x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
Delaware
|
98-0231607
|
(State
or other jurisdiction of incorporation or
organization)
|
(IRS
Employer of Identification
No.)
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
Smaller
reporting company ¨
|
Page
|
|||
PART
I.
|
FINANCIAL
INFORMATION
|
3
|
|
Item
1.
|
Financial
Statements
|
3
|
|
Notes
to Consolidated Financial Statements (unaudited)
|
6
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
25
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
|
Item
4.
|
Controls
and Procedures
|
37
|
|
PART
II.
|
OTHER
INFORMATION
|
37
|
|
Item
1.
|
Legal
Proceedings
|
37
|
|
Item
1A.
|
Risk
Factors
|
37
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
37
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
37
|
|
Item
4.
|
Other
Information
|
37
|
|
Item
5.
|
Exhibits
|
37
|
|
SIGNATURES
|
38
|
March
31,
|
December,
31
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
& cash equivalents
|
$ | 30,172,391 | $ | 48,177,794 | ||||
Accounts
receivable, net of allowance for doubtful accounts of $196,138 and
$163,280 as of March 31, 2010 and December 31, 2009,
respectively.
|
1,514,070 | 1,289,116 | ||||||
Other
receivables
|
491,020 | 709,741 | ||||||
Other
receivable - employee advances
|
190,045 | 338,689 | ||||||
Inventories
|
874,678 | 841,837 | ||||||
Advances
to suppliers
|
1,302,568 | 596,868 | ||||||
Prepaid
expense and other current assets
|
1,546,556 | 1,076,915 | ||||||
Loans
receivable
|
14,259,240 | 293,400 | ||||||
Total
current assets
|
50,350,568 | 53,324,360 | ||||||
INVESTMENT
IN UNCONSOLIDATED JOINT VENTURES
|
1,467,000 | 1,467,000 | ||||||
PROPERTY
AND EQUIPMENT, NET
|
75,603,216 | 72,713,012 | ||||||
CONSTRUCTION
IN PROGRESS
|
57,102,317 | 52,918,236 | ||||||
DEFERRED
FINANCING COSTS
|
1,234,540 | 1,336,998 | ||||||
OTHER
ASSETS
|
16,937,089 | 15,854,910 | ||||||
TOTAL
ASSETS
|
$ | 202,694,730 | $ | 197,614,516 | ||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 1,970,228 | $ | 2,081,261 | ||||
Other
payables
|
85,082 | 80,788 | ||||||
Unearned
revenue
|
2,199,805 | 1,813,641 | ||||||
Accrued
interest
|
200,509 | 786,052 | ||||||
Taxes
payable
|
2,888,511 | 1,901,577 | ||||||
Total
current liabilities
|
7,344,135 | 6,663,319 | ||||||
LONG
TERM LIABILITIES:
|
||||||||
Notes
payable, net of discount $11,946,508 and $12,707,713 as of March 31, 2010
and December 31, 2009, respectively
|
28,053,492 | 27,292,287 | ||||||
Derivative
liabilities - warrants
|
19,152,570 | 19,545,638 | ||||||
Total
long term liabilities
|
47,206,062 | 46,837,925 | ||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Preferred
stock, $0.0001 per share; 5,000,000 shares authorized; none
issued
|
- | - | ||||||
Common
stock, $0.0001 per share; 45,000,000 shares authorized, 21,183,904 shares
issued and outstanding at March 31, 2010 and December 31,
2009
|
2,118 | 2,118 | ||||||
Additional
paid-in capital
|
79,926,097 | 79,851,251 | ||||||
Cumulative
other comprehensive gain
|
8,675,165 | 8,714,019 | ||||||
Statutory
reserves
|
6,425,074 | 5,962,695 | ||||||
Retained
earnings
|
53,116,079 | 49,583,189 | ||||||
Total
stockholders' equity
|
148,144,533 | 144,113,272 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 202,694,730 | $ | 197,614,516 |
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Revenues
|
||||||||
Natural
gas revenue
|
$ | 15,483,629 | $ | 14,965,819 | ||||
Gasoline
revenue
|
1,468,816 | 1,174,398 | ||||||
Installation
and others
|
2,414,378 | 2,387,449 | ||||||
Total
revenues
|
19,366,823 | 18,527,666 | ||||||
Cost
of revenues
|
||||||||
Natural
gas cost
|
7,864,654 | 6,746,929 | ||||||
Gasoline
cost
|
1,367,278 | 1,130,057 | ||||||
Installation
and others
|
1,039,923 | 1,017,028 | ||||||
Total
cost of revenues
|
10,271,855 | 8,894,014 | ||||||
Gross
profit
|
9,094,968 | 9,633,652 | ||||||
