British
Virgin Islands
|
3312
|
Not
Applicable
|
||
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
standard industrial
classification
code number)
|
(I.R.S.
Employer
Identification
Number)
|
Christopher
S. Auguste
|
|
Selig
D. Sacks
|
Bill
Huo
|
Michael
T. Campoli
|
|
Ari
Edelman
|
Pryor
Cashman LLP
|
|
Kramer
Levin Naftalis & Frankel LLP
|
7
Times Square
|
|
1177
Avenue of the Americas
|
New
York, NY 10036
|
|
New
York, NY 10036
|
Tel:
(212) 421-4100
|
|
Tel: (212)
715-9100
|
Title of Each Class of Securities to be Registered
|
Proposed Maximum Aggregate
Offering Price (1)(2)(3)
|
Amount of
Registration Fee
|
||||||
Ordinary
Shares, par value $0.01 per share
|
$ |
44,275,000
|
$ |
|
(3) |
Per ADS
|
Total
|
|||||||
Initial
public offering price
|
$ |
5.50
|
$ |
38,500,000
|
||||
Underwriting
discounts and commissions (1)
|
$ |
0.39
|
$ |
2,730,000
|
||||
Proceeds, before expenses, to us
(2)
|
$ |
5.11
|
$ |
35,770,000
|
Global
Hunter Securities
|
Knight
|
Pages
|
||
Conventions
used in this prospectus
|
|
ii
|
Prospectus
Summary
|
1
|
|
Risk
Factors
|
10
|
|
Special
Note Regarding Forward-Looking Statements and Other Information
|
26
|
|
Use
of Proceeds
|
27
|
|
Dividend
Policy
|
28
|
|
Capitalization
|
29
|
|
Dilution
|
30
|
|
Exchange
Rate Information
|
31
|
|
Enforceability
of Civil Liabilities
|
32
|
|
Selected
Historical Consolidated Financial Data
|
33
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
|
35
|
|
Industry
|
54
|
|
Corporate
Structure and Organization
|
58
|
|
Business
|
61
|
|
PRC
Government Regulations
|
80
|
|
Management
|
85
|
|
Beneficial
Ownership
|
92
|
|
Certain
Relationships and Related Party Transactions
|
94
|
|
Description
of Share Capital
|
96
|
|
Description
Of American Depositary Shares
|
103
|
|
Shares
Eligible for Future Sale
|
113
|
|
Taxation
|
114
|
|
Underwriting
|
119
|
|
Other
Expenses of Issuance and Distribution
|
127
|
|
Legal
Matters
|
128
|
|
Experts
|
129
|
|
Where
You Can Find Additional Information
|
130
|
|
Index
to Consolidated Financial Statements
|
F-1
|
|
·
|
“shares”
or “ordinary shares” refers to our ordinary shares, par value $0.01 per
share;
|
|
·
|
“ADSs”
refers to our American Depositary Shares, each of which represents one
ordinary share, and “ADRs” refers to American Depositary Receipts, which,
if issued, evidence our ADSs;
|
|
·
|
“China”
or “PRC” refers to the People’s Republic of China, excluding the Hong Kong
Special Administrative Region, the Macau Special Administrative Region and
Taiwan;
|
|
·
|
“RMB”
or “Renminbi” refers to Renminbi yuan, the legal currency of China;
and
|
|
·
|
“$”,
“US$” or “U.S. dollars” refers to the legal currency of the United
States.
|
|
·
|
Superior
corrosion resistance;
|
|
·
|
Superior
toughness and plasticity;
|
|
·
|
Endurance
against extreme heat;
|
|
·
|
Smooth
and appealing coating; and
|
|
·
|
Easily
coated.
|
|
·
|
Increasing
our production capacity for our newly developed higher margin rare earth
coated prestressed materials.
|
|
·
|
Strengthening
our relationships with key customers, diversifying our customer base and
exploiting new business opportunities through our relationship with an
affiliated company.
|
|
·
|
Pursuing
strategic relationships and acquisition
opportunities.
|
|
·
|
We
are taking advantage of industry trends in the bridge and infrastructure
sectors in the PRC and other international
markets.
|
|
·
|
Leading
provider of coated prestressed steel
materials.
|
|
·
|
Strong
in-house research and development
capabilities.
|
|
·
|
Efficient
proprietary production technology.
|
|
·
|
Strong
recognition from domestic and international customers for supplying
materials for infrastructure
projects.
|
|
·
|
Rigorous
quality control standards.
|
|
·
|
Experienced
management and operational teams with domestic PRC market
knowledge.
|
|
·
|
Our
revenues are highly dependent on a limited number of
customers;
|
|
·
|
We
have ceased doing business with some international customers because of
anti-dumping duties;
|
|
·
|
We
expect to experience increased needs to finance our working capital
requirements;
|
|
·
|
We
may need to establish a more diverse supplier
network;
|
|
·
|
Our
revenues could decrease if steel prices
decline;
|
|
·
|
We
face intense competition;
|
|
·
|
We
may be unable to maintain sufficient levels of working
capital;
|
|
·
|
We
may be unable to protect our intellectual
property;
|
|
·
|
Adverse
changes in the economy of China may affect our
business.
|
Price
per ADS
|
|
We
currently estimate that the initial public offering price will be between
$5.00 and $6.00 per ADS.
|
ADSs
being offered by us
|
7,000,000
ADSs
|
|
Ordinary
shares outstanding before this offering
|
15,000,000
ordinary shares
|
|
Ordinary
shares to be outstanding immediately after this offering
|
22,000,000
ordinary shares
|
|
ADSs
|
Each
ADS represents one ordinary share, par value $0.01 per
share.
|
|
JP
Morgan Chase Bank, N.A., the depositary, will be the holder of the
ordinary shares underlying your ADSs and you will have rights as provided
in the deposit agreement.
Although
we do not expect to pay dividends in the foreseeable future, if we declare
dividends on our ordinary shares, the depositary will pay you the cash
dividends and other distributions it receives on our ordinary shares,
after deducting fees of up to $0.05 per ADS per distribution and
expenses.
In
addition, the depositary may charge a fee of up to $0.05 per ADS per
calendar year (or a portion thereof) for services it performs in
administering the ADSs (which may be charged on a periodic basis during
each calendar year and shall be assessed against holders of ADSs as of the
record date or record dates set by the depositary during each calendar
year).
We may
amend or terminate the deposit agreement without your consent, and if you
continue to hold your ADSs, you agree to be bound by the deposit agreement
as amended.
You
should carefully read the section in this prospectus entitled “Description
of American Depositary Shares” to better understand the terms of the ADSs.
You should also read the deposit agreement, which is an exhibit to the
registration statement that includes this prospectus.
|
||
Over-allotment
option
|
We
have granted to the underwriters an option, exercisable for 45 days from
the date of this prospectus, to purchase up to an
additional 1,050,000 ADSs, at the initial public offering price set
forth on the cover page of this prospectus, less underwriting discounts
and commissions, solely for the purpose of covering over-allotments, if
any.
|
Use
of proceeds
|
We
estimate that we will receive net proceeds of approximately $38.5 million
from this offering, assuming an initial public offering price of $5.50 per
ADS. For the purposes of estimating net proceeds, we are
assuming an initial public offering price of $5.50 per ADS, the midpoint
of the estimated range of the initial public offering price set forth on
the cover of this prospectus. We intend to use approximately $2
million for the related construction costs associated with the extension
of our current facility and approximately $20 million to purchase and
install eight new production lines for coated prestressed
materials. Approximately $3 million of the net proceeds from this
offering will go towards the purchase of additional land. We
may use a portion of the net proceeds of this offering to acquire all, or
a portion of, the minority interests in Ossen Materials or to fund
acquisitions. The remainder of the proceeds will be used for
working capital and other general corporate purposes. See the
section entitled “Use of Proceeds.”
The
terms of the purchase of any of the minority interests in Ossen Materials,
including the purchase price, are subject to future discussions and
negotiations between us and the individual shareholders, and there is no
assurance that any of these interests will be available for us to purchase
upon terms that are acceptable to us, if at all. In addition,
we currently have no plans, agreements or commitments with respect to any
material acquisitions or investments in other
companies.
|
|
Risk
factors
|
See
the section captioned “Risk Factors” and other information included in
this prospectus for a discussion of factors you should consider before
deciding to invest in our ADSs.
|
|
Payment
and settlement
|
Our
ADSs are expected to be delivered against payment on
[ ], 2010. The
ADSs will be deposited with a custodian for, and registered in the name of
a nominee of, The Depository Trust Company, or DTC, in New York, New
York. In general, beneficial interests in our shares will be
shown on, and transfers of these beneficial interests will be effected
only through, records maintained by DTC and its direct and indirect
participants.
|
|
Listing
|
We
have applied to have our ADSs listed on the Nasdaq Global Market under the
symbol “OSN.”
|
|
Depositary
|
JP
Morgan Chase Bank, N.A.
|
|
Lock-up
|
Our
directors and executive officers, and the holders of all of our
outstanding ordinary shares, have agreed with the underwriters not to
sell, transfer or otherwise dispose of any of our ordinary shares, or ADSs
representing our ordinary shares, for 180 days after the date of this
prospectus. See
“Underwriting.”
|
|
·
|
an
initial public offering price of $5.50 per ADS, the midpoint of the
estimated range of the initial public offering price set forth on the
cover of this prospectus; and
|
|
·
|
no
exercise of the underwriters’ option to purchase up to 1,050,000
additional ADSs from us to cover over-allotments.
|
Year Ended December 31,
|
For the Six Months
Ended June 30,
|
|||||||||||||||||||||||||||
2009
(Audited)
|
2008
(Audited)
|
2007
(Unaudited)
|
2006
(Unaudited)
|
2005
(Unaudited)
|
2010
(Unaudited)
|
2009
(Unaudited)
|
||||||||||||||||||||||
Revenues
|
$ | 101,087,796 | $ | 82,742,310 | $ | 71,909,873 | $ | 59,547,454 | $ | 17,195,347 | $ | 58,708,775 | $ | 40,416,407 | ||||||||||||||
Cost
of goods sold
|
87,659,925 | 70,532,733 | 63,340,890 | 56,853,946 | 15,216,951 | 47,101,721 | 35,741,095 | |||||||||||||||||||||
Gross
profit
|
13,427,871 | 12,209,577 | 8,568,983 | 2,693,508 | 1,978,395 | 11,607,054 | 4,675,312 | |||||||||||||||||||||
Selling
and distribution expenses
|
503,724 | 4,326,491 | 3,662,373 | 1,024,209 | 219,650 | 195,706 | 241,880 | |||||||||||||||||||||
General
and administrative expenses
|
1,143,672 | 1,316,606 | 571,498 | 340,847 | 255,270 | 532,276 | 638,499 | |||||||||||||||||||||
Total Operating
Expenses
|
1,647,396 | 5,643,097 | 4,288,796 | 1,410,056 | 501,920 | 727,982 | 880,379 | |||||||||||||||||||||
Income
from operations
|
11,780,475 | 6,566,480 | 4,280,187 | 1,283,451 | 1,476,475 | 10,879,072 | 3,794,933 | |||||||||||||||||||||
Interest
expenses, net
|
(1,496,712 | ) | (1,891,671 | ) | (1,189,027 | ) | (359,130 | ) | (22,920 | ) | (1,069,659 | ) | (730,104 | ) | ||||||||||||||
Other
income, net
|
183,495 | 380,766 | 278,924 | 211,875 | 56,362 | 96,720 | 14,583 | |||||||||||||||||||||
Income
before income taxes
|
10,467,258 | 5,055,575 | 3,370,084 | 1,136,196 | 1,509,917 | 9,906,133 | 3,079,412 | |||||||||||||||||||||
Income
taxes
|
(740,053 | ) | (291,520 | ) | (233,674 | ) | - | - | (1,370,598 | ) | (348,394 | ) | ||||||||||||||||
Net
income
|
9,727,205 | 4,764,055 | 3,136,410 | 1,136,196 | 1,509,917 | 8,535,535 | 2,731,018 | |||||||||||||||||||||
Less:
Net Income Attributable
to non- controlling
interest
|
1,714,670 | 809,437 | - | - | - | 1,430,029 | 484,515 | |||||||||||||||||||||
Net
income attributable to controlling interest
|
8,012,535 | 3,954,618 | 3,136,410 | 1,136,196 | 1,509,917 | 7,105,506 | 2,246,503 | |||||||||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||||||||||
Foreign
currency translation gain, net of tax
|
31,146 | 420,883 | 66,913 | 360,384 | 37,135 | 117,535 | 13,684 | |||||||||||||||||||||
Total
Other comprehensive income, net of tax
|
31,146 | 420,883 | 66,913 | 360,384 | 37,135 | |||||||||||||||||||||||
Comprehensive
Income
|
$ | 8,043,681 | $ | 4,375,501 | $ | 3,203,323 | $ | 1,496,580 | $ | 1,547,052 | $ | 7,223,041 | $ | 2,260,187 |
Balance Sheets Data (qat end of period)
|
December 31
|
June 30,
|
||||||||||||||||||||||
(in U.S. Dollars)
|
2009
|
2008
|
2007
|
2006
|
2005
|
2010
|
||||||||||||||||||
(Audited)
|
(Audited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
Cash
and cash equivalents
|
$ | 8,409,467 | $ | 3,761,315 | $ | 6,735,616 | $ | 7,828,750 | $ | 3,120,317 | $ | 3,460,341 | ||||||||||||
Total
current assets
|
68,374,508 | 47,316,208 | 35,162,129 | 18,712,764 | 9,901,704 | 91,415,426 | ||||||||||||||||||
Total
non-current assets
|
17,343,079 | 18,580,174 | 17,464,579 | 12,733,621 | 9,898,165 | 16,712,373 | ||||||||||||||||||
Total
assets
|
85,717,587 | 65,896,382 | 52,626,708 | 31,436,385 | 19,799,869 | 108,127,799 | ||||||||||||||||||
Total
liabilities
|
65,538,241 | 55,475,387 | 47,390,651 | 18,297,807 | 8,317,707 | 79,295,383 | ||||||||||||||||||
Total
shareholders’ equity
|
20,179,346 | 10,420,995 | 5,236,057 | 13,138,578 | 11,482,162 | 28,832,416 | ||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 85,717,587 | $ | 65,896,382 | $ | 52,626,708 | $ | 31,436,385 | $ | 19,799,869 | $ | 108,127,799 |
|
·
|
recruiting,
training and retaining sufficient skilled sales and management
personnel;
|
|
·
|
adhering
to our high quality and process execution
standards;
|
|
·
|
maintaining
high levels of customer
satisfaction;
|
|
·
|
creating
and managing economies of scale;
|
|
·
|
maintaining
and managing costs to correspond with timeliness of revenue recognition;
and
|
|
·
|
developing
and improving our internal administrative infrastructure, including our
financial, operational and communication systems, processes and
controls.
|
|
·
|
changes
in prices of our raw materials, with higher prices leading to reduced
operating income;
|
|
·
|
variations,
expected or unexpected, in the duration, size, timing and scope of
purchase orders;
|
|
·
|
changes
in our pricing policies or those of our
competitors;
|
|
·
|
changes
in compensation, which may reduce our gross profit for the quarter in
which they are effected;
|
|
·
|
our
inability to manage costs, including those related to our raw materials,
personnel, infrastructure and
facilities;
|
|
·
|
exchange
rate fluctuations; and
|
|
·
|
general
economic conditions.
|
|
·
|
difficulties
in integrating operations, systems, technologies, accounting methods and
personnel;
|
|
·
|
difficulties
in supporting and transitioning clients of our acquired companies or
strategic partners;
|
|
·
|
disruption
of our ongoing business;
|
|
·
|
diversion
of financial and management resources from existing
operations;
|
|
·
|
risks
of entering new markets;
|
|
·
|
potential
loss of key employees; and
|
|
·
|
inability
to generate sufficient revenue to offset transaction costs and
expenses.
