CD INTERNATIONAL ENTERPRISES, INC AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
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For the three months ended December 31, 2013 and 2012 |
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(Unaudited) |
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For the Three Months Ended
December 31, |
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2013 |
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|
2012 |
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Revenues |
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$ |
380,576 |
|
|
$ |
576,269 |
|
Cost of revenues |
|
|
133,242 |
|
|
|
610,853 |
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Gross profit |
|
|
247,334 |
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|
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(34,584 |
) |
Operating expenses: |
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|
|
|
|
|
|
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Selling, general, and administrative |
|
|
1,090,329 |
|
|
|
1,067,379 |
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Total operating expenses |
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|
1,090,329 |
|
|
|
1,067,379 |
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Operating loss |
|
|
(842,995 |
) |
|
|
(1,101,963 |
) |
Other income (expenses): |
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|
|
|
|
|
|
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Other income |
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|
133,608 |
|
|
|
214,179 |
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Interest expenses |
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(16,134 |
) |
|
|
(62,018 |
) |
Interest expenses - related parties |
|
|
(8,100 |
) |
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|
- |
|
Realized gain on marketable securities available-for-sale |
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|
94,396 |
|
|
|
129,720 |
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Loss on revaluation for receivable and payable of marketable securities available-for-sale |
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|
(26,329 |
) |
|
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(1,396,239 |
) |
Change in fair value of devirative liability |
|
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(1,191,467 |
) |
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|
213,548 |
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Total other expenses |
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(1,014,026 |
) |
|
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(900,810 |
) |
Loss from continuing operations before income taxes |
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(1,857,021 |
) |
|
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(2,002,773 |
) |
Income tax expense |
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|
- |
|
|
|
- |
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Net loss from continuing operations |
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(1,857,021 |
) |
|
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(2,002,773 |
) |
Discontinued operations: |
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|
|
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|
|
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Loss from discontinued operations, net of taxes |
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(9,315,495 |
) |
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(1,944,602 |
) |
Gain on disposal of subsidiaries, net of taxes |
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- |
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|
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- |
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Total loss from discontinued operations, net taxes |
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(9,315,495 |
) |
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(1,944,602 |
) |
Net loss |
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(11,172,516 |
) |
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(3,947,375 |
) |
Less: Net loss attributable to non-controlling interests |
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(2,494,005 |
) |
|
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(554,604 |
) |
Net loss attributable to CD International Enterprises, Inc. |
|
|
(8,678,511 |
) |
|
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(3,392,771 |
) |
Dividends on series A preferred stock |
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(20,130 |
) |
|
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(20,130 |
) |
Net loss allocable to common stockholders |
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$ |
(8,698,641 |
) |
|
$ |
(3,412,901 |
) |
COMPREHENSIVE INCOME (LOSS): |
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Net loss |
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$ |
(11,172,516 |
) |
|
$ |
(3,947,375 |
) |
Foreign currency translation adjustments |
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|
611,902 |
|
|
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(369,954 |
) |
Unrealized gain (loss) on marketable securities available-for-sale |
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(66,049 |
) |
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163,232 |
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Comprehensive loss |
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(10,626,663 |
) |
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(4,154,097 |
) |
Net loss attributable to non-controlling interests |
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(2,494,005 |
) |
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(554,604 |
) |
Foreign currency translation adjustments - non-controlling interest |
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|
37,294 |
|
|
|
62,673 |
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Comprehensive loss attributable to CD International Enterprises, Inc. |
|
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(8,169,952 |
) |
|
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(3,662,166 |
) |
Preferred stock dividend |
|
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(20,130 |
) |
|
|
(20,130 |
) |
Comprehensive loss attributable to common stockholders |
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$ |
(8,190,082 |
) |
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$ |
(3,682,296 |
) |
Basic and diluted net loss per common share - basic: |
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Net loss from continuing operations |
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$ |
(0.03 |
) |
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$ |
(0.04 |
) |
Net loss from discontinued operations |
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(0.11 |
) |
|
|
(0.03 |
) |
Net loss per common share |
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$ |
(0.14 |
) |
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$ |
(0.07 |
) |
Basic and diluted net loss per common share - diluted: |
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|
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|
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Net loss from continuing operations |
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$ |
(0.03 |
) |
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$ |
(0.04 |
) |
Net loss from discontinued operations |
|
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(0.11 |
) |
|
|
(0.03 |
) |
Net loss per common share |
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$ |
(0.14 |
) |
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$ |
(0.07 |
) |
Basic weighted average common shares outstanding |
|
|
59,763,716 |
|
|
|
52,383,214 |
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Diluted weighted average common shares outstanding |
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|
59,763,716 |
|
|
|
52,383,214 |
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Management Discussion and Analysis
Revenues
Revenues in the three month ended December 31, 2013 decreased by 34%, as compared to the three month ended December 31, 2012, primarily due to the decreased revenue generated from our consulting segment, offset by an increase of approximately $215,000 from the sales of iron ore.
Our Mineral Trading segment generated approximately $238,000 revenue in the three months ended December 31, 2013, as compared to three months ended at December 31, 2012, decreased by 42%, primarily due to revenues decreased in our business in South America. We closed the business in Mexico operations after, our operations in Mexico finally sold 11,000 metric tons of iron ore, priced at $233,000, to a local Mexican company due to that we could not receive the environmental permits and necessary export approvals in the first quarter of fiscal year 2013. Our operations in Chile experienced shipping delays due to a longer than expected timeframe to receive port authority approval to export the iron ore. In South America, we established new relationships with a supplier and are working with an engineering specialist to further strengthen our sourcing capabilities and a logistics provider to meet our inland transportation needs. In the fourth quarter of fiscal year 2013, CDII Minerals signed a purchase order with China-Base Ninbo Foreign Trade Co., Ltd. (“China Base”). China Base is a trading company located in Ningbo, China. Based on this agreement, China Base agreed to buy approximately 2,000 metric tons of iron ore from CDII Bolivia. CDII Minerals accomplished and fulfilled the contract with China- Base Ningbo Foreign Trade Co., Ltd. in December 2013.
Our Consulting segment revenues primarily consist of consulting and advisory service fees we received from certain publicly traded U.S. companies with their primary business operations located in the PRC. We receive a fixed number of shares of their marketable securities or fees from those client companies, including both recurring and one-time transaction fees for services provided to clients. Consulting segment revenues vary from period to period depending upon the timing, nature and scope of services we provide to a particular client and performance of our client companies' stock price. Our Consulting segment generated approximately $142,000 in revenues during the three months ended December 31, 2013, as compared to $163,000 during the three months ended December 31, 2012, primarily due to the declining value of our client companies' stock, coupled with a reduction in scope of consulting and transactional services provided to the new clients during the three months ended December 31, 2013.
Net loss
Net loss for the three months ended December 31, 2013 amounted to $11.2 million, as compared to net loss of approximately $3.9 million for the three months ended December 31, 2012, primarily due to an increase of $7.4 million in losses from discontinued operations.