Delaware
|
77-0632186
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
310
N. Indian Hill Blvd., #702 Claremont,
California
|
91711
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Class
|
Outstanding
at August 11, 2008
|
|
Common
Stock, $0.001 par value per share
|
91,509,354
shares
|
PART
I.
|
FINANCIAL
INFORMATION
|
2
|
||
ITEM
1.
|
FINANCIAL
STATEMENTS
|
2
|
||
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
18
|
||
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
25
|
||
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
25
|
||
|
||||
PART
II.
|
OTHER
INFORMATION
|
26
|
||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
26
|
||
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
26
|
||
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
26
|
||
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
26
|
||
ITEM
5.
|
OTHER
INFORMATION
|
26
|
||
ITEM
6.
|
EXHIBITS
|
26
|
||
|
||||
SIGNATURES
|
28
|
June
30,
2008
|
December
31,
2007
|
||||||
Item
|
(UNAUDITED)
|
(AUDITED)
|
|||||
ASSETS
|
|||||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
19,932
|
$
|
61,073
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $295,141
and
$277,140, respectively
|
689,102
|
470,298
|
|||||
Inventories
|
914,948
|
818,329
|
|||||
Prepaid
expenses
|
20,897
|
70,460
|
|||||
Other
current assets
|
136,640
|
67,372
|
|||||
Total
current assets
|
1,781,519
|
1,487,532
|
|||||
Property,
Plant and Equipment
|
|||||||
Buildings
|
1,237,537
|
1,162,060
|
|||||
Machinery
and equipment
|
703,157
|
660,273
|
|||||
Automobiles
|
81,100
|
76,154
|
|||||
Office
equipment
|
107,489
|
93,231
|
|||||
Computer
software
|
10,519
|
9,877
|
|||||
Property,
plant and equipment - total
|
2,139,802
|
2,001,595
|
|||||
Less:
accumulated depreciation
|
(525,626
|
)
|
(433,690
|
)
|
|||
Property,
plant and equipment - net
|
1,614,176
|
1,567,905
|
|||||
Construction
in progress
|
71,631
|
67,262
|
|||||
Intangible
asset - net
|
281,386
|
296,245
|
|||||
Deferred
financing costs
|
88,793
|
129,793
|
|||||
Deposit
to purchase proprietary technology
|
126,443
|
126,443
|
|||||
Total
assets
|
$
|
3,963,948
|
$
|
3,675,180
|
|||
LIABILITIES
AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
|
|||||||
Current
liabilities
|
|||||||
Accounts
payable
|
$
|
2,193,949
|
$
|
1,805,043
|
|||
Construction
costs payable
|
315,616
|
316,902
|
|||||
Due
to related parties - trade
|
233,267
|
177,970
|
|||||
Due
to related parties - non-trade
|
555,842
|
551,654
|
|||||
Current
portion of long-term liabilities
|
547,535
|
2,889
|
|||||
Total
current liabilities
|
3,846,209
|
2,854,458
|
|||||
Long-term
liabilities, less current portion
|
|||||||
Unsecured
loans payable
|
1,676,604
|
1,574,350
|
|||||
Bank
notes payable
|
13,420
|
17,988
|
|||||
Long-term
convertible notes payable
|
1,519,439
|
2,058,625
|
|||||
Less:
discount relating to long-term convertible notes payable
|
(609,325
|
)
|
(856,308
|
)
|
|||
Long-term
convertible notes payable - net
|
910,114
|
1,202,317
|
|||||
Total
long-term liabilities
|