|
|
·
|
Level
of government involvement in the
economy;
|
|
·
|
Control
of foreign exchange;
|
|
·
|
Methods
of allocating resources;
|
|
·
|
Balance
of payments position;
|
|
·
|
International
trade restrictions; and
|
|
·
|
International
conflict.
|
|
·
|
actual
or anticipated fluctuations in our quarterly operating results and
revisions to our expected results;
|
|
·
|
changes
in financial estimates by securities research
analysts;
|
|
·
|
conditions
in the markets for our products;
|
|
·
|
changes
in the economic performance or market valuations of companies specializing
in our industry or our customers or their
industries;
|
|
·
|
announcements
by us or our competitors of new products, acquisitions, strategic
relationships, joint ventures or capital
commitments;
|
|
·
|
addition
or departure of our senior management and key
personnel;
|
|
·
|
fluctuations
of exchange rates between the Renminbi and the U.S.
dollar;
|
|
·
|
litigation
related to our intellectual
property;
|
|
·
|
release
or expiry of transfer restrictions on our outstanding ordinary shares;
and
|
|
·
|
sales
or perceived potential sales of our
ADSs.
|
|
·
|
our
ability to attract and retain
customers;
|
|
·
|
the
anticipated benefits and risks associated with our business strategy,
including those relating to our current and future product
offerings;
|
|
·
|
our
future operating results;
|
|
·
|
the
anticipated benefits and risks of our key strategic customer relationships
and strategic acquisitions, joint ventures and alliances;
and
|
|
·
|
the
anticipated size or trends of the markets in which we compete and the
anticipated competition in those
markets.
|
|
·
|
Our
revenues are highly dependent on a limited number of
customers;
|
|
·
|
We
have ceased doing business with some international customers because of
anti-dumping duties;
|
|
·
|
We
expect to experience increased needs to finance our working capital
requirements;
|
|
·
|
We
may need to establish a more diverse supplier
network;
|
|
·
|
Our
revenues could decrease if steel prices
decline;
|
|
·
|
We
face intense competition;
|
|
·
|
We
may be unable to maintain sufficient levels of working
capital;
|
|
·
|
We
may be unable to protect our intellectual property;
and
|
|
·
|
Adverse
changes in the economy of China may affect our
business.
|
|
·
|
$2
million toward the construction costs associated with the extension of our
Maanshan facility; and;
|
|
·
|
$20
million toward the purchase and installation of eight new production
lines, to be located in the extended facility, which will be used for the
production of approximately 30,000 tons annually of coated PC wires and PC
strands.
|
|
·
|
on
an actual basis; and
|
|
·
|
on
a pro forma as adjusted basis to give effect to the issuance and sale
of 7,000,000 of our ADSs by us in this offering, assuming an initial
public offering price of $5.50 per ADS, the midpoint of the estimated
range of the initial public offering price set forth on the cover page of
this prospectus, after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us of approximately
$3,920,000, assuming that the underwriters do not exercise their
over-allotment option and there is no other change to the number of ADSs
sold by us as set forth on the cover page of this prospectus.
|
As of June 30, 2010
|
Actual
|
Pro forma as
adjusted
|
||||||
Cash:
|
||||||||
Cash
and cash equivalents
|
$ | 3,460,341 | 38,040,341 | |||||
Restricted
cash (1)
|
12,149,706 | 12,149,706 | ||||||
Debt:
|
||||||||
Notes
payable - bank acceptance notes (1)
|
22,030,961 | 22,030,961 | ||||||
Short-term
bank loans (2)
|
36,277,649 | 36,277,649 | ||||||
Shareholders’
equity:
|
||||||||
Ordinary
shares
|
500 | 220,000 | ||||||
Accumulated
other comprehensive income
|
660,571 | 34,610,000 | ||||||
Statutory
reserve
|
2,049,085 | 2,049,085 | ||||||
Retained
earnings
|
19,219,153 | 18,969,653 | ||||||
Non-controlling
interest
|
6,903,107 | 6,903,107 | ||||||
Total
shareholders’ equity
|
$ | 28,832,416 | 63,412,416 |
Assumed
initial public offering price per ADS
|
$ | 5.50 | ||
Net
tangible book value per ADS as of June 30, 2010
|
$ | 1.64 | ||
Increase
in adjusted net tangible book value per ADS attributable to
this offering
|
$ | 1.05 | ||
Pro
forma net tangible book value per ADS after this offering
|
$ | 2.69 | ||
Dilution
in net tangible book value per ADS after this offering
|
$ | 2.81 |
ADSs Purchased
|
Total Consideration
|
Average
Price
Per
|
||||||||||||||||||
Number
|
Percent
|
Amount
|
Percent
|
ADS
|
||||||||||||||||
Existing
shareholders
|
15,000,000 | 68 | % | $ | 150,000 | 0.43 | % | $ | 0.01 | |||||||||||
New
investors
|
7,000,000 | 32 | % | $ | 34,580,000 | 99.57 | % | $ | 4.94 | |||||||||||
Total
|
22,000,000 | 100 | % | $ | 34,730,000 | 100 | % | $ | 1.58 |
Six months ended June 30,
|
Year ended September 30,
|
|||||||
2010
|
2009
|
2009
|
2008
|
|||||
Balance
sheet items,
|
RMB6.8086=$1
|
RMB6.8448=$1
|
RMB6.8290=$1
|
RMB6.8183=$1
|
||||
except
for equity accounts
|
HK$7.7335=$1
|
HK$7.7805=$1
|
||||||
Items
in statements of
|
RMB6.8347=$1
|
RMB6.8432=$1
|
RMB6.83055=$1
|
RMB7.1643=$1
|
||||
income
and cash flows
|
HK$7.7275=$1
|
HK$7.7890=$1
|
Year
Ended December 31,
|
Six
Months Ended June 30,
|
|||||||||||||||||||||||||||
2009
(Audited)
|
2008
(Audited)
|
2007
(Unaudited)
|
2006
(Unaudited)
|
2005
(Unaudited)
|
2010
(Unaudited)
|
2009
(Unaudited)
|
||||||||||||||||||||||
Revenues
|
$ | 101,087,796 | $ | 82,742,310 | $ | 71,909,873 | $ | 59,547,454 | $ | 17,195,347 | $ | 58,708,775 | $ | 40,416,407 | ||||||||||||||
Cost
of goods sold
|
87,659,925 | 70,532,733 | 63,340,890 | 56,853,946 | 15,216,951 | 47,101,721 | 35,741,095 | |||||||||||||||||||||
Gross
profit
|
13,427,871 | 12,209,577 | 8,568,983 | 2,693,508 | 1,978,395 | 11,607,054 | 4,675,312 | |||||||||||||||||||||
Selling
and distribution expenses
|
503,724 | 4,326,491 | 3,662,373 | 1,024,209 | 219,650 | 195,706 | 241,880 | |||||||||||||||||||||
General
and administrative expenses
|
1,143,672 | 1,316,606 | 571,498 | 340,847 | 255,270 | 532,276 | 638,499 | |||||||||||||||||||||
Total
Operating Expenses
|
1,647,396 | 5,643,097 | 4,288,796 | 1,410,056 | 501,920 | 727,982 | 880,379 | |||||||||||||||||||||
Income
from operations
|
11,780,475 | 6,566,480 | 4,280,187 | 1,283,451 | 1,476,475 | 10,879,072 | 3,794,933 | |||||||||||||||||||||
Interest
expenses, net
|
(1,496,712 | ) | (1,891,671 | ) | (1,189,027 | ) | (359,130 | ) | (22,920 | ) | (1,069,659 | ) | (730,104 | ) | ||||||||||||||
Other
income, net
|
183,495 | 380,766 | 278,924 | 211,875 | 56,362 | 96,720 | 14,583 | |||||||||||||||||||||
Income
before income taxes
|
10,467,258 | 5,055,575 | 3,370,084 | 1,136,196 | 1,509,917 | 9,906,133 | 3,079,412 | |||||||||||||||||||||
Income
taxes
|
(740,053 | ) | (291,520 | ) | (233,674 | ) | - | - | (1,370,598 | ) | (348,394 | ) | ||||||||||||||||
Net
income
|
9,727,205 | 4,764,055 | 3,136,410 | 1,136,196 | 1,509,917 | 8,535,535 | 2,731,018 | |||||||||||||||||||||
Less:
Net Income Attributable
to non- Controlling
interest
|
1,714,670 | 809,437 | - | - | - | 1,430,029 | 484,515 | |||||||||||||||||||||
Net
income attributable to controlling interest
|
8,012,535 | 3,954,618 | 3,136,410 | 1,136,196 | 1,509,917 | 7,105,506 | 2,246,503 | |||||||||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||||||||||
Foreign
currency translation gain, net of tax
|
31,146 | 420,883 | 66,913 | 360,384 | 37,135 | 117,535 | 13,684 | |||||||||||||||||||||
Total
Other comprehensive income, net of tax
|
31,146 | 420,883 | 66,913 | 360,384 | 37,135 | |||||||||||||||||||||||
Comprehensive
Income
|
$ | 8,043,681 | $ | 4,375,501 | $ | 3,203,323 | $ | 1,496,580 | $ | 1,547,052 | $ | 7,223,041 | $ | 2,260,187 |
Balance Sheets Data (qat end of period)
|
December 31
|
June 30,
|
||||||||||||||||||||||
(in U.S. Dollars)
|
2009
|
2008
|
2007
|
2006
|
2005
|
2010
|
||||||||||||||||||
(Audited)
|
(Audited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
Cash
and cash equivalents
|
$ | 8,409,467 | $ | 3,761,315 | $ | 6,735,616 | $ | 7,828,750 | $ | 3,120,317 | $ | 3,460,341 | ||||||||||||
Total
current assets
|
68,374,508 | 47,316,208 | 35,162,129 | 18,712,764 | 9,901,704 | 91,415,426 | ||||||||||||||||||
Total
non-current assets
|
17,343,079 | 18,580,174 | 17,464,579 | 12,733,621 | 9,898,165 | 16,712,373 | ||||||||||||||||||
Total
assets
|
85,717,587 | 65,896,382 | 52,626,708 | 31,436,385 | 19,799,869 | 108,127,799 | ||||||||||||||||||
Total
liabilities
|
65,538,241 | 55,475,387 | 47,390,651 | 18,297,807 | 8,317,707 | 79,295,383 | ||||||||||||||||||
Total
shareholders’ equity
|
20,179,346 | 10,420,995 | 5,236,057 | 13,138,578 | 11,482,162 | 28,832,416 | ||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 85,717,587 | $ | 65,896,382 | $ | 52,626,708 | $ | 31,436,385 | $ | 19,799,869 | $ | 108,127,799 |
(All amounts in U.S. dollars, except for percentages)
|
||||||||||||||||||||||||||||||||
For Six Months Ended June 30,
|
For Year Ended December 31,
|
|||||||||||||||||||||||||||||||
2010
|
% of
Revenue
|
2009
|
% of
Revenue
|
2009
|
% of
Revenue
|
2008
|
% of
Revenue
|
|||||||||||||||||||||||||
Revenues
|
$ | 58,708,775 | 100 | % | $ | 40,416,407 | 100 | % | $ | 101,087,796 | 100 | % | $ | 82,742,310 | 100 | % | ||||||||||||||||
Cost
of Goods Sold
|
47,101,721 | 80.2 | % | 35,741,095 | 88 | % | 87,659,925 | 86.7 | % | 70,532,733 | 85.2 | % | ||||||||||||||||||||
Gross
profit
|
11,607,054 | 19.8 | % | 4,675,312 | 11.6 | % | 13,427,871 | 13.2 | % | 12,209,577 | 14.8 | % | ||||||||||||||||||||
Selling
and distribution expenses
|
195,706 | 0.3 | % | 241,880 | 0.6 | % | 503,724 | 0.5 | % | 4,326,491 | 5.2 | % | ||||||||||||||||||||
General
and administrative expenses
|
532,276 | 0.9 | % | 638,499 | 1.6 | % | 1,143,672 | 1.1 | % | 1,316,606 | 1.6 | % | ||||||||||||||||||||
Total
operating expenses
|
727,982 | 1.2 | % | 880,379 | 2.2 | % | 1,647,396 | 1.6 | % | 5,643,097 | 6.8 | % | ||||||||||||||||||||
Income
from operation
|
10,879,072 | 18.5 | % | 3,794,933 | 9.4 | % | 11,780,475 | 11.1 | % | 6,566,480 | 7.9 | % | ||||||||||||||||||||
Interest
expenses, net
|
(1,069,659 | ) | 1.8 | % | (730,104 | ) | 1.8 | % | (1,496,712 | ) | 1.5 | % | (1,891,671 | ) | 2.3 | % | ||||||||||||||||
Other
income, net
|
96,720 | 0.2 | % | 14,583 | - | 183,495 | 0.2 | % | 380,766 | 0.5 | % | |||||||||||||||||||||
Income
before income taxes
|
9,906,133 | 16.9 | % | 3,079,412 | 7.6 | % | 10,467,258 | 10.4 | % | 5,055,575 | 6.1 | % | ||||||||||||||||||||
Income
Taxes
|
(1,370,598 | ) | 2.3 | % | (348,394 | ) | 0.9 | % | (740,053 | ) | 0.8 | % | (291,520 | ) | 0.4 | % | ||||||||||||||||
Net
Income
|
8,535,535 | 14.5 | % | 2,731,018 | 6.8 | % | 9,727,205 | 9.6 | % | 4,764,055 | 5.7 | % | ||||||||||||||||||||
Less:
net income attributable to non-controlling interest
|
1,430,029 | 2.4 | % | 484,515 | 1.2 | % | 1,714,670 | 1.7 | % | 809,437 | 1.0 | % | ||||||||||||||||||||
Net
income attributable to controlling interest
|
7,105,506 | 12.1 | % | 2,246,503 | 5.6 | % | 8,012,535 | 7.9 | % | 3,954,618 | 4.7 | % | ||||||||||||||||||||
Other
comprehensive income-Foreign currency translation gain, net of
tax
|
117,535 | 0.2 | % | (13,684 | ) | - | 31,146 | - | 420,883 | 0.5 | % | |||||||||||||||||||||
Total
other comprehensive income, net of tax
|
- | - | - | - | 31,146 | - | 420,883 | 0.5 | % | |||||||||||||||||||||||
Comprehensive
Income
|
$ | 7,223,041 | 12.3 | % | $ | 2,260,187 | 5.6 | % | $ | 8,043,681 | 7.9 | % | $ | 4,375,501 | 5.3 | % |
Year ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
Revenue
($)
|
% of Total
Revenue
|
Revenue
($)
|
% of Total
Revenue
|
Change
from 2008
to 2009
|
||||||||||||||||
Products:
|
||||||||||||||||||||
Plain
surface PC strands
|
30,081,890 | 32 | % | 47,842,855 | 60 | % | (37.1 | )% | ||||||||||||
Zinc
coated PC wires and PC
strands
|
2,225,114 | 2 | % | 3,332,883 | 4 | % | (33.2 | )% | ||||||||||||
Stabilized
PC wires
|
52,179,268 | 51 | % | 32,166,572 | 36 | % | 62.2 | % | ||||||||||||
Rare
earth coated PC wires and PC
strands
|
16,601,524 | 15 | % | - | - | - |
Six months ended June 30,
|
||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||
Revenue
($)
|
% of Total
Revenue
|
Revenue
($)
|
% of Total
Revenue
|
Change
from 2009
to 2010
|
||||||||||||||||
Products:
|
||||||||||||||||||||
Plain
surface PC strands
|
18,004,460 | 30.7 | 7,245,040 | 17.9 | 148.5 | % | ||||||||||||||
Zinc
coated PC wires and PC
strands
|
1,516,857 | 2.6 | 978,756 | 2.4 | 55.0 | % | ||||||||||||||
Stabilized
PC wires
|
7,261,189 | 12.4 | 32,192,611 | 79.7 | (77.4 | )% | ||||||||||||||
Rare
earth coated PC wires and PC
strands
|
31,926,269 | 54.3 | - | - | - |
|
·
|
We
experienced increased demands for our plain surface PC strands for use in
highways, docks and other infrastructure projects in the PRC, resulting in
a 148.5% increase in sales of these products during the six months ended
June 30, 2010 as compared to the six months ended June 30, 2009. The
reason for this significant increase in demand is that the PRC Ministry of
Transportation’s implementation of the Eleventh Five-Year Plan is focused
in large part on the construction of highways, docks and other
infrastructure projects. Although we expect demand for these
products to remain high in the PRC in the near future, we do not expect to
continue to increase our revenues from sales of plain surface PC strands
at this rate because we intend to utilize a greater percentage of our
production capacity to manufacture rare earth coated PC wires and PC
strands to be used in the construction of bridges. Rare earth coated
materials generate higher profit margins, and demand for these products in
the PRC market is high as well.
