Item 4.01. Changes in Registrant’s Certifying Accountant.
On July 16, 2014, the Company has elected to not re-engage Kabani and Co., Inc. (“FORMER AUDITOR”) as its independent registered public accounting firm effective as of such date.
The Company has not appointed a new independent registered public accounting firm. The Board of Directors of the Company approved the foregoing dismissal.
The report of FORMER AUDITOR with respect to the Company’s financial statements for the fiscal years ended April 30, 2013 and April 30, 2012 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles.
Except as set forth below, during the fiscal years ended April 30, 2013 and April 30, 2012 through the effective date of FORMER AUDITOR’s termination there were no disagreements between the Company and FORMER AUDITOR on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of FORMER AUDITOR, would have caused FORMER AUDITOR to make reference to the subject matter of the disagreements in connection with its report on the Company’s financial statements. As a result of the United States Department of Justice indictment against Dickson Lee, the FORMER AUDITOR has requested that management of the Company provide the FORMER AUDITOR with an updated management representation letter covering its prior audits. The FORMER AUDITOR has not received such representation letters as of the date hereof.
Item 8.01 Other Events.
On March 27, 2014 the United States Department of Justice unsealed an indictment against L&L’s then Chairman and Chief Executive Officer, Dickson Lee, charging him with securities fraud. Mr. Lee resigned from the Company, effective April 2, 2014. The Department of Justice subsequently amended the previous complaint to include L&L Energy, Inc. as a defendant with Mr. Lee, formally arraigning the Company on May 22, 2014. The Company has pleaded not guilty. It expects that the Superseding Indictment will have a material negative impact on its business, financial condition, and results of operations.
On April 30, 2014 the GeoTeam released the third part of a series of new reports on original evidence used in LLEN investigations, shared with you in the public interest.
The Reality Of L&L Energy’s Hong Xing And DaPuAn Coal Washing Facilities
In today’s report, Part Three, GeoInvesting continues publication of the extensive evidence underlying our September 19, 2013 report accusing L&L Energy (LLEN) of making massive misrepresentations in its SEC filings. Also in today’s report we share new allegations and evidence regarding LLEN’s undisclosed shutdown of the Hong Xing and DaPuAn coal washing facilities.
Please see remainder of report here.
On April 22, 2014 the GeoTeam released the second part of a series of new reports on original evidence used in LLEN investigations, shared with you in the public interest.
GeoInvesting Investigation Shows How A Government Official Confirmed L&L Energy Fabricated Revenues From Its ZoneLin Coking Plant
In today's report, Part Two, GeoInvesting continues publication of the extensive evidence underlying our September 19, 2013 report accusing L&L Energy (LLEN) of making massive misrepresentations in its SEC filings. The public has never seen this evidence, which we shared privately with the SEC, NASDAQ, and LLEN�s terminated independent legal counsel Mr. Mark Bartlett, in order to give them time to conduct their own investigations.
Please see the remainder of the report here.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
On April 8, 2014, L & L Energy, Inc. (the “Company”) notified the NASDAQ Stock Market (the “NASDAQ”) of its intention to voluntarily delist its common stock from the NASDAQ. The Company intends to file a Form 25 with the Securities and Exchange Commission on or about April 18, 2014 to effect the voluntary delisting of its common stock from the NASDAQ. The official delisting of the Company’s common stock will become effective approximately ten days thereafter.
The Company anticipates that its common stock will trade on the OTC Markets, although there can be no assurances that any trading market for the Company’s common stock will exist, and the liquidity of such trading market may be limited.
On April 8, 2014, L & L Energy, Inc. (the “Company”) notified the NASDAQ Stock Market (the “NASDAQ”) of its intention to voluntarily delist its common stock from the NASDAQ. The Company intends to file a Form 25 with the Securities and Exchange Commission on or about April 18, 2014 to effect the voluntary delisting of its common stock from the NASDAQ. The official delisting of the Company’s common stock will become effective approximately ten days thereafter.
On April 8, 2014 the GeoTeam released the first part of a series of new reports on original evidence used in LLEN investigations, shared with you in the public interest.
GeoInvesting Publishes Evidence On L&L Energy: Canaries In LuoZhou And LaShu Coalmines
Our new series of reports will likely be the closest investors will ever come to knowing the truth about L&L Energy (LLEN).
In today's report, Part One, GeoInvesting begins publication of the extensive evidence supporting our September 19, 2013 report focusing first on the LuoZhou and LaShu coalmines. The public has never seen this evidence. We shared the evidence with the SEC and NASDAQ over six months ago in order to give the securities regulators time to conduct their own investigations. The evidence not only supports our finding that LLEN has misrepresented its ownership in the LuoZhou and LaShu mines, but also proves that LLEN fabricated the production from these two mines to inflate its financials.
SEATTLE, April 8, 2014 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company with energy (coal) operations in China, today announced that it has notified the NASDAQ Stock Market, LLC ("NASDAQ") of its intention to voluntarily delist its common stock ("LLEN") from the NASDAQ.
On November 18, 2013, NASDAQ placed a T-12 trading halt on L&L's common stock. On March 27, 2014, the Department of Justice and the Securities Exchange Commission announced charges against Mr. Dickson Lee, L&L's former Chairman and CEO. Mr. Lee pleaded not guilty to all charges. Counsel for Mr. Lee commented, "We deny these allegations completely. These charges stem from very old claims that occurred in 2008 and early 2009. At that time, this was a very small company that was just starting to experience substantial growth." Due to the pending charges, Mr. Lee has resigned from his positions as L&L's Chairman and CEO, effective April 1, 2014.
The Company's Board of Directors has voted to submit an advanced notification to NASDAQ of the Company's decision to voluntarily delist its common stock from the NASDAQ. The Company intends to file a Form 25 with the Securities and Exchange Commission ("SEC") on or about April 18, 2014 to effect the voluntary delisting of its common stock from NASDAQ. The official delisting of the Company's common stock will become effective approximately ten days thereafter. The Company anticipates that the Company's common stock will trade on the OTC Markets, although there can be no assurances that any trading market for the Company's common stock will exist, and the liquidity of such trading market may be limited.
The Company will continue to file periodic reports with the SEC pursuant to the requirements of Section 12(g) of the Securities Exchange Act of 1934, as amended.
Independent Directors, Mr. Jingcai Yang and Dr. Syd Peng, along with members of the Company's Executive Management team, will visit multiple L&L offices in China this coming week to meet with joint venture partners and staff to discuss both the short term and long term transition of the CEO position and future strategic plans. The Board will continue to update the Company's shareholders as more material information becomes available.
Please see our full report here.
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 1, 2014, Mr. Dickson V. Lee, Chief Executive Officer (“CEO”) and Chairman of the Board of Directors (“Chairman”) of L & L Energy, Inc (the “Company”) notified the Company’s Board of Directors that he is resigning his position as CEO and Chairman, effective immediately. Mr. Lee resigned for personal reasons and not due to any disagreement with the Company. On March 27, 2014, the United States Department of Justice unsealed an indictment against Mr. Lee. Mr. Lee has pleaded not guilty to the charges brought forth against him.
L & L ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED JANUARY 31 2014 AND 2013
For The Three Months Ended January 31,
For The Nine Months Ended January 31,
COST OF REVENUES
OPERATING COSTS AND EXPENSES:
Salaries & wages-selling, general and administrative
Selling, general and administrative expenses, excluding salaries and wages
Total operating expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE):
Interest income (expense)
Other income(expense), net
Loss on debt settlement
Total other income (expense)
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES
PROVISION FOR INCOME TAXES
INCOME FROM CONTINUING OPERATIONS
Income attributable to non-controlling interests
Income attributable to L & L
Gain on disposal
Net income from discontinued operations attributable to non-controlling interests
Net income from discontinued operations attributable to L & L
TOTAL INCOME FROM DISCONTINUED OPERATIONS
Net income attributable to non-controlling interests
Net income attributable to L & L
OTHER COMPREHENSIVE INCOME:
Foreign currency translation gain (loss)
Comprehensive income attributable to non-controlling interests
Comprehensive income attributable to L & L
INCOME PER COMMON SHARE – basic from continuing operations
INCOME PER COMMON SHARE – basic from discontinued operations
INCOME PER COMMON SHARE – basic
INCOME PER COMMON SHARE – diluted from continuing operations
INCOME PER COMMON SHARE – diluted from discontinued operations
INCOME PER COMMON SHARE – diluted
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – basic
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - diluted
SEATTLE, March 17, 2014 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S. based company with coal mining and distribution businesses in China, announced today that its Special Independent Committee ("SIC" or the "Committee") has appointed Mr. Nicholas Chen, Managing Partner at Pamir Law Group, to replace Mr. Mark Bartlett.
Mr. Chen is a well-known international lawyer with substantial cross border experience working in the US, China, and Taiwan. His firm, Pamir Law Group, is an international law and consulting firm based in Asia with offices in Beijing, Shanghai and Taipei. Pamir's multilingual professionals represent clients in a broad range of industries, including multinational Fortune 100 companies. Previously, Mr. Chen was a partner in several US based global law firms. Mr. Chen is US citizen with a B.A from Yale University and a J.D. from New York University School of Law. He is fluent in both English and Mandarin.
Mr. Jingcai Yang, SIC Chairman and former senior executive for the world's largest coal company, Shenhua Group, commented, "I want to thank Mr. Bartlett for his work thus far in assisting the committee. However, I look forward to the unique skill set that Mr. Chen will bring. He is a very accomplished international attorney with strong legal and business acumen dealing specifically in Asia. His language capabilities and tremendous understanding of the Chinese business environment will be important assets to the Committee as we look to complete our investigation as timely as possible."
SEATTLE, Jan. 14, 2014 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company with energy (coal) operations in China, today announced that the Company's Special Independent Committee (the "Committee") has selected Ernst & Young Advisory Services Limited ("EYASL") to support its independent investigation. Management also provided an update on its communications with NASDAQ.
Engagement of Ernst & Young Advisory Services Limited
On September 20, 2013, the L&L Board of Directors formed a Special Independent Committee to conduct a review of the allegations made by the short seller blog released on September 19, 2013. Mark Bartlett of Davis Wright Tremaine ("DWT") was retained by the Committee as its legal counsel. The Committee authorized DWT to engage EYASL to conduct independent forensic investigative procedures, which will assist the Committee's investigation into the short seller allegations.
Management Provides Update on Communications with NASDAQ
On November 18th, NASDAQ's staff placed a T-12 trading halt on L&L's common stock pending requests for additional information. The Company has responded and L&L's senior management met with NASDAQ officials at their offices in Rockville, MD onJanuary 6th. During the meeting L&L's Chief Financial Officer, Mr. Ian Robinson, shared information from his recent visit to Hong Xing and meetings with customers. The Company will continue to be in regular communication with NASDAQ.
Second Quarter 2014 Financial Results
L&L's Chief Financial Officer, Ian Robinson, commented, "The second quarter of fiscal 2014 was challenging, as we responded to inaccurate and defamatory attacks on our company and reputation. We formed a special committee of independent board members to review the allegations and have provided them with detailed documentation to refute the claims. On November 18th, NASDAQ placed a T-12 temporary trading halt on our stock pending a request for additional information. The Company has responded to the request and continues to be in steady communication with NASDAQ. L&L shares will remain halted until NASDAQ completes their review of the information provided."
