October 13, 2015 - 6:43 PM EDT
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Hongli Clean Energy Technologies Corp. Reports Fiscal Year 2015 Financial Results

PINGDINGSHAN, China, Oct. 13, 2015 (GLOBE NEWSWIRE) -- Hongli Clean Energy Technologies Corp. (NASDAQ:CETC) (“Hongli” or the “Company”) (formerly known as SinoCoking Coal and Coke Chemical Industries, Inc.), a vertically integrated producer of clean energy products located in Henan Province, today reported its financial results for the fiscal year 2015, which ended June 30, 2015.

4QFY2015 Financial Highlights:

  • Revenue decreased by 1.0% to $8.5 million for the three months ended June 30, 2015 (4QFY2015), with syngas sales offsetting decreases in sales volume and the average selling prices of coke and coal products.

  • Revenue of syngas was $5.2 million for 4QFY2015 with sales volume of 51.6 million cubic meters and average selling price per cubic meter of $0.10, which revenue accounted for 61.0% of total revenue, highlighting the Company’s successful transformation from a coke and coal producer to clean energy producer.

  • Gross profit increased by $2.3 million, or 163.0%, to $3.7 million and gross margin improved by 26.8 points to 43.0% for 4QFY2015, the highest level in recent years, thanks to the contribution from the higher margin syngas sales.

  • Net loss for 4QFY2015 was ($7.9) million, or ($0.33) per diluted share, compared to net loss of ($0.8) million, or ($0.04) per diluted share, for the same period of last fiscal year. The decrease in net income was mainly related to one-time charges of $8.4 million for bad debt and $2.3 million for asset impairment.

FY2015 Financial Highlights:

  • Revenue decreased by 9.3% to $45.6 million for FY2015, mainly due to decreased sales volume and decreases in the average selling prices of coke and coal products and partially offset by the contribution of syngas sales which started in October 2014.

  • Revenue of syngas was $12.4 million for FY2015 with sales volume of 124.1 million cubic meters and average selling price per cubic meter of $0.10, which revenue accounted for 27.3% of total revenue.

  • Gross profit increased by $3.6 million, or 40.6%, to $12.6 million for FY2015. Gross margin improved by 9.8 percentage points to the highest in four years to 27.7%. The increase in gross profit and gross margin were mainly related to high-margin syngas sales in FY2015.

  • Net loss for FY2015 was ($3.5) million, or ($0.15) per diluted share, compared to net income of $1.0 million, or $0.05 per diluted share, for FY2014. The decrease in net income was mainly related to increases at one-time charges of $9.9 million for bad debt and $2.3 million for asset impairment.

Mr. Jianhua Lv, Chairman and CEO of Hongli commented, "Fiscal year 2015 was a transitional year for Hongli as our first coke gasification facility (the “Stage I Facility”) started to generate meaningful revenue following the completion of its construction in September 2014, paving the way for Hongli’s transformation from a producer of coal and coke products to a vertically-integrated producer of clean energy products, including washed coal, “medium” or mid-coal and coal slurries, coke, coke powder, coal tar and crude benzol, syngas and electricity. This is particularly significant for Hongli given the unpredictable nature of our coal business due to the ongoing mining moratorium and the weak outlook for our coke business in wake of China’s ‘new normal’ of slower growth and Chinese steelmakers’ continuing battle of overcapacity, inventory glut, and weak prices.”

Mr. Lv continued, “We ended the fiscal year on a strong note with the new syngas business contributing 27.3% of total revenue and gross margin reaching the highest level in recent years, which we believe indicates that our new strategy is starting to bear fruit. Looking ahead, as we continue to ramp up our coke gasification facility and push forward our underground coal gasification (“UCG”) initiative, Hongli is well positioned for success in years to come, in our view.”