|
|
·
|
We
generated over half of our revenue from sales of our rare earth coated
products during the six months ended June 30, 2010. Demand for our
rare earth coated PC wires and PC strands, which are new products that we
began selling in the second half of 2009, has been very high in the PRC,
and we expect this trend to continue in the near future. Our
customers that are in the bridge construction and restoration industry in
the PRC and overseas have reported that they prefer rare earth coated
products to zinc coated products because of the anti-corrosion and other
beneficial properties of the rare earth coated products, including their
long life span. In addition, because of the high strength of the
individual rare earth coated PC strands and wires, fewer wires and strands
are required for these projects, thereby decreasing the overall cost to
our customers. During the six months ended June 30, 2010, we entered
into 13 contracts to supply rare earth PC wires and PC strands to be used
in the construction of bridges in the PRC, Taiwan and South
Korea.
|
|
·
|
We
generated significantly lower levels of revenue from sales of our
stabilized PC wires, which are products that are developed during the
middle stages of our production process prior to coating, during the six
months ended June 30, 2010. Stabilized PC wires are lower margin
products compared to rare earth coated or zinc coated products.
During the first half of 2009, when we had to increase sales in the PRC in
response to anti-dumping regulations in the US and the EU, our revenue
stream was heavily dependent on these products, which were in demand due
to the limited number of supplies of the products in the PRC. Once
we initiated production of our rare earth coated materials during the
second half of 2009, we began producing rare earth coated materials in
place of stabilized PC wires, since the margins are higher. We
expect that revenue generated by sales of our rare earth coated products
will continue to increase, especially after we construct a new building
and install a new rare earth coated material production line, as we plan
to fill more orders for rare earth coated materials from the PRC and
international markets, where demand for use of these products in the
construction and restoration of bridges is expected to continue to grow in
the near future.
|
|
·
|
Persuasive
evidence of an arrangement exists;
|
|
·
|
Delivery
has occurred or services have been
rendered;
|
|
·
|
The
seller’s price to the buyer is fixed or determinable;
and
|
|
·
|
Collectability
is reasonable assured.
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
Year
ended RMB: US$ exchange rate
|
6.8372 | 6.8542 | ||||||
Average
yearly RMB: US$ exchange rate
|
6.8409 | 6.9623 |
June
30,
|
||||||||
2010
|
2009
|
|||||||
Quarter
ended RMB: US$ exchange rate
|
6.8086 | 6.8448 | ||||||
Average
yearly RMB: US$ exchange rate
|
6.8347 | 6.8432 |
|
·
|
Level
1—defined as observable inputs such as quoted prices in active
markets;
|
|
·
|
Level
2—defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable;
and
|
|
·
|
Level
3—defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own
assumptions.
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Carrying value
as of
June 30, 2010
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||||||
Cash
and cash equivalents
|
$ | 3,460,341 | $ | 3,460,341 | - | - | ||||||||||
Restricted
cash
|
$ | 12,149,706 | $ | 12,149,706 | - | - |
Buildings
and improvements
|
5 -
20 years
|
Machinery
and equipment
|
5 -
20 years
|
Motor
vehicles
|
5
years
|
Office
Equipment
|
5 -
10 years
|
Year Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
(Audited)
|
(Audited)
|
|||||||
Net
cash used in operating activities
|
$ | (2,769,330 | ) | $ | (2,234,087 | ) | ||
Net
cash used in investing activities
|
(209,511 | ) | (2,666,665 | ) | ||||
Net
cash provided by financing activities
|
7,558,779 | 345,059 |
Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Net
cash used in operating activities
|
$ | (15,911,651 | ) | $ | (6,285,373 | ) | ||
Net
cash used in investing activities
|
(96,887 | ) | (129,876 | ) | ||||
Net
cash provided by financing activities
|
10,887,816 | 4,472,848 |
Payments due by period (in thousands of dollars)
|
|||||||||||||||||
Contractual Obligations
|
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
||||||||||||
($US
in Thousands)
|
|||||||||||||||||
Short-term
debt obligations (1)
|
58,408,610 | 58,408,610 |
|
- | - |
|
·
|
PC
wires;
|
|
·
|
PC
strands;
|
|
·
|
PC
steel bars, and
|
|
·
|
Rare
earth coated prestressed materials.
|
|
·
|
Superior
corrosion resistance, which is 2-3 times than that of common hot dip zinc
coated products;
|
|
·
|
Superior
formability, toughness, plasticity and torsional
resistance;
|
|
·
|
Superior
bonding properties and creep
resistance;
|
|
·
|
Able
to endure high temperature of up to 320°C, while pure zinc coating can
endure a temperature of 230°C only;
|
|
·
|
The
melting point temperature of rare earth plating bath is lower than that of
pure zinc coating, which helps to save 10-15% energy and better preserves
the mechanical property of prestressed
material;
|
|
·
|
Rare
earth alloy coating layer is more smooth and appealing than common zinc
coating; and
|
|
·
|
Easily
coated and amenable to changes in color of zinc
coating.
|
|
·
|
Superior
corrosion resistance;
|
|
·
|
Superior
toughness and plasticity;
|
|
·
|
Endurance
against extreme heat;
|
|
·
|
Smooth
and appealing coating; and
|
|
·
|
Easily
coated.
|
|
§
|
Plain
surface PC wires. This product consists of an individual round wire
used in the construction of
buildings.
|
|
§
|
Indented
PC wires. This product consists of an individual round wire that
contains an indentation used in the construction of
buildings.
|
|
§
|
Helical
(spiral) rib PC wires. This product consists of an individual round
wire whose surface is pulled out into a helical rib pattern used in the
construction of railway ties, or sleepers, and
buildings.
|
·
|
Ф5.0
Series, used for suspension
bridges.
|
·
|
Ф7.0
Series, used for cable-stayed
bridges.
|
|
·
|
Pricing.
Flexibility to control pricing of products and the ability to use
economies of scale to secure competitive pricing
advantages;
|
|
·
|
Technology.
Ability to manufacture products efficiently, utilize low-cost raw
materials, and to achieve better production quality;
and
|
|
·
|
Barriers to entry.
Technical knowledge, access to capital, local market knowledge and
established relationships with suppliers and customers to support the
development of commercially viable production facilities and
products.
|
|
·
|
the
performance and cost effectiveness of our
products;
|
|
·
|
our
ability to manufacture and deliver products in required volumes, on a
timely basis, and at competitive
prices;
|
|
·
|
superior
quality and reliability of our
products;
|
|
·
|
our
after-sale support capabilities, from both an engineering and an
operational perspective;
|
|
·
|
effectiveness
of customer service and our ability to send experienced operators and
engineers as well as a seasoned sales force to assist our customers;
and
|
|
·
|
overall
management capability.
|
|
·
|
Cleaning
steel wire rods or other similar raw materials by chemical pickling,
mechanical de-scaling or a similar process. The materials are then
cold drawn and reduced until the desired diameter and resistance
characteristics are achieved. This process is what provides the material
with its strength.
|
|
·
|
In
the production of strands, the individual wires (either 3 or 7 wires) are
braided together to form a
strand.
|
|
·
|
The
final step is to subject the steel material to a thermo-chemical process
which endows the material with mechanical properties, such as low
relaxation, which enable the material to last over
time.
|
|
·
|
Two
surface treatment production lines, one located in our Maanshan facility
and one in our Jiujiang facility, each composed of an acid pickling bath,
rinsing bath, high pressure water rinsing bath, phosphating bath,
saponification (boronizing) bath and cleaning
bath.
|
|
·
|
Seven
wire drawing production lines, four located in our Maanshan facility and
three in our Jiujiang facility, each composed of a pay-off machine, drawn
can and take-up machine. Each of our half-finished products is processed
on a wire drawing production line.
|
|
·
|
Three
PC strand stabilization treatment production lines, two located in our
Maanshan facility and one in our Jiujiang facility, each composed of
stranding machines, straightening wheels, jockey wheels, medium frequency
furnace, cooling tank, take-up and pay-off machines, a wire arraying
machine and a layer winding machine. The PC strand stabilization
product lines in our Jiujiang facility produce plain surface PC strands
and zinc coated PC strands of various
specifications.
|
|
·
|
One
zinc galvanization production line, located in our Jiujiang facility,
composed of a pay-off machine, degreasing furnace, acid rinsing pickling
tank, assistant plating tank, drying furnace, galvanizing furnace, drawing
tower and take-up machine. Half-finished products needed for different
series of zinc coated PC wires and strands are produced on this
line.
|
|
·
|
Two
surface finishing production lines, both located in our Jiujiang facility,
each composed of a pay-off machine, a finishing machine and a take-up
machine. These production lines are used to produce half-finished products
of zinc coated PC wires and
strands.
|
|
·
|
Two
PC wire stabilization treatment production lines, both located in our
Jiujiang facility, each composed of a pay-off machine, jockey wheel,
straightening machine, indent marking machine, medium frequency furnace,
cooling tank, towing machine, shearing machine and take-up machine. Zinc
coated PC wires, round PC wires, indented PC wires and helical rib PC
wires are produced on these production
lines.
|
|
·
|
One
unbonded PC strand production line, located in our Jiujiang facility,
composed of a pay-off machine, oiling machine, high-density polyethylene
plastic injection machine, water tank, towing machine and take-up machine.
This production line is used to produce different series of unbonded plain
surface PC strands and unbonded zinc coated PC
strands.
|
Name of Customer
|
2008 Revenues
(%)
|
2009 Revenues
(%)
|
First Half of 2010
Revenues (%)
|
|||||||||
Shanghai
Zhaoyang New Metal Material Co., Ltd.
|
35.8 | 53.8 | 20.5 | |||||||||
Crispin
Company
|
18.8 | * | * | |||||||||
Ibercordones
Pretensados S.L.
|
15.7 | * | * | |||||||||
Zhangjiagang
Ruifeng Iron and Steel Co., Ltd.
|
* | 17.5 | 35.2 | |||||||||
Jiangyin
Jingchen Logistics Distribution Exchange Co., Ltd.
|
* | * | 12.8 |
Year Ended December 31,
|
For the Six Months Ended June 30,
|
|||||||||||||||
2009
|
2008
|
2010
|
2009
|
|||||||||||||
Domestic
Sales
|
$ | 97,361,596 | $ | 51,611,646 | 56,911,895 | 38,452,787 | ||||||||||
International
Sales
|
3,726,200 | 31,130,664 | 1,796,880 | 1,963,610 | ||||||||||||
Total
Sales
|
$ | 101,087,796 | $ | 82,742,310 | $ | 58,708,775 | $ | 40,416,407 |
Nanchang
New Bayi Bridge, PRC
|
Jiujiang-Lushan
Railway Project, PRC
|
Hefei-Bangbu
Passenger Dedicated Line, PRC
|
Beijing-Shanghai
Express Rail, PRC
|
Shenzhan
Bay Bridge, PRC
|
Boyang
Lake Railway Bridge, PRC
|
Wenfu
Railway, PRC
|
Wuhan-Guangzhou
Railway, PRC
|
Pantian
Highway, PRC
|
Shanghai
No. 6 Subway, PRC
|
Nanjing-Hangzhou
Passenger Dedicated Line, PRC
|
Yunnan
Shi-Suo Expressway, PRC
|
Alameda
Corridor Turnpike, Alameda, California, U.S.A.
|
MGM
Grand Parking, Las Vegas, Nevada, U.S.A.
|
Dallas
Center of Performing Arts, Dallas, Texas, U.S.A.
|
Trois
Rivieres Grand Anchors, Canada
|
Nam
Chang Bridge, South Korea
|
Parking
Apron in the Cadiz Airport, Spain
|
Grand
Hyatt San Antonio, Texas, U.S.A.
|
Trump
Tower, Las Vegas, Nevada,
U.S.A.
|
|
·
|
Superior
product safety and quality;
|
|
·
|
Reduction
of operating costs; and
|
|
·
|
Sustaining
growth through the development of new
products.
|
|
·
|
Rare
earth coating technology;
|
|
·
|
Surface
finishing/ polishing technology;
|
|
·
|
Dual
tension gear wire stabilizing treatment
process;
|
|
·
|
Connector
production technology without
shutdown;
|
|
·
|
New
technology on constant high temperature constant tension stabilizing
treatment; and
|
|
·
|
High
speed stabilizing treatment
technology.
|
Name
|
ApplicationNo.
/Patent No.
|
Applicant
/Patent
Holder
|
Status
|
Expiration
Date
|
|
Stabilizing
Process of Indented Wire
|
2007101571490
|
Ossen
Jiujiang
|
Registered
|
11/22/2027
|
|
Method
to Change the Length of Waste of Stranded Wire Joint
|
200910144241.2
|
Ossen
Materials
|
Pending
|
-
|
|
Stirring
& Pickling Process of Raw Materials of Stranded Wire
|
200910144242.7
|
Ossen
Materials
|
Pending
|
-
|
|
Multi-Bath
Pickling Process of Materials of Stranded Wire
|
200910144243.1
|
Ossen
Materials
|
Pending
|
-
|
|
Production
Process of Zinc Coated Steel Wire
|
2010101051799
|
Ossen
Jiujiang
|
Pending
|
-
|
|
Production
Process of Helical Rib Steel Wire
|
2010101051534
|
Ossen
Jiujiang
|
Pending
|
-
|
|
Production
Process of Pre-stressed Zinc Coated Stranded Wire
|
2010101052062
|
Ossen
Jiujiang
|
Pending
|
-
|
|
Stabilizing
Production Process of High Strength Rare Earth Coated PC Steel
Wire
|
2010101051784
|
Ossen
Jiujiang
|
Pending
|
-
|
Name
|
ApplicationNo.
/Patent
No.
|
Applicant
/Patent
Holder
|
Status
|
Expiration
Date
|
|
Loose
Tensile Test Device for PC Wire
|
ZL200720192972.0
|
Ossen
Materials
|
Registered
|
12/02/2017
|
|
Hanging
Box Used in Phosphate Bath of Stranded Wire
|
ZL200820185077.0
|
Ossen
Materials
|
Registered
|
08/21/2018
|
|
Oiling
Device for PC Strand
|
ZL200820185079. x
|
Ossen
Materials
|
Registered
|
08/21/2018
|
|
Water
Cut-off Device to Test Infrared Temperature of Stranding
Machine
|
ZL200820185080.2
|
Ossen
Materials
|
Registered
|
08/21/2018
|
|
Infrared
Safety Control Device for Lift Truck
|
ZL200820185081.7
|
Ossen
Materials
|
Registered
|
08/21/2018
|
|
Device
Designed to Control Smoke by Temperature
|
ZL200820185082.1
|
Ossen
Materials
|
Registered
|
08/21/2018
|
|
Device
Designed to Control Water Temperature When Phosphatizing the PC
Strand
|
200920233724.5
|
Ossen
Materials
|
Registered
|
07/29/2019
|
|
Device
for Testing Center Steel Wire Broken for Stranded Wire
|
200920233725.x
|
Ossen
Materials
|
Registered
|
07/29/2019
|
|
Device
Designed to Test Temperature of Steel Wire When Drawing the Stranded
Wire
|
200920233726.4
|
Ossen
Materials
|
Registered
|
07/29/2019
|
Name
|
ApplicationNo.