Robinson continued, "In spite of our challenges, we continued strong execution of our coal operations and expansion of our clean energy initiatives. On target growth of our coal mining production continues to deliver good operational results. However a onetime non-cash charge reduced our net income by $6.1 million to $1.4 million for the quarter. During the second half of fiscal 2014, we remain committed to our growth plans which include acquiring additional mining operations, expanding our wholesaling business, pursuing new clean energy projects, and completing our TDR listing."
SEATTLE, Nov. 20, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with profitable energy (coal) operations in China, announced that on Tuesday it received a formal request from NASDAQ for additional information. On Monday, November 18, 2013, NASDAQ placed a T12 temporary trading halt on L&L's common stock. NASDAQ informed the Company that trading will remain halted until L&L has satisfied NASDAQ's request for additional information. The Company has been in steady communication with NASDAQ and now that we have received the request will move as quickly as possible to fulfill it to their satisfaction.
On 1/13/2012 we published our first article on LLEN regarding our opinion that the company was misrepresenting its alleged ownership claims in one of its mining assets , the Ping Yi Mine. We followed this report with a series of other updates that further explained more of LLEN’s issues and additional meaningful misrepresentations made by the company. Here is the chronology and evolution of our research and due diligence on the company:
Who Really Owns the Ping Yi Mine: L&L Energy (LLEN) or a Private Chinese Investment Group?
Conclusive Proof that L&L International (LLEN) Does Not Own the Ping Yi Mine
Transcripts Provide Conclusive Proof that L & L Int (LLEN) Never Purchased the Ping Yi Mine
True Owner and Legal Representative of the Ping Yi Mine Speaks Out to Expose L&L Fraud
GeoInvesting Blows the Whistle on L&L Energy
SEATTLE, Nov. 14, 2013 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company with a profitable energy (coal) operations in China, today management has provided a point-by-point rebuttal to the false and misleading GeoInvesting article posted on SeekingAlpha on September 19, 2013.
The Company is focused in particular on refuting two (2) allegations made by GeoInvesting. The first relates to L&L's ownership and operational status of the Hong Xing coal washing facility ("Hong Xing"). The second relates to the November 2012 transaction in which L&L transferred its ownership interests in the DaPing Coal mine and Zonelin Coking facility to Union Energy, in exchange for the LuoZhou and LaShu Coal mines. A full list of the allegations with responses is provided at the end of this response.
1. Hong Xing Washing Facility Ownership and Operational Status:
The allegation that Hong Xing was closed in 2012 is false. L&L confirms that Hong Xing operated during the entire fiscal year endedApril 30, 2013. The Company temporarily suspended operations at Hong Xing in July 2013 in order to redirect corporate cash flow to its coal wholesale business. Hong Xing last processed 12,124 tons in June 2013 and 13,449 tons in May 2013. L&L has produced invoices, payroll records, cash disbursement, receipts, and other documentation that clearly demonstrate that the facility was open during the entire period in question.
The GeoInvesting article also attempts to draw the conclusion that Hong Xing was not operating by citing low tax payments to the Second Branch of Shizong County Local Tax Bureau ("the Second Branch"). The Second Branch serves a local county jurisdiction and is not responsible for national tax collections. The Second Branch is a county tax agent that is only responsible for the county's special surcharges and taxes, including local education and construction surcharges. These surcharges are generally small. The article misrepresents that this local agency is responsible for collecting all taxes owed by Hong Xing. Hong Xing pays sales and income taxes to the proper national and provincial Chinese authorities.
The Company has made all relevant Hong Xing tax filings for sales and taxes, as well as a copy of Hong Xing's most recent SAIC filings available to the Board and the Committee. Investors should note that State Administration Tax records, not SAIC filings, are the proper tax documents reviewed by independent auditors in conjunction with annual audits.
Contrary to GeoInvesting's claim, China's tax information is normally not made publicly available by local tax bureaus. The Second Branch indicated to L&L in writing that it refused requests for Hong Xing tax filings from an unidentified party in the relevant period. The Company questions the credibility of the claims in the article that refer to any Hong Xing tax records. The Company produced the written statement from the Second Branch indicating the attempted unauthorized access of confidential tax records.
Finally regarding Hong Xing, GeoInvesting's article attempts to question the validity of L&L's reported results by confusing the ownership structure of Hong Xing and other coal washing plants used by the Company. During the period in question, L&L owned two (2) washing facilities, DaPuAn and Hong Xing. Hong Xing is owned via a subsidiary, Tai Fung. Tai Fung also has access to a third party washing facility, HunTai. Tai Fung generates coal washing revenue both from Hong Xing and HunTai. During fiscal 2013, Hong Xing/Tai Fung represented approximately 20% of consolidated total company sales, not 39% as alleged by GeoInvesting, while HunTai/TaiFung represented approximately 19% of Company sales. Both facilities in total represented 39%, GeoInvesting's claim of 39% is wrong.
Although the Company has previously disclosed this ownership structure, the article claims that L&L's description of its growth is inconsistent with this revenue structure, and is thus misleading. In fact, during the fourth fiscal quarter conference call on July 31, 2013, L&L management discussed coal washing results in the context of year-over-year comparisons. Coal washing production did in fact increase "modestly" year-over-year from 434,000 tons in FY 2012 to 474,000 tons in FY 2013.
2. LouZhou and LaShu Mine Acquisitions:
The second major allegation focuses on the November 2012 transfer of the DaPing Coal Mine and Zonelin Coking facility to Union Energy, in exchange for the LuoZhou and LaShu Coal Mines. Effective on November 18, 2012, L&L transferred cash, its 60% ownership in DaPing mine, and its 98% interest in Zonelin to Union Energy in exchange for a 95% interest in the LuoZhou and Lashu mines. An independent audit firm rendered a fairness valuation report on the transaction, in addition to the Company's auditors approval. L&L produced for the Board and the Committee the fully executed acquisition agreements, the fairness valuation report, and other documents verifying the transaction.
Despite attempts by GeoInvesting to confuse the relationship between L&L and Union Energy, the partnership is in fact straightforward and fully disclosed. Over time, L&L has joint-ventured with Union Energy in owning and operating the LuoZhou, Lashu and Weishe mines. The Company elected to continue using the Union Energy's name for those mines because of its strategic value: First, Union Energy has developed great goodwill by operating a number of mines in the area. Second, as a named consolidator, any mine affiliated with Union Energy has complied with the provision in the Guizhou Province's consolidation policy that encourages smaller mines in similar geographic areas to be affiliated with larger mining companies that possess an annual production capacity of 1-2 million tons. Union Energy is a reputable company in the region. The fact L&L opted to not change the name of the mines or signage at the mines has no bearing on the validity of L&L's ownership rights.
L&L has acted to comply with the law governing coal mine consolidation in Guizhou province, yet GeoInvesting's allegations demonstrate their fundamental misunderstanding of this policy, and Chinese business practice in general. Union Energy still owns DaPing Mine, but to satisfy administrative requirements under the Guizhou coal mine consolidation policy, DaPing is affiliated with another ownership group in the same region. This affiliation arrangement is purely administrative, and has no influence on ownership rights or the economic benefits that will accrue to Union Energy.
The allegation is false that Zonelin was torn down and not operational prior to L&L's transfer of ownership to Union Energy. Zonelin produced 21,042 tons during the second quarter of FY2012 (ended October 31, 2012) and 3,392 tons during the 18 days L&L owned Zonelin in November 2012. The Company has produced documentation to substantiate this production, as well as a satisfaction letter from Luoping National Tax Bureau stating all taxes owed by Zonelin as of December 2012 were paid. In addition to the licenses, equipment, and other intrinsic value of Zonelin, Union Energy informed L&L that it collected government subsidies and tax credits as part of a government program to improve coking plants in the region. This activity took place subsequent to the transfer of ownership to Union Energy.
Summary of GeoInvesting Allegations and L&L Responses.
The list below summarizes the false GeoInvesting's allegations, and L&L rebuttal to refute the allegations;
1) "LLEN's Hong Xing Coal Washing Factory, accounting for 39% of fiscal 2013 revenues, has been shut down since 2012."
As noted above, L&L produced for its Board and the Committee invoices, payroll records, cash disbursement, receipts, and other documentation that clearly demonstrate that the facility was open during the entire period in question. As explained above, GeoInvesting's 39% was wrong.
2) "Hong Xing did not file or pay any taxes to the Shizong County Local Tax Bureau..."
As noted above, this bureau serves a local (county) jurisdiction and is not responsible for national tax collections. The Company produced to the Board and the Committee all relevant tax filings for sales and national taxes, as well as a copy of its most recent SAIC filings. The Shizhong (National) State Tax Bureau issued a satisfaction letter to L&L on October 25, 2013 stating that all taxes have been paid and Hong Xing is in good standing.
3) "On July 31, 2013, the LLEN management team falsely claimed in its fiscal 2013 earnings conference call '...we've been trending up modestly on the coal washing side...'"
As noted above, during this conference call L&L management correctly discussed coal washing results in the context of year-over-year comparisons. Coal washing production did in fact increase "modestly" year-over-year from 434,000 tons in FY 2012 to 474,000 tons in FY 2013.
4) "LLEN's purportedly revenue producing Zonelin Coking Plant was shuttered and demolished a few months prior to LLEN's claimed$12.4M sale/exchange of Zonelin Coking Plant."
The allegation that Zonelin was torn down and not operational prior to L&L's transfer of ownership to Union Energy is false. Zonelin produced 21,042 tons during the second quarter of FY2012 (ended October 31, 2012) and 3,392 tons during the 18 days L&L owned Zonelin in November 2012. The Company has produced documentation to substantiate this production, as well as a satisfaction letter from Luoping National Tax Bureau stating all taxes owed by Zonelin as of December 2012 were paid. In addition to the licenses, permits, and other intrinsic value of Zonelin, Union Energy informed L&L that it collected government subsidies and preferential treatment as part of a government program. This activity took place subsequent to the transfer of ownership to Union Energy.
5) "The government mandated decision to shut down the Zonelin Coking Plant was first issued on June 6, 2012. On September 10, 2012, the demolition was scheduled."
As early as June 2012 the Ministry of Information and Technology of the People's Republic of China declared its intent to encourage cleaner and more efficient production at smaller coking plants. The allegation implies that Zonelin was torn down in September and not operational prior to L&L's transfer of ownership to Union Energy is false. Union Energy has informed L&L that parts of the facility have been torn down pending further evaluation. This happened after L&L transferred ownership to Union Energy. Union Energy also informed L&L that it collected government subsidies and preferential treatment as part of the government program.
6) "LLEN does not own the Hong Xing Coal Washing Factory according to officially chopped (sealed) SAIC records."
As noted above, GeoInvesting does not know Hong Xing is owned by L&L via a subsidiary, Tai Fung. Tai Fung generates coal washing revenue from Hong Xing and a third party facility, HunTai.
7) "Officially chopped SAIC filings show that neither Union Energy nor LLEN own the DaPing mine and Zonelin Coking Plant."