Operating
expenses
|
||||||||
Selling
expenses
|
2,891,790 | 2,580,825 | ||||||
General
and administrative expenses
|
1,817,656 | 1,425,324 | ||||||
Total
operating expenses
|
4,709,446 | 4,006,149 | ||||||
Income
from operations
|
4,385,522 | 5,627,503 | ||||||
Non-operating
income (expense):
|
||||||||
Interest
income
|
89,366 | 8,908 | ||||||
Interest
expense
|
- | (581,492 | ) | |||||
Other
income (expense), net
|
46,569 | (2,303 | ) | |||||
Change
in fair value of warrants
|
393,068 | 197,051 | ||||||
Foreign
currency exchange loss
|
(8,110 | ) | (50,788 | ) | ||||
Total
non-operating income (expense)
|
520,893 | (428,624 | ) | |||||
Income
before income tax
|
4,906,415 | 5,198,879 | ||||||
Provision
for income tax
|
911,145 | 997,256 | ||||||
Net
income
|
3,995,270 | 4,201,623 | ||||||
Other
comprehensive income
|
||||||||
Foreign
currency translation loss
|
(38,854 | ) | (152,115 | ) | ||||
Comprehensive
income
|
$ | 3,956,416 | $ | 4,049,508 | ||||
Weighted
average shares outstanding
|
||||||||
Basic
|
21,183,904 | 14,600,152 | ||||||
Diluted
|
21,595,038 | 14,600,152 | ||||||
Earnings
per share
|
||||||||
Basic
|
$ | 0.19 | $ | 0.29 | ||||
Diluted
|
$ | 0.19 | $ | 0.29 |
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 3,995,270 | $ | 4,201,623 | ||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation
and amortization
|
1,472,595 | 1,389,565 | ||||||
Provision
for bad debt
|
32,847 | - | ||||||
Amortization
of discount on senior notes
|
- | 170,712 | ||||||
Amortization
of financing costs
|
- | 38,578 | ||||||
Stock
based compensation
|
74,847 | 14,842 | ||||||
Change
in fair value of warrants
|
(393,068 | ) | (197,051 | ) | ||||
Change
in assets and liabilities:
|
||||||||
Accounts
receivable
|
(257,812 | ) | (41,244 | ) | ||||
Other
receivable - employee advances
|
148,593 | 151,617 | ||||||
Inventories
|
(32,830 | ) | 30,812 | |||||
Advances
to suppliers
|
(705,460 | ) | 151,828 | |||||
Prepaid
expense and other current assets
|
(167,213 | ) | (100,912 | ) | ||||
Accounts
payable and accrued liabilities
|
(111,007 | ) | 304,860 | |||||
Other
payables
|
4,296 | 212,961 | ||||||
Unearned
revenue
|
386,032 | 195,435 | ||||||
Accrued
interest
|
(585,543 | ) | (330,003 | ) | ||||
Taxes
payable
|
986,599 | 44,898 | ||||||
Net
cash provided by operating activities
|
4,848,146 | 6,238,521 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Loans
to third parties
|
(14,259,140 | ) | - | |||||
Repayment
of loans receivable
|
293,300 | - | ||||||
Purchase
of property and equipment
|
(253,844 | ) | (13,484 | ) | ||||
Additions
to construction in progress
|
(7,425,192 | ) | (2,552,098 | ) | ||||
Prepayment
on long term assets
|
(1,047,327 | ) | (426,913 | ) | ||||
Return
of acquisition deposit
|
(124,653 | ) | - | |||||
Payment
for intangible assets
|
- | (35,822 | ) | |||||
Payment
for land use rights
|
4,722 | - | ||||||
Net
cash used in investing activities
|
(22,812,134 | ) | (3,028,317 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net
cash provided by financing activities
|
- | - | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
(41,415 | ) | (6,226 | ) | ||||
NET
(DECREASE) INCREASE IN CASH & CASH EQUIVALENTS
|
(18,005,403 | ) | 3,203,978 | |||||
CASH
& CASH EQUIVALENTS, BEGINNING OF PERIOD
|
48,177,794 | 5,854,383 | ||||||
CASH
& CASH EQUIVALENTS, END OF PERIOD
|
$ | 30,172,391 | $ | 9,058,361 | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Interest
paid
|
$ | 1,085,543 | $ | 1,084,130 | ||||
Income
taxes paid
|
$ | - | $ | 997,257 | ||||
Non-cash
transactions for investing and financing activities:
|
||||||||
Construction
in progress transferred to property and equipment
|
$ | 4,106,200 | $ | - | ||||
Capitalized
interest - amortization of discount of notes payable and
issuance cost
|
$ | 863,662 | $ | - |
|
a.
