RENEWABLE ENERGY TRADE BOARD CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except for share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2011
|
|
|
June 30,
2012
|
|
|
June 30,
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
US$
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
5,350
|
|
|
|
39,766
|
|
|
|
6,257
|
|
Trading securities (Note (i))
|
|
|
5,635
|
|
|
|
6,983
|
|
|
|
1,099
|
|
Available-for-sale securities (Note (f) and (i))
|
|
|
11,162
|
|
|
|
23,138
|
|
|
|
3,641
|
|
Trade accounts receivable, net of Rmb3,243 allowance for doubtful accounts as of December 31, 2011 and June 30, 2012, respectively
|
|
|
46,518
|
|
|
|
99,776
|
|
|
|
15,700
|
|
Inventories
|
|
|
119,665
|
|
|
|
13,316
|
|
|
|
2,095
|
|
Value added tax and business tax recoverable
|
|
|
29,474
|
|
|
|
841
|
|
|
|
132
|
|
Due from related parties
|
|
|
2,346
|
|
|
|
10,266
|
|
|
|
1,615
|
|
Prepaid expenses and other current assets
|
|
|
2,353
|
|
|
|
1,828
|
|
|
|
288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
222,503
|
|
|
|
195,914
|
|
|
|
30,827
|
|
|
|
|
|
Prepayment for land use right
|
|
|
4,130
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
27,982
|
|
|
|
3,554
|
|
|
|
559
|
|
Intangible assets
|
|
|
10,326
|
|
|
|
9,008
|
|
|
|
1,417
|
|
Goodwill
|
|
|
4,859
|
|
|
|
4,859
|
|
|
|
765
|
|
Equity-method investment
|
|
|
|
|
|
|
20,678
|
|
|
|
3,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
269,800
|
|
|
|
234,013
|
|
|
|
36,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
161,061
|
|
|
|
125,976
|
|
|
|
19,822
|
|
Accrued professional fees
|
|
|
3,047
|
|
|
|
926
|
|
|
|
146
|
|
Income tax payable
|
|
|
30
|
|
|
|
|
|
|
|
|
|
Due to related parties
|
|
|
12,842
|
|
|
|
41,223
|
|
|
|
6,487
|
|
Overdraft from security account
|
|
|
|
|
|
|
4,101
|
|
|
|
645
|
|
Warrant liabilities (Note (d) and (i))
|
|
|
84
|
|
|
|
115
|
|
|
|
18
|
|
Government subsidies
|
|
|
600
|
|
|
|
600
|
|
|
|
94
|
|
Other liabilities and accrued expenses
|
|
|
28,652
|
|
|
|
7,257
|
|
|
|
1,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
206,316
|
|
|
|
180,198
|
|
|
|
28,354
|
|
|
|
|
|
Deferred tax liabilities-non-current
|
|
|
4,664
|
|
|
|
2,252
|
|
|
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
210,980
|
|
|
|
182,450
|
|
|
|
28,708
|
|
|
|
|
|
SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, (US$0.1 par value; 400,000,000 shares authorized;
Shares issued and outstanding 2,249,854 as of December 31, 2011 and June 30, 2012)*
|
|
|
1,675
|
|
|
|
1,675
|
|
|
|
264
|
|
Preferred stock, (US$0.01 par value; 1,000,000,000 shares authorized;
Shares issued and outstanding 1,000,000, as of December 31, 2011 and June 30, 2012)
|
|
|
77
|
|
|
|
77
|
|
|
|
12
|
|
Additional paid-in capital
|
|
|
556,227
|
|
|
|
555,890
|
|
|
|
87,471
|
|
Accumulated deficit
|
|
|
(484,050
|
)
|
|
|
(491,021
|
)
|
|
|
(77,264
|
)
|
Accumulated other comprehensive loss
|
|
|
(15,109
|
)
|
|
|
(15,058
|
)
|
|
|
(2,369
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS EQUITY
|
|
|
58,820
|
|
|
|
51,563
|
|
|
|
8,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
269,800
|
|
|
|
234,013
|
|
|
|
36,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The amounts included give retroactive effect to the 1-for-10 reverse split of the Companys common stock completed on October 24, 2012.