Three Months Ended June 30, 2015 Financial Results

  For the Three Months Ended June 30, 
($ millions, expect per share data) 2015  2014  % Change 
Revenue $8.50  $8.59   -1.0%
Coke products $3.03  $8.16   -62.9%
Coal products $0.29  $0.43   -33.0%
Syngas $5.19  $0.00   NM 
Gross margin  43.0%  16.2%  26.8%
Operating (loss) margin  -94.9%  7.6%  NM 
Net loss ($7.88) ($0.84)  NM 
Diluted loss per share ($0.33) ($0.04)  NM 
             

Revenue

For the three months ended June 30, 2015, total revenue decreased by approximately $0.1 million, or 1.0%, to $8.5 million from $8.6 million for the same period of last fiscal year as a result of decreases in sales of coke and coal products which was partially offset by sales of syngas which have started to generate revenue from the second quarter of fiscal year 2015.

Revenue of coke products, including finished coke, coke powder, coal tar, and crude benzol, decreased by $5.1 million, or 62.9%, to $3.0 million for the three months ended June 30, 2015, compared to $8.2 million for the same period of last fiscal year. The Company sold 18,362 metric tons of coke products during the three months ended June 30, 2015, a decrease of 22,536 metric tons, or 55.1%, from 40,898 metric tons for the same period of last fiscal year. Average selling price per metric ton for coke products was $165 for the three months ended June 30, 2015, compared to $199 for the same period of last fiscal year. The decrease in sales of coke products was mainly due to continued weakness in coke market demand as well as the Company’s use of coke to produce syngas.

Revenue of coal products, including unprocessed metallurgical coal, processed or washed coal, mid-coal and coal slurries, decreased by $0.1 million, or 33.0%, to $0.3 million for the three months ended June 30, 2015, compared to $0.4 million for the same period of last fiscal year. The Company sold 9,176 metric tons of coal products during the three months ended June 30, 2015, a decrease of 1,320 metric tons, or 12.6%, from 10,496 metric tons for the same period of last fiscal year. Average selling price per metric ton for coal products was $31 for the three months ended June 30, 2015, compared to $41 for the same period of last fiscal year. The decrease in sales of coal products was mainly related to unstable and unpredictable raw coal supply from our coal mines affected by the ongoing mining moratorium. We are unable to anticipate when the moratorium or policy will change to allow us to reopen our mining activities.

Revenue of syngas from our coke gasification facility, which was completed and commenced production in October 2014, was $5.2 million, or 61.0% of total revenue, with sales volume of 51.6 million cubic meters and average selling price per cubic meter of $0.10. The Company had long-term syngas supply agreements with customers to provide syngas at a fixed rate of $0.10 per cubic meter.

  
 For the Three Months Ended June 30,
 20152014
 Revenue Volume ASP Revenue Volume ASP
 ($'000) ('000 MT) ($/MT) ($'000) ('000 MT) ($/MT)
Coke products3,028 18 165 8,158 41 199
Coal products289 9 31 431 10 41
Coke and Coal Combined3,316 28 120 8,590 51 167
  
 Revenue Volume ASP Revenue Volume ASP
 ($'000) (million M3) ($/M3) ($'000) (million M3) ($/M3)
Syngas5,185 52 0.10 - - -
            

Gross profit and gross margin

Cost of revenue decreased by $2.4 million, or 32.7%, to $4.8 million for the three months ended June 30, 2015 from $7.2 million for the same period of last fiscal year. The decrease in cost of revenue was mainly as a result of lower sales volume for our coke and coal products. Gross profit increased by $2.3 million, or 163.0%, to $3.7 million for the three months ended June 30, 2015 from $1.4 million for the same period of last fiscal year. Gross margin was 43.0% for the three months ended June 30, 2015, compared to 16.2% for the same period of last fiscal year as a result of increased contribution from the higher margin syngas sales.

Operating income (loss) and operating (loss) margin

Operating expenses, including selling, general and administrative expenses, increased by $11.0 million to $11.7 million for the three months ended June 30, 2015 from $0.7 million for the same period of last fiscal year. The increase in operating expenses was mainly due to increases in bad debt expense of $8.4 million and asset impairment charges of $2.3 million. As a result, operating loss was $8.1 million for the three months ended June 30, 2015, compared to operating income of $0.7 million for the same period of last fiscal year. Operating loss margin was 94.9% for the three months ended June 30, 2015, compared to operating margin of 7.6% for the same period of last fiscal year.