|
XXNGC
holds the licenses and approvals necessary to operate its natural gas
business in China.
|
|
b.
|
SXNGE
provides exclusive technology consulting and other general business
operation services to XXNGC in return for a consulting services fee which
is equal to XXNGC’s revenue.
|
|
c.
|
XXNGC’
shareholders have pledged their equity interests in XXNGC to the
Company.
|
|
d.
|
Irrevocably
granted the Company an exclusive option to purchase, to the extent
permitted under PRC law, all or part of the equity interests in XXNGC and
agreed to entrust all the rights to exercise their voting power to the
person appointed by the Company.
|
|
|
March 31, 2010
(Unaudited)
|
December 31, 2009
|
|
||||
Materials and
supplies
|
$
|
453,382
|
$
|
345,611
|
||||
Gasoline
|
421,296
|
496,226
|
||||||
Total
|
$
|
874,678
|
$
|
841,837
|
|
|
March 31, 2010
(unaudited)
|
December 31, 2009
|
|
||||
Shanxi
Yuojin Mining Company, due on November 30, 2009, extended
to November 30, 2010, annual interest at 5.84% (1)
|
$
|
-
|
$
|
293,400
|
||||
Shanxi
JunTai Housing Purchase Ltd., due on January 10, 2011, annual interest at
5.84% (2)
|
4,401,000
|
-
|
||||||
Ms.
Taoxiang Wang, due on February 19, 2011, annual interest at 5.84%
(3)
|
9,858,240
|
-
|
||||||
$
|
14,259,240
|
$
|
293,400
|
(1)
|
This Company paid off this
loan on March 11, 2010.
|
(2)
|
The
applicable interest rate of this loan is the People’s Bank of China’s
standard one-year rate, 5.31% at inception of the loan, which is subject
to change with the government policy, plus an additional 10% interest rate
float. Pursuant to these terms, the interest rates were 5.84% at the
inception date and March 31, 2010. This loan is guaranteed by a
third-party individual.
|
(3)
|
This one-year loan was
secured by Ms. Taoxiang Wang’s 40% of ownership in Xi’an Demaoxing Real
Estate Co. On April 22 and April 27, 2010, Ms. Wang repaid $ 5,868,000 and
$4,130,962, respectively, of which $140,722 was the interest
payments. As of April 27, 2010, this loan was paid
off.
|
March 31, 2010
(unaudited)
|
December 31, 2009
|
|||||||
Condensed
balance sheet information:
|
||||||||
Current
assets
|
$ | 2,993,878 |
$
|
2,993,878 | ||||
Noncurrent
assets
|
- | - | ||||||
Total
assets
|
$ | 2,993,878 | $ | 2,993,878 | ||||
Current
liabilities
|
- | - | ||||||
Noncurrent
liabilities
|
- | - | ||||||
Equity
|
$ | 2,993,878 | $ | 2,993,878 | ||||
Total
liabilities and equity
|
$ | 2,993,878 | $ | 2,993,878 |
Office
equipment
|
5
years
|
Operating
equipment
|
5-20
years
|
Vehicles
|
5
years
|
Buildings
and improvements
|
5-30
years
|
|
|
March 31, 2010
(unaudited)
|
December 31, 2009
|
|||||
Office equipment
|
$
|
478,423
|
$
|
439,055
|
||||
Operating
equipment
|
63,032,066
|
61,350,503
|
||||||
Vehicles
|
2,486,614
|
2,486,614
|
||||||
Buildings
and improvements
|
24,055,153
|
21,414,553
|
||||||
Total
property and equipment
|
90,052,256
|
85,690,725
|
||||||
Less
accumulated depreciation
|
(14,449,040
|
)
|
(12,977,713
|
)
|
||||
Property
and equipment, net
|
$
|
75,603,216
|
$
|
72,713,012
|
No.