/Patent
No.
|
Applicant
/Patent
Holder
|
Status
|
Expiration
Date
|
|
Steel
Wire Joint Machine with Pressure Detecting Function
|
200920233728.3
|
Ossen
Materials
|
Registered
|
07/29/2019
|
|
Automatic
Paper Rolling Device of Asphalt Paper
|
200920233729.8
|
Ossen
Materials
|
Registered
|
07/29/2019
|
|
Aerial
Overhaul Platform for Forklift
|
200920233730.0
|
Ossen
Materials
|
Registered
|
07/29/2019
|
|
Skid
Used When Packing PC Strand
|
200920233731.5
|
Ossen
Materials
|
Registered
|
07/29/2019
|
|
Precision
Measurement Instrument for measuring Indented Depth of Pre-stressed
Indented PC Wire
|
2010201102461
|
Ossen
Jiujiang
|
Pending
|
-
|
|
Double-Pump
Spray Device of Zinc Coated Steel Wire’s Coating- Assistant
Tank
|
2010201102599
|
Ossen
Jiujiang
|
Pending
|
-
|
|
A
New Dual-Conical-Surfaces Self-locking Power Lock
|
2010201102809
|
Ossen
Jiujiang
|
Pending
|
-
|
|
A
New Stranding Pulley Designed for Production of High Strength Pre-stressed
Rare Earth Coated Steel Wire
|
201020117245x
|
Ossen
Jiujiang
|
Pending
|
-
|
|
Cooling
Device Designed for the Cutter Bit for Indentation Used for Production of
Indented PC Wire
|
ZL200720192974.x
|
Ossen
Jiujiang
|
Registered
|
12/02/2017
|
|
Adjustable
Ingress Pipe of Steel Wire-rewinding Machine
|
ZL200720192973.5
|
Ossen
Jiujiang
|
Registered
|
12/02/2017
|
|
A
Control Device for Alarming the Coating Leakage on the Zinc Coating
Production Line
|
ZL200720192533.x
|
Ossen
Jiujiang
|
Registered
|
11/22/2017
|
|
Device
Designed to Remove Dust of High Strength Pre-stressed Rare Earth Coated
Steel Wire
|
2010201102654
|
Ossen
Jiujiang
|
Registered
|
02/08/2020
|
|
Stabilizing
Temperature Alarm Control Device for High Strength Pre-stressed Rare Earth
Coated Steel Wire
|
2010201172407
|
Ossen
Jiujiang
|
Pending
|
-
|
Name of Trademark
|
Application No.
/Trademark No.
|
Applicant
/Trademark
Holder
|
Status
|
|||
A
Figurative Trademark (Registered
under Madrid Agreement)
|
0973552
|
Ossen
Innovation Materials
|
Registered
|
|||
“OSSEN” (Registered
under Madrid Agreement)
|
0945308
|
Ossen
Innovation Materials
|
Registered
|
|||
A
Figurative Trademark (PRC Domestic Registered)
|
4396898
|
Ossen
Innovation Materials
|
Registered
|
|||
“OSSEN”
(PRC Domestic Registered)
|
4396895
|
Ossen
Innovation Materials
|
Registered
|
|||
“” (Domestic Registered)
|
|
4396896
|
|
Ossen
Innovation Materials
|
|
Registered
|
|
·
|
Convention
establishing the World Intellectual Property Organization (WIPO
Convention) (June 4, 1980);
|
|
·
|
Paris
Convention for the Protection of Industrial Property (March 19,
1985);
|
|
·
|
Patent
Cooperation Treaty (January 1, 1994);
and
|
|
·
|
The
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)
(November 11, 2001).
|
Functions
|
Number of
employees
|
% of total
|
||||||
Manufacturing
|
127 | 54 | % | |||||
Technology
|
45 | 19 | % | |||||
Research
& Development
|
19 | 8 | % | |||||
Quality
Control
|
9 | 4 | % | |||||
General
Administration, Purchasing, Sales and Marketing
|
38 | 16 | % | |||||
Total
|
238 | 100 | % |
|
·
|
Equity
transfer contract or agreement;
|
|
·
|
Documents
illustrating the relationship between the non-PRC resident enterprise’s
investor and the overseas intermediary holding company being transferred
in respect of financing, operation, sales and
purchase;
|
|
·
|
Documents
illustrating the operation, personnel, finance and properties of the
overseas intermediary holding company being
transferred;
|
|
·
|
Documents
illustrating the relationship between the overseas intermediary holding
company being transferred and the PRC resident enterprise in respect of
financing, operation, sales and
purchase;
|
|
·
|
Documents
illustrating the reasonable commercial purpose of the non-PRC resident
enterprise’s investor in setting up the overseas intermediary holding
company being transferred; and
|
|
·
|
Other
relevant documents required by the tax
authority.
|
|
·
|
the
Environmental Protection Law of the
PRC;
|
|
·
|
the
Law of PRC on the Prevention and Control of Water
Pollution;
|
|
·
|
Implementation
Rules of the Law of PRC on the Prevention and Control of Water
Pollution;
|
|
·
|
the
Law of PRC on the Prevention and Control of Air
Pollution;
|
|
·
|
Implementation
Rules of the Law of PRC on the Prevention and Control of Air
Pollution;
|
|
·
|
the
Law of PRC on the Prevention and Control of Solid Waste Pollution;
and
|
|
·
|
the
Law of PRC on the Prevention and Control of Noise
Pollution.
|
Name
|
Position(s)
|
Age
|
||
Liang
Tang
|
Chairman
of Board
|
42
|
||
Wei
Hua
|
Chief
Executive Officer and Director
|
47
|
||
Yilun
Jin
|
Chief
Financial Officer
|
35
|
||
Junhong
Li
|
Director
|
43
|
||
Xiaobing
Liu
|
Director
|
50
|
||
Yingli
Pan
|
Director
|
55
|
||
Zhongcai
Wu
|
Director
|
60
|
|
·
|
selecting
our independent auditors and pre-approving all audit and non-audit
services permitted to be performed by our independent
auditors;
|
|
·
|
reviewing
with our independent auditors any audit problems or difficulties and
management’s response;
|
|
·
|
reviewing
and approving all proposed related party transactions, as defined in
Item 404 of Regulation S-K;
|
|
·
|
discussing
our annual audited financial statements with management and our
independent auditors;
|
|
·
|
reviewing
major issues as to the adequacy of our internal controls and any special
audit steps adopted in light of material control deficiencies;
and
|
|
·
|
meeting
separately and periodically with management and our independent
auditors.
|
|
·
|
reviewing
and approving the total compensation package for our senior executives;
and
|
|
·
|
reviewing
periodically, and approving, any long-term incentive compensation or
equity plans, programs or similar arrangements, annual bonuses, employee
pension and welfare benefit plans.
|
|
·
|
identifying
and recommending to the board qualified candidates to be nominated for the
election or re-election to the board of directors and committees of the
board of directors, or for appointment to fill any
vacancy;
|
|
·
|
reviewing
annually with the board of directors the current composition of the board
of directors with regards to characteristics such as independence, age,
skills, experience and availability of service to us;
and
|
|
·
|
advising
the board of directors periodically with regard to significant
developments in the law and practice of corporate governance as well as
our compliance with these laws and practices, and making recommendations
to the board of directors on all matters of corporate governance and on
any remedial actions to be taken, if
needed.
|
|
·
|
appointing
officers and determining the term of office of the
officers;
|
|
·
|
authorizing
the payment of donations to religious, charitable, public or other bodies,
clubs, funds or associations as deemed
advisable;
|
|
·
|
exercising
the borrowing powers of the company and mortgaging the property of the
company;
|
|
·
|
executing
checks, promissory notes and other negotiable instruments on behalf of the
company; and
|
|
·
|
maintaining
or registering a register of mortgages, charges or other encumbrances of
the company.
|
|
·
|
each
of our directors and executive officers;
and
|
|
·
|
each
person known to us to beneficially own more than 5% of our outstanding
ordinary shares.
|
Shares Beneficially
Owned
Prior to Offering(1)
|
Shares Beneficially
Owned
After Offering
|
Shares Beneficially Owned
Assuming Exercise of an Option
Granted to the Underwriters to
Purchase
Additional Shares
|
||||||||||||||||||||||
Name
|
Number
|
Percent
|
Number
|
Percent
|
Number
|
Percent
|
||||||||||||||||||
Directors,
Executive Officers and 5% Shareholders:
|
||||||||||||||||||||||||
Liang
Tang
|
11,889,500 | 79 | % | 11,889,500 | 54.0 | % | 11,889,500 | 51.6 | % | |||||||||||||||
Wei Hua(2)
|
600,000 | 4 | % | 600,000 | 2.7 | % | 600,000 | 2.6 | % | |||||||||||||||
Yilun Jin(3)
|
50,000 | * | 50,000 | * | 50,000 | * | ||||||||||||||||||
Junhong
Li
|
- | - | - | - | - | - | ||||||||||||||||||
Xiaobing
Liu
|
- | - | - | - | - | - | ||||||||||||||||||
Yingli
Pan
|
- | - | - | - | - | - | ||||||||||||||||||
Zhongcai
Wu
|
- | - | - | - | - | - |
|
*
|
Less
than 1%
|
(1)
|
Beneficial
ownership is determined in accordance with the rules and regulations of
the SEC. Percentage of beneficial ownership of each listed person prior to
this offering is based on ordinary shares outstanding as of the date of
this prospectus, including ordinary shares convertible from all
outstanding preferred shares, and the ordinary shares underlying any
options and warrants exercisable by such person within 60 days of the date
of this prospectus. Percentage of beneficial ownership of each listed
person after this offering is based on ordinary shares outstanding
immediately after the closing of this offering and the ordinary shares
underlying any options and warrants exercisable by such person within 60
days of the date of this
prospectus.
|
(2)
|
The
spouse of our chief executive officer, Wei Hua, owns 100% of the shares of
Fascinating Acme Development Ltd., which owned 4% of the shares of Ossen
Innovation Group prior to the business combination, and owns 4% of our
shares since the business combination. Mr. Hua may be deemed to
beneficially own these shares under SEC rules and
regulations.
|
(3)
|
Mr.
Jin has been granted a stock option to purchase up to 150,000 ordinary
shares pursuant to our 2010 Employee Stock Option Plan. 50,000
shares are currently exercisable, 50,000 shares will be exercisable in
October 2011 and 50,000 in October
2012.
|
|
·
|
Under
Delaware corporate law, with very limited exceptions, a vote of the
stockholders is required to amend the certificate of incorporation. Under
British Virgin Islands law, no article or regulation shall be amended,
rescinded or altered, and no new article shall be made, without the
approval of the members pursuant to a special resolution, unless the
memorandum of association and articles of association provide
otherwise.
|
|
·
|
Cash. The
depositary will distribute any U.S. dollars available to it resulting from
a cash dividend or other cash distribution or the net proceeds of sales of
any other distribution or portion thereof (to the extent applicable), on
an averaged or other practicable basis, subject to (i) appropriate
adjustments for taxes withheld, (ii) such distribution being impermissible
or impracticable with respect to certain registered ADR holders, and (iii)
deduction of the depositary’s expenses in (1) converting any foreign
currency to U.S. dollars to the extent that it determines that such
conversion may be made on a reasonable basis, (2) transferring foreign
currency or U.S. dollars to the United States by such means as the
depositary may determine to the extent that it determines that such
transfer may be made on a reasonable basis, (3) obtaining any approval or
license of any governmental authority required for such conversion or
transfer, which is obtainable at a reasonable cost and within a reasonable
time and (4) making any sale by public or private means in any
commercially reasonable manner. If exchange rates fluctuate
during a time when the depositary cannot convert a foreign currency, you
may lose some or all of the value of the
distribution.
|
|
·
|
Shares. In
the case of a distribution in shares, the depositary will issue additional
ADRs to evidence the number of ADSs representing such
shares. Only whole ADSs will be issued. Any shares
which would result in fractional ADSs will be sold and the net proceeds
will be distributed in the same manner as cash to the ADR holders entitled
thereto.
|
|
·
|
Rights to receive additional
shares. In the case of a distribution of rights to
subscribe for additional shares or other rights, if we provide evidence
satisfactory to the depositary that it may lawfully distribute such
rights, the depositary will distribute warrants or other instruments in
the discretion of the depositary representing such
rights. However, if we do not furnish such evidence, the
depositary may:
|
|
·
|
sell
such rights if practicable and distribute the net proceeds in the same
manner as cash to the ADR holders entitled thereto;
or
|
|
·
|
if
it is not practicable to sell such rights, do nothing and allow such
rights to lapse, in which case ADR holders will receive
nothing.
|
|
We
have no obligation to file a registration statement under the Securities
Act in order to make any rights available to ADR
holders.
|
|
·
|
Other
Distributions. In the case of a distribution of
securities or property other than those described above, the depositary
may either (i) distribute such securities or property in any manner it
deems equitable and practicable or (ii) to the extent the depositary deems
distribution of such securities or property not to be equitable and
practicable, sell such securities or property and distribute any net
proceeds in the same way it distributes
cash.
|
|
·
|
temporary
delays caused by closing our transfer books or those of the depositary or
the deposit of shares in connection with voting at a shareholders’
meeting, or the payment of
dividends;
|
|
·
|
the
payment of fees, taxes and similar charges;
or
|
|
·
|
compliance
with any U.S. or foreign laws or governmental regulations relating to the
ADRs or to the withdrawal of deposited
securities.
|
|
·
|
to
receive any distribution on or in respect of
shares,
|
|
·
|
to
give instructions for the exercise of voting rights at a meeting of
holders of shares,
|
|
·
|
to
pay the fee assessed by the depositary for administration of the ADR
program and for any expenses as provided for in the ADR,
or
|
|
·
|
to
receive any notice or to act in respect of other
matters
|
|
·
|
a
fee of US$1.50 per ADR or ADRs for transfers of certificated or direct
registration ADRs;
|
|
·
|
a
fee of up to US$0.05 per ADS for any cash distribution made pursuant to
the deposit agreement;
|
|
·
|
a
fee of up to US$0.05 per ADS per calendar year (or portion thereof) for
services performed by the depositary in administering the ADRs (which fee
may be charged on a periodic basis during each calendar year and shall be
assessed against holders of ADRs as of the record date or record dates set
by the depositary during each calendar year and shall be payable in the
manner described in the next succeeding
provision);
|
|
·
|
reimbursement
of such fees, charges and expenses as are incurred by the depositary
and/or any of the depositary’s agents (including, without limitation, the
custodian and expenses incurred on behalf of holders in connection with
compliance with foreign exchange control regulations or any law or
regulation relating to foreign investment) in connection with the
servicing of the shares or other deposited securities, the delivery of
deposited securities or otherwise in connection with the depositary’s or
its custodian’s compliance with applicable law, rule or regulation (which
charge shall be assessed on a proportionate basis against holders as of
the record date or dates set by the depositary and shall be payable at the
sole discretion of the depositary by billing such holders or by deducting
such charge from one or more cash dividends or other cash
distributions);
|
|
·
|
a
fee for the distribution of securities (or the sale of securities in
connection with a distribution), such fee being in an amount equal to the
fee for the execution and delivery of ADSs which would have been charged
as a result of the deposit of such securities (treating all such
securities as if they were shares) but which securities or the net cash
proceeds from the sale thereof are instead distributed by the depositary
to those holders entitled thereto;
|
|
·
|
stock
transfer or other taxes and other governmental
charges;
|
|
·
|
cable,
telex and facsimile transmission and delivery charges incurred at your
request in connection with the deposit or delivery of
shares;
|
|
·
|
transfer
or registration fees for the registration of transfer of deposited
securities on any applicable register in connection with the deposit or
withdrawal of deposited securities;
and
|
|
·
|
expenses
of the depositary in connection with the conversion of foreign currency
into U.S. dollars.