2,600,138
|
2,794,655
|
|||||
Minority
interest in a subsidiary
|
91,382
|
110,838
|
|||||
Shareholders’
equity (deficiency)
|
|||||||
Common
stock - $0.001 par value
|
|||||||
Authorized
200,000,000 shares. Issued and outstanding 88,788,245 and 81,519,676
shares at June 30, 2008 and December 31, 2007
|
88,788
|
81,520
|
|||||
Preferred
stock - $0.001 par value
|
|||||||
Authorized
20,000,000 shares, none issued
|
—
|
—
|
|||||
Additional
paid-in capital
|
9,992,766
|
9,217,876
|
|||||
Stock-based
compensation reserve
|
(224,764
|
)
|
(307,053
|
)
|
|||
Deficit
accumulated
|
(12,391,738
|
)
|
(11,074,522
|
)
|
|||
Accumulated
other comprehensive income
|
(38,833
|
)
|
(2,592
|
)
|
|||
Total
shareholders’ equity (deficiency)
|
(2,573,781
|
)
|
(2,084,771
|
)
|
|||
Total
liabilities and stockholders’ equity
|
$
|
3,963,948
|
$
|
3,675,180
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
||||||||||||
Item
|
2008
|
2007
|
2008
|
2007
|
|||||||||
Net
sales
|
$
|
3,027,497
|
$
|
1,872,647
|
$
|
5,211,768
|
$
|
3,256,740
|
|||||
Cost
of sales
|
2,960,296
|
1,798,905
|
5,081,862
|
3,044,675
|
|||||||||
Gross
profit
|
67,201
|
73,742
|
129,906
|
212,065
|
|||||||||
Operating
expenses
|
|||||||||||||
Consulting
and professional fees
|
70,310
|
267,678
|
188,777
|
457,139
|
|||||||||
Officers’
compensation
|
59,431
|
89,427
|
118,463
|
154,469
|
|||||||||
General
and administrative
|
229,147
|
196,499
|
474,517
|
375,523
|
|||||||||
Selling
expenses
|
66,127
|
63,642
|
114,581
|
207,267
|
|||||||||
Research
and development
|
55,415
|
43,495
|
101,132
|
92,799
|
|||||||||
Depreciation
and amortization
|
26,641
|
29,591
|
52,818
|
60,864
|
|||||||||
Allowance
and provision
|
(2,439
|
)
|
398
|
(58
|
)
|
664
|
|||||||
Total
operating expenses
|
504,632
|
690,730
|
1,050,230
|
1,348,725
|
|||||||||
Operating
loss
|
(437,431
|
)
|
(616,988
|
)
|
(920,324
|
)
|
(1,136,660
|
)
|
|||||
|
|||||||||||||
Interest
expenses
|
(203,313
|
)
|
(276,146
|
)
|
(422,860
|
)
|
(401,904
|
)
|
|||||
Loss
before minority interest in a subsidiary’s deficit
|
(640,744
|
)
|
(893,134
|
)
|
(1,343,184
|
)
|
(1,538,564
|
)
|
|||||
Minority
interest in a subsidiary’s deficit
|
9,723
|
750
|
25,968
|
6,921
|
|||||||||
Loss
from continuing operations
|
(631,021
|
)
|
(892,384
|
)
|
(1,317,216
|
)
|
(1,531,643
|
)
|
|||||
|
|||||||||||||
Loss
on discontinued operations:
|
|||||||||||||
Discountinued
urea entrepot trade - Commission
paid to a related party
|
—
|
(414,509
|
)
|
—
|
(414,509
|
)
|
|||||||
|
|||||||||||||
Net
loss
|
$
|
(631,021
|
)
|
$
|
(1,306,893
|
)
|
$
|
(1,317,216
|
)
|
$
|
(1,946,152
|
)
|
|
Other
comprehensive loss Translation adjustment
|
(20,271
|
)
|
(37,337
|
)
|
(36,241
|
)
|
(161,131
|
)
|
|||||
Comprehensive
loss
|
$
|
(651,292
|
)
|
$
|
(1,344,230
|
)
|
$
|
(1,353,457
|
)
|
$
|
(2,107,283
|
)
|
|
|
|||||||||||||
Net
(loss) from continuing operations per common
share - basic and diluted
|
$
|
(0.007
|
)
|
$
|
(0.012
|
)
|
$
|
(0.015
|
)
|
$
|
(0.021
|
)
|
|
Net
loss on discontinued operations per common