|
Project Description
|
Location
|
March 31, 2010
(unaudited)
|
Commencement
Date
|
Expected
completion
date
|
Estimated
additional
cost to
complete
|
|||||||||
1
|
Jingbian
LNG (1)
|
JBLNG
|
$
|
45,882,038
|
Dec-06
|
Jun-10
|
$
|
9,873,000
|
|||||||
2
|
Sa
Pu mother station
|
HXNGC
|
840,799
|
Jul-08
|
Jun-11
|
6,300,000
|
|||||||||
3
|
Xi'an
Cangsheng mother station
|
XXNGC
|
1,925,557
|
Sep-08
|
May-11
|
3,220,000
|
|||||||||
4
|
Sanhuanbei
fueling station
|
XXNGC
|
1,725,563
|
Mar-10
|
May
-10
|
1,126,656
|
|||||||||
5
|
Sanyao
fueling station
|
XXNGC
|
1,662,652
|
Mar-10
|
May-10
|
1,085,580
|
|||||||||
6
|
Matengkong
fueling station
|
XXNGC
|
1,581,766
|
Mar-10
|
May
-10
|
1,164,798
|
|||||||||
7
|
International
port
|
XXNGC
|
1,376,406
|
May-09
|
Dec
-10
|
2,800,000
|
|||||||||
8
|
Other
CIP projects
|
XXNGC
|
2,107,536
|
Various
|
Various
|
500,000
|
|||||||||
$
|
57,102,317
|
$
|
26,070,034
|
(1)
|
Phase I of the LNG project cost
$48,963,000 to construct and the additional
$6,792,038 represent costs incurred in connection with phase II
and phase III of the LNG
plant
|
|
●
|
Level 1 inputs to the
valuation methodology are quoted prices (unadjusted) for identical assets
or liabilities in active
markets.
|
|
●
|
Level 2 inputs to the
valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the
asset or liability, either directly or indirectly, for substantially the
full term of the financial
instrument.
|
|
●
|
Level 3 inputs to the
valuation methodology are unobservable and significant to the fair value
measurement.
|
|
|
March 31, 2010
(unaudited)
|
|
|
December
31, 2009
|
|
||
Annual dividend
yield
|
-
|
-
|
||||||
Expected
life (years)
|
2.57
|
2.82
|
||||||
Risk-free
interest rate
|
1.34
|
%
|
1.49
|
%
|
||||
Expected
volatility
|
90
|
%
|
90
|
%
|
Carrying Value at
March 31, 2010
|
Fair Value Measurement at
March 31, 2010
|
|||||||||||||||
(unaudited)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Senior
notes
|
$
|
28,053,492
|
$
|
-
|
$
|
-
|
$
|
35,764,078
|
||||||||
Redeemable
liability - warrants
|
17,500,000
|
-
|
-
|
15,468,681
|
||||||||||||
Derivative
liability - warrants
|
1,652,570
|
-
|
1,652,570
|
-
|
||||||||||||
Total
liability measured at fair value
|
$
|
47,206,062
|
$
|
-
|
$
|
1,652,570
|
$
|
51,232,759
|
For
the three months ended
March
31
|
||||||||
2010
|
2009
|
|||||||
Tax
provision (credit) at statutory rate
|
34
|
%
|
34
|
%
|
||||
Foreign
tax rate difference
|
(9
|
)%
|
(9
|
)%
|
||||
Effect
of favorable tax rate
|
(7
|
)%
|
(10
|
)%
|
||||
Other
item (1)
|
1
|
%
|
4
|
%
|
||||
Total
provision for income taxes
|
19
|
%
|
19
|
%
|
Valuation allowance
|
For
the three months end
March
31,2010
(unaudited)
|
Year
ended
December
31,2009
|
||||||
Balance,
beginning of period
|
$
|
1,099,171
|
$
|
563,541
|
||||
Increase
|
116,291
|
535,630
|
||||||
Balance,
end of period
|
$
|
1,215,462
|
$
|
1,099,171
|
March 31, 2010
(unaudited)
|
December 31, 2009
|
|||||||
Value
added tax payable
|
$ | 810,976 | $ | 740,772 | ||||
Business
tax payable
|
