x
|
Quarterly
report pursuant Section 13 or 15(d) of the Securities Exchange Act
of
1934
|
¨
|
Transition
report pursuant Section 13 or 15(d) of the Securities Exchange Act
of
1934
|
Delaware
|
|
98-0381367
|
(State
or Other Jurisdiction
of
Incorporation or Organization)
|
|
(IRS
Employer
Identification
No.)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
(Do
not check if a smaller reporting company)
|
Page
Number
|
|
PART
I. FINANCIAL INFORMATION
|
|
Item
1. Financial Statements
|
|
Consolidated
Balance Sheets as of March 31, 2008 (unaudited) and December 31,
2007
|
2
|
Consolidated
Statements of Operations and Other Comprehensive Income (Loss) for
the
three months ended March 31 2008 and 2007 (unaudited)
|
3
|
Consolidated
Statements of Cash Flows for the three months ended March 31, 2008
and
2007 (unaudited)
|
4
|
Notes
to Consolidated Financial Statements (unaudited)
|
5
|
Item
2. Management's Discussion and Analysis of
Financial Condition and
Results of Operations
|
18
|
Item
3. Quantitative and Qualitative Disclosures
About Market Risk
|
22
|
Item
4T. Controls and Procedures
|
22
|
PART
II. OTHER INFORMATION
|
23
|
Item
1. Legal Proceedings
|
23
|
Item
1A. Risk Factors
|
23
|
Item
2. Unregistered Sales of Equity Securities
and Use of Proceeds
|
23
|
Item
3. Defaults Upon Senior
Securities
|
24
|
Item
4. Submission of Matters to a Vote of
Security Holders
|
24
|
Item
5. Other Information
|
24
|
Item
6. Exhibits
|
24
|
SIGNATURES
|
25
|
March
31,
|
December
31,
|
||||||
2008
|
2007
|
||||||
(unaudited)
|
|||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
& cash equivalents
|
$
|
768,400
|
$
|
617,406
|
|||
Accounts
receivable and other receivable, net of allowance for doubtful
accounts of
$24,095,816 and $25,447,689
|
1,356,605
|
618,052
|
|||||
Other
receivables
|
3,671,817
|
2,292,763
|
|||||
Inventory
|
1,733,654
|
1,179,448
|
|||||
Advances
to suppliers
|
9,452,441
|
9,741,090
|
|||||
Prepaid
expense and other current assets
|
5,227,194
|
5,066,015
|
|||||
Total
current assets
|
22,210,111
|
19,514,774
|
|||||
PROPERTY
AND EQUIPMENT, net
|
5,433,918
|
5,306,254
|
|||||
CONSTRUCTION
IN PROGRESS
|
8,122,327
|
7,722,756
|
|||||
MARKETABLE
SECURITY
|
10,958,608
|
14,239,999
|
|||||
INTANGIBLE
ASSETS, net
|
2,097,922
|
2,050,652
|
|||||
OTHER
ASSETS
|
3,911,974
|
3,720,785
|
|||||
LOAN
RECEIVABLE
|
2,545,300
|
2,439,275
|
|||||
TOTAL
ASSETS
|
$
|
55,280,160
|
$
|
54,994,495
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable
|
$
|
1,122,468
|
$
|
1,186,768
|
|||
Accrued
expenses
|
183,327
|
219,936
|
|||||
Total
current liabilities
|
1,305,795
|
1,406,704
|
|||||
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 18,310,250 and 18,310,250
|
1,831
|
1,831
|
|||||
Additional
paid-in capital
|
33,860,062
|
33,860,062
|
|||||
Other
comprehensive income
|
15,139,414
|
16,520,775
|
|||||
Statutory
reserve
|
4,314,488
|
4,314,488
|
|||||
Retained
Earnings
|
658,570
|
(1,109,365
|
)
|
||||
Total
stockholders' equity
|
53,974,365
|
53,587,791
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