|
|
·
|
amend
the form of ADR;
|
|
·
|
distribute
additional or amended ADRs;
|
|
·
|
distribute
cash, securities or other property it has received in connection with such
actions;
|
|
·
|
sell
any securities or property received and distribute the proceeds as cash;
or
|
|
·
|
none
of the above.
|
|
·
|
payment
with respect thereto of (i) any stock transfer or other tax or other
governmental charge, (ii) any stock transfer or registration fees in
effect for the registration of transfers of shares or other deposited
securities upon any applicable register and (iii) any applicable fees and
expenses described in the deposit
agreement;
|
|
·
|
the
production of proof satisfactory to it of (i) the identity of any
signatory and genuineness of any signature and (ii) such other
information, including without limitation, information as to citizenship,
residence, exchange control approval, beneficial ownership of any
securities, compliance with applicable law, regulations, provisions of or
governing deposited securities and terms of the deposit agreement and the
ADRs, as it may deem necessary or proper;
and
|
|
·
|
compliance
with such regulations as the depositary may establish consistent with the
deposit agreement.
|
|
·
|
any
present or future law, rule, regulation, fiat, order or decree of the
United States, the British Virgin Islands, the People’s
Republic of China or any other country, or of
any governmental or regulatory authority or securities exchange
or market or automated quotation system, the provisions of or governing
any deposited securities, any present or future provision of our charter,
any act of God, war, terrorism or other circumstance beyond our, the
depositary’s or our respective agents’ control shall prevent or delay, or
shall cause any of them to be subject to any civil or criminal penalty in
connection with, any act which the deposit agreement or the ADRs provide
shall be done or performed by us, the depositary or our respective agents
(including, without limitation,
voting);
|
|
·
|
it
exercises or fails to exercise discretion under the deposit agreement or
the ADR;
|
|
·
|
it
performs its obligations under the deposit agreement and ADRs without
gross negligence or bad faith;
|
|
·
|
it
takes any action or refrains from taking any action in reliance upon the
advice of or information from legal counsel, accountants, any person
presenting shares for deposit, any registered holder of ADRs, or any other
person believed by it to be competent to give such advice or information;
or
|
|
·
|
it
relies upon any written notice, request, direction or other document
believed by it to be genuine and to have been signed or presented by the
proper party or parties.
|
|
·
|
be
a party to and bound by the terms of the deposit agreement and the
applicable ADR or ADRs, and
|
|
·
|
appoint
the depositary its attorney-in-fact, with full power to delegate, to act
on its behalf and to take any and all actions contemplated in the deposit
agreement and the applicable ADR or ADRs, to adopt any and all procedures
necessary to comply with applicable laws and to take such action as the
depositary in its sole discretion may deem necessary or appropriate to
carry out the purposes of the deposit agreement and the applicable ADR and
ADRs, the taking of such actions to be the conclusive determinant of the
necessity and appropriateness
thereof.
|
|
·
|
1%
of the number of our ordinary shares then outstanding which will equal
approximately million shares immediately after this offering;
and
|
|
·
|
the
average weekly trading volume of our ordinary shares on the exchange on
which we are listed at the time during the four calendar weeks preceding
the date on which notice of the sale is filed with the
SEC.
|
·
|
75%
or more of our gross income in a taxable year consists of “passive income”
(including dividends, interest, gains from the sale or exchange of
investment property and certain rents and royalties);
or
|
·
|
at
least 50% of our assets in a taxable year (averaged over the year and
generally determined based upon value) produce or are held for the
production of passive income.
|
|
·
|
the
gain is effectively connected income (and, if a treaty applies, the gain
is attributable to a permanent establishment maintained by the Non-U.S.
Holder in the United States or, in the case of an individual, the income
is attributable to a fixed place of business);
or
|
|
·
|
the
Non-U.S. Holder is an individual who is present in the United States for
183 days or more during the taxable year of disposition and certain other
conditions are met.
|
Name
|
Number of
Shares
|
|||
Global
Hunter Securities, LLC
|
|
|||
Knight
Capital Markets LLC
|
||||
Total
|
|
Per
Share
|
Total
Without
Over-
Allotment
Option
|
Total
With
Over-
Allotment
Option
|
|||||||||
Public
offering price
|
$ | 5.50 | $ | 38,500,000 | $ | 44,275,000 | ||||||
Underwriting
discount
|
$ | 0.39 | $ | 2,730,000 | $ | 3,139,500 | ||||||
Proceeds,
before expenses, to us
|
$ | 5.11 | $ | 35,770,000 | $ | 41,135,500 |
|
·
|
the
information set forth in this prospectus and otherwise available to the
representatives;
|
|
·
|
our
prospects and the history and prospects for the industry in which we
operate;
|
|
·
|
an
assessment of our management;
|
|
·
|
our
prospects for future earnings;
|
|
·
|
the
general condition of the securities markets at the time of this
offering;
|
|
·
|
the
recent market prices of, and demand for, publicly traded securities of
generally comparable companies; and
|
|
·
|
other
factors deemed relevant by the underwriters and
us.
|
|
·
|
the
purchaser is entitled under applicable provincial securities laws to
purchase our securities without the benefit of a prospectus qualified
under those securities laws;
|
|
·
|
where
required by law, that the purchaser is purchasing as principal and not as
agent;
|
|
·
|
the
purchaser has reviewed the text above under Resale Restrictions;
and
|
|
·
|
the
purchaser acknowledges and consents to the provision of specified
information concerning its purchase of our securities to the regulatory
authority that by law is entitled to collect the
information.
|
Amount to be
Paid
|
||||
SEC
registration fee
|
$ | 5,235.84 | ||
FINRA
filing fee
|
5,700 | |||
Nasdaq
Stock Market listing fee
|
125,000 | |||
Printing
and engraving expenses
|
30,000 | |||
Legal
fees and expenses
|
700,000 | |||
Accounting
fees and expenses
|
200,000 | |||
Roadshow
expenses
|
50,000 | |||
Transfer
agent and registrar fees
|
0 | |||
Miscellaneous
fees and expenses
|
10,000 | |||
Total
|
$ | 1,120,235.84 |
|
·
|
the
rules under the Exchange Act requiring the filing with the SEC of
quarterly reports on Form 10-Q or current reports on Form
8-K;
|
|
·
|
the
sections of the Exchange Act regulating the solicitation of proxies,
consents or authorizations in respect of a security registered under the
Exchange Act;
|
|
·
|
the
provisions of Regulation FD aimed at preventing issuers from making
selective disclosures of material information;
and
|
|
·
|
the
sections of the Exchange Act requiring insiders to file public reports of
their stock ownership and trading activities and establishing insider
liability for profits realized from any “short-swing” trading transaction
(i.e., a purchase and sale, or sale and purchase, of the issuer’s equity
securities within less than six
months).
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Financial Statements:
|
|
Consolidated
Balance Sheets
|
F-3
|
Consolidated
Statements of Operations
|
F-4
|
Consolidated
Statements of Shareholders’ Equity
|
F-5
|
Consolidated
Statements of Cash Flows
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7
to F-26
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 8,409,467 | $ | 3,761,315 | ||||
Restricted
cash
|
11,824,214 | 9,977,092 | ||||||
Note
receivable-bank
acceptance note
|
150,208 | - | ||||||
Accounts
receivable, net of allowance for doubtful accounts of $42,487 and
$35,782 at December 31, 2009 and 2008
|
15,157,087 | 4,713,488 | ||||||
Inventories
|
10,206,861 | 9,300,261 | ||||||
Prepayments
|
19,833,561 | 19,270,693 | ||||||
Other
current assets
|
964,876 | 293,359 | ||||||
Notes
receivable from related party-bank acceptance notes
|
1,828,234 | - | ||||||
Total
Current Assets
|
68,374,508 | 47,316,208 | ||||||
Long-term
Assets
|
||||||||
Property,
plant and equipment, net
|
13,088,809 | 14,246,542 | ||||||
Land
use rights, net
|
4,254,270 | 4,333,632 | ||||||
Total
Long-term Assets
|
17,343,079 | 18,580,174 | ||||||
TOTAL
ASSETS
|
$ | 85,717,587 | $ | 65,896,382 | ||||
LIABILITIES
AND SHAREHOLDERS’EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Notes
payable – bank acceptance notes
|
$ | 19,744,925 | $ | 18,236,993 | ||||
Short-term
bank loans
|
27,350,377 | 19,404,161 | ||||||
Accounts
payable
|
240,275 | 428,441 | ||||||
Customer
deposits
|
5,189,759 | 2,936,267 | ||||||
Taxes
payable
|
110,493 | 6,465 | ||||||
Other
payables and accrued expenses
|
32,473 | 1,475,472 | ||||||
Due
to related parties
|
12,869,939 | 12,987,588 | ||||||
Total
Current Liabilities
|
65,538,241 | 55,475,387 | ||||||
TOTAL
LIABILITIES
|
65,538,241 | 55,475,387 | ||||||
Shareholders'
Equity
|
||||||||
Common
stock, no par value, 50,000 shares authorized, 50,000 shares issued
and outstanding
|
500 | 500 | ||||||
Accumulated
other comprehensive income
|
543,036 | 511,890 | ||||||
Statutory
reserve
|
1,093,331 | 661,597 | ||||||
Retained
earnings
|
13,069,401 | 5,488,600 | ||||||
Non-controlling
interest
|
5,473,078 | 3,758,408 | ||||||
TOTAL
SHAREHOLDERS’ EQUITY
|
20,179,346 | 10,420,995 | ||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 85,717,587 | $ | 65,896,382 |
Year Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
REVEUNUES
|
$ | 101,087,796 | $ | 82,742,310 | ||||
COST
OF GOODS SOLD
|
87,659,925 | 70,532,733 | ||||||
GROSS
PROFIT
|
13,427,871 | 12,209,577 | ||||||
Selling
and distribution expenses
|
503,724 | 4,326,491 | ||||||
General
and administrative expenses
|
1,143,672 | 1,316,606 | ||||||
Total
Operating Expenses
|
1,647,396 | 5,643,097 | ||||||
INCOME
FROM OPERATIONS
|
11,780,475 | 6,566,480 | ||||||
Interest
expenses, net
|
(1,496,712 | ) | (1,891,671 | ) | ||||
Other
income, net
|
183,495 | 380,766 | ||||||
INCOME
BEFORE INCOME TAXES
|
10,467,258 | 5,055,575 | ||||||
INCOME
TAXES
|
(740,053 | ) | (291,520 | ) | ||||
NET
INCOME
|
9,727,205 | 4,764,055 | ||||||
LESS:
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST
|
1,714,670 | 809,437 | ||||||
NET
INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
|
8,012,535 | 3,954,618 | ||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||
Foreign
currency translation gain, net of tax
|
31,146 | 420,883 | ||||||
TOTAL
OTHER COMPREHENSIVE INCOME, NET OF TAX
|
31,146 | 420,883 | ||||||
COMPREHENSIVE
INCOME
|
$ | 8,043,681 | $ | 4,375,501 |
Common
Stock
|
Accumulated
Other
Comprehensive
|
Statutory
|
Retained
Earnings/
|
Non
Controlling
|
||||||||||||||||||||||||
Shares
|
Amount
|
Income
|
Reserve
|
(Accumulated
Deficit)
|
Interest
|
Total
|
||||||||||||||||||||||
Balance,
January 1, 2008
|
50,000 | $ | 500 | $ | 91,007 | $ | 238,676 | $ | 1,956,903 | $ | 2,948,971 | $ | 5,236,057 | |||||||||||||||
Net
income
|
- | - | 3,954,618 | 809,437 | 4,764,055 | |||||||||||||||||||||||
Transfer
to statutory reserve
|
- | - | 422,921 | (422,921 | ) | - | - | |||||||||||||||||||||
Foreign
currency translation adjustment, net of tax
|
- | - | 420,883 | - | - | - | 420,883 | |||||||||||||||||||||
Balance,
December 31, 2008
|
50,000 | 500 | 511,890 | 661,597 | 5,488,600 | 3,758,408 | 10,420,995 | |||||||||||||||||||||
Net
income
|
- | - | - | 8,012,535 | 1,714,670 | 9,727,205 | ||||||||||||||||||||||
Transfer
to statutory reserve
|
- | - | 431,734 | (431,734 | ) | - | - | |||||||||||||||||||||
Foreign
currency translation adjustment, net of tax
|
- | - | 31,146 | - | - | - | 31,146 | |||||||||||||||||||||
Balance,
December 31, 2009
|
50,000 | $ | 500 | $ | 543,036 | $ | 1,093,331 | $ | 13,069,401 | $ | 5,473,078 | $ | 20,179,346 |
Year ended December 31,
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 9,727,205 | $ | 4,764,055 | ||||
Adjustments
to reconcile net income to net cash used in operating
activities
|
||||||||
Depreciation
and amortization
|
1,457,784 | 1,555,624 | ||||||
Deferred
taxes
|
(838 | ) | (1,176 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
(Increase)
Decrease In:
|
||||||||
Accounts
receivable
|
(10,443,599 | ) | 1,002,464 | |||||
Inventories
|
(906,600 | ) | (2,112,944 | ) | ||||
Prepayments
|
(562,867 | ) | (12,408,746 | ) | ||||
Due
from related party
|
- | 3,846,600 | ||||||
Note
receivable-bank acceptance note from unrelated party
|
(150,208 | ) | - | |||||
Notes
receivable from related party
|
(1,828,234 | ) | - | |||||
Other
current assets
|
(670,679 | ) | 10,680 | |||||
Accounts
payable
|
(188,166 | ) | (35,011 | ) | ||||
Customer
deposits
|
2,253,492 | 2,749,301 | ||||||
Taxes
payable
|
104,028 | (134,501 | ) | |||||
Other
payables and accrued expenses
|
(1,442,999 | ) | (1,616,329 | ) | ||||
Due
to related parties
|
(117,649 | ) | 145,896 | |||||
Net
cash used in operating activities
|
(2,769,330 | ) | (2,234,087 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases
of plant and equipment
|
(209,511 | ) | (2,287,268 | ) | ||||
Purchases
of land use rights
|
- | (379,397 | ) | |||||
Net
cash used in investing activities
|
(209,511 | ) | (2,666,665 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Increase
in restricted cash
|
(1,847,122 | ) | (5,465,258 | ) | ||||
Proceeds
from short-term bank loans
|
35,687,123 | 22,322,080 | ||||||
Repayments
of short-term bank loans
|
(27,789,153 | ) | (21,446,704 | ) | ||||
Proceeds
from notes payable to unrelated parties
|
1,507,931 | 18,236,993 | ||||||
Repayment
of notes payable to related party
|
- | (10,937,778 | ) | |||||
Cash
dividend paid to a shareholder
|
- | (2,364,274 | ) | |||||
Net
cash provided by financing activities
|
7,558,779 | 345,059 | ||||||
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
4,579,938 | (4,555,693 | ) | |||||
Effect
of exchange rate changes on cash
|
68,214 | 1,581,392 | ||||||
Cash
and cash equivalents at beginning of year
|
3,761,315 | 6,735,616 | ||||||
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 8,409,467 | $ | 3,761,315 | ||||
SUPPLEMENTARY
CASH FLOW INFORMATION
|
||||||||
Cash
paid during the period for:
|
||||||||
Income
taxes paid
|
$ | 637,267 | $ | 441,029 | ||||
Interest
paid
|
$ | 1,492,404 | $ | 1,514,114 |
Name
|
Domicile and Date
of Incorporation
|
Paid-in Capital
|
Percentage
of
Effective Ownership
|
Principal
Activities
|
|||||
Ossen
Group (Asia) Co., Ltd. ("Ossen Asia")
|
BVI
February
7, 2002
|
USD
|
-
|
100
|
% |
Investments
holdings
|
|||
Topchina
Development Group Ltd. ("Topchina")
|
BVI
November
3, 2004
|
USD
|
-
|
100
|
% |
Investments
holdings
|
|||
Ossen
Innovation Materials Co., Ltd. ("Ossen Materials")
|
The
PRC
October
27, 2004
|
RMB
|
75,000,000
|
81
|
% |
Design,
engineering, manufacture and sale
of
customized prestressed steel materials
|
|||
Ossen
(Jiujiang) Steel Wire & Cable Co., Ltd. ("Ossen
Jiujiang")
|
The
PRC
April
13, 2005
|
RMB
|
50,000,000
|
85.75
|
% |
Design,
engineering, manufacture and sale
of customized
prestressed steel
materials
|
|
·
|
Persuasive
evidence of an arrangement exists,
|
|
·
|
Delivery
has occurred or services have been
rendered,
|
|
·
|
The
seller’s price to the buyer is fixed or determinable,
and
|
|
·
|
Collectability
is reasonable assured.