- | 1,540 | ||||||
Income
tax payable
|
2,039,416 | 1,127,961 | ||||||
Urban
maintenance tax payable
|
34,357 | 27,442 | ||||||
Income
tax for individual payable
|
3,762 | 3,862 | ||||||
Total
tax payable
|
$ | 2,888,511 | $ | 1,901,577 |
March 31,
2010
|
December
31,
2009
|
|||||||
(unaudited)
|
||||||||
Prepaid
rent – natural gas stations
|
$
|
335,487
|
$
|
340,211
|
||||
Prepayment
for acquiring land use right
|
1,936,440
|
1,936,440
|
||||||
Advances
on purchasing equipment and construction in progress
|
13,104,648
|
12,056,964
|
||||||
Refundable
security deposits
|
1,388,978
|
1,264,283
|
||||||
Others
|
171,536
|
257,012
|
||||||
Total
|
$
|
16,937,089
|
$
|
15,854,910
|
|
·
|
An indenture for the 5.00%
Guaranteed Senior Notes due
2014;
|
|
·
|
An investor rights
agreement;
|
|
·
|
A registration rights agreement
covering the shares of common stock issuable upon exercise of the
warrants;
|
|
·
|
An information rights agreement
that grants to the Investor, subject to applicable law, the right to
receive certain information regarding the
Company;
|
|
·
|
A share-pledge agreement whereby
the Company granted to the Collateral Agent (on behalf of the holders of
the Senior Notes) a pledge on 65% of the Company’s equity interest in
SXNGE, a PRC corporation and wholly-owned subsidiary of the Company;
and
|
|
·
|
An account pledge and security
agreement whereby the Company granted to the Collateral Agent a security
interest in the account where the proceeds from the Senior Notes are
deposited.
|
Date
|
|
Prepayment Percentage
|
|
|
July
30, 2011
|
8.3333
|
%
|
||
January
30, 2012
|
8.3333
|
%
|
||
July
30, 2012
|
16.6667
|
%
|
||
January
30, 2013
|
16.6667
|
%
|
||
July
30, 2013
|
25.0000
|
%
|
Year
|
Principal
|
|||
2009
|
$
|
43,200,000
|
||
2010
|
42,400,000
|
|||
2011
|
41,600,000
|
|||
2012
|
40,800,000
|
|||
2013
and thereafter
|
40,000,000
|
|
|
Warrants
Outstanding
|
Weighted Average
Exercise Price
|
Aggregate
Intrinsic Value
|
|
|||||||
Outstanding,
December 31, 2008
|
1,994,242
|
$
|
14.28
|
-
|
||||||||
Granted
|
-
|
-
|
-
|
|||||||||
Forfeited
|
(160,588
|
)
|
|
7.20
|
-
|
|||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Outstanding,
December 31, 2009
|
1,833,654
|
$
|
8.93
|
$
|
4,008,434
|
|||||||
Granted
|
-
|
-
|
-
|
|||||||||
Forfeited
|
-
|
|
-
|
-
|
||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Outstanding,
March 31, 2010 (unaudited)
|
1,833,654
|
$
|
8.93
|
$
|
1,607,507
|
Outstanding Warrants
|
|
||||||
Exercise Price
|
Number
|
|
Average
Remaining
Contractual
Life
|
|
|||
$ |
7.37
|
1,450,000
|
4.83
|
||||
$ |
14.86
|
383,654
|
2.34
|
||||
$ |
8.93
|
1,833,654
|
4.31
|
|
i.
|
Making
up cumulative prior years’ losses, if
any;
|
ii.
|
Allocations
to the “Statutory surplus reserve” of at least 10% of income after tax, as
determined under PRC accounting rules and regulations, until the fund
amounts to 50% of the Company's registered
capital;
|
|
iii.
|
Allocations
to the discretionary surplus reserve, if approved in the shareholders’
general meeting.