GeoInvesting is not aware that in order to satisfy administrative production requirements under the Guizhou Provincial coal consolidation policy, DaPing is administratively affiliated with another ownership group in the region. Regarding Zonelin, L&L has produced documentation to affirm its ownership prior to the November 18, 2012 transfer. Our partner, 2% owner, and listed legal representative for Zonelin�prior to its transfer�was Mr. Laozhong Yang. As the law allows, the SAIC filing bears the name of Mr. Yang. (Mr. Yang is also the Company's local partner in the Hong Xing Washing Plant.) The Company cautions investors to understand that in China, legal representatives can be cited in SAIC filings even if they are not the owners of a company.
8) "The demolition of the Zonelin Coking Plant prior to its alleged swap to Union Energy casts doubt on LLEN's acquisition of the LuoZhou and LaShu mines..."
As noted above, Zone Union Energy has informed L&L that parts of the facility have been torn down pending further evaluation. The Company has produced documentation to substantiate production before the transfer in November 2012 as well as documents to substantiate its transfer of ownership to Union Energy.
9) "The Chinese government assigned the right to consolidate the DaPing mine to another company (not Union Energy)..."
As noted above, in order to satisfy administrative production requirements under the Guizhou Provincial coal consolidation policy, DaPing is administratively affiliated with another ownership group in the region. Union Energy is located in North Guizhou.
10) "Current SAIC filings show that Union Energy owns the LuoZhou and LaShu mines."
As noted above, L&L has joint-ventured with Union Energy in owning and operating the LuoZhou, LaShu and Weishe mines. L&L produced to the Board and the Committee the fully executed acquisition agreements, a fairness letter, and other documents verifying the transaction. Union Energy is a strong, reputable company in the region and the current ownership structure allows the Company to enjoy the benefits of their brand while reducing mining risks to the Company. The fact L&L opted to not change the name of the mines or signage at the mines has no bearing on the validity of L&L's ownership rights. If GeoInvesting only reviewed the SAIC filings, it would not understand the ownership structure.
11) "Interviews of Union Energy management who all repeatedly assert that, while they are familiar with LLEN, Union Energy, not LLEN, is the owner of the LuoZhou and LaShu mines."
L&L does not know the identity of the "Union Energy management" who made these assertions, but the Company acknowledges that some employees outside of the senior leadership at Union Energy may have misunderstood the ownership structure and misrepresented it to GeoInvesting. As noted above, L&L has joint-ventured with Union Energy in owning and operating the LuoZhou, LaShu and Weishe mines, and the mines continue to enjoy partial ownership by Union Energy and signage and other outward indications of Union Energy's participation in the ventures. L&L produced for the Board and the Committee the fully executed acquisition agreements, a valuation fairness letter, and other documents verifying the transaction.
12) "Articles in local PRC newspapers and official government websites clearly show that Union Energy, not LLEN, acquired and owns the LaShu and LuoZhou mines."
As noted above, L&L has joint-ventured with Union Energy in owning and operating the LuoZhou, LaShu and Weishe mines. Local websites indicate the name of Union Energy because the Company, for strategic reasons, has decided not to change the name of the mines when L&L acquired them. L&L produced for the Board and the Committee the fully executed acquisition agreements, a valuation fairness letter, and other documents verifying the transaction.
13) "Signage apparently recently erected at both mines bears Union Energy's name, not LLEN's."
As noted above, L&L elected to continue using the Union Energy name for those mines because of its strategic value. The Company believes that Union Energy has developed much goodwill by operating or affiliating with a number of mines in the area. As a named consolidator, any mine affiliated with Union Energy has complied with Guizhou Province's consolidation policy.
14) "Union Energy's participation in the Guizhou provincial mine consolidation process is ongoing and well documented. Union Energy was assigned to acquire the LuoZhou and LaShu mines in March 2013 and just finalized the acquisition of mining rights for both mines in August 2013."
Union Energy owned both LuoZhou and LaShu since 2011. In November 2012, the L&L acquired controlling interest in both mines from Union Energy. The announcement in August 2013 that GeoInvesting cites mischaracterizes a purely administrative announcement that approved a backlog of previously filed mining right assignments including LuoZhou and LaShu. This was done after the government finalized parts of the consolidation policy and issued a letter to the mines in June 2013.
15) "The nominee who claimed to hold LLEN's equity ownership in the DaPuAn mine and SuTsong mine is an individual who appears not to exist."
Mr. Jun Han's identification number was improperly recorded when filed with the local business registration office. Mr. Han's correct identification number is 530102 1959 1104 2119.
16) "LLEN made a misrepresentative statement regarding the legal status of the DaPuAn mine and SuTsong mine."
Again, GeoInvesting is not familiar with China laws, nor understands fully our company's subsidiaries. Thus, GeoInvesting confused the Company's legal structure, and status. The law of Yunnan Province changed in the past requiring the sole proprietorship ownership of DaPuAn Mine to be owned by a legal entity, a one-man company that is not available in the US. In addition, in China, the law allows a legal person to represent an entity as an agent of the real owner, which is not also available under the US law. Accordingly, the ownership of DaPuAn Mine was changed from a sole proprietorship to Shizong Hengtai Coal Mining Co, Ltd. L&L later entered an agreement with the legal person of Shizong Hengtai Ltd; Mr. Laozhong Yang, who is our local partner, after DaPuAn Mine was renamed. In the agreement signed by Shizong Hengtai and L&L on June 21, 2012, it confirms that L&L owns 80% of the equity of Shizong Hengtai Coal Mining Co., Ltd. The Company produced for the Board and the Committee appropriate documents supporting the name changes, including fully executed agreements and legal opinions from the large, reputable law firm; (Beijing) DaCheng Law Firm.
SEATTLE, Nov. 12, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company with profitable energy (coal) operations in China, today provided an update regarding its investigation into the allegations posted by GeoInvesting in an article on SeekingAlpha on September 19, 2013.
The L&L management team has authored a detailed report that refutes each allegation made by GeoInvesting. The report includes fully executed acquisition agreements, legal opinions, and supporting documents including fairness valuations reports, tax filings, invoices, receipts, payroll records, SAIC filings, and correspondence, to rebut the allegations. The Company has made the report and all documentation available to its Board of Directors (the "Board") and the Board's Special Independent Committee ("the Committee").
Upon evaluation by the Committee, the report and related documentation will be disclosed to the general public.
In evaluating the allegations presented by GeoInvesting, L&L cautions investors to consider the motives of all parties involved. L&L is a Seattle based company governed by the laws of the United States, overseen by a Board of Directors consisting of leaders in the industry. L&L has made significant investments in China over past the 18 years, which have leveraged Chinese economic growth in order to create shareholder value. In contrast, GeoInvesting is a small firm actively engaged in suspicious short-selling. It publishes what L&L believes to be defamatory reports, using false identification and deceptive tactics to collect misleading information. L&L believes that its report to the Committee fully refutes GeoInvesting allegations, and looks forward to disclosure the report to the public in due time.
L&L management will continue to focus its resources on building a world class energy company, via acquiring additional mining operations, expanding wholesaling business, pursuing new clean energy projects, and completing its TDR listing.
SEATTLE, Oct. 28, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable energy (coal) operations in China, today announced that it signed a strategic marketing agreement with Guizhou Zheshang Coal Group ("Zheshang"). Under the agreement, L&L will utilize its extensive customer network to market coal produced by Zheshang. L&L will be responsible for customer relationships, transportation and logistics, while Zheshang will be responsible for mining production, and mine safety. The partners are targeting sales of approximately 1.2 million tons of coal per year.
Zheshang is a privately held company located in Guizhou with 10 mines that produce approximately 2 million tons per year. Zheshang is currently expanding their targeted annual production to 5 million tons.
Walter Lin, L&L Vice President of China Operations commented, "L&L is pleased to work with Zheshang Coal Group again, building on previous successful partnership efforts. Given the large size of the agreed tonnage, L&L and Zheshang will scale its sales up in phases. With expected prices around $115 or RMB714 per ton, the financial impact will be significant. L&L is continuing to build an extensive sales and distribution capability, and with this supply agreement we will meet customers demand beyond our own production capacity."
SEATTLE, Oct. 15, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the Company"), a U.S.-based company with profitable energy (coal) operations in China, and seeking to expand into China's clean and environmental initiatives, is pleased to announce entry into an agreement with WanYuan Environmental Protection Ltd. ("WanYuan") for broad based business initiatives. WanYuan is a Chinese sewage treatment company with a track record of over ten years of experience and processing capacity approximating 200 thousand tons per day. WanYuan seeks to expand into clean energy initiatives while also raising its capacity to 500thousand tons per day. L&L intends to partner with WanYuan to assist their growth through a combination of access to the China Low-Carbon Industry Investment Center ("CLCIIC"), western-style management, and fund raising from Chinese banks and international sources.
Dickson Lee, Chief Executive Officer of L&L Energy Inc., commented, "L&L put an early emphasis on coal washing, which has reduced sulfur and other emissions in the regions we operate. We look forward to applying those same principles with the CLCIIC project and WanYuan. As China continues to put more emphasis on clean energy and renewables, we believe WanYuan's model for leveraging China's need for renewable sewage facilities will be an attractive opportunity for us and our partners moving forward. This is a strong but measured first step in increasing our footprint in the industry and bringing value to our CLCIIC relationship."
Haichao Wang, Chief Executive Officer of WanYuan, added, "L&L is the perfect partner for us as we expand beyond environmental remediation and into cleaner energy sources. L&L's business relationships and US expertise will enable both companies to capitalize on exciting new market opportunities."
On October 7, 2013 L&L Energy (LLEN) issued yet another misrepresentative press release, in which the company tried to attribute nearly half of its fiscal 2013 coal-washing revenue to a second previously undisclosed facility that LLEN refers to as “TaiFung”.
Never, in any of LLEN’s public filings, is there any mention of a TaiFung coal washing facility.
Please see our entire article here.
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SEATTLE, Oct. 7, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with energy (coal) operations in China, today released additional information to refute the recent defamatory article by short-seller firm, GeoInvesting. In addition to contracts, legal opinions and other supportive evidence already produced, the Company has collected additional documents refuting allegations that its Hong Xing's coal washing facility ("Hong Xing") was shut down since 2012 and produced no revenue. The Company has collected the following documentation and explanatory material, which will be also shared with the proper authorities.
In addition, GeoInvesting's allegation that they "sent [a] representative to visit the Shizong County Local Tax Bureau, Second Branch [and t]he local tax bureau confirmed that the Hong Xing Coal Washing Factory paid less than RMB 30,000 to the Shizong County Local Tax Bureau," fundamentally misrepresents how Chinese tax collections operate. Hong Xing pays taxes to the proper Chinese authorities for its sales. The Shizong County Local Tax Bureau, Second Branch ("Second Branch") is a county tax agent that is only responsible for the county's special surcharges and taxes, including local education and construction surcharges. The surcharge amount is generally small.
Furthermore, L&L believes that the Second Branch refused to give any information to GeoInvesting's investigators. A certification received from the Second Branch states that it recently rejected a request from an unknown party to review Hong Xing's data. The requesting party failed to provide proper identification.