|
2008
|
2009
|
|||||||
Year
ended RMB: US$ exchange rate
|
6.8372 | 6.8542 | ||||||
Average
yearly RMB: US$ exchange rate
|
6.8409 | 6.9623 |
•
|
Level
1—defined as observable inputs such as quoted prices in active
markets;
|
•
|
Level
2—defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable;
and
|
•
|
Level
3—defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own
assumptions.
|
Buildings
and improvements
|
5 ~
20 years
|
Machinery
and equipment
|
5 ~
20 years
|
Motor
vehicles
|
5
years
|
Office
Equipment
|
5 ~
10 years
|
Year ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Major
customers with revenues of more than 10% of the Company’s sales
|
||||||||
Sales
to major customers
|
$ | 72,040,540 | $ | 58,216,143 | ||||
Percentage
of sales
|
71 | % | 70 | % | ||||
Number
of customers
|
2 | 3 | ||||||
Major
suppliers with purchases of more than 10% of the Company’s purchases
|
||||||||
Purchases
from major suppliers
|
$ | 74,621,428 | $ | 54,738,995 | ||||
Percentage
of purchases
|
89 | % | 72 | % | ||||
Number
of suppliers
|
4 | 3 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Accounts
receivable
|
$ | 15,199,574 | $ | 4,749,270 | ||||
Less:
allowance for doubtful accounts
|
(42,487 | ) | (35,782 | ) | ||||
Net
Accounts receivable
|
$ | 15,157,087 | $ | 4,713,488 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Beginning
balance
|
$ | 35,782 | $ | 13,672 | ||||
Allowance
for doubtful accounts
|
6,705 | 22,110 | ||||||
Written
– offs
|
- | - | ||||||
Ending
balance
|
$ | 42,487 | $ | 35,782 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Raw
materials
|
$ | 5,584,313 | $ | 5,200,622 | ||||
Work-in-progress
|
237,422 | 292,997 | ||||||
Finished
goods
|
4,385,126 | 3,806,642 | ||||||
10,206,861 | 9,300,261 | |||||||
Less:
Provision for slow-moving inventories
|
- | - | ||||||
Inventories,
net
|
$ | 10,206,861 | $ | 9,300,261 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Security
deposits
|
$ | 410,255 | $ | 51,064 | ||||
VAT
receivable
|
535,824 | 232,745 | ||||||
Other
|
18,797 | 9,550 | ||||||
Total
other current assets
|
$ | 964,876 | $ | 293,359 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
At
cost:
|
||||||||
Buildings
|
$ | 3,899,669 | $ | 3,878,091 | ||||
Machinery
and equipment
|
13,801,699 | 13,635,258 | ||||||
Motor
vehicles
|
247,926 | 230,046 | ||||||
Office
equipment
|
97,266 | 93,654 | ||||||
18,046,560 | 17,837,049 | |||||||
Less:
Accumulated depreciation
|
||||||||
Buildings
|
(684,755 | ) | (442,383 | ) | ||||
Machinery
and equipment
|
(4,036,209 | ) | (2,974,065 | ) | ||||
Motor
vehicles
|
(163,593 | ) | (118,814 | ) | ||||
Office
equipment
|
(73,194 | ) | (55,245 | ) | ||||
(4,957,751 | ) | (3,590,507 | ) | |||||
Property,
plant and equipment, net
|
$ | 13,088,809 | $ | 14,246,542 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Cost
of land use rights
|
$ | 4,506,975 | $ | 4,495,797 | ||||
Less:
Accumulated amortization
|
(252,705 | ) | (162,165 | ) | ||||
Land
use rights, net
|
$ | 4,254,270 | $ | 4,333,632 |
2010
|
$ | 90,140 | ||
2011
|
90,140 | |||
2012
|
90,140 | |||
2013
|
90,140 | |||
2014
|
90,140 | |||
Thereafter
|
3,803,570 | |||
Total
|
$ | 4,254,270 |
(a)
|
Names
and Relationship of Related
Parties:
|
Existing Relationship with the
Company
|
||
Mr.
Tang
|
Director
and controlling shareholder of the Company
|
|
Shanghai
Zhengfangxing Steel Co., Ltd. (“SZS”)
|
Under
common control of Mr. Tang
|
|
Shanghai
Ossen Investment Co., Ltd. (“SOI”)
|
Under
common control of Mr.
Tang
|
(b)
|
Summary
of Balances with Related Party:
|
December 31,
|
||||||||
2009
|
2008
|
|||||||
Due
from related party:
|
||||||||
SZS
|
$ | - | $ | - | ||||
$ | - | $ | - |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Due
to related party:
|
||||||||
SZS
|
$ | - | $ | 145,896 | ||||
$ | - | $ | 145,896 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Notes
receivable from related party:
|
||||||||
SZS,
due June 11, 2010
|
$ | 804,423 | $ | - | ||||
SZS,
due March 25, 2010
|
1,023,811 | - | ||||||
$ | 1,828,234 | $ | - |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Due
to shareholder:
|
||||||||
Mr.
Tang
|
$ | 12,869,939 | $ | 12,841,692 |
(c)
|
Summary
of Related Party Transactions:
|
December 31,
|
||||||||||||
Note
|
2009
|
2008
|
||||||||||
SZS
|
SZS
provided guarantee for the short-term bank loans borrowed by the
Company
|
12
|
$ | 8,775,521 | $ | 6,857,110 | ||||||
SZS
sold raw materials to the Company
|
8
|
$ | 11,487,206 | $ | 20,482,023 | |||||||
SOI
|
SOI
provided guarantee for the short-term bank loans borrowed by the
Company
|
12
|
$ | 5,411,572 | $ | 5,398,150 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Deferred
government grant
|
$ | - | $ | 1,327,653 | ||||
Others
|
32,473 | 147,819 | ||||||
Total
|
$ | 32,473 | $ | 1,475,472 |
Bank
acceptance notes:
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Due
June 10, 2009 (subsequently repaid on its due date)
|
$ | - | $ | 2,188,439 | ||||
Due
March 7, 2009 (subsequently repaid on its due date)
|
- | 1,458,959 | ||||||
Due
April 7, 2009 (subsequently repaid on its due date)
|
- | 1,458,959 | ||||||
Due
May 28, 2009 (subsequently repaid on its due date)
|
- | 2,917,919 | ||||||
Due
April 24, 2009 (subsequently repaid on its due date)
|
- | 1,458,959 | ||||||
Due
May 26, 2009 (subsequently repaid on its due date)
|
- | 1,458,959 | ||||||
Due
May 12, 2009 (subsequently repaid on its due date)
|
- | 1,458,959 | ||||||
Due
March 12, 2009 (subsequently repaid on its due date)
|
- | 2,917,920 | ||||||
Due
March 26, 2009 (subsequently repaid on its due date)
|
- | 2,917,920 | ||||||
Due
March 15, 2010 (subsequently repaid on its due date)
|
1,462,587 | - | ||||||
Due
March 26, 2010 (subsequently repaid on its due date)
|
1,462,587 | - | ||||||
Due
March 23, 2010 (subsequently repaid on its due date)
|
1,462,587 | - | ||||||
Due
March 10, 2010 (subsequently repaid on its due date)
|
2,925,173 | - | ||||||
Due
March 15, 2010 (subsequently repaid on its due date)
|
2,925,173 | - | ||||||
Due
April 29, 2010 (subsequently repaid on its due date)
|
1,462,587 | - | ||||||
Due
May 5, 2010 (subsequently repaid on its due date)
|
1,170,070 | - | ||||||
Due
May 18, 2010 (subsequently repaid on its due date)
|
1,170,070 | - | ||||||
Due
May 27, 2010 (subsequently repaid on its due date)
|
1,170,070 | - | ||||||
Due
June 10, 2010 (subsequently repaid on its due date)
|
1,170,070 | - | ||||||
Due
June 8, 2010 (subsequently repaid on its due date)
|
1,170,070 | - | ||||||
Due
June 15, 2010 (subsequently repaid on its due date)
|
2,193,881 | - | ||||||
Total
|
$ | 19,744,925 | $ | 18,236,993 |
Interest rate
per annum
|
December 31,
|
|||||||||||
2009
|
2008
|
|||||||||||
Due
January 6, 2010, guaranteed by SZS, subsequently repaid on due
date
|
5.31 | % | $ | 2,925,173 | $ | - | ||||||
Due
January 14, 2010, subsequently repaid on due date
|
5.35 | % | 731,294 | - | ||||||||
Due
January 15, 2010, subsequently repaid on due date
|
5.35 | % | 1,462,587 | - | ||||||||
Due
February 20, 2010, subsequently repaid on due date
|
5.84 | % | 2,925,174 | - | ||||||||
Due
February 27, 2010, subsequently repaid on due date
|
5.31 | % | 731,294 | - | ||||||||
Due
March 4, 2010 , subsequently repaid on due date
|
5.31 | % | 2,340,139 | - | ||||||||
Due
March 8, 2010, subsequently repaid on due date
|
5.31 | % | 731,294 | - | ||||||||
Due
March 12, 2010, subsequently repaid on due date
|
5.84 | % | 1,462,587 | - | ||||||||
Due
March 27, 2010 subsequently repaid on due date
|
5.84 | % | 1,462,587 | - | ||||||||
Due
March 30, 2010 guaranteed by SZS
|
5.84 | % | 1,462,587 | - | ||||||||
Due
May 13, 2010 subsequently repaid on due date
|
5.31 | % | 1,316,328 | - | ||||||||
Due
May 30, 2010 , guaranteed by SOI, subsequently repaid on due
date
|
5.31 | % | 1,462,587 | - | ||||||||
Due
June 2, 2010 , guaranteed by SOI, subsequently repaid on due
date
|
5.31 | % | 1,462,587 | - | ||||||||
Due
September 8, 2010 guaranteed by SZS
|
5.31 | % | 3,948,985 | - | ||||||||
Due
September 9, 2010 guaranteed by SZS
|
5.31 | % | 438,776 | - | ||||||||
Due
November 6, 2010 guaranteed by SOI
|
5.84 | % | 1,316,328 | - | ||||||||
Due
November 9, 2010, guaranteed by SOI
|
5.84 | % | 1,170,070 | - | ||||||||
Due
January 8, 2009, guaranteed by SZS, subsequently repaid on due
date
|
7.28 | % | - | 2,917,919 | ||||||||
Due
January 17, 2009 guaranteed by SOI, subsequently repaid on due
date
|
5.58 | % | - | 1,313,064 | ||||||||
Due
January 30, 2009, subsequently repaid on due date
|
5.54 | % | - | 1,458,959 | ||||||||
Due
January 30, 2009, subsequently repaid on due date
|
5.54 | % | - | 1,458,959 | ||||||||
Due
March 3, 2009, subsequently repaid on due date
|
7.47 | % | - | 729,480 | ||||||||
Due
March 5, 2009, subsequently repaid on due date
|
7.47 | % | - | 2,188,439 | ||||||||
Due
April 1, 2009, guaranteed by SOI, subsequently repaid on due
date
|
5.58 | % | - | 1,167,168 | ||||||||
Due
May 8, 2009, subsequently repaid on due date
|
7.47 | % | - | 1,313,064 | ||||||||
Due
July 17, 2009 , guaranteed by SOI, subsequently repaid on due
date
|
5.58 | % | - | 1,458,959 | ||||||||
Due
July 17, 2009 , guaranteed by SOI, subsequently repaid on due
date
|
5.58 | % | - | 1,458,959 | ||||||||
Due
September 18, 2009 guaranteed by SZS, subsequently repaid on due
date
|
7.56 | % | - | 3,939,191 | ||||||||
Totals
|
$ | 27,350,377 | $ | 19,404,161 |
Year Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Current
tax expenses
|
$ | 740,880 | $ | 292,460 | ||||
Deferred
taxes
|
(827 | ) | (940 | ) | ||||
Income
tax expenses
|
$ |
740,053
|
$ | 291,520 |
Year Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Computed
"expected" income tax expenses
|
$ | 2,616,815 | $ | 1,394,103 | ||||
Effect
on tax incentive / holiday
|
(1,308,407 | ) | (1,102,583 | ) | ||||
Permanent
difference – tax exempted income
|
(568,355 | ) | - | |||||
Income
tax expenses
|
$ | 740,053 | $ | 291,520 |
December 31,
|
||||||||
2009
|
2008
|
|||||||
Deferred
tax assets:
|
||||||||
Current
portion:
|
||||||||
Provision
of doubtful accounts
|
$ |
5,311
|
$ |
4,473
|
Year ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Domestic
Sales
|
$ | 97,361,596 | $ | 51,611,646 | ||||
International
Sales
|
3,726,200 | 31,130,664 | ||||||
TotalSales
|
$ | 101,087,796 | $ | 82,742,310 |
Condensed
Consolidated Balance Sheets as of June 30, 2010 (Unaudited) and June 30,
2009
|
Q-2
to Q-3
|
Condensed
Consolidated Statements of Operations and Comprehensive Income for the Six
Months Ended June 30, 2010 and 2009 (Unaudited)
|
Q-4
|
Condensed
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
2010 and 2009 (Unaudited)
|
Q-5
to Q6
|
Notes
to Condensed Consolidated Financial Statements for the Six Months Ended
June 30, 2010 and 2009 (Unaudited)
|
Q-7
to Q-30
|
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 3,460,341 | $ | 8,409,467 | ||||
Restricted
cash
|
12,149,706 | 11,824,214 | ||||||
Notes
receivable – bank acceptance notes
|
- | 150,208 | ||||||
Accounts
receivable, net of allowance for doubtful accounts of $34,868 and $42,487
at June 30, 2010 and December 31, 2009
|
33,781,820 | 15,157,087 | ||||||
Inventories
|
15,103,091 | 10,206,861 | ||||||
Advance
to suppliers
|
17,942,685 | 19,833,561 | ||||||
Other
current assets
|
666,440 | 964,876 | ||||||
Notes
receivable from related party – bank acceptance notes
|