share - basic and diluted
|
$
|
-
|
$
|
(0.0056
|
)
|
$
|
—
|
$
|
(0.0057
|
)
|
|||
Weighted
average number of common shares
outstanding-basic and diluted
|
88,211,903
|
74,157,432
|
85,651,240
|
72,971,896
|
Six
Months Ended June 30,
|
|||||||
Item
|
2008
|
2007
|
|||||
Cash
flows from operating activities:
|
|||||||
Net
loss
|
$
|
(1,317,216
|
)
|
$
|
(1,946,152
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
166,660
|
137,742
|
|||||
Amortization
of detachable warrants, options and stocks as compensation
|
493,211
|
734,374
|
|||||
Provision
for doubtful debt
|
(2,439
|
)
|
7,233
|
||||
(Gain)/Loss
on disposal of fixed assets
|
—
|
2,033
|
|||||
Minority
interest in a subsidiary
|
(25,968
|
)
|
(6,921
|
)
|
|||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(216,365
|
)
|
768,554
|
||||
Inventories
|
(96,619
|
)
|
(341,622
|
)
|
|||
Prepaid
expenses
|
(6,582
|
)
|
(9,538
|
)
|
|||
Other
current assets
|
(69,268
|
)
|
11,663
|
||||
Accounts
payable
|
452,813
|
545,827
|
|||||
Due
to related parties-trade
|
72,066
|
70,000
|
|||||
Net
cash provided by (used in) operating activities
|
(549,707
|
)
|
(26,807
|
)
|
|||
Cash
flows from investing activities:
|
|||||||
Purchase
of property and equipment
|
(21,371
|
)
|
(100,258
|
)
|
|||
Net
cash used in investing activities
|
(21,371
|
)
|
(100,258
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from issuance of common stock
|
650,000
|
—
|
|||||
Proceeds
from related parties
|
296,944
|
87,083
|
|||||
Repayment
to related parties
|
(410,109
|
)
|
(278,020
|
)
|
|||
Repayment
of long-term borrowings
|
(4,725
|
)
|
(2,739
|
)
|
|||
Net
cash provided by financing activities
|
532,110
|
(193,676
|
)
|
||||
Effect
of exchange rate changes on cash and cash
equivalents
|
(2,173
|
)
|
30,867
|
||||
Cash
and cash equivalents:
|
|||||||
Net
increase (decrease)
|
(41,141
|
)
|
(289,874
|
)
|
|||
Balance
at beginning of period
|
61,073
|
498,103
|
|||||
Balance
at end of period
|
$
|
19,932
|
$
|
208,229
|
|||
|
|||||||
Supplemental
Disclosures of Cash flow Information:
|
|||||||
Cash
paid for interest
|
$
|
1,008
|
$
|
—
|
|||
Cash
paid for taxes
|
$
|
—
|
$
|
—
|
|||
|
|||||||
Non-cash
investing and financing activities:
|
|||||||
Issuance
of detachable warrants in conjunction with loans
|
—
|
15,172
|
|||||
Issuance
of detachable warrants as compensation to consultants
|
—
|
44,414
|
|||||
Issuance
of common stock for long-term convertible notes payable
and interest
|
112,558
|
222,258
|
|||||
Issuance
of stock as compensation to consultants
|
19,600
|
126,000
|
|||||
Issuance
of stock for cashless exercise of warrants
|
—
|
1,708
|
|||||
Conversion
of accrued interests into principal
|
112,917
|
—
|
Common
Stock
|
Additional
Paid-in
|
Stock-based
Compensation
|
Accumulated
|
Other
Comprehensive
|
Total
Stockholders’
|
|||||||||||||||||
Item
|
Shares
|
Amount
|
Capital
|
Reserve
|
Deficits
|
Income
|
Deficiency
|
|||||||||||||||
Balance,
January 1, 2007
|
70,149,556
|
70,150
|
8,311,975
|
(523,468
|
)
|
(7,766,654
|
)
|
1,166
|
93,169
|