L&L will provide all relevant documentation, including the Second Branch's certification, to the proper authorities.
It’s been 13 days since we published our “Whistle Blower” report on LLEN when we presented several pieces of evidence to support our opinion that LLEN has been misrepresenting its operations to investors. The National Business Daily (“NBD”), a national financial newspaper in China, published an article that confirmed some of our findings. This article will continue to address details around LLEN issues and summarize a followup article published by NBD that continues to confirm our evidence. But first we think its imperative to expand on a topic we touched upon regarding a highly dilutive debt for equity exchange transaction.
Please see our entire article titled,"Huge Undisclosed Dilution and Further Misrepresentation in L&L Energy’s Response to GeoTeam’s Findings" here.
SEATTLE, Sept. 27, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable energy (coal) operations in China, today announced that several members of its management and Board of Directors are increasing their ownership of L&L shares. The Company believes that the increase in share ownership demonstrates the collective commitment by management and the board to the success of L&L. The increase also demonstrates their belief that the Company's shares are significantly undervalued.
Mr. Dickson Lee, the Company's Chairman and Chief Executive Officer, recently took possession of 750,447 shares of company stock previously pledged as collateral for a personal loan, a transaction by Mr. Lee that required a cash outlay of over $1 million. This transaction was disclosed in a Form 4 filing with the SEC yesterday. Mr. Clayton Fong, Vice President of US Operations, has agreed to take company shares in lieu of cash salary. Finally, several board members have agreed to take a substantial portion of their director fees in the form of equity rather than cash. L&L directors' cash fees include $80,000 annually per director, where directors may substitute equity for any percentage of their cash fee. Two directors have elected to receive their entire board fee in equity.
Mr. Lee commented, "Our Board of Directors and management team are confident in our business strategy and outlook, and believe the shares are significantly undervalued in the wake of the recent short-seller allegations. All of our key senior people are increasing our stake in the Company, at a real cash cost to ourselves, in order to fully demonstrate our commitment to L&L. Our interests are fully aligned with our shareholders, since our financial success hinges on the value of Company shares as well. We look forward to fully putting to rest the unfounded short-seller accusations in the near future, and refocusing on capturing the exciting growth opportunities in front of us."
SEATTLE, Sept. 25, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable energy (coal) operations in China, today reaffirmed its ownership of the Luozhou and Lashu Mines and clarified previously released statements that responded to allegations made by short-sellers.
In November 2012, L&L acquired a 95% equity stake in the Luozhou and Lashu Mines. L&L accomplished this by purchasing 95% interests in two Union Energy subsidiaries, Guizhou Union Energy Shun Da Inventory and Transport Corporation and Guizhou Union Energy WuZhou Energy Development Corporation, which previously owned 100% interest in both of the respective mines.
In a press release dated September 24, 2013 the Company stated that in the Company's SEC Form 10-K for fiscal 2013, "the Company clearly states that it acquired the mines by purchasing equity interests in Union Energy subsidiaries." The release goes on to state that "the Company completed the acquisition by obtaining a 95% equity interest in two entities, 'Guizhou Union Energy Shun Da Inventory and Transport Corporation', the owner of LuoZhou Coal Mine and 'Guizhou Union Energy WuZhou Energy Development Corporation', the owner of LaShu Coal mine."
To clarify the statement quoted above the 10-K only discloses that the Company did complete the acquisition by purchasing 95% interest in both the Luozhou and Lashu mines from Union Energy through an equity ownership transfer agreement. The additional disclosure of the names of the two Union Energy subsidiaries were made to respond to short sellers questioning of L&L's ownership of mines that do not bear L&L's name. Retaining the name of Union Energy, our joint venture partner and a reputable and well-connected mining group in the region, on our operating businesses in no way influences L&L's ownership rights.
SEATTLE, Sept. 24, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable energy (coal) operations in China, announced today that management has produced key documents to the special committee of independent directors to repudiate the short seller allegations posted by GeoInvesting.
The GeoInvesting report alleges that L&L does not own the LuoZhou and LaShu mines. The claim hinges on the fact that the mines are owned by an entity not named "L&L Energy." In the company's SEC Form 10-K report for the year ended July 31, 2013, the company clearly states that it acquired the mines by purchasing equity interests in Union Energy subsidiaries. The Company completed the acquisition by obtaining a 95% equity interest in two entities, "Guizhou Union Energy Shun Da Inventory and Transport Corporation", the owner of LuoZhou Coal Mine and "Guizhou Union Energy WuZhou Energy Development Corporation", the owner of LaShu Coal mine. The Company supplied to its independent board committee the following documents: the equity acquisition agreement; a supplement that explains the deal structure; a Proof of Purchase Status document stating that L&L fulfilled its payment obligations under the agreement; and a legal opinion from DaCheng Law Offices that confirms L & L's controlling interest in the LuoZhou and LaShu mines. Similarly, allegation 7 purports that SAIC filings show that neither Union Energy nor L&L own the DaPing mine and ZoneLin Coking Plant. The Company has provided to its committee both the original and translated versions of the Acquisition Agreement of DaPing Coal Mine, and an original copy of the ZoneLin Acquisition Agreement.
The Company is still collecting all relevant documents and is making progress in delivering evidence to the committee of independent board members. The committee is to examine all information with a critical eye and formulate their independent opinion to the public in due time.
SEATTLE, Sept. 20, 2013 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable energy (coal) operations in China, today announced that it has formed a special independent committee to conduct a review of the allegations made by the GeoInvesting blog released yesterday.
The special committee is chaired by Mohan Datwani, Chair of the Audit Committee and independent director. Mr. Datwani, an experienced attorney, was formerly a partner of a large international law firm. Three other Independent Directors have also been appointed to the special committee: Joe Borich, a career federal official and former US Consul General to Shanghai under the US Embassy to China, Dr. Syd Peng, PhD., a world renowned underground mining expert, and Jingcai Yang, former senior executive for the world's largest coal company, Shenhua Group.
Mark Bartlett of Davis Wright Tremaine ("DWT") has been retained by the committee as legal counsel. Mr. Bartlett formerly served as a First Assistant U.S. Attorney with the U.S. Department of Justice for nine years.
The special committee will conduct an independent and thorough review of the allegations in the GeoInvesting blog and intends to make the appropriate disclosures to shareholders promptly upon completion of the review. Further, the special independent committee will instruct the Company on further legal matters.
L&L Energy (LLEN) purports to be an American company engaged in producing, processing, and selling coal in the People's Republic of China with vertically-integrated operations that include mining, washing, wholesale, and distribution. GeoInvesting is preparing to file a whistle-blower report to the NASDAQ and SEC that will accuse L&L Energy of defrauding investors by booking substantial revenue from operations that have been idled for quite some time. GeoInvesting also believes that LLEN's string of acquisitions and divestitures of various properties over the last few years amounts to a bait and switch shell game where it claimed to come into possession of assets through swap transactions that never occurred through the exchange of assets it never owned in the first place. Most notably, we will show that revenue of $77.6 million disclosed in LLEN's 2013 10K, generated from its Hong Xing coal washing factory, was actually close to zero, if it is not actually zero.
Please see our entire report first viewed by our Premium Members here.
SEATTLE, Sept. 16, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable energy (coal) operations in China, announces that it has reached a strategic agreement with the China Low-Carbon Industry Investment Center ("CLCIIC"), a China national investment platform approved by the China State Council, to jointly develop new energy initiatives in Beijing City, China's national capitol.
China is one of the world's largest energy markets and accounts for more than half of worldwide coal consumption. CLCIIC was created with support from the (China) National Development Bank, and the National Development and Reform Commission ("NDRC"). L&L is the first US company to partner with CLCIIC to help it to fulfill its mission of environmental protection and energy savings.
In particular, CLCIIC has invited L&L to build new energy projects using low-carbon & new energy technology on CLCIIC's land located at an industrial park in Zhuozhou City, Hebei Province, approximately 30 miles from the center of Beijing City. One project plans to use advanced technology to convert waste and produce methanol blend gasoline. Other projects will address waste removal and incineration, sewage treatment, and the reduction of air pollution, in particular, the reduction of sulfur dioxide and nitrous oxide emissions in coal fired plants. In the future the flagship projects should be replicable to all 30 provinces in China. L&L used its wholly owned subsidiary, Repulse Bay Inc., to execute the Beijing agreement.
Managing Director of CLCIIC, Zhang ZouYu, commented, "I'm very pleased to work with L&L Energy, an outstanding US energy company with a fully committed management team to start this Beijing project." Mr. Zhang continued, "L&L's in-China experience will be critical to ensure a smooth operational jump start into our new and clean energy initiatives in Beijing. L&L can also help recruit additional US energy companies to help balance environmental protection, while meeting China's growing energy needs."
Dickson Lee, CEO of L&L Energy, Inc., commented: "With our hard work and preparation since 2012, and the recent opening of ourBeijing office in 2013, we are excited to enter this partnership with CLCIIC, an energy investment arm of the China State Council. Together we will start our clean energy business in North China, while L&L also maintains its traditional energy (coal) operations in South China. We look forward to having profitable Beijing operations in the future."
First Quarter 2014 Financial Results
"The first quarter of fiscal 2014 was one of progress and growth for L&L," stated Clayton Fong, Vice President of US Operations for L&L Energy. "Coal production increased significantly, revenue grew impressively, and we improved profitability as we rework our mix of business toward more profitable segments. Our balance sheet remains strong. We will further enhance our ability to fund growth with our upcoming Taiwan Depository Receipt listing. We believe we are poised for meaningful success in the quarters ahead."
SEATTLE, Aug. 21, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable coal operations in China, today provided an update on its Taiwan Depository Receipt ("TDR") project.
TDR Application to be Submitted in September 2013As previously announced, KPMG has completed and issued unqualified opinions on L&L's FY 2012 and 2011 financials, and is in the process of completing its review of L&L's recently filed FY2013 financials. Taishin Securities, L&L's underwriter, is on schedule to complete the necessary documents for the TDR issuance.
Management expects to submit the formal TDR application to the Taiwan Stock Exchange ("TSE") in September 2013.
Potential Dividend in Connection with TDR ListingL&L has noted that companies listed on the TSE generally issue cash dividends each year. Management is currently in discussions with Taishin and legal counsel on how to best adopt a dividend policy, which would apply to all LLEN shareholders including the US shareholders. Management expects further discussion with shareholders on this important issue at L&L's 2013 Annual General Shareholders meeting on September 16 in Seattle, WA.
L&L Director and Audit Committee Chairman, Mohan Datwani, commented, "We have received solid support from the business community in Taiwan to pursue this TDR issuance. The Company and management have long history and business background inTaiwan. I believe this is attributed to Mr. Lee's philanthropic deed to Chung Yuan Christian University in Taiwan, and Company's commitment to grow its business in Taiwan. Two business newspapers have recently published interviews highlighting L&L's TDR project and business plans in Taiwan. The interview articles are available on the Company's website."
SEATTLE, Aug. 19, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable coal operations in China, provided a strategic update on acquisitions, management and operations.