Net income (loss) and EPS

Total other income was $0.5 million for the three months ended June 30, 2015, compared to total other expenses of ($1.2) million for the same period of last fiscal year. The change in total other income was mainly related to favorable impact of change in fair value of warrants of $1.8 million.

As a result of the foregoing, net loss for the three months ended June 30, 2015 was ($7.9) million, or ($0.33) per diluted share, compared to net loss of ($0.8) million, or ($0.04) per diluted share, for the same period of last fiscal year.

Twelve Months Ended June 30, 2015 Financial Results

  For the Twelve Months Ended June 30, 
($ millions, expect per share data) 2015  2014  % Change 
Revenue $45.61  $50.27   -9.3%
Coke products $28.80  $43.86   -34.3%
Coal products $4.37  $6.41   -31.8%
Syngas $12.44  $0.00   NM 
Gross margin  27.7%  17.9%  9.8%
Operating (loss) margin  -6.8%  13.4%  NM 
Net income (loss) ($3.46) $0.99   NM 
Diluted earnings (loss) per share ($0.15) $0.05   NM 
             

Revenue

For the twelve months ended June 30, 2015, total revenue decreased by $4.7 million, or 9.3%, to $45.6 million from $50.3 million for the same period of last fiscal year as a result of decreases in sales of coke and coal products and partially offset by sales of syngas which started to generate revenue from the second quarter of fiscal year 2015.

Revenue of coke products, including finished coke, coke powder, coal tar, and crude benzol, decreased by $15.1 million, or 34.3%, to $28.8 million for the twelve months ended June 30, 2015, compared to $43.9 million for the same period of last fiscal year. The Company sold 160,786 metric tons of coke products for fiscal year 2015, a decrease of 48,288 metric tons, or 23.1%, from 209,074 metric tons for the same period of last fiscal year. Average selling price per metric ton for coke products was $179 for fiscal year 2015, compared to $210 for the same period of last fiscal year. The decrease in sales of coke products was mainly due to continued weakness in coke market demand as well as the Company’s use of coke to produce syngas.

Revenue of coal products, including unprocessed metallurgical coal, processed or washed coal, mid-coal and coal slurries, decreased by $2.0 million, or 31.8%, to $4.4 million for the twelve months ended June 30, 2015, compared to $6.4 million for the same period of last fiscal year. The Company sold 59,525 metric tons of coal products for fiscal year 2015, a decrease of 15,134 metric tons, or 20.3%, from 74,659 metric tons for the same period of last fiscal year. Average selling price per metric ton for coal products was $73 for fiscal year 2015, compared to $86 for the same period of last fiscal year. The decrease in sales of coal products was mainly related to unstable and unpredictable raw coal supply from our coal mines affected by the ongoing mining moratorium. We are unable to anticipate when the moratorium or policy will change to allow us to reopen our mining activities.

Revenue of syngas from our coke gasification facility, which was completed and commenced production in October 2014, was $12.4 million, or 27.3% of total revenue, with sales volume of 124.1 million cubic meters and average selling price per cubic meter of $0.10. The Company had long-term syngas supply agreements with customers to provide syngas at a fixed rate of $0.10 per cubic meter.

  
 For the Twelve Months Ended June 30,
 2015  2014  
 Revenue Volume ASP Revenue Volume ASP
 ($'000) ('000 MT) ($/MT) ($'000) ('000 MT) ($/MT)
Coke products28,799 161 179 43,857 209 210
Coal products4,371 60 73 6,410 75 86
Coke and Coal Combined33,170 220 151 50,268 284 177
  
 Revenue Volume ASP Revenue Volume ASP
 ($'000) (million M3) ($/M3) ($'000) (million M3) ($/M3)
Syngas12,444 124 0.10 - - -
            

Gross profit and gross margin

Cost of revenue decreased by $8.3 million, or 20.1%, to $33.0 million for the twelve months ended June 30, 2015 from $41.3 million for the same period of last fiscal year. The decrease in cost of revenue was mainly as a result of lower sales volume for our coke and coal products. Gross profit increased by $3.6 million, or 40.6%, to $12.6 million for the twelve months ended June 30, 2015 from $9.0 million for the same period of last fiscal year. Gross margin was 27.7% for the twelve months ended June 30, 2015, compared to 17.9% for the same period of last fiscal year as a result of increased contribution from the higher margin syngas sales.