|||||||||||||
Issuance
of common stock for exercise of warrants at January 5,
2007
|
1,000,000
|
1,000
|
(1,000
|
)
|
—
|
—
|
—
|
—
|
||||||||||||||
Issuance
of common stock for cashless exercise of warrants on April 11,
2007
|
610,278
|
610
|
(610
|
)
|
—
|
—
|
—
|
—
|
||||||||||||||
Issuance
of common stock for cashless exercise of warrants on April 20,
2007
|
97,844
|
98
|
(98
|
)
|
—
|
—
|
—
|
—
|
||||||||||||||
Issuance
of common stock for conversion of principal and interest of 6%
Notes
during 12 months ended December 31, 2007
|
5,821,998
|
5,822
|
353,405
|
—
|
—
|
—
|
359,227
|
|||||||||||||||
Issuance
of 700,000 shares of common stock to a consultant on April 18,
2007
|
700,000
|
700
|
125,300
|
—
|
—
|
—
|
126,000
|
|||||||||||||||
Issuance
of 140,000 shares of common stock to an investor relations consultant
on
October 24, 2007
|
140,000
|
140
|
20,860
|
—
|
—
|
—
|
21,000
|
|||||||||||||||
Issuance
of 3,000,000 shares to two Chinese citizens designated by a related
party
on October 30, 2007
|
3,000,000
|
3,000
|
222,300
|
—
|
—
|
—
|
225,300
|
|||||||||||||||
Issuance
of 250,000 shares of warrants to a consultant
|
—
|
—
|
44,414
|
—
|
—
|
—
|
44,414
|
|||||||||||||||
Amortizaton
of fair value of warrants issued to a financing consultant during
fiscal
year ended December 31, 2007
|
—
|
—
|
—
|
77,181
|
—
|
—
|
77,181
|
|||||||||||||||
Amortization
of fair value of employee stock option cancelled
|
—
|
—
|
—
|
55,792
|
—
|
—
|
55,792
|
|||||||||||||||
Amortization
of fair value of employee stock options granted in 2006
|
—
|
—
|
—
|
83,442
|
—
|
—
|
83,442
|
|||||||||||||||
Fair
value of warrants issued to a related party in June
|
—
|
—
|
15,172
|
—
|
—
|
—
|
15,172
|
|||||||||||||||
Fair
value of warrants issued to a related party in September
|
—
|
—
|
60,742
|
—
|
—
|
—
|
60,742
|
|||||||||||||||
Fair
value of warrants issued to a related party in December
|
—
|
—
|
65,416
|
—
|
—
|
—
|
65,416
|
|||||||||||||||
Net
loss for fiscal ended December 31, 2007
|
—
|
—
|
—
|
—
|
(3,307,868
|
)
|
—
|
(3,307,868
|
)
|
|||||||||||||
Other
comprehensive income fiscal year ended December 31, 2007
|
—
|
—
|
—
|
—
|
—
|
(3,758
|
)
|
(3,758
|
)
|
|||||||||||||
Balance,
December 31, 2007
|
81,519,676
|
81,520
|
9,217,876
|
(307,053
|
)
|
(11,074,522
|
)
|
(2,592
|
)
|
(2,084,771
|
)
|
|||||||||||
Issuance
of 140,000 shares of common stock to an Investor Relations consultant
on
February 27, 2008
|
140,000
|
140
|
19,460
|
—
|
—
|
—
|
19,600
|
|||||||||||||||
Issuance
of 5,000,000 shares of common stock to an investor for the consideration
of $650,000 on March 14, 2008
|
5,000,000
|
5,000
|
645,000
|
—
|
—
|
—
|
650,000
|
|||||||||||||||
Issuance
of common stock for conversion of principal and interest of 6%
Notes
during six months ended June 30, 2008
|
2,128,569
|
2,128
|
110,430
|
—
|
—
|
—
|
112,558
|
|||||||||||||||
Amortizaton
of fair value of warrants issued to a financing consultant during
six
months ended June 30, 2008
|
—
|
—
|
—
|
38,591
|
—
|
—
|
38,591
|
|||||||||||||||
Amortization