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
6
RENEWABLE ENERGY TRADE BOARD CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
For the six months ended June 30, 2011 and 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
2012
|
|
|
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
US$
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(16,935
|
)
|
|
|
(9,205
|
)
|
|
|
(1,449
|
)
|
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
4,487
|
|
|
|
1,897
|
|
|
|
299
|
|
Amortization of intangible assets
|
|
|
1,319
|
|
|
|
1,318
|
|
|
|
207
|
|
Amortization of long-term prepayment for land use right
|
|
|
45
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,615
|
|
|
|
1,283
|
|
|
|
201
|
|
Loss on disposal of available-for-sale securities
|
|
|
25
|
|
|
|
|
|
|
|
|
|
Gain on disposal of trading securities
|
|
|
(759
|
)
|
|
|
(310
|
)
|
|
|
(49
|
)
|
Change in fair value on trading securities
|
|
|
3,257
|
|
|
|
2,672
|
|
|
|
420
|
|
Change in fair value of warrants liabilities
|
|
|
(1,780
|
)
|
|
|
31
|
|
|
|
5
|
|
Gain on sale of equity-method investment
|
|
|
|
|
|
|
(1,745
|
)
|
|
|
(275
|
)
|
Net loss in equity-method investment
|
|
|
|
|
|
|
699
|
|
|
|
110
|
|
Loss on disposal of subsidiary
|
|
|
|
|
|
|
20,700
|
|
|
|
3,257
|
|
Gain on deemed disposal of subsidiary
|
|
|
|
|
|
|
(32,751
|
)
|
|
|
(5,153
|
)
|
Deferred tax benefit
|
|
|
(385
|
)
|
|
|
(358
|
)
|
|
|
(56
|
)
|
Impairment on available-for-sale securities
|
|
|
|
|
|
|
6,289
|
|
|
|
990
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease/(increase) in trade accounts receivable
|
|
|
8,300
|
|
|
|
(53,951
|
)
|
|
|
(8,489
|
)
|
(Increase)/Decrease in inventories
|
|
|
(13,591
|
)
|
|
|
83,671
|
|
|
|
13,166
|
|
Decrease in due from related parties and other assets
|
|
|
14,949
|
|
|
|
(7
|
)
|
|
|
(1
|
)
|
(Increase)/Decrease in value added tax and business tax recoverable
|
|
|
(3,784
|
)
|
|
|
12,984
|
|
|
|
2,043
|
|
Decrease in trade accounts payable
|
|
|
(2,826
|
)
|
|
|
(720
|
)
|
|
|
(113
|
)
|
Decrease in other current liabilities
|
|
|
(5,530
|
)
|
|
|
(2,674
|
)
|
|
|
(421
|
)
|
Increase in government subsidies
|
|
|
300
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in due to related parties
|
|
|
1,657
|
|
|
|
(9,198
|
)
|
|
|
(1,447
|
)
|
Decrease in income taxes payable
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)/provided by operating activities
|
|
|
(9,669
|
)
|
|
|
20,625
|
|
|
|
3,245
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from disposal of available-for-sale securities and trading securities
|
|
|
8,167
|
|
|
|
5,422
|
|
|
|
853
|
|
Purchase of available-for-sale securities and trading securities
|
|
|
(2,892
|
)
|
|
|
(9,558
|
)
|
|
|
(1,504
|
)
|
Deemed disposal of interest in CMNEH
|
|
|
|
|
|
|
(2,146
|
)
|
|
|
(338
|
)
|
Purchase of property, plant and equipment
|
|
|
(47
|
)
|
|
|
(45
|
)
|
|
|
(7
|
)
|
Proceeds from sales of equity-method investment
|
|
|
|
|
|
|
11,798
|
|
|
|
1,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
|
5,228
|
|
|
|
5,471
|
|
|
|
861
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital contribution from non-controlling interest before deconsolidation of consolidated subsidiary
|
|
|
|
|
|
|
4,510
|
|
|
|
710
|
|
Proceeds from exercise of stock option
|
|
|
915
|
|
|
|
|
|
|
|
|
|
Overdraft from security account
|
|
|
1,730
|
|
|
|
4,101
|
|
|
|
645
|
|
Repayment of short term loan
|
|
|
(6,041
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by/(used in) financing activities
|
|
|
(3,396
|
)
|
|
|
8,611
|
|
|
|
1,355
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(510
|
)
|
|
|
(291
|
)
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
(8,347
|
)
|
|
|
34,416
|
|
|
|
5,415
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
14,014
|
|
|
|
5,350
|
|
|
|
842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
5,667
|
|
|
|
39,766
|
|
|
|
6,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
|
|
|
190
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
7
RENEWABLE ENERGY TRADE BOARD CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
(Amounts in thousands, except for share data)
For the six months ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Preferred Stock
|
|
|
Additional
Paid
in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Accumulated
other
comprehensive
income
(loss)
|
|
|
Non-
Controlling
interest
|
|
|
Total
shareholders
equity
|
|
|
|
Share
|
|
|
Amount
|
|
|
Share
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
Rmb
|
|
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
Balance at December 31, 2011 *
|
|
|
2,249,854
|
|
|
|
1,675
|
|
|
|
1,000,000
|
|
|
|
77
|
|
|
|
556,227
|
|
|
|
(484,050
|
)
|
|
|
(15,109
|
)
|
|
|
|
|
|
|
58,820
|
|
Stock based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,897
|
|
Changes in ownership interests in a subsidiary without losing control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,186
|
|
|
|
90
|
|
|
|
|
|
|
|
2,234
|
|
|
|
4,510
|
|
Release of reserves upon completion of deemed disposal of interest in CMNEH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,420
|
)
|
|
|
2,144
|
|
|
|
|
|
|
|
(2,234
|
)
|
|
|
(4,510
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,205
|
)
|
|
|
|
|
|
|
|
|
|
|
(9,205
|
)
|
Net unrealized gain on available-for-sale securities, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84
|
|
|
|
|
|
|
|
84
|
|
Translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
|
|
|
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2012 *
|
|
|
2,249,854
|
|
|
|
1,675
|
|
|
|
1,000,000
|
|
|
|
77
|
|
|
|
555,890
|
|
|
|
(491,021
|
)
|
|
|
(15,058
|
)
|
|
|
|
|
|
|
51,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2012 (US$) (i)
|
|
|
2,249,854
|
|
|
|
264
|
|
|
|
1,000,000
|
|
|
|
12
|
|
|
|
87,471
|
|
|
|
(77,264
|
)
|
|
|
(2,369
|
)
|
|
|
|
|
|
|
8,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The amounts included the retroactive effect resulting from the reverse stock split on October 24, 2012 that every ten shares of the Companys issued and
outstanding common stock will be converted automatically into one issued and outstanding common stock with par value per share increased from US$0.01 to US$0.1.