55,280,160
|
$
|
54,994,495
|
Three Months Ended March 31,
|
|||||||
2008
|
2007
|
||||||
(unaudited)
|
(unaudited)
|
||||||
Net
Revenue
|
$
|
908,519
|
$
|
5,008,472
|
|||
Cost
of Revenue
|
567,288
|
3,018,250
|
|||||
Gross
profit
|
341,231
|
1,990,222
|
|||||
Operating
expenses
|
|||||||
Selling
expenses
|
182,259
|
349,014
|
|||||
General
and administrative expenses
|
659,344
|
3,172,509
|
|||||
Total
operating expenses
|
841,603
|
3,521,523
|
|||||
|
|
||||||
Loss
from operations
|
(500,372
|
)
|
(1,531,301
|
)
|
|||
Non-operating
income (expense):
|
|||||||
Other
income (expense)
|
2,212,059
|
(67,197
|
)
|
||||
Interest
income
|
56,248
|
90,009
|
|||||
Interest
expense
|
-
|
(1,057
|
)
|
||||
|
|
||||||
Total
non-operating income (expense)
|
2,268,307
|
21,755
|
|||||
|
|
||||||
Loss
before provision for income taxes
|
1,767,935
|
(1,509,546
|
)
|
||||
Provision
for income taxes
|
-
|
-
|
|||||
Net
income (loss)
|
1,767,935
|
(1,509,546
|
)
|
||||
Other
comprehensive income (loss)
|
|||||||
Foreign
currency translation gain
|
1,900,030
|
641,676
|
|||||
Unrealized
loss on marketable equity security
|
(3,281,391
|
)
|
(2,497,159
|
)
|
|||
|
|||||||
Comprehensive
income (loss)
|
$
|
386,574
|
$
|
(3,365,029
|
)
|
||
Weighted
average shares outstanding :
|
|||||||
Basic
|
18,310,250
|
18,310,250
|
|||||
Diluted
|
18,310,250
|
18,310,250
|
|||||
Earnings
per share:
|
|||||||
Basic
|
$
|
0.10
|
$
|
(0.08
|
)
|
||
Diluted
|
$
|
0.10
|
$
|
(0.08
|
)
|
Three Months Ended March 31,
|
|||||||
2008
|
2007
|
||||||
(unaudited)
|
(unaudited)
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income (loss)
|
$
|
1,767,935
|
$
|
(1,509,546
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
118,141
|
115,221
|
|||||
Allowance
for bad debts
|
(2,370,691
|
)
|
1,360,277
|
||||
(Increase)
/ decrease in assets:
|
|||||||
Accounts
receivable
|
1,670,737
|
(1,760,948
|
)
|
||||
Other
receivable & Loan Receivable
|
(1,264,440
|
)
|
(1,177,348
|
)
|
|||
Inventory
|
(495,907
|
)
|
(1,851,263
|
)
|
|||
Advances
to suppliers
|
682,752
|
487,098
|
|||||
Prepaid
expense
|
49,372
|
(2,512
|
)
|
||||
Increase
/ (decrease) in current liabilities:
|
|||||||
Accounts
payable and accrued expenses
|
(89,350
|
)
|
354,315
|
||||
Accrued
expenses
|
(44,532
|
)
|
1,992
|
||||
Net
cash used in operating activities
|
24,017
|
(3,982,714
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Acquisition
of property and equipment
|
(64,214
|
)
|
(57,187
|
)
|
|||
Additions
to construction in progress
|
-
|
(823,584
|
)
|
||||
Proceeds
from other assets
|
47,403
|
43,583
|
|||||
|
|||||||
Net
cash used in investing activities
|
(16,811
|
)
|
(837,188
|
)
|
|||
Effect
of exchange rate changes on cash and cash equivalents
|
143,788
|
105,437
|
|||||
NET
INCREASE (DECREASE) IN CASH & CASH
EQUIVALENTS
|
150,994
|
(4,714,465
|
)
|
||||
CASH
& CASH EQUIVALENTS, BEGINNING OF PERIOD
|
617,406
|
11,824,327
|
|||||
CASH
& CASH EQUIVALENTS, END OF PERIOD
|
$
|
768,400
|
$
|
7,109,862
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Interest