L&L Forms Strategic Partnership to Execute Large AcquisitionAs discussed on January 31, 2013, the Company's Board of Directors have decided focus on acquiring large mining operations inNorth China with annual production of over 1 million tons. Over the past few months L&L's internal due diligence team, led by L&L Directors Dr. Syd Peng and Mr. Jingcai Yang, have identified two large operating mines (the "Targets") in North China that fit L&L's criteria for production, safety, and efficiency.
While the Company believes its valuation is undervalued, management is pursuing additional resources to bring value to its shareholders. L&L is pleased to announce it has formed a strategic alliance with previously announced partner Tianjin Fuhao, a subsidiary of Tianjin Materials and Equipment Company, one of China's largest enterprises ("Tianjin") and a private logistic company in Beijing to complete an acquisition of one of L&L's Targets. (See link on L&L's website for information on Tianjin.)
Tianjin, with its financial strength, will contribute the majority initial funding needed to acquire a Target. L&L in return operate and pre-sell coal from the Target to Tianjin once L&L secures controlling interest. The private logistics company will also provide additional funding and benefit from future transactions.
Dickson Lee, L&L Chairman & CEO commented, "With such a strategic alliance in place, I feel confident we will execute an acquisition of a large mining operation before the end of the calendar 2013. We have been working to identify a mutually beneficial project with Tianjin Fuhao since August of 2011 and I look forward to utilizing all three parties' resources to benefit from this acquisition."
James Schaeffer Joins L&L Management Team Mr. Schaeffer, current L&L Advisory Board Member, will join L&L's management team as a Director of Operations, helping the Company evaluate new energy opportunities in the US as management believes US operations would improve LLEN's visibility and shareholder value. Mr. Schaeffer is an experienced executive with thirty years of mining and exploration experience in both the US and Asia. He was formerly President of John T. Boyd's China operations, and a CEO of a Hong Kong energy company. Mr. Schaeffer holds an MBA from University of Pittsburgh, and is a member of the American Society of Mining, Metallurgy and Exploration.
L&L to Dispose Hong Xing Washing Facility The Hong Xing Washing facility is L&L's smaller coal washing plant located in Shezone County, Yunnan Province ("Hong Xing"). Over the past few months L&L management decided to wind down operations due to increased needs to capital expenditures. Management has decided Hong Xing will not be accretive to L&L in the long run and has stopped Hong Xing's washing operations.Hong Xing facility is to be sold or disposed to an interested buyer as soon as possible.
SEATTLE, July 30, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced its financial results for fiscal year 2013, ended April 30, 2013.
Fiscal Year 2013 Highlights:
"Our fiscal 2013 year was one of strong organic and acquisitive growth," commented L&L Vice President and Director, Clayton Fong."Our two newly acquired mines, Luozhou and Lashu, were able to ramp up their production ahead of schedule contributing 167,000 tons to the Company's mining segment in a little over 5 months. With the addition of L&L's Weishe mine, which produced approximately 143,000 tons during FY2013, the Company anticipates its three Guizhou mines to produce 1.2 million tons by 2015."
Fong continued, "Luozhou and Lashu have been wonderful additions to our mining portfolio. We have been pleased with their organic expansion thus far and look forward to expanding both mines, as well as our Weishe mine, to their designed capacities."
SEATTLE, Aug. 15, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable coal operations in China, today announced that it has settled $5,000,000 in debt and trade payables, removing these obligations from its balance sheet in exchange for the issuance of shares of its common stock and freeing up cash flow for the Company to execute its wholesale growth with Datang International Power Group ("Datang").
On May 15, 2013, the Company signed an updated contract to provide one million tons of coal to a member of Datang, one of the five primary power generators in China. Since then, the Company's strategic focus has been to execute the Datang contract, aside from pursuing other strategic initiatives.
The Company, with the free up of cash flow, intends to accelerate the execution of the Datang relationship and further build out its distribution network in South China. L&L currently has three rail loading and blending facilities strategically located to source coal from a broad area. L&L's senior management is also exploring with Datang the leverage of its US network to further reduce coal pollutants in the power generation process.
Mohan Datwani, Independent Board Member of L&L, commented, "Being from Asia, Datang is a brand name. The transaction with Ironridge Global IV, Ltd., an overseas passive investor, came at an opportune time as historically low August coal prices create a favorable opportunity for us to secure large quantities of coal. Further, we are in process of completing due diligence on a large mining operation with over one million tons of annual capacity in North China. The ability to free up working capital for acquisitions as well as capital expenditures for the expansion of our current operations will be important as we progress through our growth plans."
SEATTLE, Aug. 5, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with profitable energy (coal) operations in China, announced today that its Taiwan Depository Receipt issuance ("TDR") is moving forward on schedule. The TDR is to provide capital for L&L's growth, and in management's view, will be accretive to shareholders.
Last week, L&L held a joint kick-off meeting in Taiwan to discuss strategy and ensure a coordinated TDR effort among its underwriter, Taishin Securities ("Taishin"), its auditor, KPMG (Taiwan), and its legal advisor, Chieh Yeh Law Firm, a prestigiousTaiwan firm. Following the kick off meeting, Taishin has begun analyzing the Company's energy market and customer portfolios, while KPMG is conducting its final independent review of the Company's audited financial statements ended April 30, 2013. KPMG has issued its unqualified opinions and endorsed L&L's 2012 and 2011 financial statements. The current timetable calls for clearing a prospectus and completing the TDR placement by the end of calendar 2013.
L&L Chairman and CEO Dickson Lee commented, "I am pleased with the TDR progress. As part of our due diligence Taishin brought to our attention that companies listed on the Taiwan Stock Exchange generally issue cash dividends each year. If L&L adopts Taishin's advice to issue an annual cash dividend, we are optimistic that the TDR could benefit all US shareholders. We will consider Taishin's advice as we move this project forward."
Full Year 2013 Results
"Our fiscal 2013 year was one of strong organic and acquisitive growth," commented L&L Vice President and Director, Clayton Fong. "Our two newly acquired mines, Luozhou and Lashu, were able to ramp up their production ahead of schedule contributing 167,000 tons to the Company's mining segment in a little over 5 months. With the addition of L&L's Weishe mine, which produced approximately 143,000 tons during FY2013, the Company anticipates its three Guizhou mines to produce 1.2 million tons by 2015."
The 5 mines L&L currently owns produced approximately 670,000 tons for FY2013. When fully expanded L&L's current mining operations are targeted to produce approximately 1.8 million tons. In the fourth quarter the Company's mining production, the primary driver of its earnings produced on target with 196,000 tons, however net income was reduced $1.9 million, or $0.05 per share, from a non-cash derivative expense due to a market valuation on a derivative per US accounting standards.
In addition to the Company's growth in South China, L&L announced earlier this year that it has begun to evaluate larger mining operations with over 1 million tons of annual production in northern China. These larger mines have inherently lower production costs and will allow L&L to grow its mining segment exponentially. L&L Directors, Mr. Jingcai Yang and Dr. Syd Peng have played integral roles in this due diligence process. L&L also relocated its headquarters to Beijing in April 2013.
L&L's wholesale segment also saw significant growth this year, securing a new large contract with Datang Power. The increase in volume allowed the Company to further build out its infrastructure, developing additional coal processing operations in Guizhou. Earlier this year L&L opened its second loading and blending station in Guizhou. The facilities at ShinPingBa and ZhaZhou are strategically placed to increase the Company's ability to source coal from a broader area.
L&L also signed a strategic agreement with Apollo Technologies a Taiwan based environmental remediation monitoring firm to explore joint ventures in clean coal projects in China.
SEATTLE, July 29, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced its preliminary financial highlights while the Company's auditor is finalizing its audit report. L&L
Preliminary Financial Highlights Year Over Year:
* the approximate non-cash $1.9 million loss or $0.05 reduction was due to a market valuation on a derivative per US accounting standards
L&L's Chief Financial Officer, Ian Robinson, commented, "We are pleased to share our preliminary financial highlights with our investors. We have demonstrated tremendous year-over-year growth and we look forward to releasing our final results in detail on, or before Tuesday, July 30, 2013. Management will also host a conference call to discuss our FY2013 results on Wednesday, July 31."
SEATTLE, June 24, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with profitable coal operations in China announces KPMG Taiwan ("KPMG") has completed its review of the Company's FY2011 and FY2012 audits in pursuance of L&L's Taiwan Depositary Receipt ("TDR") project.
Following April's engagement of KPMG, KPMG proceeded with its independent financial review of L&L's financial statements to comply with Taiwan Stock Exchange listing regulations. In the process, KPMG has conducted its necessary procedures including examining documents, interviewing managers, and reconciling balance sheets and income statements into the Taiwan GAAP standards. As of today, KPMG has issued draft review opinions on the previous two fiscal years. KPMG will release its final work after their review of L&L's current (FY2013) financial statements, which is scheduled to be completed at the end of July 2013.
L&L Chairman and CEO, Dickson Lee commented, "I am pleased that our TDR project is moving forward smoothly and on schedule. Working with KPMG and Taishin Securities has been a positive experience and I am looking forward to expanding upon the TDR project, when fully executed, to bring further accretive value to our shareholders."
SEATTLE, June 17, 2013 /PRNewswire/ -- L & L Energy, Inc. ("L&L" or the "Company"), a U.S.-based company with profitable energy (coal) operations in China, announced today that its common stock (NASDAQ: "LLEN") has been added to the Russell Global and 3000� Stock Indexes according to a preliminary list of additions posted by Russell Investments on June 14, 2013.
L&L's Chairman and CEO Dickson Lee stated, "We are very pleased that our stock will be included in the Russell Global and 3000 Stock Indexes. Our inclusion in these widely-referenced stock indexes will help increase L&L's visibility with institutional investors, as well as the overall liquidity and value of our shares.
SEATTLE, May 21, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable coal operations in China, is pleased to announce it has selected top tier Taiwan underwriter, Taishin (meaning New Taiwan) Securities Co, to underwrite L&L's Taiwan Depository Receipt (TDR) listing.
Following April's engagement of KPMG Taiwan (KPMG) to audit L&L's financial statements to comply with Taiwan Stock Exchange listing regulations, Taishin will act as underwriter to raise capital for the issuance in Taiwan.
Taishin Securities is a subsidiary of Taishin Financial Holdings (2887: Taiwan Stock Exchange). Taishin Financial Holdings also controls Taishin International Bank and Taishi Venture Capital, as well as 22% ownership of Chang Hwa Commercial Bank, the oldest commercial bank in Taiwan.
In conjunction with the Taiwan listing, L&L is expanding its Taiwan operations, including establishing business with Apollo Technology in clean (coal) energy business and exploring opportunities with China Development & Industrial Bank (CDIB) on international trade finance.
L&L Chairman and CEO, Dickson Lee commented, "I am pleased to secure strong partners such as Taishin and KPMG for ourTaiwan listing. Taishin team has demonstrated professionalism and support for our expansion into the Taiwan energy market. I look forward to working with Taishin to enhance LLEN shareholders value."
SEATTLE, May 15, 2013 /PRNewswire/ -- L & L Energy, Inc., (Nasdaq: LLEN) ("L&L" or the "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced today that it has signed an agreement to provide one million tons of coal to a Datang International Power Co. ("Datang") power plant.