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
8
Notes
(a) Basis of Preparation
The unaudited interim consolidated financial
statements of the Group are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or US GAAP, for interim financial reporting. The interim financial statements should be read in
conjunction with the Groups annual financial statements and the accompanying notes for the years ended December 31, 2009, 2010 and 2011. In the opinion of management, the unaudited interim condensed consolidated financial statements
reflect all normal recurring adjustments which are necessary for a fair statement of the results for the interim periods presented. The results for the six months ended June 30, 2012 do not necessarily indicate the results expected for the full
fiscal year or for any future period.
The financial information as of December 31, 2011 presented in the unaudited
condensed financial statements is derived from our audited consolidated financial statements for the year ended December 31, 2011. The accompanying unaudited condensed consolidated financial statements have been prepared using the same
accounting policies as used in the preparation of the Companys consolidated financial statements included in the Companys Report on Form 20-F for the fiscal year ended December 31, 2011.
For the periods ended June 30, 2011 and 2012, the Group reported a net loss of approximately Rmb16.94 million and Rmb9.21 million
respectively. For the period ended June 30, 2012, the Group reported net operating cash flow from operations of approximately Rmb20.63 million. The Companys cash and cash equivalents balance at June 30, 2012 was Rmb39.77
million.
(b) Going Concern
The Company believes that the Group will be able to generate adequate cash flows to finance its operations and meet its cash obligations for the 12 months following June 30, 2012 based on the
following:
|
|
|
positive operating cash flows are expected to be generated from the profitable manufacturing and sale of solar modules;
|
|
|
|
potential sale in the open market of available for sale and trading securities with ending carrying amounts of approximately Rmb30.12 million as of
June 30, 2012; and
|
|
|
|
tight controls exercised by the Companys Board of Directors on timing and magnitude of cash outlays for investments initiatives.
|
The unaudited consolidated financial statements as of June 30, 2012 have been prepared assuming that
the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.
(c) New accounting standards
The Company has reviewed issued accounting
pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncement to have an impact on its results of operations or financial position.
(d) Warrants and option rights
On September 23, 2008, the Company entered into a Securities Purchase Agreement (the SPA) with certain investors for a private placement transaction. Pursuant to the SPA, the Company
issued (i) 498,338 shares of common stock, (ii) 249,170 warrants to purchase common stock at an exercise price of US$6.00 per share (Warrant A) and (iii) 1,277,136 warrants to purchase common stock at an exercise price of
US$0.01 per share (Warrant B) for a total net cash proceeds of US$1,364,000.
According to ASC 815 (formerly
contained in FAS133, EITF0019, EITF07-05), the Company determined that Warrant B was a liability instrument and further recorded its fair value at issuance as warrant liability in the consolidated balance sheet, and was subsequently carried at fair
value. The remaining proceeds of the private placement were then recorded in the consolidated balance sheet between common stock and additional paid in capital based on the relative fair value of the common stock and the other related financial
instruments associated with the issuance.
Since the adoption of ASC 815-40-15 on January 1, 2009, Warrant A and option
rights were recognized as liabilities and are carried at fair value at each reporting date with changes in fair value being recorded in the statements of operations.
9
(e) Net loss per share
Net loss per share is calculated based on the weighted average number of shares of common stock issued and, as appropriate, diluted shares of common stock equivalents outstanding for each of the relevant
periods and the related loss amount. The number of incremental shares from assumed exercise of stock options, stock purchase warrants, warrants, and option rights have been determined using the treasury stock method. Under the treasury stock method,
the proceeds from the assumed conversion of options and warrants are used to repurchase common stock using the average fair value of those periods.
Increase in number of shares caused by warrants issued (note (d)) have been considered in the calculation of loss per share.
Basic and diluted net loss per share have been calculated in accordance with ASC 260 (formerly referred to SFAS No. 128 Earnings per Share), for the six months period ended June 30,
2011 and 2012 as follows:
|
|
|
|
|
|
|
|
|
|
|
Period ended June 30,
|
|
|
|
2011
|
|
|
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
|
(Amounts expressed in
thousands, except per share
data)
|
|
Net loss for the period attributable to the shareholders of the Company
|
|
|
(16,935
|
)
|
|
|
(9,205
|
)
|
Weighted-average shares used in computing basic and diluted net loss per share *
|
|
|
2,248,870
|
|
|
|
2,249,854
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
(7.5
|
)
|
|
|
(4.1
|
)
|
For the six months ended June 30, 2011 and 2012, the number of shares used in the calculation of
diluted net loss per share is equal to the number of shares used to calculate basic loss per share as the incremental effect of share options, stock purchase warrants, warrants, options and convertible note would be anti-dilutive. The weighted
average number ordinary share equivalent of stock options, stock purchase warrants, convertible note and warrants which have not been included in the calculation of diluted net loss per share for the six months ended June 30, 2011 and 2012 were
approximately 6,993,000 and 6,802,000 respectively.
*
|
The amounts included give retroactive effect to the 1-for-10 reverse split of the Companys common stock completed on October 24, 2012.
|
(f) Available-for-sale securities
The available-for-sale securities as of December 31, 2011 and June 30, 2012 were Hong Kong marketable equity securities.