of fari value of employee stock options granted in 2006
|
—
|
—
|
—
|
43,698
|
—
|
—
|
43,698
|
|||||||||||||||
Net
loss for the six months ended June 30, 2008
|
—
|
—
|
—
|
—
|
(1,317,216
|
)
|
—
|
(1,317,216
|
)
|
|||||||||||||
Other
comprehensive income for the six months ended June 30,
2008
|
—
|
—
|
—
|
—
|
—
|
(36,241
|
)
|
(36,241
|
)
|
|||||||||||||
Balance,
June 30, 2008
|
88,788,245
|
88,788
|
9,992,766
|
(224,764
|
)
|
(12,391,738
|
)
|
(38,833
|
)
|
(2,573,781
|
)
|
Buildings
|
20-35
years
|
|
Machinery
and equipment
|
4-12
years
|
|
Automobiles
|
8
years
|
|
Office
equipments
|
5
years
|
|
Computer
software
|
3
years
|
Item
|
June
30,
2008
|
December
31,
2007
|
|||||
Accounts
receivables - gross
|
$
|
984,243
|
$
|
747,438
|
|||
Allowance
for doubtful accounts
|
(295,141
|
)
|
(277,140
|
)
|
|||
Accounts
receivables - net
|
$
|
689,102
|
$
|
470,298
|
Item
|
June
30,
2008
|
December
31,
2007
|
|||||
Raw
materials
|
$
|
722,743
|
$
|
686,290
|
|||
Finished
goods
|
192,205
|
132,039
|
|||||
Total
|
$
|
914,948
|
$
|
818,329
|
Item
|
June
30,
2008
|
December
31,
2007
|
|||||
Prepaid
stock-based compensation to consultants
|
$
|
—
|
$
|
46,865
|
|||
Others
|
20,897
|
23,595
|
|||||
Total
|
$
|
20,897
|
$
|
70,460
|
Item
|
June
30,
2008
|
December
31,
2007
|
|||||
Property
plant and equipment:
|
|||||||
Buildings
|
$
|
1,237,537
|
$
|
1,162,060
|
|||
Machinery
and equipment
|
703,157
|
660,273
|
|||||
Automobiles
|
81,100
|
76,154
|
|||||
Office
equipment
|
107,489
|
93,231
|
|||||
Computer
software
|
10,519
|
9,877
|
|||||
Property
plant and equipment - total
|
$
|
2,139,802
|
$
|
2,001,595
|
|||
Less:
Accumulated depreciation
|
(525,626
|
)
|
(433,690
|
)
|
|||
Property
plant and equipment - net
|
$
|
1,614,176
|
$
|
1,567,905
|
Amortization
Year
|
Gross
carrying value
|
Accumulated
amount
of
amortization
|
Net
Value at
June
30, 2008
|
Net
value
at
December 31, 2007
|
|||||||||
8.5
|
$
|
480,411
|
$
|
199,025
|
$
|
281,386
|
$
|
296,245
|
Future
expected amortization
|
Amount
|
|||
2008
|
$
|
28,259
|
||
2009
|
56,519
|
|||
2010
|
56,519
|
|||
2011
|
56,519
|
|||
2012
|
56,519
|
|||
Thereafter
|
$
|
27,051
|
Item
|
June
30,
2008
|
December
31,
2007
|
|||||
Consulting
and professional payables
|
$
|
367,000
|
$
|
436,381
|
|||
Payables
to material suppliers
|
780,333
|
425,306
|
|||||
Interest
payable
|
150,554
|
192,275
|
|||||
Salary
payable
|
291,140
|
212,219
|
|||||
Insurance
payable
|
103,226
|
95,247
|
|||||
Office
rental payable
|
86,219
|
80,960
|
|||||
Credit
card balance
|
82,440
|
84,042
|
|||||
Advances
from customers
|
230,340
|
169,553
|
|||||
Others
|
102,697
|
109,060
|
|||||
Total
|
$
|
2,193,949
|
$
|
1,805,043
|
Item
|
Nature
|
Notes
|
June
30,
2008
|
December
31,
2007
|
|||||||||
Mr.
Wei Li ("Mr. Li")
|
Non-trade
|
(1)
|
|
$
|
524,119
|
$
|
377,218
|
||||||
Discount
of loans due to Mr. Li with detachable warrants
|
Non-trade
|
—
|
(88,195
|
)
|
|||||||||
China
Star Investment Management Co., Ltd. ("China Star")
|
Non-trade
|
(2)
|
(57,277
|
)
|
205,631
|
||||||||
Ms.