Operating income (loss) and operating (loss) margin

Operating expenses, including selling, general and administrative expenses, increased by $13.5 million to $15.7 million for the twelve months ended June 30, 2015 from $2.3 million for the same period of last fiscal year. The increase in operating expenses was mainly due to: 1) increase in bad debt expense of $9.9 million, 2) increase in depreciation expense of $0.5 million, and 3) increase in asset impairment charges of $2.3 million. As a result, operating loss was ($3.1) million for the twelve months ended June 30, 2015, compared to operating income of $6.7 million for the same period of last fiscal year. Operating loss margin was (6.8%) for the twelve months ended June 30, 2015, compared to operating margin of 13.4% for the same period of last fiscal year.

Net income (loss) and EPS

Total other income was $1.7 million for the twelve months ended June 30, 2015, compared to total other expenses of ($3.9) million for the same period of last fiscal year. The change in total other income was mainly due to favorable impact of change in fair value of warrants of $7.1 million and partially offset by an increase in interest expenses of $1.1 million.

As a result of the foregoing, net loss for the twelve months ended June 30, 2015 was ($3.5) million, or ($0.15) per diluted share, compared to net income of $1.0 million, or $0.05 per diluted share, for the same period of last fiscal year.

Financial Condition

As of June 30, 2015, the Company had cash of approximately $0.1 million, short-term loans and current portion of long-term loans of $44.5 million, and long-term loans of $0, compared to $0.2 million, $20.8 million, and $29.2 million, respectively, at June 30, 2014. Working capital as of June 30, 2015 was ($25.4) million, as compared to $6.8 million at June 30, 2014. The increase in working capital deficit was due to: 1) the $29.2 million loans reclassified in current portion, 2) $4.2 million increase in short-term loans, 3) $10.1 million in short-term loans being repaid, 4) $16.2 million investment in the constructions of coke gasification and underground coal gasification facilities, and 5) $1.4 million accrued for construction and asset purchases payable. Working capital deficit was offset by: 1) $8.2 million loan receivable collected, and 2) $13.2 million of funds raised in a private placement during the fiscal year ended June 30, 2015.

Net cash provided by operating activities was $0.5 million for the twelve months ended June 30, 2015, compared to net cash used in operating activities of $0.6 million for the same period of last fiscal year. Net cash used in investing activities was $8.2 million for the twelve months ended June 30, 2015, compared to $0 for the same period of last fiscal year. The Company collected $8.0 million from the loans receivable from Capital Paradise Limited, and invested $13.6 million in coke gasification facilities and $2.6 million in the construction of underground coal gasification. Net cash provided by financing activities was $7.5 million for the twelve months ended June 30, 2015, compared to $0.1 million for the same period of last fiscal year. During fiscal year 2015, we received $13.2 million through a registered sale of 2,818,845 shares of our common stock, obtained a $0.2 million loan from Mr. Jianhua Lv, our Chairman and Chief Executive Officer, repaid $8.1 million outstanding loans to Bairui Trust, repaid $2.0 million outstanding loans to Capital Paradise Limited, and received $4.2 million loans from Capital Paradise Limited.

Recent Development 

On October 8, 2015, the Company entered into a supplemental agreement with Bairui Trust Co., Ltd. to extend the maturity date of a RMB 180 million (approximately $29.3 million) from the Lender from October 2, 2015, to April 2, 2016. The annual interest rate of the Loan remained unchanged at 11.88%. Due to a national holiday in China, the agreement was executed on October 8, 2015.

On September 29, 2015, the Company received a letter from The NASDAQ Stock Exchange regarding the Registrant’s failure to comply with NASDAQ Continued Listing Rule (the “Rule”) 5550(a)(2). NASDAQ requires that listed securities maintain a minimum bid price of $1 per share. The Company has been provided with a period of 180 calendar days, or until March 28, 2016, to regain compliance with the NASDAQ’s rule. The Company intends to evaluate available options to resolve the deficiency and regain compliance.