The following is a summary of available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2011
|
|
|
June 30,
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
Cost of available-for-sale securities
|
|
|
30,908
|
|
|
|
49,068
|
|
Impairment
|
|
|
(15,411
|
)
|
|
|
(21,700
|
)
|
Unrecognized loss
|
|
|
(4,335
|
)
|
|
|
(4,230
|
)
|
|
|
|
|
|
|
|
|
|
Fair value of available-for-sale securities
|
|
|
11,162
|
|
|
|
23,138
|
|
|
|
|
|
|
|
|
|
|
(g) Equity-method investment
Affiliated companies, in which the Company has significant influence, but not control, are accounted for equity-method investment. Equity-method investment adjustments include the Companys
proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, adjustments to recognize certain differences between the Companys carrying value and the Companys equity in net assets of the
investee at the date of investment, impairments, and other adjustments required by the equity method. Gain or losses are realized when such investments are sold.
Equity-method investment are accounted for by equity method of accounting, and consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2011
|
|
|
June 30,
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
China Merchants New Energy Holdings Limited (CMNEH)
|
|
|
|
|
|
|
20,678
|
|
10
(g) Equity-method investment (continued)
On January 16, 2012, the Company entered into a three-year cooperation framework
agreement (the Framework Agreement) with GCL-Poly, CMNE, and Sinofield to cooperate on the development of roof-top solar projects in the United States and China. Based on the provisions of the Framework Agreement, CMNE and Sinofield
entered into a definitive subscription agreement on March 27, 2012, pursuant to which CMNE subscribed for 220 newly issued ordinary shares of Sinofield, representing 68.75% of the equity interests in Sinofield in consideration of transferring
CMNEs entire interest in China Technology New Energy limited (CTNE) to Sinofield. CTNE holds exclusive rights to develop at least 180 MW roof-top solar plants in China. This transaction was consummated on April 2, 2012. As a
result, CMNE became a substantial shareholder of Sinofield. The Company owned 31.25% of equity interest in Sinofield and Investment in Sinofield remained as an equity-method investment of the Company after this transaction. In connection with this
transaction, CTNE became a wholly-owned subsidiary of Sinofield and Sinofield changed its name to China Merchants New Energy Holdings Limited (CMNEH). The execution copy of the subscription agreement dated March 27, 2012 was filed
with the SEC as an exhibit to our report on Form 6-K dated March 28, 20120 (File No. 000-29008).
In furtherance to the
Framework Agreement, on April 19, 2012, CMNEH entered into a subscription agreement with GCL-Poly Investment Limited (GCL-Poly Investment, a third party), pursuant to which GCL-Poly investment agreed to subscribe and purchase 80
newly issued ordinary shares of CMNEH in consideration for HKD48 million in cash. On April 30, 2012, the transactions contemplated under the subscription agreement were consummated and GCL-Poly Investment and CMNE became a 20% shareholder and
55% shareholder, respectively, of CMNEH. As a result, the shareholding of the Company in CMNEH was further reduced to 25%. As contemplated by the subscription agreement, the Company, as an indirect shareholder of CMNEH, has settled non-trade
payables in a total amount of approximately Rmb24 million by way of equity investment into CMNEH group upon the completion on April 30, 2012.
On May 14, 2012, China Green Holdings Limited (CGHL), a wholly owned subsidiary of the Company, entered into a sale and purchase Agreement with Hyatt Servicing Limited
(Hyatt), pursuant to which Hyatt agreed to purchase 24 issued ordinary shares of CMNEH from CGHL, in consideration for HKD14,400,000 in cash. Also on May 14, 2012, CGHL entered into another sale and purchase Agreement (the
Agreement) with Profit Icon Investments Limited (Profit Icon), a wholly-owned subsidiary of Goldpoly New Energy Holdings Limited (Goldpoly) whose ordinary shares are listed on the Main Board of The Stock Exchange of
Hong Kong Limited, pursuant to which, Profit Icon agreed to purchase 36 issued ordinary shares of CMNEH from CGHL, in consideration for HKD21,600,000 which was satisfied by the allotment and issue of 22,905,621 new ordinary shares of Goldpoly at a
price of HKD0.943 per share. The transaction was closed on May 23, 2012. As a result of the share transfers, Hyatt and Profit Icon became a 6% shareholder and 9% shareholder, respectively, of CMNEH. The shareholding of the Company in CMNEH
decreased from 25% to 10%.
On June 19, 2012, CMNEH entered into a subscription agreement with Talesun, pursuant to which
Talesun agreed to subscribe 40 newly issued ordinary shares of CMNEH in consideration of HKD50,000,000 in cash. The transaction closed on June 29, 2012. As a result, Talesun became a 9.09% shareholder of CMNEH. The shareholding of the Company
in CMNEH was further reduced to 9.09%.
The carrying amount of the equity-method investment represented the share of net
assets value of the Companys 9.09% equity interest in CMNEH as at June 29, 2012.
Change in Ownership in
Previously Consolidated Subsidiary Results in Using the Equity Method of Accounting in the current Period
On
February 20, 2012, Beijing Yin Bao Hong Di Equity Investment Management Centre, an independent third party, entered into an investment agreement with Sinofield and Trendar Solar to invest HK$5.5 million in cash into Trendar Solar so that it
would own an 8.4% of the then enlarged share capital of Trendar Solar. As a result, the Companys indirect shareholding in Trendar Solar has been diluted from 100% to 91.6%. The Company does not lose control to Trendar Solar and the transaction
is accounted for equity transaction. Rmb2.234 million was recognized as non-controlling interest with the difference credited to the share premium.