Yvonne Wang ("Ms. Wang")
|
Non-trade
|
(3)
|
89,000
|
57,000
|
|||||||||
Subtotal
|
$
|
555,842
|
$
|
551,654
|
|||||||||
Kiwa-CAU
R&D Center
|
Trade
|
(4)
|
218,688
|
164,280
|
|||||||||
Tianjin
Challenge Feed Co., Ltd. ("Challenge Feed")
|
Trade
|
(5)
|
14,579
|
13,690
|
|||||||||
Subtotal
|
$
|
233,267
|
$
|
177,970
|
|||||||||
Total
|
$
|
789,109
|
$
|
729,624
|
Item
|
June
30,
2008
|
December
31,
2007
|
|||||
Unsecured
loan payable to Zoucheng Municipal Government, non-interest bearing,
becoming due within three years from Kiwa Shandong’s first profitable year
on a formula basis, interest has not been imputed due to the
undeterminable repayment date
|
$
|
1,312,125
|
$
|
1,232,100
|
|||
Unsecured
loan payable to Zoucheng Science & Technology Bureau, non-interest
bearing, it is due in Kiwa Shandong’s first profitable year, interest has
not been imputed due to the undeterminable repayment date
|
364,479
|
342,250
|
|||||
Total
|
$
|
1,676,604
|
$
|
1,574,350
|
Item
|
Bio-fertilizer
|
Livestock
Feed
|
Urea
Entrepot
Trade(1)
|
Corporate(2)
|
Total
|
|||||||||||
Three
months ended June 30, 2008
|
||||||||||||||||
Net
sales
|
$
|
35,416
|
$
|
2,992,081
|
$
|
—
|
$
|
—
|
$
|
3,027,497
|
||||||
Gross
profit
|
8,359
|
58,842
|
—
|
—
|
67,201
|
|||||||||||
Operating
expenses
|
81,322
|
107,427
|
—
|
315,883
|
504,632
|
|||||||||||
Operating
profit (loss)
|
(72,963
|
)
|
(48,585
|
)
|
—
|
(315,883
|
)
|
(437,431
|
)
|
|||||||
Interest
income (expense)
|
(115
|
)
|
(31
|
)
|
—
|
(203,167
|
)
|
(203,313
|
)
|
|||||||
Minority
interest in subsidiary
|
—
|
9,723
|
—
|
—
|
9,723
|
|||||||||||
Net
income (loss)
|
$
|
(73,078
|
)
|
$
|
(38,893
|
)
|
$
|
—
|
$
|
(519,050
|
)
|
$
|
(631,021
|
)
|
||
Total
assets as of June 30, 2008
|
$
|
2,239,743
|
$
|
1,357,200
|
$
|
—
|
$
|
367,005
|
$
|
3,963,948
|
||||||
Three
months ended June 30, 2007
|
||||||||||||||||
Net
sales
|
$
|
17,198
|
$
|
1,855,449
|
$
|
—
|
$
|
—
|
$
|
1,872,647
|
||||||
Gross
profit
|
3,259
|
70,483
|
—
|
—
|
73,742
|
|||||||||||
Operating
expenses
|
107,266
|
74,231
|
42,750
|
466,483
|
690,730
|
|||||||||||
Operating
profit (loss)
|
(104,007
|
)
|
(3,748
|
)
|
(42,750
|
)
|
(466,483
|
)
|
(616,988
|
)
|
||||||
Interest
income (expense)
|
(7,208
|
)
|
(9
|
)
|
(111
|
)
|
(268,818
|
)
|
(276,146
|
)
|
||||||
Minority
interest in subsidiary
|
—
|
750
|
—
|
—
|
750
|
|||||||||||
(Loss)
from discontinued operations
|
—
|
—
|
414,509
|
—
|
—
|
|||||||||||
Net
income (loss)
|
$
|
(111,215
|
)
|
$
|
(3,007
|
)
|
$
|
(457,370
|
)
|
$
|
(735,301
|
)
|
$
|
(1,306,893
|
)
|
|
Total
assets as of June 30, 2007
|
$
|
2,253,803
|
$
|
893,877
|
$
|
8,249
|
$
|
471,811
|
$
|
3,627,740
|
(1) |
In
July 2007, the Company has entered three termination agreements
with each
party of the Urea entrepot trade for the termination of contracts
between
Kiwa BVI and Shengkui Technologies, Hua Yang Roneo Corporation
and UPB
International Sourcing Limited. Pursuant to these termination agreements,
the Company will have neither rights nor obligations under previous
contracts in connection with the urea entrepot trade except for
a
commission due to UPB. Based on these facts, we recognized relevant
expenses in the second quarter of
2007.