On August 12, 2015, the Company announced that it had agreed in principle to lease a facility for syngas production for 10 years for an annual payment of RMB 10.1 million (approximately US$1.6 million) from Zhengzhou Coal Industry (Group) Co., Ltd. ("ZMJT"), a large-scale state-owned coal and electric energy company.

On July 2, 2015, the Company announced that, at its Annual Meeting of Shareholders held on June 30, 2015, a majority of the shares of common stock present at the meeting in person or by proxy voted in favor of changing its name from “SinoCoking Coal and Coke Chemical Industries, Inc.” to “Hongli Clean Energy Technologies Corp.” and its trading symbol on NASDAQ from "SCOK” to “CETC”. The changes went into effect on July 28, 2015 on NASDAQ.

On May 4, 2015, the Company announced: 1) it had shipped 51 million cubic meters of syngas to its three syngas customers and generated RMB 31 million in sales (all from the Stage I Facility which we completed at the end of September 2014 and commenced production in October 2014) during the 3QFY15 quarter.

About Hongli Clean Energy Technologies Corp.

Previously known as SinoCoking Coal and Coke Chemical Industries, Inc., Hongli Clean Energy Technologies Corp. (“Hongli” or the “Company”) is a Florida corporation and an emerging producer of clean energy products located in Pingdingshan City, Henan Province, China. The Company has historically been a vertically-integrated coal and coke processor of basic and value-added coal products for steel manufacturers, power generators, and various industrial users. The Company has been producing metallurgical coke since 2002, and acts as a key supplier to regional steel producers in central China. The Company also produces and supplies thermal coal to its customers in central China. The Company currently owns its assets and conducts its operations through its subsidiaries, Top Favour Limited and Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd., and its affiliated companies, Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd., Baofeng Coking Factory, Baofeng Hongchang Coal Co., Ltd., Baofeng Hongguang Environment Protection Electricity Generating Co., Ltd., Zhonghong Energy Investment Company, Henan Hongyuan Coal Seam Gas Engineering Technology Co., Ltd., Baofeng Shuangri Coal Mining Co., Ltd., and Baofeng Xingsheng Coal Mining Co., Ltd.

For additional information on the Company, please go to  http://www.cetcchina.net/ or refer to the company's periodic reports filed with the Securities and Exchange Commission (http://www.cetcchina.net/sec-filings.html). Investors wishing to receive the Company's corporate communications as they become available may go to the company's Investor Relations site (http://www.cetcchina.net/corporate-overview.html) and register under Email Alerts.

Also, investors may submit questions directly to Mr. Lv and his staff to receive non-confidential information about the company's operations and products at the company's "Ask Management" blog (http://www.cetcchina.net/ask-management.html).

Forward-Looking Statements

This press release contains forward-looking statements, particularly as related to, among other things, the business plans of the Company, statements relating to goals, plans and projections regarding the Company's financial position and business strategy. The words or phrases "plans," "would be," "will allow," "intends to," "may result," "are expected to," "will continue," "anticipates," "expects," "estimate," "project," "indicate," "could," "potentially," "should," "believe," "think," "considers" or similar expressions are intended to identify "forward-looking statements." These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of local, regional, and global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic reports and on documents we file from time to time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

  
  
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND SUBSIDIARIES 
  
CONSOLIDATED BALANCE SHEETS 
    
  June 30, 
  2015  2014 
ASSETS        
CURRENT ASSETS        
Cash $81,605  $191,992 
Accounts receivable, net  13,970,451   8,946,435 
Other receivables and deposits  4,928,967   5,787,232 
Loans receivable  -   8,032,037 
Inventories  3,191,605   7,419,821 
Advances to suppliers  8,216,127   8,700,022 
Prepaid expenses  16,670   - 
Total current assets  30,405,425   39,077,539 
         