On January 16, 2012, the Company entered into a three-year cooperation framework agreement (the Framework Agreement) with GCL-Poly, CMNE, and Sinofield to cooperate on the development of
roof-top solar projects in the United States and China. Based on the provisions of the Framework Agreement, CMNE and Sinofield entered into a definitive subscription agreement on March 27, 2012, pursuant to which CMNE subscribed for 220 newly
issued ordinary shares of Sinofield, representing 68.75% of the equity interests in Sinofield in consideration of transferring CMNEs entire interest in China Technology New Energy limited (CTNE) to Sinofield. CTNE holds exclusive
rights to develop at least 180 MW roof-top solar plants in China. This transaction was consummated on April 2, 2012. As a result, CMNE became a substantial shareholder of Sinofield. The Company owned a 31.25% equity interest in Sinofield and
Sinofield has remained an associate of the Company after this transaction until the date of this report.
11
(g) Equity-method investment (continued)
|
|
|
|
|
Gain on deemed disposal of a group of subsidiaries
|
|
Rmb
|
|
Fair value of the 31.25% equity interest in CMNEH retained by the Group with fair value determined referenced by the
consideration of the allotment of the 220 shares
|
|
|
48,651
|
|
Add:
|
|
|
|
|
Release of non-controlling interest
|
|
|
2,234
|
|
Less:
|
|
|
|
|
Net assets derecognized
|
|
|
(18,134
|
)
|
|
|
|
|
|
Gain on the deemed disposal recognized in the consolidated statements of operations
|
|
|
32,751
|
|
|
|
|
|
|
On May 14, 2012, China Green Holdings Limited (CGHL), a wholly owned subsidiary of the
Company, entered into a Sales sale and purchase Agreement with Hyatt Servicing Limited (Hyatt), pursuant to which Hyatt agreed to purchase 24 issued ordinary shares of CMNEH from CGHL, in consideration for HKD14,400,000 in cash. Also on
May 14, 2012, CGHL entered into another sale and purchase agreement (the Agreement) with Profit Icon Investments Limited (Profit Icon), a wholly-owned subsidiary of Goldpoly New Energy Holdings Limited
(Goldpoly) whose ordinary shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, pursuant to which, Profit Icon agreed to purchase 36 issued ordinary shares of CMNEH from CGHL, in consideration for HKD21,600,000
which was satisfied by the allotment and issue of 22,905,621 new ordinary shares of Goldpoly at a price of HKD0.943 per share.
Proceeds on the disposal of the 24 ordinary shares in the Sinofield Group on May 23, 2012 were HKD14,400,00, equivalent to Rmb11.80
million, satisfied by cash.
Proceeds on the disposal of the 36 ordinary shares in the Sinofield Group on May 23, 2012
were HKD21,600,000, equivalent to Rmb17.72 million, satisfied by the allotment and issue of 22,905,621 new shares of Goldpoly.
On June 19, 2012, CMNEH entered into a subscription agreement with Talesun, pursuant to which Talesun agreed to subscribe 40 newly
issued ordinary shares of CMNEH in consideration for HKD50,000,000 in cash. The transaction closed on June 29, 2012. As a result, Talesun became a 9.09% shareholder of CMNEH. The shareholding of the Company in CMNEH was further diluted from 10%
to 9.09%.
|
|
|
|
|
Gain on sale of equity-method investment
|
|
Rmb
|
|
Fair value of 9.09% equity interest in CMNEH held by the Company
|
|
|
20,678
|
|
Add:
|
|
|
|
|
Proceeds on the disposal
|
|
|
29,526
|
|
Shares of result of the equity method investment
|
|
|
699
|
|
Less:
|
|
|
|
|
Cost of the investment of 31.25% of the equity interest retained by the Company in CMNEH
|
|
|
(49,158
|
)
|
|
|
|
|
|
Gain on sale of equity-method investment
|
|
|
1,745
|
|
|
|
|
|
|
12
(h) Segment information
The Company engages in the business of developing and manufacturing solar energy products, which we refer to as our Solar Energy Operations. The Solar Energy Operations is the sole business and segment of
the Group.
Below represents summarized financial information for the Solar Energy Operations for the period ended
June 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
Operating
loss
|
|
|
Total
assets
|
|
|
Net
identifiable
assets
|
|
|
Depreciation
and
amortization
|
|
|
Capital
expenditures
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
Period ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Solar Energy Operations
|
|
|
10,771
|
|
|
|
(4,210
|
)
|
|
|
166,260
|
|
|
|
1,014
|
|
|
|
2,571
|
|
|
|
45
|
|
Corporate*
|
|
|
|
|
|
|
(9,269
|
)
|
|
|
67,753
|
|
|
|
50,549
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
|
|
10,771
|
|
|
|
(13,479
|
)
|
|
|
234,013
|
|
|
|
51,563
|
|
|
|
2,601
|
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The details of corporate/unallocated items including mainly staff costs, legal and professional fees are as follows:
|
|
|
|
|
|
|
|
Period
ended
June 30,
2012
|
|
|
|
Rmb
|
|
Unallocated general and administrative expenses
|
|
|
(9,269
|
)
|
|
|
|
|
|
Operating loss
|
|
|
(9,269
|
)
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
6,537
|
|
Trading securities
|
|
|
6,983
|
|
Available-for-sale securities
|
|
|
23,138
|
|
Due from related parties
|
|
|
9,569
|
|
Prepaid expenses and other assets
|
|
|
820
|
|
Property, plant and equipment
|
|
|
27
|
|
Investments in affiliates
|
|
|
20,678
|
|
Due to related parties
|
|
|
(10,119
|
)
|
Overdraft from security account
|
|
|
(4,101
|
)
|
Liabilities relating to warrants
|
|
|
(115
|
)
|
Other liabilities
|
|
|
(2,868
|
)
|
|
|
|
|
|
Net identifiable assets
|
|
|
50,549
|
|
|
|
|
|
|
The Group operates mainly in the PRC, and all long-lived assets are located in the PRC.