- | 1,828,234 | ||||||
Due
from and advance to related party
|
8,311,343 | - | ||||||
Total
Current Assets
|
91,415,426 | 68,374,508 | ||||||
Non-current
Assets
|
||||||||
Property,
plant and equipment, net
|
12,485,490 | 13,088,809 | ||||||
Land
use rights, net
|
4,226,883 | 4,254,270 | ||||||
Total
Non-current Assets
|
16,712,373 | 17,343,079 | ||||||
TOTAL
ASSETS
|
$ | 108,127,799 | $ | 85,717,587 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
LIABILITIES AND SHAREHOLDERS’
EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Notes
payable – bank acceptance notes
|
$ | 22,030,961 |
$
|
19,744,925 | ||||
Bank
Loans-short term
|
36,277,649 | 27,350,377 | ||||||
Accounts
payable
|
730,819 | 240,275 | ||||||
Customer
deposits
|
6,430,833 | 5,189,759 | ||||||
Income
taxes payable
|
888,379 | 110,493 | ||||||
Other
payables and accrued expenses
|
12,742 | 32,473 | ||||||
Due
to shareholder
|
12,924,000 | 12,869,939 | ||||||
Total
Current Liabilities
|
79,295,383 | 65,538,241 | ||||||
TOTAL
LIABILITIES
|
79,295,383 | 65,538,241 | ||||||
Shareholders'
Equity
|
||||||||
Common
stock, no par value, 50,000 shares authorized, 50,000 shares issued and
outstanding
|
500 | 500 | ||||||
Accumulated
other comprehensive income
|
660,571 | 543,036 | ||||||
Statutory
reserve
|
2,049,085 | 1,093,331 | ||||||
Retained
earnings
|
19,219,153 | 13,069,401 | ||||||
Non-controlling
interest
|
6,903,107 | 5,473,078 | ||||||
TOTAL
SHAREHOLDERS’ EQUITY
|
28,832,416 | 20,179,346 | ||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 108,127,799 |
|
$
|
85,717,587 |
FOR THE THREE MONTHS
ENDED JUNE 30,
|
FOR THE SIX MONTHS
ENDED JUNE 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
REVENUES
|
$ | 30,030,450 | $ | 24,159,615 | $ | 58,708,775 | $ | 40,416,407 | ||||||||
COST
OF GOODS SOLD
|
23,836,150 | 20,293,727 | 47,101,721 | 35,741,095 | ||||||||||||
GROSS
PROFIT
|
6,194,300
|
3,865,888 | 11,607,054 | 4,675,312 | ||||||||||||
Operating
Expenses:
|
||||||||||||||||
Selling
and distribution expenses
|
102,663 | 172,546 | 195,706 | 241,880 | ||||||||||||
General
and administrative expenses
|
280,860 | 379,450 | 532,276 | 638,499 | ||||||||||||
Total
Operating Expenses
|
383,523 | 551,996 | 727,982 | 880,379 | ||||||||||||
INCOME
FROM OPERATIONS
|
5,810,777 | 3,313,892 | 10,879,072 | 3,794,933 | ||||||||||||
Other
Income (Expenses):
|
||||||||||||||||
Interest
expenses, net
|
(537,532 | ) | (369,457 | ) | (1,069,659 | ) | (730,104 | ) | ||||||||
Other
income, net
|
68,849 | 8,743 | 96,720 | 14,583 | ||||||||||||
Total
Other Expenses
|
(468,683 | ) | (360,714 | ) | (972,939 | ) | (715,521 | ) | ||||||||
INCOME
BEFORE INCOME TAXES
|
5,342,094 | 2,953,178 | 9,906,133 | 3,079,412 | ||||||||||||
INCOME
TAXES
|
(771,167 | ) | (332,724 | ) | (1,370,598 | ) | (348,394 | ) | ||||||||
NET
INCOME
|
4,570,927 | 2,620,454 | 8,535,535 | 2,731,018 | ||||||||||||
LESS:
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
818,357 | 463,540 | 1,430,029 | 484,515 | ||||||||||||
NET
INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD AND
SUBSIDIARIES
|
3,752,570 | 2,156,914 | 7,105,506 | 2,246,503 | ||||||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||
Foreign
currency translation gain, net of tax
|
113,679 | (12,788 | ) | 117,535 | 13,684 | |||||||||||
COMPREHENSIVE
INCOME
|
$ | 3,866,249 | $ | 2,144,126 | $ | 7,223,041 | $ | 2,260,187 |
FOR THE SIX MONTHS
ENDED JUNE 30,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 8,535,535 | $ | 2,731,018 | ||||
Adjustments
to reconcile net income to net cash provided by/ (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
727,593 | 717,087 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
(Increase)
Decrease In:
|
||||||||
Accounts
receivable
|
(18,624,733 | ) | (6,862,266 | ) | ||||
Inventories
|
(4,896,230 | ) | (1,816,163 | ) | ||||
Advance
to suppliers
|
1,890,876 | (1,663,504 | ) | |||||
Due
from and advance to related party
|
(8,311,343 | ) | - | |||||
Other
current assets
|
298,436 | (423,414 | ) | |||||
Notes
receivable - bank acceptance notes
|
150,208 | - | ||||||
Notes
receivable from related party - bank acceptance notes
|
1,828,234 | - | ||||||
Increase
(Decrease) In:
|
||||||||
Accounts
payable
|
490,544
|
1,128,356 | ||||||
Customer
deposits
|
1,241,074 | (364,453 | ) | |||||
Income
taxes payable
|
777,886
|
266,614 | ||||||
Other
payables and accrued expenses
|
(19,731 | ) | (731,119 | ) | ||||
Due
to related shareholder
|
- | 732,471 | ||||||
Net
cash used in operating activities
|
$ | (15,911,651 | ) | $ | (6,285,373 | ) | ||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases
of plant and equipment
|
$ | (96,887 | ) | $ | (129,876 | ) |
FOR THE SIX MONTHS
ENDED JUNE 30,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Increase
in restricted cash
|
$ | (325,492 | ) | $ | (14,425,269 | ) | ||
Proceeds
from bank loans
|
29,815,234 | 22,206,639 | ||||||
Repayments
of bank loans
|
(20,887,962 | ) | (15,459,561 | ) | ||||
Proceeds
from notes payable-bank acceptance notes
|
22,030,961 | 30,388,032 | ||||||
Repayment
of notes payable-bank acceptance notes
|
(19,744,925 | ) | (18,236,993 | ) | ||||
Net
cash provided by financing activities
|
$ | 10,887,816 | $ | 4,472,848 | ||||
INCREASE
IN CASH AND CASH EQUIVALENTS
|
(5,120,722 | ) | (1,942,401 | ) | ||||
Effect
of exchange rate changes on cash
|
171,596
|
(114,575 | ) | |||||
Cash
and cash equivalents at beginning of period
|
8,409,467 | 3,761,315 | ||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 3,460,341 | $ | 1,704,339 | ||||
SUPPLEMENTARY
CASH FLOW INFORMATION
|
||||||||
Cash
paid during the periods:
|
||||||||
Income
taxes paid
|
$ | 792,774 | $ | 81,728 | ||||
Interest
paid
|
$ | 846,614 | $ | 702,821 |
Name
|
Domicile and Date
of Incorporation
|
Paid-in Capital
|
Percentage
of
Effective Ownership
|
Principal
Activities
|
||||||||
Ossen
Group (Asia) Co., Ltd. ("Ossen Asia")
|
BVI
February
7, 2002
|
USD
|
- | 100 | % |
Investments
holdings
|
||||||
Topchina
Development Group Ltd. ("Topchina")
|
BVI
November
3, 2004
|
USD
|
- | 100 | % |
Investments
holdings
|
||||||
Ossen
Innovation Materials Co., Ltd. ("Ossen Materials")
|
The
PRC
October
27, 2004
|
RMB
|
75,000,000 | 81 | % |
Design,
engeneering, manufacture and sale of
customized prestressed steel materials
|
||||||
Ossen
(Jiujiang) Steel Wire & Cable Co., Ltd. ("Ossen
Jiujiang")
|
The
PRC
April
13, 2005
|
RMB
|
50,000,000 | 85.75 | % |
Design,
engeneering, manufacture and sale of customized
prestressed steel
materials
|
For the Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Period
ended RMB: US$ exchange rate
|
6.8086 | 6.8448 | ||||||
Average
six month ended RMB: US$ exchange rate
|
6.8347 | 6.8432 |
For the Three
Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Period
ended RMB: US$ exchange rate
|
6.8086
|
6.8448 | ||||||
Average
three month ended RMB: US$ exchange rate
|
6.8335
|
6.8399 |
|
l
|
Persuasive
evidence of an arrangement exists,
|
|
l
|
Delivery
has occurred or services have been
rendered,
|
|
l
|
The
seller’s price to the buyer is fixed or determinable,
and
|
|
l
|
Collectability
is reasonable assured.
|
•
|
Level
1—defined as observable inputs such as quoted prices in active
markets;
|
•
|
Level
2—defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable;
and
|
•
|
Level
3—defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own
assumptions.
|
Buildings
and improvements
|
5 ~
20 years
|
Machinery
and equipment
|
5 ~
20 years
|
Motor
vehicles
|
5
years
|
Office
Equipment
|
5 ~
10
years
|
For the Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
(unaudited)
|
||||||||
Major
customer with revenues of more
than 10% of the Company’s sales
|
||||||||
Sales
to major customer
|
$ | 40,425,687 | $ | 31,160,268 | ||||
Percentage
of sales
|
69 | % | 77 | % | ||||
Number
|
3 | 1 | ||||||
Major
suppliers with purchases of more
than 10% of the Company's purchases
|
||||||||
Purchases
from major suppliers
|
$ | 42,800,059 | $ | 34,294,884 | ||||
Percentage
of purchase
|
87 | % | 81 | % | ||||
Number
|
2 | 1 |
For the Three Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
(unaudited)
|
||||||||
Major
customer with revenues of more
than 10% of the Company’s sales
|
||||||||
Sales
to major customer
|
$ |
22,178,153
|
$ | 18,603,183 | ||||
Percentage
of sales
|
74
|
% | 77 | % | ||||
Number
|
4 | 1 | ||||||
Major
suppliers with purchases of more
than 10% of the Company's purchases
|
||||||||
Purchases
from major suppliers
|
$ | 26,816,705 | $ | 16,431,052 | ||||
Percentage
of purchase
|
85 | % | 77 | % | ||||
Number
|
2 | 1 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Accounts
receivable
|
$ |
33,816,688
|
$ | 15,199,574 | ||||
Less:
allowance for doubtful accounts
|
34,868
|
42,487 | ||||||
$ | 33,781,820 | $ | 15,157,087 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Beginning
balance
|
$ |
42,487
|
$ |
35,782
|
||||
Allowance
for doubtful accounts
|
(7,619
|
)
|
6,705
|
|||||
Written
- offs
|
- | - | ||||||
$ | 34,868 | $ | 42,487 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Raw
materials
|
$ | 7,865,073 | $ | 5,584,313 | ||||
Work-in-progress
|
247,051 | 237,422 | ||||||
Finished
goods
|
6,990,967 | 4,385,126 | ||||||
15,103,091 | 10,206,861 | |||||||
Less:
provision for slow-moving inventories
|
- | - | ||||||
$ | 15,103,091 | $ | 10,206,861 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Security
deposits
|
$ | 599,005 | $ | 410,255 | ||||
VAT
deductible
|
54,434 | 535,824 | ||||||
Other
receivables
|
13,001 | 18,797 | ||||||
$ | 666,440 | $ | 964,876 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Buildings
|
$ | 3,919,868 | $ | 3,899,669 | ||||
Machinery
and equipment
|
13,876,164 | 13,801,699 | ||||||
Motor
vehicles
|
248,967 | 247,926 | ||||||
Office
equipment
|
98,447 | 97,266 | ||||||
18,143,447 | 18,046,560 | |||||||
Less:
Accumulated depreciation
|
||||||||
Buildings
|
(808,935 | ) | (684,755 | ) | ||||
Machinery
and equipment
|
(4,586,919 | ) | (4,036,209 | ) | ||||
Motor
vehicles
|
(181,401 | ) | (163,593 | ) | ||||
Office
equipment
|
(80,702 | ) | (73,194 | ) | ||||
(5,657,957 | ) | (4,957,751 | ) | |||||
$ | 12,485,490 | $ | 13,088,809 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Cost
of land use rights
|
$ | 4,525,907 | $ | 4,506,975 | ||||
Less:
Accumulated amortization
|
(299,024 | ) | (252,705 | ) | ||||
$ | 4,226,883 | $ | 4,254,270 |
2010
|
$ | 45,261 | ||
2011
|
90,518 | |||
2012
|
90,518 | |||
2013
|
90,518 | |||
2014
|
90,518 | |||
Thereafter
|
3,819,550 | |||
Total
|
$ | 4,226,883 |
(a)
|
Names
and Relationship of Related
Parties:
|
Existing Relationship with the Company
|
|
Mr.
Tang
|
Director
and controlling shareholder of the Company
|
Shanghai
Zhengfangxing Steel Co., Ltd. (“SZS”)
|
Under
common control of Mr. Tang
|
Shanghai
Ossen Investment Co., Ltd. (“SOI”)
|
Under
common control of Mr.
Tang
|
(b)
|
Summary
of Balances with Related Party:
|
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Due
from and advance to related party:
|
||||||||
SZS
|
$ | 8,311,343 | $ | - |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Notes
receivable from related party:
|
||||||||
SZS,
due June 11, 2010
|
$ | - | $ | 804,423 | ||||
SZS,
due March 25, 2010
|
- | 1,023,811 | ||||||
$ | - | $ | 1,828,234 |
June 30,
2010
|
December 31,
2009
|
|||||||
Due
to shareholder:
|
(unaudited)
|
|||||||
Mr.