paid
|
$
|
-
|
$
|
-
|
|||
Income
taxes paid
|
$
|
-
|
$
|
-
|
Operating
equipment
|
10
years
|
|||
Vehicles
|
8
years
|
|||
Office
equipment
|
5
years
|
|||
Buildings
|
30
years
|
March
31,
2008
|
December
31,
2007
|
||||||
Operating
equipment
|
$
|
1,068,681
|
$
|
1,025,862
|
|||
Vehicles
|
740,523
|
722,360
|
|||||
Office
equipment
|
85,230
|
81,671
|
|||||
Buildings
|
4,933,330
|
4,735,665
|
|||||
6,827,764
|
6,565,558
|
||||||
Less
accumulated depreciation
|
(1,393,846
|
)
|
(1,259,304
|
)
|
|||
$
|
5,433,918
|
$
|
5,306,254
|
· |
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.
|
Description
|
Level
1
|
Level
2
|
Level
3
|
|||||||
Assets
|
||||||||||
Marketable
securities
|
$
|
-
|
$
|
10,958,608
|
$
|
-
|
For the Three
Months Ended March
31,
|
|||||||
2008
|
2007
|
||||||
Compound
fertilizer
|
$
|
856,268
|
$
|
3,034,750
|
|||
|
|||||||
Liquid
fertilizer
|
16,140
|
1,128,166
|
|||||
|
|||||||
Pesticide
|
36,111
|
845,556
|
|||||
|
|
|
|||||
|
$
|
908,519
|
$
|
5,008,472
|
March
31,
2008
|
December
31,
2007
|
||||||
Raw
Material
|
$
|
605,187
|
$
|
425,542
|
|||
Packaging
|
293,521
|
250,018
|
|||||
Finished
Goods
|
1,030,629
|
691,730
|
|||||
Consumables
|
350
|
336
|
|||||
1,929,689
|
1,367,626
|
||||||
Less
Obsolescence Reserve
|
(196,033
|
)
|
(188,178
|
)
|
|||
Inventory,
net
|
$
|
1,733,654
|
$
|
1,179,448
|
·
|
in
November, 2021 - prepayment for next 8 years commencing on November
2021
and
|
|
·
|
in
November, 2029 - prepayment of remaining 7 years commencing on November
2029
|
2008
|
2007
|
||||||
Prepaid
Lease (for 15 years)
|
$
|
2,727,235
|
$
|
2,617,962
|
|||
Current
portion
|
193,080
|
185,344
|
|||||
Long-term
portion
|
$
|
2,534,155
|
$
|
2,432,618
|
2008
|
2007
|
||||||
Rights
to use land
|
$
|
1,952,146
|
$
|
1,873,929
|
|||
Fertilizers
proprietary technology rights
|
1,142,480
|
1,096,704
|
|||||
|
3,094,626
|
2,970,633
|
|||||
Less
Accumulated amortization
|
(996,704
|
)
|
(919,981
|
)
|
|||
$
|
2,097,922
|
$
|
2,050,652
|
Options
outstanding
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic Value
|
||||||||
Outstanding,
December 31, 2007
|
136,000
|
$
|
5.39
|
$
|
0
|
|||||
Granted
|
-
|
-
|
||||||||
Forfeited
|
-
|
-
|
||||||||
Exercised
|
-
|
-
|
||||||||
Outstanding,
March 31, 2008
|
136,000
|
$
|
5.39
|
$
|
0
|
Outstanding Options
|
Exercisable Options
|
||||||||||||||||
Exercise
Price
|
Number
|
Average
Remaining
Contractual Life
|
Average Exercise
Price
|
Number
|
Average
Exercise
Price
|
||||||||||||
|
|
|
|
|
|
||||||||||||
$
|
5.00
|
100,000
|
1.18
|
$
|
5.00
|
100,000
|
$
|
5.00
|
|||||||||
$
|
5.80
|
10,000
|
1.75
|
$
|
5.80
|
10,000
|
$
|
5.80
|
|||||||||
$
|
6.72
|
26,000
|
2.51
|
$
|
6.72
|
26,000
|
$
|
6.72
|
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
of 5-10% of income after tax, as determined under PRC accounting
rules and
regulations, to the Company’s “Statutory common welfare fund”, which is
established for the purpose of providing employee facilities and
other
collective benefits to the Company’s employees; and
|
iv.
