WEB NEWS Comments & Business Outlook
CHINA WATER GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months
Ended March 31,
2012
2011
Sales
$
89,554
$
43,375
Cost of sales
65,948
33,219
Gross profit
23,606
10,156
Operating expenses:
Selling and distribution expenses
30,928
34,482
General and administrative expenses
336,272
166,702
Total operating expenses
367,200
201,184
Loss from operations
(343,594)
(191,028)
Other income (expense):
Interest expense
(45,763)
34
Gain on financial instruments
-
14,588
Other expenses
621
(177)
Total other income (expense)
(45,142)
14,445
Loss before income taxes
(388,736)
(176,583)
Provision for income taxes
10
203
Net loss
(388,746)
(176,786)
Less: net loss attributable to noncontrolling interest
(25,213)
(13,484)
Net loss attributable to China Water Group, Inc.
$
(363,533)
$
(163,302)
Basic loss per share
$
(0.00)
$
(0.01)
Diluted loss per share
$
(0.00)
$
(0.01)
Basic
169,133,450
160,869,561
Diluted
169,133,450
160,869,561
The accompanying notes are an integral part of these consolidated financial statements.
Auditor trail
ITEM 4.01. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
During the Company’s two most recent fiscal years and any subsequent interim period through to the date of the Company’s engagement of CATS, neither the Company nor anyone on its behalf, has consulted with CATS or any other auditor regarding any accounting or audit concerns, including, without limitation, those stated in Item 304(a)(2) of Regulation S-B.
PZC audited the Company’s financial statements for the fiscal years ended December 31, 2011 and 2010 and PZC’s reports are included in the Company’s annual reports on Form 10-KSB for those periods. PZC’s reports on the Company’s financial statements for the fiscal years ended December 31, 2011 and 2010 or for any subsequent interim period did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
Comments & Business Outlook
CHINA WATER GROUP, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2011
2010
2011
2010
Sales
Third parties
$
137,189
$
95,073
$
259,898
$
241,010
Related parties
-
27,232
-
27,232
Total sales
137,189
122,305
259,898
268,242
Cost of sales
Third parties
71,578
51,893
156,133
144,311
Related parties
-
14,841
-
14,841
Total cost of sales
71,578
66,734
156,133
159,152
Gross profit
65,611
55,571
103,765
109,090
Operating expenses:
Selling and distribution expenses
36,841
49,584
109,274
109,246
General and administrative expenses
145,557
90,191
382,499
347,471
Total operating expenses
182,398
139,775
491,773
456,717
Loss from operations
(116,787)
(84,204)
(388,008)
(347,627)
Other income (expense):
Interest income (expense)
607
(69)
(3)
(311)
Gain on financial instruments
7,497
4,058
32,669
92,061
Other income (expense)
(3,341)
3,532
(5,337)
(16,254)
Total other income
4,763
7,521
27,329
75,496
Loss before income taxes
(112,024)
(76,683)
(360,679)
(272,131)
Provision for income taxes
907
2
1,391
419
Net loss
(112,931)
(76,685)
(362,070)
(272,550)
Less: net loss attributable to noncontrolling interest
(9,580)
(7,429)
(28,578)
(32,685)
Net loss attributable to China Water Group, Inc.
$
(103,351)
$
(69,256)
$
(333,492)
$
(239,865)
Basic loss per share
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
Diluted loss per share
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
Weighted average number of common shares outstanding
Basic
169,133,450
139,383,450
166,409,091
139,383,450
Diluted
169,133,450
139,383,450
166,409,091
139,383,450
Comments & Business Outlook
CHINA WATER GROUP, INC.
Consolidated Statements of Operations
For the Years Ended
2010 2009
Sales
Third parties $ 258,796 $ 1,260,729
Related parties 66,625 -
Total sales 325,421 1,260,729
Cost of sales
Third parties 161,389 435,505
Related parties 55,953 -
Total cost of sales 217,342 435,505
Gross profit 108,079 825,224
Operating expenses
Selling and distribution expenses 133,310 164,755
General and administrative expenses 632,748 1,245,073
Total operating expenses 766,058 1,409,828
Loss from operations (657,979 ) (584,604 )
Other income (expense)
Interest income (expense) (368 ) (174 )
Gain (loss) on financial instruments 107,016 (107,265 )
Other income (expense) (12,521 ) (51,014 )
Impairment loss on goodwill
(7,499,608
)
-
Total other income (expense) (7,405,481 ) (158,453 )
Loss before income taxes (8,063,460 ) (743,057 )
Provision for income taxes 420 120,298
Net loss (8,063,880 ) (863,355 )
Less: net loss attributable to noncontrolling interest (59,970 ) (71,012 )
Net loss attributable to China Water Group, Inc. $ (8,003,910 ) $ (792,343 )
Basic loss per share $ (0.06 ) $ (0.00 )
Diluted loss per share $ (0.06 ) $ (0.00 )
Weighted average number of common shares outstanding
Basic 139,383,450 139,383,450
Diluted 139,383,450 139,383,450
Deal Flow
On the September 30, 2011 , Guangzhou Xinchen Water Co., a subsidiary of the Registrant and China Construction Bank Co., Ltd. Guangzou Liwan Sub-branch, concluded
RMB 15 Million ($2.37 Million USD) loan agreement (the “Loan Agreement”). The Loan Agreement specifies the loan term as three years commencing from October 9, 2011, a variable loan interest rate of equal to the benchmark interest rate of People 's Bank of China as in effect from time to time (currently 6.65%) plus 15% resulting in a current rate of 7.65%, The proceeds of the Loan Agreement will be used for the Registrant’s working capital needs to expand its bottled water operations.