Tang
|
$ | 12,924,000 | $ | 12,869,939 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Accrued
welfare
|
$ | 12,354 | $ | - | ||||
Others
|
388 | 32,473 | ||||||
$ | 12,742 | $ | 32,473 |
Bank acceptance notes:
|
June 30,
2010
|
December 31,
2009
|
||||||
(unaudited)
|
||||||||
Due
December 18,2010
|
$ | 587,492 | $ | - | ||||
Due
December 18,2010
|
587,492 | - | ||||||
Due
December 2,2010
|
587,492 | - | ||||||
Due
December 2,2010
|
587,492 | - | ||||||
Due
November 28,2010
|
587,492 | - | ||||||
Due
November 28,2010
|
587,492 | - | ||||||
Due
November 19,2010
|
587,492 | - | ||||||
Due
November 19,2010
|
587,492 | - | ||||||
Due
November 7,2010
|
587,492 | - | ||||||
Due
November 7,2010
|
587,492 | - | ||||||
Due
October 30,2010
|
734,365 | - | ||||||
Due
October 30,2010
|
734,365 | - | ||||||
Due
October 8,2010
|
1,468,731 | - | ||||||
Due
October 8,2010
|
1,468,731 | - | ||||||
Due
September 26,2010, subsequently repaid on due date
|
1,468,731 | - | ||||||
Due
September 24,2010, subsequently repaid on due date
|
5,874,927 | - | ||||||
Due
August 8,2010, subsequently repaid on due date
|
734,365 | - | ||||||
Due
August 8,2010, subsequently repaid on due date
|
734,365 | - | ||||||
Due
August 8,2010, subsequently repaid on due date
|
734,365 | - | ||||||
Due
August 8,2010, subsequently repaid on due date
|
734,365 | - | ||||||
Due
July 19,2010, subsequently repaid on due date
|
1,468,731 | - |
Bank acceptance notes:
|
June 30,
2010
|
December 31,
2009
|
||||||
(unaudited)
|
||||||||
Due
June 15, 2010, subsequently repaid on due date
|
- | 2,193,881 | ||||||
Due
June 10, 2010, subsequently repaid on due date
|
- | 1,170,070 | ||||||
Due
June 8, 2010, subsequently repaid on due date
|
- | 1,170,070 | ||||||
Due
May 27, 2010, subsequently repaid on due date
|
- | 1,170,070 | ||||||
Due
May 18, 2010, subsequently repaid on due date
|
- | 1,170,070 | ||||||
Due
May 5, 2010, subsequently repaid on due date
|
- | 1,170,070 | ||||||
Due
April 29, 2010, subsequently repaid on due date
|
- | 1,462,587 | ||||||
Due
March 26, 2010, subsequently repaid on due date
|
- | 1,462,587 | ||||||
Due
March 23, 2010, subsequently repaid on due date
|
- | 1,462,587 | ||||||
Due
March 15, 2010, subsequently repaid on due date
|
- | 1,462,587 | ||||||
Due
March 15, 2010, subsequently repaid on due date
|
- | 2,925,173 | ||||||
Due
March 10, 2010, subsequently repaid on due date
|
- | 2,925,173 | ||||||
Total
|
$ | 22,030,961 | $ | 19,744,925 |
Bank Name
|
Interest rate
per annum
|
June 30,
2010
|
December 31,
2009
|
||||||||||||
(unaudited)
|
|||||||||||||||
Due
May 26,2011, guaranteed
by SZS and SOI
|
Bank
of Communications (“BOC”) Ma An Shan Branch
|
5.58 | % | 1,468,731 | - | ||||||||||
Due
May 24,2011, guaranteed
by SZS and SOI
|
BOC
Ma An Shan Branch
|
5.31 | % | 1,468,731 | - | ||||||||||
Due
May 13,2011, guaranteed by SZS
|
CCB
Ma An Shan Branch
|
5.31 | % | 1,321,858 | - | ||||||||||
Due
March 25,2011 guaranteed by SZS
|
CCB
Ma An Shan Branch
|
4.78 | % | 1,468,731 | - | ||||||||||
Due
March 18,2011 guaranteed by SZS
|
CCB
Ma An Shan Branch
|
4.78 | % | 1,615,604 | - | ||||||||||
Due
March 11,2011, guaranteed by SZS
|
CCB
Ma An Shan Branch
|
4.78 | % | 1,468,731 | - | ||||||||||
Due
February 1,2011, guaranteed by SOI,
|
Anhui
Rural Commercial Bank (“ARCB”)
Yu
Shan Branch
|
5.84 | % | 2,937,461 | - | ||||||||||
Due
January 12 ,2011, guaranteed by SZS
|
Agricultural
Bank of China (“ABC”) Jiu Long Branch
|
5.84 | % | 1,468,731 | - | ||||||||||
Due
January 7,2011, guaranteed by SZS
|
China
Everbright Bank
Wu
Hu Banch
|
5.31 | % | 4,406,192 | - | ||||||||||
Due
January 7,2011, guaranteed by SZS
|
ABC
Jiu Long Branch
|
5.84 | % | 2,937,461 | - | ||||||||||
Due
December 29,2010, guaranteed by SZS
|
China
Construction Bank (“CCB”) Ma An Shan Branch
|
4.37 | % | 1,468,731 | |||||||||||
Due
November 9, 2010, guaranteed by SOI and SZS
|
Anhui
Commercial Bank (“ACB”) Fei Cui Yuan Branch
|
5.84 | % | 1,174,985 | 1,170,070 | ||||||||||
Due
November 6, 2010 guaranteed by SOI and SZS
|
ACB
Fei Cui Yuan Branch
|
5.84 | % | 1,321,858 | 1,316,328 | ||||||||||
Due
November 3 ,2010, guaranteed by SZS
|
Bank
of China (“BOC”)
Jiu
Jiang Branch
|
5.31 | % | 440,619 | - | ||||||||||
Due
October 27,2010, guaranteed by SOI
|
ARCB
Yu Shan Branch
|
5.84 | % | 2,937,461 | - | ||||||||||
Due
September 9,2010, guaranteed by SZS, subsequently
repaid on due date
|
CCB
Jiu Jiang Branch
|
5.31 | % | 440,619 | 438,776 | ||||||||||
Due
September 8, 2010 guaranteed by SZS, subsequently
repaid on due date
|
CCB
Jiu Jiang Branch
|
5.31 | % | 3,965,573 | 3,948,985 | ||||||||||
Due
September 7,2010, guaranteed by SZS, subsequently
repaid on due date
|
BOC
Jiu Jiang Branch
|
5.31 | % | 734,365 | - | ||||||||||
Due
August 27,2010, guaranteed by SZS, subsequently
repaid on due date
|
BOC
Jiu Jiang Branch
|
5.31 | % | 293,746 | - | ||||||||||
Due
July 6,2010, guaranteed by SOI, subsequently
repaid on due date
|
Industrial
and Commercial Bank of China (“ICBC”) Hui Tong Branch
|
4.86 | % | $ | 2,937,461 | $ | - |
Bank Name
|
Interest rate
per annum
|
|
June 30,
2010
|
December 31,
2009
|
|||||||||||
(unaudited)
|
|||||||||||||||
Due
June 2, 2010, guaranteed by SOI, subsequently
repaid on due date
|
BOC
Ma An Shan Branch
|
5.31 | % | - | 1,462,587 | ||||||||||
Due
May 30, 2010, guaranteed by SOI, subsequently
repaid on due date
|
BOC
Ma An Shan Branch
|
5.31 | % | - | 1,462,587 | ||||||||||
Due
May 13, 2010, subsequently repaid on due date
|
CCB
Ma An Shan Branch
|
5.31 | % | - | 1,316,328 | ||||||||||
Due
March 30, 2010 guaranteed by SZS, subsequently
repaid on due date
|
ABC
Jiu Long Branch
|
5.84 | % | - | 1,462,587 | ||||||||||
Due
March 27, 2010, subsequently repaid on due date
|
ARCB
Yu Shan Branch
|
5.84 | % | - | 1,462,587 | ||||||||||
Due
March 12, 2010, subsequently repaid on due date
|
ARCB
Yu Shan Branch
|
5.84 | % | - | 1,462,587 | ||||||||||
Due
March 8, 2010, subsequently repaid on due date
|
CCB
Ma An Shan Branch
|
5.31 | % | - | 731,294 | ||||||||||
Due
March 4, 2010 , subsequently repaid on due date
|
CCB
Ma An Shan Branch
|
5.31 | % | - | 2,340,139 | ||||||||||
Due
February 27, 2010, subsequently repaid on due date
|
BOC
Jiu Jiang Branch
|
5.31 | % | - | 731,294 | ||||||||||
Due
February 20, 2010, subsequently repaid on due date
|
ARCB
Yu Shan Branch
|
5.84 | % | - | 2,925,174 | ||||||||||
Due
January 15, 2010, subsequently repaid on due date
|
ICBC
Hui Tong Branch
|
5.35 | % | - | 1,462,587 | ||||||||||
Due
January 14, 2010, subsequently repaid on due date
|
ICBC
Hui Tong Branch
|
5.35 | % | - | 731,294 | ||||||||||
Due
January 6, 2010, guaranteed by SZS, subsequently
repaid on due date
|
ABC
Jiu Long Branch
|
5.31 | % | - | 2,925,173 | ||||||||||
Total
|
$ | 36,377,648 | $ | 27,350,377 |
For the Six Months Ended June 30,
|
||||||||
(unaudited)
|
||||||||
2010
|
2009
|
|||||||
Current
tax expenses
|
$ | 1,370,287 | $ | 348,394 | ||||
Deferred
taxes
|
311 | - | ||||||
Income
tax expenses
|
$ | 1,370,598 | $ | 348,394 |
For the Six Months Ended June 30,
|
||||||||
(unaudited)
|
||||||||
2010
|
2009
|
|||||||
Computed
"expected" income tax expenses
|
$ | 2,476,533 | $ | 769,853 | ||||
Effect
on tax incentive / holiday
|
(1,105,935 | ) | (384,927 | ) | ||||
Non-deductable
expense/tax exempted income
|
- | (36,532 | ) | |||||
Income
tax expenses
|
$ | 1,370,598 | $ | 348,394 |
June 30,
2010
|
December 31,
2009
|
|||||||
(unaudited)
|
||||||||
Deferred
tax assets:
|
||||||||
Current
portion:
|
||||||||
Provision
of doubtful accounts
|
$ | 5,022 | $ | 5,311 |
For the Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
(unaudited)
|
||||||||
Domestic
Sales
|
$ | 56,911,895 | $ | 38,452,797 | ||||
International
Sales
|
1,796,880 | 1,963,610 | ||||||
$ | 58,708,775 | $ | 40,416,407 |
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
OSSEN
INNOVATION CO., LTD.
|
|
By:
|
/s/ Wei Hua
|
Name: Wei
Hua
|
|
Title: Chief
Executive
Officer
|
Signature
|
Title
|
Date
|
||
/s/ Liang
Tang*
|
Chairman of the
Board
|
|||
Name: Liang
Tang
|
December 13, 2010
|
|||
/s/ Wei Hua
|
Chief Executive
Officer and Director
|
|||
Name: Wei
Hua
|
(Principal
Executive Officer)
|
December 13, 2010
|
||
/s/ Yilun
Jin
|
Chief Financial
Officer
|
|||
Name: Yilun
Jin
|
(Principal
Financial Officer and Principal
|
December 13, 2010
|
||
Accounting
Officer)
|
||||
/s/ Junhong
Li*
|
Director
|
|||
Name: Junhong
Li
|
December 13, 2010
|
|||
/s/
Xiaobing Liu*
|
Director
|
|||
Name:
Xiaobing Liu
|
December 13, 2010
|
|||
/s/ Yingli
Pan*
|
Director
|
|||
Name: Yingli
Pan
|
December 13, 2010
|
|||
/s/
Zhongcai Wu*
|
Director
|
|||
Name: Zhongcai
Wu
|
December 13, 2010
|
|||
*By:
/s/ Wei Hua
|
||||
Name:
Wei Hua
|
December 13, 2010
|
|||
Attorney-in-Fact
|
|
|
CT
CORPORATION SYSTEM
|
|
|
|
/s/ Ronnie Spruilli,
Jr.
|
|
Ronnie Spruilli, Jr.
|
|
Vice President
|
Exhibit
Number
|
|
Description
of Documents
|
|||||||
1.1
|
Form
of Underwriting Agreement (3)
|
||||||||
3.1
|
Amended
and Restated Memorandum of Association (3)
|
||||||||
3.2
|
Amended
and Restated Articles of Association (3)
|
||||||||
4.2
|
Form
of Ordinary Share Certificate (3)
|
||||||||
5.1
|
Opinion
of Withers BVI regarding the issue of ordinary shares being registered
(3)
|
||||||||
10.1
|
Share
Exchange Agreement between Ultra Glory International Ltd., the shareholder
of Ultra Glory International Ltd., Ossen Innovation Materials Group Co.,
Ltd. and the Shareholders of Ossen Innovation Materials Group Co., Ltd.,
dated July 7, 2010 (2)
|
||||||||
10.2
|
Form
of Sales Contract between Ossen Innovation Materials Co. Ltd. and Shanghai
Zhaoyang New Metal Material Co., Ltd. (2)
|
||||||||
10.3
|
Form
of Sales Contract between Ossen (Jiujiang) Steel Wire & Cable Co.,
Ltd. and The Crispin Company (2)
|
||||||||
10.4
|
Form
of Sales Contract between Ossen (Jiujiang) Steel Wire & Cable Co.,
Ltd. and Ibercordones Pretensados S. L. (2)
|
||||||||
10.5
|
Form
of Sales Contract between Ossen Innovation Materials Co., Ltd. and
Zhangjiagang Ruifeng Iron and Steel Co., Ltd. (2)
|
||||||||
10.6
|
Form
of Coating Processing Agreement between Ossen Innovation Materials Co.,
Ltd. and Zhangjiagang Ruifeng Iron and Steel Co., Ltd. (2)
|
||||||||
10.7
|
Form
of Purchase Contract between Ossen Innovation Materials Co., Ltd. and
Zhangjiagang Free Trade Zone B.M. International Trading Co., Ltd. (2)
|
||||||||
10.8
|
Form
of Sales Contract between Shanghai Z.F.X. Steel Co., Ltd. and Ossen
Innovation Materials Co. Ltd. (2)
|
||||||||
10.9
|
Form
of Purchase Contract between Ossen Innovation Materials Co., Ltd. and
Zhangjiagang Free Trade Zone JinDe Trading Co., Ltd. (2)
|
||||||||
10.10
|
Form
of Purchase Contract between Ossen Innovation Materials Co., Ltd. and
Jiangsu Shagang Group Co., Ltd. (2)
|
||||||||
10.11
|
Employment
Contract by and between Ossen Innovation Co., Ltd. and Liang Tang, dated
November 24, 2010(1)
|
||||||||
10.12
|
Form
of Stabilization Processing Agreement between Shanghai Zhaoyang New Metal
Material Co., Ltd. and Ossen Innovation Materials Co., Ltd. (2)
|
||||||||
10.13
|
Form
of Loan Contract between Ossen Innovation Materials Co., Ltd. and
Feicuiyuan Branch, Huishang Bank (2)
|
||||||||
10.14
|
Form
of Loan Guarantee Contract between Shanghai Ossen Investment Co., Ltd. and
Feicuiyuan Branch, Huishang Bank (2)
|
||||||||
10.15
|
Form
of Loan Guarantee Contract between Shanghai Z.F.X. Steel Co., Ltd. and
Feicuiyuan Branch, Huishang Bank (2)
|
||||||||
10.16
|
Cooperation
Agreement between Ossen (Jiujiang) Steel Wire & Cable Co., Ltd.,
Shanghai Machinery Manufacturing Technology Research Institute,
Organization Department of Jiujiang Committee of CPC and Jiujiang Bureau
of Science and Technology, dated January 2008 (2)
|
||||||||
10.17
|
Employment
Agreement, dated October 26, 2010, entered into by the Company and Yilun
Jin.(3)
|
||||||||
10.18
|
Purchase
Agreement, dated January 5, 2010, between the Company and Jiangyin Runde
Logistics Co., Ltd.
(3)
|
||||||||
10.19
|
Purchase
Agreement, dated January 1, 2010, between the Company and Jiangsu Shagang
Group Co., Ltd.
(3)
|
||||||||
10.20
|
Loan
Contribution Agreement, dated November 26, 2010, between Ossen Innovation
Co., Ltd., Topchina Development Group, Ltd., Ossen Group (Asia) Co., Ltd.
and Dr. Liang Tang.
(4)
|
21.1
|
Subsidiaries
of the Registrant (2)
|
||||||||
23.1
|
Consent
of Sherb & Co., LLP (1)
|
||||||||
23.2
|
Consent
of Withers BVI (included in Exhibit 5.1)
|
||||||||
23.3
|
Consent
of Beijing Tianzhi Jiutao Management Consulting Co., Ltd. (3)
|
||||||||
23.4
|
Consent
of The Institute of Quantitative & Technical Economics, Chinese
Academy of Social Sciences. (3)
|
||||||||
24.1
|
Power
of Attorney (3)
|
||||||||
99.1
|
Investor
Presentation (3)
|
(1)
|
Attached
as an exhibit hereto.
|
(2)
|
Incorporated
by reference to our Shell Company Report on Form 20-F, filed on July 12,
2010.
|
(3)
|
Incorporated
by reference to our Registration Statement on Form F-1, filed on August 3,
2010, or an amendment
thereto.
|
(4)
|
Incorporated
by reference to our Current Report on Form 6-K, filed on November 26,
2010.
|