PLANT AND EQUIPMENT, net  18,750,242   14,426,319 
         
CONSTRUCTION IN PROGRESS  65,420,768   40,389,961 
         
OTHER ASSETS        
Security deposit  -   4,873,928 
Prepayments  19,674,034   61,815,632 
Intangible assets, net  56,355,185   32,305,697 
Long-term investments  2,920,247   2,898,233 
Other assets  114,589   113,725 
Total other assets  79,064,055   102,007,215 
         
Total assets $193,640,490  $195,901,034 
LIABILITIES AND EQUITY        
CURRENT LIABILITIES        
Current maturity of long-term loans $44,471,220  $20,795,425 
Accounts payable, trade  70,164   2,978,326 
Other payables and accrued liabilities  4,503,689   2,460,113 
Other payables - related party  736,596   526,699 
Acquisition payable  4,747,250   4,711,463 
Customer deposits  80,306   79,701 
Taxes payable  907,472   765,421 
Current portion of warrants liability  289,481   - 
Total current liabilities  55,806,178   32,317,148 
         
LONG-TERM LIABILITIES        
Long-term loans  -   29,243,566 
Warrants liability  2,626,168   16 
Total long-term liabilities  2,626,168   29,243,582 
         
Total liabilities  58,432,346   61,560,730 
         
COMMITMENTS AND CONTINGENCIES        
         
EQUITY        
Common stock, $0.001 par value, 100,000,000 shares authorized, 23,960,217 shares and 21,121,372 shares issued and outstanding as of June 30, 2015 and 2014, respectively  23,960   21,121 
Additional paid-in capital  6,846,397   3,592,053 
Statutory reserves  3,689,941   3,689,941 
Retained earnings  108,831,633   112,295,407 
Accumulated other comprehensive income  11,484,613   10,410,182 
Total SinoCoking Coal and Coke Chemicals Industries, Inc's equity  130,876,544   130,008,704 
         
NONCONTROLLING INTERESTS  4,331,600   4,331,600 
         
Total equity  135,208,144   134,340,304 
         
Total liabilities and equity $193,640,490  $195,901,034 



  
  
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND SUBSIDIARIES 
  
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME 
    
  For the Year Ended June 30, 
  2015  2014 
       
REVENUE $45,613,084  $50,267,693 
         
COST OF REVENUE  32,973,492   41,275,791 
         
GROSS PROFIT  12,639,592   8,991,902 
         
OPERATING EXPENSES:        
Selling  137,858   154,716 
General and administrative  15,601,184   2,121,849 
Total operating expenses  15,739,042   2,276,565 
         
INCOME (LOSS) FROM OPERATIONS  (3,099,450)  6,715,337 
         
OTHER INCOME (EXPENSE)        
Interest income  165,367   566,541 
Interest expense  (5,552,467)  (4,477,049)
Other finance expense  (63,083)  (71,870)
Other income, net  -   109,100 
Change in fair value of warrants  7,131,724   5 
Total other income (expense), net  1,681,541   (3,873,273)
         
INCOME (LOSS) BEFORE INCOME TAXES  (1,417,909)  2,842,064 
         
PROVISION FOR INCOME TAXES  2,045,865   1,851,482 
         
NET INCOME (LOSS)  (3,463,774)  990,582 
         
OTHER COMPREHENSIVE INCOME (LOSS)        
Foreign currency translation adjustment  1,074,431   506,959 
         
COMPREHENSIVE INCOME (LOSS) $(2,389,343) $1,497,541 
         
WEIGHTED AVERAGE NUMBER OF COMMON SHARES        
Basic and diluted  23,291,832   21,121,372 
         
EARNINGS (LOSSES) PER SHARE        
Basic and diluted $(0.15) $0.05 

  

  
  