In October of 2012, L&L signed a contract to provide 360,000 tons of coal to Datang's Heshan Power Plant in Guangixi over a 10 month period. Today, subsidiaries of L&L and Datang executed an updated contract to increase L&L's coal supply to one million tons a year. L&L began shipments to Datang under the original contract in January 2013. The increase of coal to Datang's Heshan Power Plant is an endorsement that important customers like Datang are satisfied with L&L's service and quality of coal.
In connection, earlier last year L&L secured its first coal processing facility at ShinPingBa rail station, Guizhou. In preparing for extended coal sales to Datang, L&L recently completed a new coal processing center at Zhazuo Rail Station, Guizhou. These facilities enable L&L to secure additional coal with coal blending and loading capability for further expansion.
L&L Chairman and CEO, Dickson Lee , commented, "Wholesaling coal to customers like the Datang, one of China's largest power generators, is an important driver to our growth. We look forward to further expanding our distribution network for additional revenue and bottom line growth."
SEATTLE, May 6, 2013 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with profitable coal operations in China, is pleased to announce the opening of its China headquarters in the capital city of Beijing.
With a grand opening and ribbon cutting ceremony held on April 22nd, L&L's new China headquarters located in Beijing's Coal Tower became operational. Staff in the new office have begun evaluating mines designed with annual production capacities of one million tons or greater. L&L Director and former CEO of Shenhua's largest subsidiary, Mr. Jingcai Yang, has been working with L&L management to identify operations that meet L&L's criteria for safety, management, and operational efficiency. L&L will further work with L&L Director Dr. Syd Peng and John T. Boyd Mining Consulting Co. of Pittsburgh, Pennsylvania to ensure acquisition targets meet international JORC standards. These initiatives are in line with L&L's Board of Director's announcement on January 31st to secure larger scale operations with safe operating histories.
The Beijing headquarters also houses L&L's recently established subsidiary, Beijing L&L Jiang Energy Technology Co. With the help of L&L Advisory Board member Dr. Che Ming Dao , an Ohio State University graduate and clean energy expert, L&L Beijing and Apollo Technology Inc. of Taiwan will jointly initiate projects to control coal emissions and remove environmental pollutants such as sulfur, nitrogen and mercury in China.
L&L Chairman and CEO, Dickson Lee commented, "I want to thank hard working L&L management team and Board members for making our Beijing office available quickly, which will facilitate our expansion to North China, and coordinate our Guizhou, Kunming and Taiwan operations. The new Beijing headquarters will create tremendous value by enhancing our connections with new, larger energy partners, and positioning the Company to better respond to the growing China energy need.
SEATTLE, May 2, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with profitable coal operations in China, announced today it has entered into a strategic partnership with Apollo Technology Co. of Taiwan ("Apollo") as its clean (coal) energy response to demands in China, the global leader in new investments into clean energy products.
The execution of the partnership is consistent with L&L's 2012 shareholders meetings mandate to expand business, in addition to seeking an alternative listing in a Taiwan Deposit Receipt (TDR) issuance.
Apollo is a top pollution control group in Taiwan with 60 technical staff. Apollo's expertise covers chemical engineering and environmental science which will help L&L to eliminate sulfur and nitrogen from the coal-fueled utility plants and to reduce CO2 in China. In its 18 years of operations, Apollo has executed approximately 200 large environmental improvement studies or pollution clean ups for customer such as Taiwan Power Co, Long Life Utility Co, Formosa Petroleum Co, and Taiwan's Environmental Protection Agency (EPA). Apollo's senior management is US educated and 70% of its team members are postgraduates, with 25 engineers holding US OHSA certifications.
L&L's Chairman and CEO, Dickson Lee , commented, "I am pleased to enter the first Taiwan business partnership with Apollo. Using the Apollo team and its experience, we will provide a basis to apply US clean energy technology in China and expand our business from before-combustion coal operations to after-combustion energy controls with our existing customers, such as Datang Utility, in response to the demands in China. I look forward to working with Apollo to meet the growing needs in China's coal-as-fuel industry."
SEATTLE, April 17, 2013 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with profitable coal operations in China, announced today that it has engaged KPMG Taiwan ("KPMG"), a big four accounting firm, to audit its financials for a potential Taiwan Depositary Receipt ("TDR") issue.
At L&L's Annual Shareholders Meeting on August 31, 2012, shareholders voted to pursue a secondary listing, or equivalent, on an Asian based exchange. L&L's Chairman and CEO, Dickson Lee , has had various discussions with Asian business leaders, including Mr. Lee Sush-Der, Chairman of the Taiwan Stock Exchange and has been encouraged by their support. Expanding L&L's business in Taiwan is a natural choice given its robust banking networks, proximity to China, western management practices, and increasing need for energy (coal).
Prior to acceptance of their appointment, KPMG conducted due diligence in Los Angeles with L&L's independent auditor, Kabani and Co. ("Kabani"), and interviewed L&L's management team in Seattle. KPMG will audit L&L's financial statements under applicable Taiwan Stock Exchange rules, including FY 2013 ended April 30, 2013. KPMG's audit will be for L&L's TDR efforts, while Kabani continues as L&L's US independent auditor.
The current low valuations on US stock exchanges attributed to companies with Chinese operations and increased funding costs, means it is strategically advantageous to use the TDR to raise funds to expand L&L's business, and to unlock shareholders' value and liquidity to an investor base familiar with China operations.
L&L's Audit Committee Chair, Mohan Datwani, Esq. , commented, "I am pleased that KPMG, a big four accounting firm, has agreed to audit our financials. Over the past eighteen months the Company has positioned itself well, achieving five consecutive quarters of top and bottom end growth, with our most recent quarterly EPS at $0.42 (3Q FY2012), making a solid financial case for a TDR issue."
Third Quarter 2013 Results
"Our third quarter results show five quarters of consecutive growth," commented Ian Robinson, Chief Financial Officer of L&L. "This quarter's strong earnings were bolstered by our two newly acquire mines, Luozhou and Lashu, ramping up their production ahead of schedule. The two new mines have reached their approved capacities and with all our mines fully operational, we were able to surpass our record earnings and production numbers from last quarter."
Mr. Robinson continued saying, "Our wholesale segment also recorded solid growth this quarter as L&L increased shipments to Datang Power under the previously increased contract, signed in October 2012."
L&L's Vice President and Director Clayton Fong summarized, "Last quarter, the five mines we currently own produced at an annual rate of 900,000 tons. Organically they are targeted to grow 100% between now and 2015. We also expect significant growth in our wholesale and washing operations in the next few years. That growth could increase even higher with a few additional acquisitions. We continue to look at opportunities in Guizhou province and have begun looking at even larger mines in Sanxi and Inner Mongolia. With our business running well, I am very pleased how well positioned we are. The future is bright
Updates Shareholders on Operations
Guizhou Expansion Ahead of Schedule
In November 2012, L&L acquired two newly built mines in the Guizhou Province. The Luozhou and Lashu mines added 34.2 million tons of reserves and, when fully expanded, will add 750,000 tons of annual production to L&L's mining segment. Today the Company is pleased to announce that both new mines are producing ahead of schedule and as a result, L&L expects strong sales and profit for the third quarter ended January 31, 2013. These two mines, along with L&L's Weishe mine, will exceed the one million ton annual production minimum outlined under the Guizhou coal consolidation policy.
L&L's Expansion to Shanxi and Inner Mongolia
With a strong and expanding operational base established in Guizhou in both wholesale and mining, L&L's Board has decided to speed up the evaluation of larger coal operations in the Shanxi and Inner Mongolia Provinces located in North China. Having already undergone a consolidation, the remaining mines in Shanxi and Inner Mongolia have larger production capacities and safer operating histories. L&L will be targeting mines with over one million tons of annual capacity.
L&L Director, Mr. Jingcai Yang will guide the due diligence process, accessing his robust coal network. Mr. Yang was formerly the Chairman & CEO of the Shendong Coal Corporation, Shenhua's largest coal subsidiary. Recently, L&L relocated its China headquarters to Beijing, which will provide additional support to the due diligence process. Shanxi and Inner Mongolia are the number one and two coal producing provinces in China.
L&L Chairman and CEO, Dickson Lee commented, "Over the 18 years of L&L's operations, we have continuously expanded and upgraded our portfolio to improve scalability, safety, and technology. Our South China operations create a solid base for our mining segment and we will work with Mr. Yang, Dr. Syd Peng , and other partners to evaluate new opportunities in Shanxi and Inner Mongolia."
SEATTLE, Jan. 17, 2013 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced that its Board of Directors (the "Board") will meet in Sanya, Hainan Island , China on January 25, 2013 for four days of strategic planning.
In the current fiscal year beginning May 1, 2012, L&L has demonstrated material growth both in sales and earnings. As of the October 31, 2012, the Company has seen four consecutive quarters of increased production, net income and earnings per share, which was a result of the Company's efforts to upgrade its mining portfolio and grow its wholesale segment. L&L increased business with one of China's largest end users, Datang Power and expects sales to steadily grow over 2013. The Company was also able to acquire two newly built mines with 34.2 million tons of reserves.
As the Company begins 2013, the Board has called a strategic planning session in China to asses L&L's expansion opportunities for the coming year. Over the four days, Directors will discuss acquisitive and organic growth of L&L's current operations in mining and wholesale, as well as additional opportunities in Northern provinces, specifically L&L's expansion of its Beijing operations. The Board will also focus on a potential dual listing in Asia, as the Company's common stock may see stronger sponsorship among Asian investors and financial market intermediaries. Last fall L&L shareholders voted to give management and the Board discretion to explore dual listing L&L's common stock on an exchange that would provide stronger valuations.
L&L's Chairman and CEO, Dickson Lee commented, "We have demonstrated our ability to execute in the world's fastest growing economy and our robust corporate ambition has provided many opportunities going forward. As my resolve and passion has, and always will be for growth and shareholders benefit, I called for this Board of Directors meeting to discuss these opportunities in depth. I appreciate the Board's commitment and look forward to four intensive and productive days. "
Item 3.02 Unregistered Sales of Equity Securities
The registrant entered an agreement with a private, accredited investor in January 2013 to sell 505,780 shares of its restricted LLEN common stock, with warrants, for $875,000 in cash. The warrants are exercisable for three years to purchase 111,271 shares of its restricted LLEN common stock with a $2.10 exercise price. The agreement pursuant to which the investment was made gives the investor piggyback registration rights on any registration statement declared effective within six months. It also gives the investor the option to participate in up to 10% of certain future PIPE transactions for three years.
Second Quarter Highlights:
"We have seen four consecutive quarters of increased production, net income, and earnings per share," commented Ian Robinson, Chief Financial Officer of L&L. "Currently our newly acquired Luozhou and Lashu mines are producing. These two, along with Weishe, will be organically expanded to produce, in aggregate, approximately one million tons of coal annually when fully expanded."
