AOB » Topics » Item 7A. Quantitative and Qualitative Disclosures about Market Risk

This excerpt taken from the AOB 10-K filed Mar 9, 2009.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Issuance of Common Stock

See PART II Item 5 for issuance of unregistered common stock during the year ended 2007.

Inflation

Inflation has not had a material impact on our business.

Currency Exchange Fluctuations

All of Company’s revenues and majority of the expenses in 2008 were denominated primarily in Renminbi (“RMB”), the currency of China, and was converted into US dollars at the exchange rate of 7.0842 to 1. In the third quarter of 2005, the Renminbi began to rise against the US dollar. As a result of the appreciation of RMB we recognized a foreign currency translation gain of $ 12,819,020. There could be no assurance that RMB-to-U.S. dollar exchange rates will remain stable. A devaluation of RMB relative to the U.S. dollar would adversely affect our business, financial condition and results of operations. We do not engage in currency hedging.

This excerpt taken from the AOB 10-Q filed Nov 10, 2008.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

 

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Table of Contents
This excerpt taken from the AOB 10-Q filed Aug 11, 2008.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

 

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Table of Contents
This excerpt taken from the AOB 10-Q filed May 7, 2008.

ITEM 3—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

I TEM 4—CONTROLS AND PROCEDURES

As of the end of the period covered by this report (the “Evaluation Date”), we carried out an evaluation in accordance with the requirements of auditing standards and applicable U.S. rules. The Company’s internal audit group evaluated the effectiveness of the design and operation of our disclosure controls and

 

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procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to this Quarterly Report on Form 10-Q before its filing with the Commission. The audit group made its evaluation pursuant to Rule 13a-15 under the Exchange Act to the maximum possible extent and to the best knowledge of the internal audit group.

Based upon our evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective and basically sound in all material aspects under Rule 13a-15. However, given the fact that our major operations are located China, the Company and the internal audit group consistently make efforts to coordinate the evolving control and disclosure environment in China with the regulatory environment in the United States. The Company has identified this aspect as an area for improvement and is taking measures to train its staff for better performance.

There were no changes in the Company’s internal control over financial reporting during the first quarter of 2008 that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

These excerpts taken from the AOB 10-K filed Mar 6, 2008.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Issuance of Common Stock

The Company has sold 8,000,000 shares of the Company’s common stock at $8.50 per share on June 28, 2007 through a follow-on public offering. On July 3, 2007, the underwriters of the Company’s follow-on public offering exercised their option in full to purchase an additional 1,275,000 shares of the Company’s common stock to cover over-allotments. In total, including the over-allotment shares, the Company has sold 9,275,000 shares of the Company’s common stock at $8.50 per share. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and was declared effective on June 27, 2007.

The Company also issued 4,318,920 shares of the Company’s common stock upon the exercise of warrants during December 31, 2007.

See PART II Item 5 for issuance of unregistered common stock during the year ended 2007.

Inflation

Inflation has not had a material impact on our business.

Currency Exchange Fluctuations

All of Company’s revenues and majority of the expenses in 2007 were denominated primarily in Renminbi (“RMB”), the currency of China, and was converted into US dollars at the exchange rate of 7.5658 to 1. In the third quarter of 2005, the Renminbi began to rise against the US dollar. As a result of the appreciation of RMB we recognized a foreign currency translation gain of $11,888,914. There could be no assurance that RMB-to-U.S. dollar exchange rates will remain stable. A devaluation of RMB relative to the U.S. dollar would adversely affect our business, financial condition and results of operations. We do not engage in currency hedging.


Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Issuance of Common Stock

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company has sold 8,000,000 shares of the Company’s common stock at $8.50 per share on June 28, 2007 through a follow-on public offering. On
July 3, 2007, the underwriters of the Company’s follow-on public offering exercised their option in full to purchase an additional 1,275,000 shares of the Company’s common stock to cover over-allotments. In total, including the
over-allotment shares, the Company has sold 9,275,000 shares of the Company’s common stock at $8.50 per share. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and was declared
effective on June 27, 2007.

The Company also issued 4,318,920 shares of the Company’s common stock upon the exercise of warrants
during December 31, 2007.

See PART II Item 5 for issuance of unregistered common stock during the year ended 2007.


Inflation

Inflation has not had a material impact
on our business.

Currency Exchange Fluctuations

FACE="Times New Roman" SIZE="2">All of Company’s revenues and majority of the expenses in 2007 were denominated primarily in Renminbi (“RMB”), the currency of China, and was converted into US dollars at the exchange rate of 7.5658 to
1. In the third quarter of 2005, the Renminbi began to rise against the US dollar. As a result of the appreciation of RMB we recognized a foreign currency translation gain of $11,888,914. There could be no assurance that RMB-to-U.S. dollar exchange
rates will remain stable. A devaluation of RMB relative to the U.S. dollar would adversely affect our business, financial condition and results of operations. We do not engage in currency hedging.

STYLE="margin-top:18px;margin-bottom:0px">
ITEM 8. Financial Statements and Supplementary Data

The information required by Item 8 appears after
the signature page to this report.

This excerpt taken from the AOB 10-Q filed Nov 5, 2007.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

This excerpt taken from the AOB 10-Q filed Aug 8, 2007.

ITEM 3—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales are made in RMB, any exchange rate change affecting the value of the RMB relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the RMB were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the RMB were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

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