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND SUBSIDIARIES 
  
CONSOLIDATED STATEMENTS OF CASH FLOWS 
    
  For the Year Ended June 30, 
  2015  2014 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss) $(3,463,774) $990,582 
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:        
Depreciation  1,376,901   908,232 
Amortization and depletion  70,953   70,913 
Write-off other receivables and advances to suppliers  -   89,298 
Change in fair value of warrants  (7,131,724)  (5)
Bad debt expense  10,113,269   169,936 
Loss from inventory LCM  44,388   169,957 
Gain on waived liabilities  -   (96,472)
Impairment loss of long-lived assets  2,431,718   - 
Amortization of prepaid expenses  83,330   - 
Change in operating assets and liabilities        
Accounts receivable, trade  (5,009,210)  427,486 
Other receivables  895,390   (1,558,667)
Inventories  4,220,150   (4,568,625)
Advances to suppliers  (958,306)  128,205 
Accounts payable, trade  (2,917,080)  2,800,529 
Other payables and accrued liabilities  638,907   323,870 
Customer deposits  -   (130,272)
Taxes payable  135,602   (373,545)
Net cash provided by (used in) operating activities  530,514   (648,578)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Collection of loans receivable  8,232,037   - 
Loan receivable to CPL  (200,000)  - 
Payments of gasification equipment  (13,575,250)  - 
Prepayments of construction of underground coal gasification  (2,606,926)  - 
Net cash used in investing activities  (8,150,139)  - 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Change in restricted cash  -   9,770,396 
Payments of note payable  -   (9,770,396)
Repayment of short-term loans - Bairui Trust  (8,146,640)  - 
Proceeds from short-term loans - CPL  4,227,765   - 
Repayment of short-term loans - CPL  (1,990,699)    
Proceeds from short-term loans - others  -   163,700 
Payment of short-term loans - others  -   (489,380)
Proceeds from issuance of common stock  13,204,539   - 
Proceeds from (payment to) related parties  215,920   385,000 
Net cash provided by financing activities  7,510,885   59,320 
         
EFFECT OF EXCHANGE RATE ON CASH  (1,647)  (768)
         
DECREASE IN CASH  (110,387)  (590,026)
         
CASH, beginning of period  191,992   782,018 
         
CASH, end of period $81,605  $191,992 
         
SUPPLEMENTAL CASH FLOW INFORMATION:        
Cash paid for income tax $2,053,280  $1,738,133 
Cash paid for interest expense, net of capitalized interest $4,901,566  $3,376,213 
         
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES        
Reclassification of short-term loans to long-term loans $-  $29,243,566 
Reclassification long-term loans to short-term loans $29,327,902  $- 
Common stock issued for a service fee $100,000  $- 
Issuance of warrants related to the sale of common stock $10,047,356  $- 
Transfer of construction in progress into plant and equipment $7,052,383  $- 
Reclassification of prepayments to construction in progress $29,947,047  $- 
Reclassification of prepayments to land use right $11,902,241  $- 
Reclassification of construction in progress to land use rights $11,861,507  $- 
Other payable accrued for land use right registration $473,743  $- 


 
 
HONGLI CLEAN ENERGY TECHNOLOGIES CORP. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF EQUITY
                         
                 Accumulated       
        Additional  Retained earnings  other       
  Common Stock  paid-in  Statutory     comprehensive  Noncontrolling    
  Shares  Par Value  capital  reserves  Unrestricted  income  interest  Total 
BALANCE, July 1, 2013  21,121,372  $21,121  $3,592,053  $3,689,941  $111,304,825  $9,903,223  $4,331,600  $132,842,763 
Net income                  990,582           990,582 
Foreign currency translation adjustments                      506,959       506,959 
BALANCE, June 30, 2014  21,121,372   21,121   3,592,053   3,689,941   112,295,407   10,410,182   4,331,600   134,340,304 
Issuance of common shares  2,838,845   2,839   3,254,344                   3,257,183 
Net loss                  (3,463,774)          (3,463,774)
Foreign currency translation adjustments                      1,074,431       1,074,431 
BALANCE, June 30, 2015  23,960,217  23,960  6,846,397  3,689,941  108,831,633  11,484,613  4,331,600  135,208,144 
                                 

 

Company Contact:
Song Lv, CFO
Phone: + 86-375-2882-999
Email: [email protected]
Website: http://www.cetcchina.net/

Investor Relations Contact:
Tina Xiao
Weitian Group LLC
Phone: +1-917-609-0333
Email: [email protected] 

Source: GlobeNewswire (October 13, 2015 - 6:43 PM EDT)

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