SPARK ENERGY (OTC:CHPC)

China Prosperous Clean Energy Corporation and Subsidiaries

The Company’s consolidated sales increased to $9,278,961 for the quarter ended March 31, 2011, a 98.57% increase from $4,672,996 reported for the quarter ended March 31, 2010. The increase in revenue resulted primarily from the following factors:

1) The retail prices of natural gas filling stations of the Company located in Anyang, Jiaozuo, Changzhi have been adjusted upwards along with China's domestic retail prices of crude oil.

2) With China's rapid economic growth, we organize the thought and seize chance to develop the LPG wholesale market, which resulted the business growth of 161.65% compared with the same quarter of last year.

Our consolidated net income decreased by 55.97% to$10,204 for the quarter ended March 31, 2011, as compared to$23,175for the quarter ended March 31, 2010. This decrease was attributable to

1) The Company’s consolidated sales increased by 98.57% for the quarter ended March 31, 2011 compared with the same quarter of last year, but purchasing costs increase more than revenue growth, which resulted in decline of gross profit .

 
2) The increase in expense. In December, 2010,a technical services agreement was entered between Liu Zhijun and the Company,according to the agreement, service charge of $12,501 was accounted in this quarter.

Our primary source of liquidity will continue to be cash generated from operations as well as existing cash on hand. Our current cash and cash equivalents and cash generated from operations will satisfy our expected working and other capital requirements for the foreseeable future based on current business strategy and expansion plan. We believe that we will have available resources to meet both our short-term and long-term liquidity requirements, including debt service

Based on past performance and current expectations, we believe our cash and cash equivalents, cash generated from operations, as well as future possible cash investments

The Company's consolidated operating income for the year ended December 31, 2010 increased to $277,230 from ($264,301) reported for the year ended December 31, 2009. This was mainly due to:

1) Because of the recovery of the economic, the sales increased by 27.48%.
2) Along with the increase of sales, the COS was controlled and the operating expense decreased by 0.91%.

We are positive about the future increase in the operating income as we will continue building new CNG filling stations as further revenue source, aided by prudent cost controls on both the production and operating components of our business. We anticipate further improvements in the control of cost of sales, increase of sales and expanding of market share. Thus while management expects this factor to favorably benefit gross and operating income, we also anticipate further improvements in the internal management, enhancement in the management efficiency and reduction in management costs, that will also improve margins.

We are positive about the future increase in the net income because of the following:
 
a)   We will continue building new CNG filling stations as to expand our market share, for example Linying mother station will be completed and put into operation in April 2011. The second gas station  in Changzhi is in approval, which will be put into operation in June 2011;

b)   We will improve prudent cost controls on both the production and operating components of our business, through centralized purchasing to obtain lower prices of raw materials; maintaining long-term stable cooperative relations with the existing gas source supplier; increasing the development of new gas source suppliers; we will solve gas supply problems and reduce cost of sales by the way of equity participation and self-built CNG mother station;   
 
c)   We are also looking forward to reorganizing and optimizing existing management processes, improving of internal management, increasing of management efficiency and reducing administrative costs, which will lead to the increase of our profits.

• The Company’s consolidated sales decreased to $6,739,042 for the quarter ended September 30, 2010, a 9.47% decrease from $7,443,652 reported for the quarter ended September 30, 2009. The decrease in revenue resulted primarily from the following factors:

1) The sales of our three LPG stations decrease by 75.34%,which was affected by energy policies and the LPG taxis being out of the market.

2) Although customers affected by economic crisis in 2009 were being in recovery, LPG wholesale business still declined by 19.59% compared with the same quarter of last year. Meanwhile, we are trying to develop the market. The growth rate increased by 56.44% and 26.95% compared with the first quarter and second quarter,respectively.

• Our consolidated net income increased by 2,941.32% to $363,376 for the quarter ended September 30, 2010, as compared to $11,948 for the quarter ended September 30, 2009. This decrease was attributable to:

1) The CNG retail business market continued to expand with strong profitability, resulting in the increase of gross profit.

2) Pipe project of Shijiazhuang City was put into operation during this quarter, whose net income accounted for 18.32% of the consolidated net income, resulting in the increase of consolidated net income.

3) Along with the decline of LPG wholesale business, the related variable expense -- transportation expenses also decreased 82% at the same time.

• EPS was $0.03 vs. nil
  
• CHPC has a negative working capital position.

We believe income from operations will show further improvements as we will continue building new CNG filling stations with further revenue source, aided by prudent cost controls on both the production and operating components of our business. We anticipate further improvements in cost of sales, increased sales and market share. Thus, while management expects this factor to favorably benefit gross and operating income, we also anticipate that with the addition of quality members to management, efficiency will be enhanced, which will also improve margins.