|
|
Options
Outstanding
|
Weighted Average
Exercise Price
|
Aggregate
Intrinsic Value
|
|||||||||
Outstanding,
December 31, 2008
|
-
|
$ |
-
|
$ |
-
|
|||||||
Granted
|
318,850
|
|
4.90
|
|
1,983,247
|
|||||||
Forfeited
|
75,000
|
4.90
|
466,500
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Outstanding,
December 31, 2009
|
243,850
|
$
|
4.90
|
$
|
1,516,747
|
|||||||
Granted
|
|
|
|
|
||||||||
Forfeited
|
|
|||||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Outstanding,
March 31, 2010 (unaudited)
|
243,850
|
$
|
4.90
|
$
|
1,197,304
|
Outstanding Options
|
|
|
Exercisable Options
|
|
|||||||||||||||||
Exercise
Price
|
Number
|
Average
Remaining
Contractual
Life
|
Exercise
Price
|
Number
|
Average
Remaining
Contractual
Life
|
||||||||||||||||
$
|
4.90
|
243,850
|
5.00
|
-
|
-
|
-
|
For the three
months ended March 31,
|
||||||||
2010
(unaudited)
|
2009
(unaudited)
|
|||||||
Basic earnings per share
|
||||||||
Net
income
|
$
|
3,995,270
|
$
|
4,201,623
|
||||
Weighted
shares outstanding-Basic
|
21,183,904
|
14,600,152
|
||||||
Earnings
per share-Basic
|
$
|
0.19
|
$
|
0.29
|
||||
Diluted
earnings per share
|
||||||||
Net
income
|
$
|
3,995,270
|
$
|
4,201,623
|
||||
Weighted
shares outstanding-Basic
|
21,183,904
|
14,600,152
|
||||||
Effect
of diluted securities-Warrants
|
411,134
|
-
|
||||||
Weighted
shares outstanding-Diluted
|
21,595,038
|
14,600,152
|
||||||
Earnings
per share-Diluted
|
$
|
0.19
|
$
|
0.29
|
For the three
months ended March 31,
|
||||||||
|
2010
(unaudited)
|
2009
(unaudited)
|
||||||
Numbers
of natural gas vendors
|
3
|
3
|
||||||
Percentage
of total natural gas purchases
|
88
|
%
|
80
|
%
|
Year
ending December 31, 2010
|
$
|
1,280,191
|
||
Year
ending December 31, 2011
|
2,087,346
|
|||
Year
ending December 31, 2012
|
1,921,385
|
|||
Year
ending December 31, 2013
|
1,830,217
|
|||
Year
ending December 31, 2014
|
2,218,208
|
|||
Thereafter
|
34,447,281
|
|||
Total
|
$
|
43,784,628
|
Year
ending December 31, 2010
|
$
|
10,343,316
|
||
Year
ending December 31, 2011
|
2,143,287
|
|||
Thereafter
|
-
|
|||
Total
|
$
|
12,486,603
|
|
·
|
Distribution and sale of
compressed natural gas through our VIE owned CNG fueling
stations for hybrid (natural gas/gasoline) powered vehicles (37 stations
as of March 31, 2010);
|
|
·
|
Installation, distribution and
sale of piped natural gas to residential and commercial customers through
our VIE owned pipelines. We distributed and sold piped natural gas to
110,713 residential customers as of March 31,
2010;
|
|
·
|
Distribution and sale of gasoline
through our VIE owned CNG fueling stations for gasoline and hybrid
(natural gas/gasoline) powered vehicles (eight of our VIE owned CNG
fueling stations sold gasoline as of March 31, 2010);
and
|
|
·
|
Conversion of gasoline-fueled
vehicles to hybrid (natural gas/gasoline) powered vehicles at our auto
conversion sites.