Segment assets consist primarily of cash and cash equivalents, inventories, trade accounts receivable, other assets and fixed assets.
Segment liabilities comprise of operating liabilities.
13
(i) Fair value measurements
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e. the exit price) in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and also
considers assumptions that market participants would use when pricing the asset or liability. ASC 820 also discusses valuation techniques, such as market, income and/or cost approaches and specifies a three-level hierarchy of valuation inputs that
prioritizes the inputs to valuation techniques used to measure fair value.
Level 1: Observable inputs such as quoted prices
(unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are
observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entitys own assumptions.
The following represents the Companys assets and liabilities measured at fair value on a recurring basis as of December 31,
2011 and June 30, 2012, (the basis for that measurement):
Investment in Equity Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement at December 31, 2011
|
|
|
|
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
|
Total at
December 31,
2011
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
Trading securities
|
|
|
5,635
|
|
|
|
|
|
|
|
|
|
|
|
5,635
|
|
Available-for-sale securities
|
|
|
11,162
|
|
|
|
|
|
|
|
|
|
|
|
11,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
16,797
|
|
|
|
|
|
|
|
|
|
|
|
16,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurement at June 30, 2012
|
|
|
|
Quoted
Prices in
Active
Markets
for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level
3)
|
|
|
Total at
June 30
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
Trading securities
|
|
|
6,983
|
|
|
|
|
|
|
|
|
|
|
|
6,983
|
|
Available-for-sale securities
|
|
|
23,138
|
|
|
|
|
|
|
|
|
|
|
|
23,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
30,121
|
|
|
|
|
|
|
|
|
|
|
|
30,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
(i) Fair value measurements (continued)
Liabilities relating to warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
|
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Balance as of
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
Warrant A
|
|
|
|
|
|
|
|
|
|
|
84
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in Active
Markets for Identical
Assets
(Level 1)
|
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Balance as of
June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
|
Rmb
|
|
Warrant A
|
|
|
|
|
|
|
|
|
|
|
115
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of the warrants was derived based on the Binomial Model and Monte Carlo simulation. The
assumptions include selecting several comparables from the market devoted to solar energy as reference to determine the volatility rate of the Company. Stock price, volatility, expected term, risk-free rate and fundamental changes event
probabilities are the significant inputs into these valuation models.
The keys assumptions have been used were as follows:
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
2012
|
|
Risk-free rate
(1)
|
|
|
0.24
|
%
|
|
|
0.28
|
%
|
Volatility rate
(2)
|
|
|
82.17
|
%
|
|
|
106.97
|
%
|
Dividend yield
(3)
|
|
|
|
|
|
|
|
|
|
1.
|
The risk-free interest rate represents the yields to maturity of U.S. Government Strips with respective terms to maturity as at the valuation date.
|
|
2.
|
Expected volatility is estimated based on the historical volatility of the Companys stock price and/or the comparable public-traded companies.
|
|
3.
|
The Company has no expectation of paying dividends on its common stock.
|
The following represents the reconciliation of the beginning and ending balance of liabilities relating to warrants and option rights measured at fair value on a recurring basis using significant
unobservable inputs (Level 3) during the year ended December 31, 2011 and six months ended June 30, 2012:
|
|
|
|
|
Warrants
|
|
|
|
|
|
June 30,
2012
|
|
|
|
Rmb
|
|
Beginning balance at January 1, 2012
|
|
|
84
|
|
Issuances
|
|
|
|
|
Total gains and losses (realized/unrealized):
|
|
|
|
|
Included in losses
|
|
|
31
|
|
Included in other comprehensive income (loss)
|
|
|
|
|
Settlement/Cancelled upon expiration
|
|
|
|
|
|
|
|
|
|
Ending balance at June 30, 2012
|
|
|
115
|
|
|
|
|
|
|
15
(j) Income tax expenses (credits)
Income tax expenses (credits) represent the sum of the income tax payable and deferred tax.
Income tax is based on taxable profit for the year. Taxable profit differs from net loss as reported in the Companys statements of
operations because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Groups liability for income tax is calculated using tax rates that
have been enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between
the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the asset and liability method. Deferred tax liabilities are generally
recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized.
For business combinations, deferred taxes are recognized to the extent that the fair value of assets and liabilities acquired exceeds
their respective tax bases.
The Company is a tax exempted company incorporated in the British Virgin Islands. The
Companys subsidiaries incorporated in Hong Kong and in the PRC are subject to Hong Kong Profits Tax and Enterprise Income Tax in the PRC, respectively.
The Groups subsidiaries incorporated in Hong Kong were subject to a tax rate of 16.5% in 2011 and 2012 on the assessable profits arising in or derived from Hong Kong. For those Hong Kong
subsidiaries which generate PRC sourced income, PRC income tax was accrued on the assessable profits at a rate of 25% in 2011 and 2012.
