | 10,179,797 | $ | 17,370,334 | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
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||||||||||||
Depreciation
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3,420,945 | 2,596,689 | 1,580,843 | |||||||||
Amortization of intangible assets
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226,110 | 92,740 | 86,543 | |||||||||
Loss on disposal of assets
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2,658,823 | 1,292,480 | 17,248 | |||||||||
Impairment of long-term assets
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9,021,583 | - | - | |||||||||
Impairment of goodwill
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21,612,398 | - | - | |||||||||
Stock based compensation
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224,636 | 572,605 | 231,368 | |||||||||
Issuance of common stock for services
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1,508,969 | - | - | |||||||||
Value of re-priced warrants
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- | - | 22,782 | |||||||||
Value of change in conversion price of convertible notes
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- | - | 267,748 | |||||||||
Amortization of debt issuance costs
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30,089 | 211,517 | 1,470,443 | |||||||||
Amortization of discount on convertible debt
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70,811 | 497,769 | 3,460,441 | |||||||||
Change in working capital components, net of effects of acquisitions
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Accounts receivable
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(3,000,232 | ) | (4,936,388 | ) | (2,324,978 | ) | ||||||
Other receivables
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2,298,738 | (2,110,081 | ) | (5,464,327 | ) | |||||||
Inventory
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1,459,054 | (3,592,137 | ) | (8,815,870 | ) | |||||||
Advances to suppliers
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(501,481 | ) | (679,134 | ) | (44,147 | ) | ||||||
Prepaid expenses
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240,567 | (159,176 | ) | (499,047 | ) | |||||||
Deferred taxes
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(2,413,233 | ) | - | - | ||||||||
Other assets
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- | (1,356,005 | ) | (2,239,491 | ) | |||||||
Accounts payable
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(2,149,043 | ) | 1,048,356 | 3,300,773 | ||||||||
Other payables
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(7,473,558 | ) | (44,890 | ) | 8,509,638 | |||||||
Unearned revenue
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(61,264 | ) | 260,441 | 211,081 | ||||||||
Accrued expenses
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5,103,218 | (80,828 | ) | 119,325 | ||||||||
Accrued payroll
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(641,830 | ) | 157,338 | 626,587 | ||||||||
Tax and welfare payable
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1,513,971 | (69,463 | ) | 447,753 | ||||||||
Interest payable
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(132,624 | ) | (720 | ) | 121,139 | |||||||
Net cash provided by (used in) operating activities
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(9,982,418 | ) | 3,880,910 | 18,456,186 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
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||||||||||||
Purchase of property and equipment
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(21,136,415 | ) | (9,810,142 | ) | (10,696,569 | ) | ||||||
Purchase of intangible assets
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(450,059 | ) | (67,551 | ) | (140,580 | ) | ||||||
Cash paid for the purchase of business, net of cash acquired
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(11,983,170 | ) | - | (67,490,049 | ) | |||||||
Proceeds from the sale of subsidary
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- | 835,770 | - | |||||||||
Net cash used in investing activities
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(33,569,644 | ) | (9,041,923 | ) | (78,327,198 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
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||||||||||||
Proceeds from the sale of common stock
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13,000,000 | 10,000,000 | 65,950,069 | |||||||||
Offering costs paid
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(42,005 | ) | (1,740,072 | ) | (7,030,261 | ) | ||||||
Proceeds from exercise of warrants
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- | 8,062,510 | 2,138,848 | |||||||||
Repayment of borrowings under line of credit facility, net
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5,455,755 | - | - | |||||||||
Proceeds from short-term loans
|
- | 4,541,500 | - | |||||||||
Proceeds from issuance of convertible notes
|
- | - | 19,000,000 | |||||||||
Issuance costs for convertible notes
|
- | - | (1,716,666 | ) | ||||||||
Payment on note payable
|
(421,373 | ) | - | (1,161,297 | ) | |||||||
Purchase of treasury shares
|
(47,196 | ) | - | (1,811,746 | ) | |||||||
Capital contributed by noncontrolling interest holders
|
401,282 | 118,664 | 1,097,690 | |||||||||
Purchase of noncontrolling interest in majority owed hog farms
|
(406,103 | ) | (2,518,089 | ) | - | |||||||
Repayment of contribution of noncontrolling interest holder
|
- | (586,800 | ) | - | ||||||||
Net cash provided by financing activities
|
17,940,360 | 17,877,713 | 76,466,637 | |||||||||
Effect of exchange rate changes on cash and cash equivalents
|
431,464 | 24,076 | 547,544 | |||||||||
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
|
(25,180,238 | ) | 12,740,776 | 17,143,169 | ||||||||
CASH & CASH EQUIVALENTS, BEGINNING BALANCE
|
37,580,154 | 24,839,378 | 7,696,209 | |||||||||
CASH & CASH EQUIVALENTS, ENDING BALANCE
|
$ | 12,399,916 | $ | 37,580,154 | $ | 24,839,378 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Interest paid, net of amounts capitalized
|
$ | 826,485 | $ | 312,620 | $ | 363,191 | ||||||
Income taxes paid
|
$ | 1,960,804 | $ | 1,211,610 | $ | 408,435 |