|
March 31,2010
|
March 31,2009
|
Increase in dollar
amount
|
Increase in
percentage
|
|||||||||||||
Natural
gas from filling stations
|
$
|
14,629,610
|
$
|
14,257,925
|
$
|
371,685
|
2.6
|
% | ||||||||
Natural
gas from pipelines
|
854,019
|
707,895
|
146,124
|
20.6
|
% | |||||||||||
Gasoline
|
1,468,816
|
1,174,398
|
294,418
|
25.1
|
% | |||||||||||
Installation
|
2,007,774
|
1,901,034
|
106,740
|
5.6
|
% | |||||||||||
Auto
conversion
|
406,604
|
486,414
|
(79,810
|
) |
(16.4
|
)% | ||||||||||
Total
|
$
|
19,366,823
|
$
|
18,527,666
|
$
|
839,157
|
4.5
|
% |
March 31, 2010
|
March 31, 2009
|
Increase in dollar
amount
|
Increase in
percentage
|
|||||||||||||
Natural
gas from filling stations
|
$
|
7,272,136
|
$
|
6,244,441
|
$
|
1,027,695
|
16.5
|
%
|
||||||||
Natural
gas from pipelines
|
592,518
|
502,489
|
90,029
|
17.9
|
%
|
|||||||||||
Gasoline
|
1,367,278
|
1,130,057
|
237,221
|
21.0
|
%
|
|||||||||||
Installation
|
798,054
|
722,862
|
75,192
|
10.4
|
%
|
|||||||||||
Auto
conversion
|
241,869
|
294,165
|
(52,296
|
) |
(17.8
|
)%
|
||||||||||
Total
|
$
|
10,271,855
|
$
|
8,894,014
|
$
|
1,377,841
|
15.5
|
%
|
March 31, 2010
|
March 31, 2009
|
Increase in
dollar amount
|
Increase in
percentage
|
|||||||||||||
Natural
gas from filling stations
|
$
|
7,357,474
|
$
|
8,013,484
|
$
|
(656,010
|
) |
(8.2
|
)% | |||||||
Natural
gas from pipelines
|
261,501
|
205,406
|
56,095
|
27.3
|
% | |||||||||||
Gasoline
|
101,538
|
44,341
|
57,197
|
129.0
|
% | |||||||||||
Installation
|
1,209,720
|
1,178,172
|
31,548
|
2.7
|
% | |||||||||||
Auto
conversion
|
164,735
|
192,249
|
(27,514
|
) |
(14.3
|
)% | ||||||||||
Total
|
$
|
9,094,968
|
$
|
9,633,652
|
$
|
(538,684
|
)
|
(5.6
|
)% |
|
|
|
Payments due by period
|
|
||||||||||||||||
Contractual obligations
|
|
Total
|
|
|
Less than
1 year
|
|
|
1-3
Years
|
|
|
3-5
years
|
|
|
More than
5 years
|
|
|||||
|
(in thousands)
|
|
||||||||||||||||||
Long-Term
Debt Obligations
|
40,000
|
-
|
20,000
|
20,000
|
$
|
-
|
||||||||||||||
Other
Long-Term Liabilities Reflected on Company's Balance Sheet
|
17,500
|
-
|
-
|
17,500
|
(1) | |||||||||||||||
Total
|
57,500
|
-
|
20,000
|
37,500
|
$
|
(1)
|
The $17,500,000 reflects
derivative liability related to the embedded put option in the 1,450,000
warrants we issued to Abax in January 2008. Abax is entitled to require
the Company purchase back the portion of warrants not exercised upon
expiration.
|
Year
ending December 31, 2010
|
$
|
1,280,191
|
||
Year
ending December 31, 2011
|
2,087,346
|
|||
Year
ending December 31, 2012
|
1,921,385
|
|||
Year
ending December 31, 2013
|
1,830,217
|
|||
Year
ending December 31, 2014
|
2,218,208
|
|||
Thereafter
|
34,447,281
|
|||
Total
|
$
|
43,784,628
|
Year
ending December 31, 2010
|
$
|
10,343,316
|
||
Year
ending December 31, 2011
|
2,143,287
|
|||
Thereafter
|
-
|
|||
Total
|
$
|
12,486,603
|
Office
equipment
|
5
years
|
Operating
equipment
|
5-20
years
|
Vehicles
|
5
years
|
Buildings
and improvements
|
5-30
years
|
|
·
|
Level 1 inputs to the valuation
methodology are quoted prices (unadjusted) for identical assets or
liabilities in active
markets.
|
|
·
|
Level 2 inputs to the valuation
methodology include quoted prices for similar assets and liabilities in
active markets, and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the
financial instrument.
|
|
·
|
Level 3 inputs to the valuation
methodology are unobservable and significant to the fair value
measurement.
|
Exhibit Number
|
Description of Exhibit
|
|
31.1*
|
Certification
of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended
|
|
31.2*
|
Certification
of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended
|
|
32.1*
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Executive
Officer)
|
|
32.2*
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Financial
Officer)
|
China
Natural Gas, Inc.
|
||
May
7, 2010
|
By:
|
/s/
Qinan Ji
|
Qinan
Ji
|
||
Chief
Executive Officer
|
||
(Principal
Executive Officer)
|
May
7, 2010
|
By:
|
/s/
David She
|
David
She
|
||
Chief
Financial Officer
|
||
(Principal
Financial and Accounting
Officer)
|