We are positive about the future increase in the net income as it will benefit from the following factors:

a) We will continue building new CNG filling stations as to expand our market share, such as Linying mother station that was completed in September 2010, equipment installation teating for which is under way. The second gas station in Changzhi is being built and will be completed by the end of 2010;

b) The Company will take proper measures to reduce fluctuations in the COS. These measures includes: centralized purchasing to obtain lower prices of raw materials, maintaining long-term stable cooperative relations with the existing gas source suppliers, increasing the development of new gas suppliers, and solving gas supply problems and reducing the cost of sales by way of joint venture and self-built CNG mother stations.

c) We are also looking forward to reorganization and optimization of existing management processes, improvement of internal management, increase management efficiency and reduction of administrative costs, which will lead to the increase of our profits.

"The People's Republic of China National Economic and Social Development of the 11 th Five-Year Plan" clearly declaim that optimizing the energy industry to accelerate the development of LPG, to expand cooperation with offshore LPG resources, and develop gas industry. Especially "implement clean energy car action plan, development of hybrid vehicles, and promote gas use on city buses, taxis and other industries”. LPG, CNG and other clean energy will play an important role in future, there will be immense room for development and a very good development prospects. We plan to add 4 stations in 2010, 20 new stations in 2011, which will be the highlights of the Company.

We are intrigued by the China Prosp Clean Energy story due to the following comments in the company's first quarter filing:

Our new primary business operations include: retail sales of CNG and operation of CNG filling stations; retail sales of LPG and operation of LPG filling stations; and wholesale of LPG and CNG. Our primary business is carried out by Origin Orbit through Anyang Prosperous and Anyang Top. Along with the reform and opening up and China's sustained economic growth and rising consumption level, the gas industry as the basis of the energy industry, has been in a sustained and rapid development process, including LPG and CNG, and other clean gas consumption. With China's sustained and rapid economic growth, and increasing social environmental awareness, clean, renewable energy has been encouraging by industrial policy. "The People's Republic of China National Economic and Social Development of the 11th Five-Year Plan" clearly declaim that optimizing the energy industry to accelerate the development of LPG, to expand cooperation with offshore LPG resources, and develop gas industry. Especially "implement clean energy car action plan, development of hybrid vehicles, and promote gas use on city buses, taxis and other industries”. LPG, CNG and other clean energy will play an important role in future, there will be immense room for development and a very good development prospects.

We plan to add 8 stations in 2010, 20 new stations in 2011, which will be the highlights of the Company.

The Company's consolidated income (loss) from operations for the quarter ended March 31, 2010 increased by 1,177.20% to $91,573, from ($8,501) reported for the quarter ended March 31, 2009. This was mainly due to:

1) The increase in sales. Due to the recovery of Chinese economy, some of our LPG clients affected by economic crisis in 2009 gradually resumed production, which resulted in the increase in wholesale sales of liquefied gas by 10.93%;

2) New acquisition. We were able to lower the transportation cost by directly transporting the products through the distribution pipeline operated by Henan Ancai Energy Co., Ltd.

We believe income from operations will show further improvements as we will continue building new CNG filling stations with further revenue source, aided by prudent cost controls on both the production and operating components of our business. We anticipate further improvements in cost of sales, increased sales and market share. Thus, while management expects this factor to favorably benefit gross and operating income, we also anticipate that with the addition of quality members to management, efficiency will be enhanced, which will also improve margins.

We are positive about the future increase in the net income as it will benefit from the following factors:

a) We will continue building new CNG filling stations as to expand our market share, such as Linying mother station that will be completed and put into operation in June 2010 and the second gas station in Changzhi that is in the approval process and will be completed by the end of 2010;

b) The Company will take proper measures to reduce fluctuations in the COS. These measures includes: centralized purchasing to obtain lower prices of raw materials, maintaining long-term stable cooperative relations with the existing gas source suppliers, increasing the development of new gas suppliers, and solving gas supply problems and reducing the cost of sales by way of joint venture and self-built CNG mother stations.

c) We are also looking forward to reorganization and optimization of existing management processes, improvement of internal management, increase management efficiency and reduction of administrative costs, which will lead to the increase of our profits.

While it is way too early to tell if these initiatives will bear fruit the GeoTeam will still track the CHPC story.

As of June 30, 2008, upon the consummation of the Share Exchange Transaction , an aggregate of 12,000,000 shares of our Common Stock were issued and outstanding

Source: 8-K (June 30, 2008)

AOPM became pubic via a reverse merger transaction on June 30,  2008.

Source: 8-K (June 30, 2008)