Mr. Robinson continued saying, "In addition to our expansion in mining, we have also continued to grow our wholesale operations. In October we inked a new contract with Datang Power International, one of China's largest energy producers, to provide 360,000 tons of coal over the next 10 months to one of Datang's power plants. In September, GuangYeh, a local sales company, was rolled under L&L's Tai Fung subsidiary to expand our wholesale capacity in Yunnan. It is expected to substantially grow its coal sales over the next year. "
L&L's Vice President and Director Clayton Fong summarized, "We saw consistent production growth in our mining and continue to increase our foothold as a wholesaler in China. This quarter's coal mining production was our best ever. We are on track for a record year in coal production, which is the primary driver of our earnings."
SEATTLE, Dec. 4, 2012 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced on Monday that the United States District Court, Western District of Washington ("the Court") at Seattle granted the Company's motion to dismiss the class action lawsuit (Mills vs. L&L Energy, Inc., Case No. C11-1423RSL) filed against L&L and several of its officers and directors.
The lawsuit was based on internet reports published by short sellers. L&L denied the accusations contained in these reports. In the lawsuit, L&L and the other defendants filed a motion with the court to dismiss the plaintiffs' complaint, which was granted on the grounds that the plaintiffs failed to adequately allege a violation of federal securities law. While the plaintiffs may seek the court's permission to file an amended complaint, the following comments from the judge were favorable to L&L:
"The record suggests that the plaintiff does not have the necessary evidence of intentional falsehood and loss causation: he has already had two opportunities to amend the complaint and some of the deficiencies identified in this order have been apparent from the outset. The court is loath to grant leave to amend where the particulars of the amendment are unknown and the existing record suggests futility."
L&L's Chairman and CEO, Dickson Lee commented, "We are very pleased with the court's favorable ruling supporting L&L's motion to dismiss. I congratulate management's discipline to fight the false accusations while remaining focused on growing the company and shareholder value. I believe that L&L is better positioned and is to becoming a leader in the coal sector of a growing Chinese economy."
SEATTLE, Nov. 19, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable coal operations in China, announced today its completion of acquisitions of the LuoZhou and LaShu mines, nearby its existing Weishe model mine under its consolidation strategy in Guizhou Province.
Following preliminary agreement and due diligence, L&L is pleased to announce a $37.1 million acquisition of 95% of both mines from Union Energy, satisfied by a cash outlay of approximate $1.7 million and transfers of the Company's interests in Zonelin Coking Plant (98%) and the DaPing Mine (60%).
The two mines contain some 34.2 million tons of low sulfur, high BTU, anthracite coal reserves. Already at trial coal production, the LuoZhou mine will move from an annual production rate of 200,000 tons to 450,000 tons by the end of 2013. LaShu will similarly move from 150,000 tons to 300,000 tons over time. With the production capacity of its existing Weishe mine of 150,000 tons moving to 500,000 tons over time, L&L anticipates a production rate of 500,000 tons within 2013 and to beyond 1 million tons over time.
These acquisitions leverage on government's consolidation, in the context of the Company's US management style and technology, to attract opportunities for the Company to expand and upgrade its coal assets through acquisition of larger and cost effective mines, including thus far, three of Union Energy's seven mines.
L&L's Chairman and CEO, Dickson Lee, commented: "We completed the transaction to build coal reserves, increase production capacity and increase EPS for our shareholders." Mr. Lee goes on: "By leveraging on L&L's publicly listed platform in the USA and global management capability, we continue to work closely with Union Energy to realize the full potential of its mine portfolio. We also have a pipeline of other opportunities and strategic assets in China."
SEATTLE, Nov. 9, 2012 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced that its Chairman and CEO, Dickson Lee, has loaned the Company $1 million to fund expansion of operations in China.
Mr. Lee's $1 million loan to the Company will be used to enhance L&L's logistical capabilities, which will increase the Company's capacity to fulfill larger contracts, such as the 360,000 ton contract recently signed with Datang Power, one of China's largest utilities.
Mr. Lee commented, "My confidence in L&L's success has never been higher. I am happy to loan the Company my personal funds, now and in the future if needed, to fuel its growth in way that minimizes dilution to our shareholders."
SEATTLE, Nov. 5, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with track record of profitable coal operations in China, announced that it has entered into a strategic project agreement with Taggart (Beijing) Engineering Ltd. ("Taggart"), an affiliate of Taggart Global, to jointly expand each other's coal businesses in China.
Taggart Global, a US based firm located in Pittsburgh, Pennsylvania, is known for innovative engineering and construction of environmental friendly coal washing and loading plants. Taggart's advanced coal preparation facilities have increased coal processing efficiency for their customers, including Anglo Coal, Peabody, and Shenhua. Taggart's China sales primarily include state owned mining operations, as most private mining operators lack economy of scale for Taggart's specialized washing and blending facilities. However, the coal quality produced from such technology is key for large end users, such as Datang Power.
Under the agreement, L&L, an American based coal company with coal mining resources and a logistics platform in China, will jointly build facilities with Taggart, utilizing each other's advantage to mutually expand their coal businesses.
Dickson Lee, L&L Chairman & CEO, commented, "I am very pleased with the signing of this strategic alliance. Our Board of Directors, led by Mr. Jingcai Yang, has shown great leadership and teamwork developing this relationship. The partnership with Taggart will enhance L&L's ability to bridge small coal mines and large end users, further improving our wholesale and logistics platform in line with our consolidation strategy."
SEATTLE, Oct. 22, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announces that it expects to finalize the acquisition of two new mines, the LuoZhou Mine ("LuoZhou") and LaShu Mine ("LaShu"), in the next 30 days.
Both LuoZhou and LaShu are newly constructed mines located in HeZhang County, Guizhou Province China, near L&L's Weishe Mine. The two mines produce low sulfur, high BTU, anthracite coal with approximately 34.2 million tons of combined coal reserves. LuoZhou has 27 million tons of reserves and in accordance with the newly adopted mining standards set by government, has completed its trial production. It is anticipated to produce at an initial annual rate of 200,000 tons in December, ramping up to its approved rate of 300,000 tons per year over the subsequent months. LuoZhou is targeted to expand to 450,000 tons by the end of 2013. LaShu is starting its trial production process and will initially produce at a rate of 150,000 tons per year and ramp up to its approved rate of 300,000 tons. Both mines are currently owned by Union Energy ("Union"), a partner of L&L.
Union owns a portfolio of 7 mines in HeZhang County. As disclosed earlier, Union wishes to diversify its mining portfolio and to expand its customer base with L&L. L&L's acquisition of approximately 90% controlling interest in LuoZhou and LaShu will be structured as an equity interest swap for L&L's coking coal mine and its Zone Lin coking facility. Details of the swap are being reviewed by advisers and the transaction is expected to be completed within 30 days. Subject to final valuation, L&L may issue cash and/or a small amount of LLEN shares to Union as additional consideration under the swap.
SEATTLE, Oct. 18, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a five-year track record of profitable coal operations in China, is pleased to announce today it has signed an updated contract to sell 360,000 tons of coal to Datang International Power Co. ("Datang"). Datang is one of China's largest power generators.
On October 15, 2012, L&L entered into a contract with Datang to increase its coal supplied to 360,000 tons through September 2013. The contract is timed for the higher demand over the winter season and firming of coal prices in the region. L&L will begin shipments this month, ramping up to a targeted 37,000 tons per month in early 2013. L&L satisfied Datang's stringent vendor qualification process and delivered a trial shipment in June. The updated contract is a realization of the company's consolidation and distribution strategy, with emphasis on building business relationships with major coal players in China. Datang also noted L&L's strong logistics network, particularly its access to limited railroad capacity in the region which helps ensure timely deliveries to the Company's customers.
L&L's Chairman and CEO Dickson Lee commented, "I am pleased with this new contract, which is another step in cementing our relationship with Datang. We look forward to supplying more coal to Datang beyond this contract."
SEATTLE, Oct. 1, 2012 /PRNewswire/ -- L & L Energy, Inc., (Nasdaq: LLEN) ("L & L" or the "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced that its recently acquired GuangYeh operation contributed its first month of sales as coal prices begin to firm in September.
New Coal Sales from GuangYeh Operation
L & L's GuangYeh operation contributed its first sales during September. Approximately 6,000 tons of coal was sold for $ 0.65 million at $108 per ton. Sales from GuangYeh are anticipated to grow to $19 million over the next year, as discussed in L & L's September 5th news release.
Coal Prices Firming
Coal prices and demand have begun to firm as the fall and winter approach. Traditionally, L & L's coal sales prices see a 7-10% swing from the summer lows to winter peaks. The sales price for L & L thermal coal bottomed in August and has steadily increased from the beginning of September.
L & L Chairman and CEO, Dickson Lee, commented, "We are pleased with how quickly GuangYeh completed its first deliveries. Moreover, with the firming of prices and anticipated increasing demand for coal, we expect that L & L sales will exceed that of the first quarter. These developments are a realization of our consolidation strategy, and in parallel the Company is expanding its complimentary distribution."
First Quarter 2013 Results
"Our production and net income are up substantially on both a year-over-year and quarter-on-quarter basis," commented Ian Robinson, Chief Financial Officer of L&L. "The rebound that began in the fourth quarter is expected to accelerate as our Weishe mine, which recently passed its final safety inspection, ramps up production."
Mr. Robinson continued, "We anticipate seasonal improvement to coal sale prices moving forward, driving further revenue and earnings growth. Our efforts to expand our wholesale business are producing solid results. We remain optimistic that these initiatives, in combination with our continued focus on consolidation opportunities in Guizhou Province, will produce long-term shareholder benefits."
SEATTLE, Sept. 5, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company with a five-year track record of profitable coal operations in China, has acquired the existing operations of GuangYeh Coal Sales Co. ("GuangYeh").
GuangYeh, an owner-operated sales company, has historical annual coal sales of 68,000 tons to various steel factories in Yunnan Province. Sales have been on a cash-at-delivery basis. Lacking the resources to expand, and recognizing L&L's unique platform and infrastructure, GuangYeh rolled its entire business, sales orders, customer base, and staff into L&L's Tai Fung subsidiary in Kunming in August 2012. The owner of GuangYeh joins the L&L's sales team, and GuangYeh's coal wholesale license will be sold. With L&L's brand name and infrastructure, the acquired operation is expected to grow 250% to 180,000 tons in the first year. Under the terms of the agreement, GuangYeh's former owner and staff can receive a performance bonus when sales and profit reach a predetermined target.
Dickson Lee, L&L's Chairman & CEO, commented, "The acquisition of a sales-focused company such as GuangYeh is an effective way to expand our business. The transaction bolsters our coal sales and logistical personal and is in line with our growth plan. As a part of strategy to expand our sales and distribution business, we intend to acquire other coal sales companies, bringing in additional sales and profits to our operations."
L&L Energy is well-positioned for growth in the coming year, and we have very attractive opportunities created by the dynamic marketplace in China. I am excited about the future of our Company and believe the anticipated growth will result in significant shareholder value improvement.
Positioned for Growth
Despite setbacks in the first three quarters of the fiscal year, we have successfully enhanced our operations and recruited great talent, while continuing to report solid net earnings.
Improved Mine Portfolio – We have been upgrading our portfolio of mines to reflect the new realities of China's regulatory environment. Our acquisition of the Weishe mine is a great reflection of our strategy moving forward. Rather than focusing on smaller, inefficient mines like Ping Yi, which we divested during the fourth quarter, we are now pursuing larger and better-designed mines that meet and exceed the new safety and production regulations. This strategy will allow us to reduce capital expenditures while ramping production more rapidly.