On March 16, 2007, the National Peoples Congress adopted the Enterprise Income Tax Law, or New Income Tax Law, which became effective on January 1, 2008 and replaced the previous separate
income tax laws for domestic enterprises and foreign-invested enterprises (including PRC subsidiaries of the Company) by adopting a unified income tax rate of 25% for most enterprises. In accordance with the implementation rules of the New Income
Tax Law, the preferential tax treatments previously granted to certain PRC subsidiaries of the Company would not continue and they would be subject to the statutory tax rate of 25%. Among all the Companys PRC subsidiaries, Zhangzhou Trendar
Solar (not a subsidiary, became an affiliate since May 2012) has obtained a preferential tax concession from the tax bureau that it was fully exempt from the PRC enterprise income tax for two years starting from the year 2008, followed by a 50% tax
exemption for the next three years from 2010 to 2012. Accordingly, the enacted tax rate for Zhangzhou Trendar Solar was 12.5% for 2010 to 2012.
Since all the PRC subsidiaries of the Company reported accumulated deficits up to June 30, 2012, no provision for PRC dividend withholding tax had been made. Upon distribution of any future earnings
in the form of dividends or otherwise in the future, the Group would be subject to the respective withholding tax under the PRC Enterprise Income Tax Law issued by the State Council.
The Group had no material uncertain tax positions for 2011 and the six months ended June 30, 2012 and there were no interest and
penalties related to uncertain tax positions. In addition, the Group had no material unrecognized tax benefit which would affect the effective income tax rate in future periods. The Group does not anticipate any significant increase or decrease in
its liability for unrecognized tax benefits within the next twelve months. The tax positions of the Companys PRC subsidiaries for 2007 to 2011 and the six months ended June 30, 2012 are subject to inspection by the PRC tax authorities.
For the Companys Hong Kong subsidiaries, their respective tax positions are subject to inspection for 2005 to 2011 and the six months ended June 30, 2012 by the Hong Kong tax authorities.
Composition of income tax expenses (credits)
Income tax credits are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
Period
ended
June 30,
2011
|
|
|
Period
ended
June 30,
2012
|
|
|
|
Rmb
|
|
|
Rmb
|
|
Current income tax expenses (credits)
|
|
|
|
|
|
|
|
|
Deferred income tax credits
|
|
|
(385
|
)
|
|
|
(358
|
)
|
|
|
|
|
|
|
|
|
|
Income tax credits
|
|
|
(385
|
)
|
|
|
(358
|
)
|
|
|
|
|
|
|
|
|
|
16
(k) Stock purchase warrants issued to consultants
On July 4, 2011, the Company issued a warrant to Grade Rich Ltd., an independent third party, in return for its 24-months consulting
services in respect of public relations and government relations. The warrant grants the holder a right to purchase 400,000 shares of the Companys common stock at an exercise price of US$3.50 per share within two years from July 4, 2011.
On July 4, 2011, the Company issued a warrant to Prosper Victory Ltd., an independent third party for its two-year
service with regard to introducing strategic partners to the Company, and facilitating the cooperation or alliance between well-known solar energy companies and the Company. The warrant grants the holder a right to purchase 600,000 shares of the
Companys common stock at an exercise price of US$3.01 per share within two years from July 4, 2011.
The warrants
contain provisions which restrict the holders from transferring, selling or pledging the warrants or underlying shares other than pursuant to a registration statement under the Securities Act or pursuant to an available exemption under the
Securities Act. The above warrants are classified as equity-based payment according to ASC 505-05.
(l) Translation into United States
Dollars
The consolidated financial statements of the Group are stated in Rmb. Translations of amounts from Rmb into U.S.
dollars are solely for the convenience of the reader and were calculated at the rate of (Rmb 6.35512 = US$1) on June 30, 2012, representing the exchange rate set forth in the Peoples Bank of China in the PRC. The translation is not
intended to imply that the Rmb amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on June 30, 2012 or at any other rate.
(m) Remediation efforts on the internal controls
We continue to develop
and implement remediation plans to address our material weakness. We have been hiring experienced accounting personnel with knowledge on U.S. GAAP and financial reporting requirements promulgated by the SEC. We would carry on to review our efforts
to improve our internal controls and may in the future identify additional deficiencies to our internal controls. Should we discover any additional deficiencies, we intend to take appropriate measures to correct or improve our internal controls.
(n) Subsequent events
Reverse Stock Split
On October 24, 2012, the Company implemented a
reverse stock split with the ratio of 1-for-10. As a result, the par value per share of the Companys common stock was increased to US$0.10, the number of shares of common stock authorized was reduced to 400,000,000, and the number of shares of
the Companys issued and outstanding common stock was reduced from 22,498,549 to approximately 2,249,854. In addition, the reverse stock split also resulted in proportionate adjustment to the per share exercise price of, and the number of
shares issuable upon the exercise of all outstanding stock options and warrants to purchase or acquire shares of the Companys common stock.
Change of the Companys Name
Effective from October 24, 2012,
the Companys name has changed into Renewable Energy Trade Board Corporation in order to better reflect the Companys current strategic plans and help clarify the identity of the Companys business. The Companys
trading symbol has been changed to EBOD accordingly.
Sale and Purchase Agreement
On November 22, 2012, China Green Holdings Limited (China Green), a wholly-owned subsidiary of the Company, together with
China Merchants New Energy Group Limited (CMNE), Ease Soar Limited (Ease Soar), Talesun Solar Hong Kong Limited (Talesun), Hyatt Servicing Limited (Hyatt Servicing) and Sino Arena Investments Limited
(Sino Arena) (China Green, CMNE, Ease Soar, Talesun, Hyatt Servicing and Sino Arena, collectively the Vendors), entered into a sale and purchase agreement (Sale and Purchase Agreement) with Profit Icon Investments
Limited (Profit Icon) and Goldpoly New Energy Holdings Limited (Goldpoly), pursuant to which the Vendors will sell their entire interest in China Merchants New Energy Holdings Limited (CMNEH), representing
approximately 92.17% of the issued share capital of CMNEH to Profit Icon for an aggregate consideration of approximately HK$2,119,910,000 (subject to adjustment) (Consideration) on the terms and subject to the conditions set out in the
Sale and Purchase Agreement. Upon the completion of the transactions contemplated under the Sale and Purchase Agreement (Completion), CMNEH will become a wholly-owned subsidiary of Profit Icon.