|
Allocations
to the discretionary surplus reserve, if approved in the stockholders’
general meeting.
|
· |
Our
inability to timely file this quarterly report on Form
10-Q.
Effective disclosure controls and procedures ensure that management
receives information as appropriate to allow timely decisions regarding
required disclosures. The recent earthquakes in the People's Republic
of
China have negatively impacted our ability to assemble all of the
necessary information required to be included in this quarterly report
on
Form 10-Q, including financial information, with sufficient time
to permit
timely filing of this quarterly report on Form 10-Q. For this reason, we
were not able to file this quarterly report within the time period
prescribed and our management is not able to make a determination
at this
time that our disclosure controls and procedures were effective as
of the
end of the period covered by this
report.
|
· |
Our
inability to complete the Management’s Annual Report on Internal Control
over Financial Reporting.
For the reasons described in the Form 10-K under “Internal Control over
Financial Reporting,” our management’s assessment of our internal controls
over financial reporting was substantially delayed and was not complete
as
of the date of the Form 10-K. Because we were not able to complete
this
report within the time period prescribed and include such report
in the
Form 10-K, our management is not able to make a determination at
this time
that our disclosure controls and procedures were effective as of
the end
of the period covered by this
report.
|
(a)
|
Exhibits
|
Exhibit
No.
|
Exhibit
Description
|
|
3.1
|
Certificate
of Incorporation (incorporated by reference to Company’s Form SB-2 filed
September 3, 2002)
|
|
3.2
|
By-Laws
(incorporated by reference to Company’s Form SB-2 filed September 3,
2002).
|
|
10.1
|
Bodisen
Biotech, Inc. 2004 Stock Option Plan (incorporated by reference to
Company’s Form 10-KSB filed March 31, 2005)
|
|
10.2
|
Form
of Bodisen Biotech, Inc. Nonstatutory Stock Option Agreement (incorporated
by reference to Company’s Form 10-KSB filed March 31,
2005)
|
|
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
|
Bodisen
Biotech, Inc.
|
||
May
20, 2008
|
By:
|
/s/ Bo
Chen
|
Bo
Chen
|
||
Chairman,
Chief Executive Officer and President
|
||
(Principal
Executive Officer)
|
||
May
20, 2008
|
By:
|
/s/ Junyan
Tong
|
Junyan
Tong
|
||
Chief
Financial Officer
|
||
(Principal
Financial and
Accounting
Officer) |
Exhibit
No.
|
Exhibit
Description
|
|
3.1
|
Certificate
of Incorporation (incorporated by reference to Company’s Form SB-2 filed
September 3, 2002)
|
|
3.2
|
By-Laws
(incorporated by reference to Company’s Form SB-2 filed September 3,
2002).
|
|
10.1
|
Bodisen
Biotech, Inc. 2004 Stock Option Plan (incorporated by reference to
Company’s Form 10-KSB filed March 31, 2005)
|
|
10.2
|
Form
of Bodisen Biotech, Inc. Nonstatutory Stock Option Agreement (incorporated
by reference to Company’s Form 10-KSB filed March 31,
2005)
|
|
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
|