|
(2) |
Beijing
Representative Office of Kiwa Shandong fulfills part of corporate
managerial function. Most of its expenses relating to this function
were
categorized into corporate
segment.
|
Fiscal
year
|
Amount
|
|||
2008
|
$
|
111,660
|
||
2009
|
53,140
|
|||
Total
|
$
|
164,800
|
Bio-fertilizer
|
|
Changes
|
|
Bio-enhanced
feed
|
|
Changes
|
|
||||||||||||||||||
|
|
2008
Q2
|
|
2007
Q2
|
|
Amount
|
|
Percentage
|
|
2008
Q2
|
|
2007
Q2
|
|
Amount
|
|
Percentage
|
|||||||||
Net
Sales
|
$
|
35,416
|
$
|
17,198
|
$
|
18,218
|
105.9
|
%
|
$
|
2,992,081
|
$
|
1,855,449
|
$
|
1,136,632
|
61.3
|
%
|
|||||||||
Cost
of Sales
|
27,057
|
13,939
|
13,118
|
94.1
|
%
|
2,933,239
|
1,784,966
|
1,148,273
|
64.3
|
%
|
|||||||||||||||
Gross
Profit
|
$
|
8,359
|
$
|
3,259
|
$
|
5,100
|
156.5
|
%
|
$
|
58,842
|
$
|
70,483
|
$
|
(11,641
|
)
|
-16.5
|
%
|
||||||||
Gross
Profit Margin
|
23.6
|
%
|
18.9
|
%
|
2.0
|
%
|
3.8
|
%
|
Exhibit
No.
|
Description
|
Incorporated
by Reference in Document
|
Exhibit
No. in Incorporated Document
|
|||
3.1
|
Certificate
of Incorporation, effective as of July 21, 2004.
|
Form
8-K filed on July
23, 2004
|
3.1
|
|||
3.2
|
Bylaws,
effective as of July 22, 2004.
|
Form
8-K Filed on July
23, 2004
|
3.2
|
|||
3.3
|
Certificate
of Amendment to Certificate of Incorporation, effective as of September
27, 2006.
|
Form
10-QSB filed on November 15, 2006
|
3.3
|
|||
10.1
|
Consulting
Agreement between the Company and Robert Schechter dated January
10,
2008
|
Filed
herewith.
|
||||
10.2
|
Contract
for Joint Venture between the Company and Hebei Huaxing Pharmaceuticals
Co., Ltd. dated May 22, 2008
|
Form
8-K filed on May 27, 2008
|
10.1
|
|||
21
|
List
of Subsidiaries
|
Form
10-KSB filed on April 2, 2007
|
21
|
|||
31.1
|
Certification
of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
of the
Securities Exchange Act of 1934
|
Filed
herewith.
|
Exhibit
No.
|
|
Description
|
|
Incorporated
by Reference in Document
|
|
Exhibit
No. in Incorporated Document
|
31.2
|
Certification
of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
of the
Securities Exchange Act of 1934
|
Filed
herewith.
|
||||
32.1
|
Certification
of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed
herewith.
|
||||
32.2
|
Certification
of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed
herewith.
|
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
(Registrant)
|
||
|
|
|
August 11, 2008 | /s/ Wei Li | |
Wei Li |
||
Chief
Executive Officer and Chairman of the
Board
of Directors (Principal
Executive Officer)
|
August 11, 2008 | /s/ Lianjun Luo | |
Lianjun Luo |
||
Chief
Financial Officer and Director
(Principal
Financial Officer and Principal
Accounting
Officer)
|