17
Sale and Purchase Agreement (continued)
Pursuant to the Sale and Purchase Agreement, among other things, the Consideration will
be payable to the Vendors or their nominees (if applicable) proportionately with reference to their respective interest in CMNEH and will be satisfied by (i) the issue and allotment of 959,462,250 shares of par value HK$0.10 each in the capital
of Goldpoly credited as fully paid at HK$1.00 each (Consideration Shares) to the Vendors; and (ii) the issue of convertible bonds with a total principal amount of HK$1,160,447,750 convertible into shares of Goldpoly at the initial
conversion price of HK$1.00 per conversion share (Consideration CB) to the Vendors, of which Consideration CB in the principal amount of HK$847,964,000 will be subject to escrow arrangement to secure the profit guarantee of CMNEH for
2013 through 2015.
China Green, as one of the Vendors holding 8.69% of the issued share capital of CMNEH, expects to receive
HK$199,870,000 as consideration of the sale of its entire interest in CMNEH, which will be satisfied by (i) the allotment and issue of 39,974,000 shares of Consideration Shares to China Green or its nominee; and (ii) the issue of
Consideration CB in a total principal amount of HK$159,896,000 to China Green or its nominee, of which the Convertible Bonds in the principal amount of HK$79,948,000 will be delivered to an escrow agent pursuant to the escrow arrangement
contemplated under the Sale and Purchase Agreement.
The Consideration Shares which China Green anticipates to receive may not
be sold, transferred, or otherwise disposed of, or encumbered whether directly or indirectly, for a period of twelve months after the date of Completion. The Consideration CB will mature on the fifth anniversary of the issue date, bearing no
interest, convertible at the initial conversion price of HK$1.00 per share during the conversion period. For the Convertible Bonds in an aggregate principal amount of HK$79,948,000 to be held in escrow, the conversion period will commence on the
release date and end on the maturity date. For the rest of the Convertible Bonds, the conversion period will commence on the day immediately after the end of the first anniversary of the issue date and end on the maturity date, subject to the terms
and conditions under the Consideration CB instrument.
The Completion of the transactions contemplated by the Sale and
Purchase Agreement is conditional upon fulfillment (unless waived) of a number of conditions precedent, including but without limitation to, approval of the shareholders of Goldpoly, receipt of permission granted by the regulatory bodies and a deed
of indemnity executed by the Vendors in favour of Profit Icon and Goldpoly. As of the date of this report, the transactions were not consummated yet.
Liquidation of European subsidiary
Due to the debt crisis and economic
decline in Europe and the unsatisfactory operational results of LSP Solar GmbH, an indirect wholly-owned subsidiary of the Company in Germany (LSP GmbH), on November 30, 2012, the Board of the Directors of the Company decided to
voluntary liquidate and dissolve LSP GmbH in accordance with the laws of Germany.
Establishment of a subsidiary in Hong
Kong
On November 30, 2012, the Board of the Directors of the Company approved the establishment of an indirect
wholly-owned subsidiary in Hong Kong in order to establish a trading platform for solar power plants in China.
18
About EBOD
EBOD is a fast growing clean energy group in China based in Hong Kong, providing solar energy products and solutions to the global market under the LSP brand.
EBODs ultimate major shareholder is China Merchants Group, a state-owned conglomerate in China
(http://www.cmhk.com
).
For more information, please visit
http://www.chinactdc.com
Forward-Looking Statement Disclosure:
It should be noted that certain statements herein
which are not historical facts, including, without limitation, those regarding: A) the timing of product, service and solution deliveries; B) our ability to develop, implement and commercialize new products, services, solutions and technologies; C)
expectations regarding market growth, prices, developments and structural changes; D) expectations regarding our product volume growth, market share, prices and margins; E) expectations and targets for our results of operations; F) the outcome
of pending and threatened litigation; G) expectations regarding the successful completion of contemplated acquisitions on a timely basis and our ability to achieve the set targets upon the completion of such acquisitions; and H) statements preceded
by believe, expect, anticipate, foresee, target, estimate, designed, plans, will or similar expressions are forward-looking statements. These
statements are based on managements best assumptions and beliefs in light of the information currently available to it. Because they involve risks and uncertainties, actual results may differ materially from the results that we currently
expect. Factors that could cause these differences include the risk factors specified on our annual report on Form 20-F for the year ended December 31, 2011 under Item 3.D Risk Factors. Other unknown or unpredictable factors or
underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. The Company does not undertake any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
|
RENEWABLE ENERGY TRADE BOARD CORPORATION
|
|
|
By:
|
|
/s/ Alan Li
|
|
|
Name:
|
|
Alan Li
|
|
|
Title:
|
|
Chief Executive Officer
|
Date: December 20, 2012
Renewable Energy Trade Board Corp. (MM) (NASDAQ:EBOD)
Historical Stock Chart
From Apr 2024 to May 2024
Renewable Energy Trade Board Corp. (MM) (NASDAQ:EBOD)
Historical Stock Chart
From May 2023 to May 2024