Full message from Chairman
investors should be aware that in a release LLEN issued this morning, Dixon Lee did not discuss key details included in an 8K filed in the prior evening highlighting the resignation of a Director of the company..
LLEN PR Newswire Press Release Excerpt:
Letter From Dennis Bracy, Director of LLEN Excerpt (Exhibit 4)
Dear L&L Board Members:
I am writing in response to the company’s 8-K notice to the SEC concerning my resignation from the Board of Directors. I disagree with the company’s characterization of events.
The purpose of this letter is to set the record straight.
My resignation was the final step in a long, frustrating experience centered around Dickson Lee, Chairman and CEO of L&L. The company he founded has the potential to be very successful financially, while setting a high standard for safety and environmental performance. It has the potential.
Unfortunately, Dickson Lee operates as if L&L were his own private fiefdom, not a NASDAQ-listed public company. For Dickson, good governance apparently is a low priority, more or less a waste of time and money.
SEATTLE, Aug. 13, 2012 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a Seattle-based company with a track record of profitable coal operations in China, completed its annual on-site investor tour in China. This year's site visit focused on the Company's growth in Guizhou Province under its consolidation strategy. In attendance were investors representing institutions from both the U.S. and Asia, including affiliation with a blue-chip Hong Kong-listed company.
On August 10, the site visit began at L&L's Guiyang headquarters with a management meeting and presentation on the Company's expansion. Following the presentation, investors visited L&L's loading and storage space at ShinPingBa and GuangShunYuan Mining Co.'s 33-acre site, where L&L plans to co-develop a coal washing, blending and storage facility. On August 11, management led a tour of the Weishe mine, which was designated as a model mine by the HeZhang County government and recently received final approval for full coal production.
"Hosting a site visit enables investors to see the size of our operations firsthand and gain greater insight into our robust business," commented Dickson Lee, L&L's Chairman and CEO. "We will continue our strong communication with our shareholders at the upcoming annual general shareholders meeting on August 31, where shareholders will elect L&L's directors for the coming year. I will also issue a Chairman's Message in the next few days summarizing our past year and giving insight going forward."
SEATTLE, Aug. 6, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or the "Company"), a U.S.-based company with a track record of profitable coal operations in China, announced today that it has entered a strategic agreement with GuangShunYuan Group Mining Co. ("GSY") to expand the Company's wholesale and logistics operations in China.
GSY is a large, privately owned, integrated coal supplier based in Guizhou Province. It operates twenty-six (26) coal mines that have 7.5 million tons of coal mining capacity annually. GSY also has a wholesale network handling 1.6 million tons of coal annually, as well as chain stores selling coal related machinery and equipment. The agreement allows L & L to access GSY's vast mining resources and assist in securing additional coal from GSY. In return, GSY can leverage L & L's existing business relationship with Datang International, one of the largest utility companies in China.
Furthermore, L & L will work with GSY to develop a new coal washing, blending, and wholesale facility on 33 acres of GSY land, located near the ZhaZuo Railway Station, a key rail access point in Guizhou. GSY also operates a loading facility next to L & L's ShinPingBa loading station. The new strategic rail terminal, in addition to L & L facilities at ShinPingBa, will boost L & L's capabilities to serve additional large-scale customers.
Dickson Lee, L & L's Chairman and CEO, commented, "We are delighted to reach this strategic partnership with GSY. By leveraging on GSY's vast mining assets, we have demonstrated our innovative ability to expand business effectively with less capital investment. Moving forward, we plan to develop a joint venture with GSY to accelerate our revenue and profit growth."
Full Year 2012 Results
"Our efforts have resulted in a surge in production the last quarter of the fiscal year," commented Dickson Lee, L&L's Chairman and Chief Executive Officer. "With the success we've seen from the Weishe mine ("Weishe") acquisition, we are pursuing opportunities to acquire larger and more modern mine operations. To that end, we are currently focused on Union Energy's LuoZhou Mine, which recently began trial production."
Mr. Lee continued, "While we execute our consolidation strategy in Guizhou Province, we are aggressively pursuing the expansion of our wholesale operations in the region. Smaller mine operators, often unable to meet the demands of larger coal purchasers, provide an opportunity for us to aggregate coal supplies in our wholesale operation, meeting the requirements of major customers such as Datang International. Partnerships, like the one we have established with AVIC Sichuan, will also enable us to further strengthen this business segment by increasing our logistics network. I believe fiscal 2013 will be an impressive year of growth and improving shareholder value for our Company."
SEATTLE, July 23, 2012 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: LLEN) ("L&L"), a Seattle-based company with a five-year track record of profitable coal operations in China, announced that it recently signed a Letter of Intent ("agreement") with AVIC Sichuan Coal Logistics Co., Ltd. ("AVIC Sichuan") of Chengdu City, to jointly explore business opportunities in China.
Under the agreement, AVIC Sichuan agrees to share its resources including its customer base, logistics network, financial capabilities, and market intelligence, with L&L. The initial strategic partnership focuses on two large markets of Chongqing City (population 28 million), and Chengdu City (population 14 million).
AVIC Sichuan is headquartered in Chengdu City, one of the most important economic, and transportation centers in western China. It operates primarily in Sichuan Province, one of the most populous provinces in China and adjacent to L&L's Guizhou operations. AVIC Sichuan has a strong coal network in Chongqing City, and is a subsidiary of AVIC International Holding Corp. ("AVIC International"), a major enterprise operating in aviation, logistics, finance and real estate. AVIC International has 50,000 employees and assets exceeding RMB 100 billion ($15.7 billion).
"We are excited to enter a business alliance with AVIC Sichuan, and to expand our business into the large Sichuan market, which needs coal. Working with AVIC Sichuan will help streamline our coal logistics and grow our sales opportunities," commented Dickson Lee, Chairman and CEO of L&L. "Leveraging AVIC Sichuan's strong, established reputation in the region will allow us to explore new financial capabilities, helping us execute our growth strategy."
SEATTLE, July 19, 2012 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a track record of profitable coal operations in China, announced that the Company's recently constructed Weishe Mine, located in the Guizhou Province, ("Weishe" or "the Mine") has passed its final safety inspection and is to receive its license for full scale coal production.
Since February 2012, regulators have been performing inspections on Weishe's shaft construction, air ventilation, safety equipment and coal extraction practices to ensure the newly constructed mine meets various new safety standards. In June 2012, Weishe was designated a model mine by the HeZhang County government for its modern design, safety equipment, and management practices. The Mine's initial approved production rate is 150,000 tons per annum and can be expand to 450,000 tons after additional improvements. Coal from Weishe will be sent via L&L's wholesale and logistics platform in to its end users, bringing additional profits to the Company.
"This is another strong step forward for L&L," commented Dr. Syd Peng, Ph.D., L&L Director. "The on schedule completion of the construction and safety inspections at Weishe, our first project with Union Energy, represents an important milestone in our relationship. We continue to work toward the effective execution of our consolidation strategy and intend to repeat the successes of Weishe as we seek to further upgrade our mining portfolio for expanded operations."
SEATTLE, July 18, 2012 /PRNewswire/ -- L&L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a five-year track record of profitable coal operations in China, announced that Dickson Lee, L&L's Chairman and CEO, and Jingcai Yang, L&L Director and former Senior Executive for Shenhua Group, attended a meeting with senior executives of China Construction Bank Corp. ("CCB") at their Beijing office to discuss financing options to support L&L's growing wholesale business.
CCB, one of the four large state owned banks in China, offers accounts receivable factoring to select companies contracted with reputable enterprises such as Datang International Power Generation Co. Ltd. ("Datang"). CCB recognized L&L's growing operations in Southeast China and its initiatives to improve the mining industry, specifically in the Guizhou and Yunnan provinces. Securing such financing will enable L&L to further expand its wholesale and logistics platform, as well as ramp up its capacity to large customers.
In February 2012, L&L received a license to expand its wholesale operations to Guizhou and in March completed Datang's vendor qualification process. In June, L&L made its first shipment of coal to Datang's HeShan power plant. While many suppliers in the region lack efficient delivery capabilities, L&L has established the necessary rail and logistics network to service major customers in Guizhou and surrounding provinces.
L&L Director, Mr. Yang, commented: "The support shown by China Construction Bank is another positive step forward for L&L. By solidifying a financing facility with such a reputable partner, we will strengthen our position in the marketplace and further reinforce our capabilities to service major enterprises such as Datang."
SEATTLE, July 12, 2012 /PRNewswire/ -- L & L Energy, Inc. (Nasdaq: LLEN) ("L&L"), a U.S.-based company with a five-year track record of profitable coal operations in China, has appointed James Schaeffer, MBA, as an independent strategic and technical advisor.
Prior to joining L&L's Advisory Board, Mr. Schaeffer served as the CEO of Mongolia Energy Corporation (HKG: 00276), an energy and resource developer with operations in Mongolia and northwestern China. Previously, he was stationed in Beijing as the Executive Director—Asia Pacific of John T. Boyd Company, a top coal engineering firm. Mr. Schaeffer has over three decades of mining experience and has participated in projects throughout Asia, including China and Southeast Asia. He is known internationally and throughout the Asia-Pacific region by many leading corporations and banking and financial institutions in the energy and resource sectors.
Mr. Schaeffer is a Registered Professional Engineer in Kentucky, Pennsylvania and West Virginia. He is also a member of the International Society of Mining, Metallurgy, and Exploration. Mr. Schaeffer also holds a degree in Mining Engineering from the University of Pittsburgh.
Dickson Lee, L&L's Chairman & CEO, commented, "Jim is a proven mining executive with in-country experience. Adding professionals with these two attributes will benefit the core of our business as we continue to expand our operations to other areas of China."
SEATTLE, July 10, 2012 /PRNewswire/ -- L&L Energy, Inc. ("L&L"), a U.S.-based company with a five-year track record of profitable coal operations in China, has reached an agreement with HunTai Coal Ltd. ("HunTai") in Yunnan Province to operate and manage HunTai's newly built 600,000-ton-capacity washing plant. L&L will receive a management fee for operating the plant and can earn revenues from wholesaling the washed coal.
L&L's TaiFung Coal Ltd. ("TaiFung") subsidiary and HunTai entered into the agreement on July 10. HunTai, currently in trial operation, will expand L&L's coal washing operation in the region, providing the Company with further recognition as an industry leader. The agreement is expected to generate approximately $63 million of additional wholesale revenue and $5.9 million in net income, based on coal pricing of $160 per ton. Additionally, L&L will earn a management fee of $0.5 million for the next 12 months of operation.
The HunTai coal washing plant is built near its targeted customer, Yunnan Coal Energy Inc., which requires approximately 3 million tons of washed coking coal each year.
Ed Moy, L&L Vice President and Director, commented, "L&L is recognized as a leader in the coal washing industry. Through management innovation, the Company is able to synergize its expertise with other entities to produce more revenue and profit."
SEATTLE, July 2, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN") ("L&L" or "Company"), a Seattle-based company with a five-year track record of profitable coal operations in China, announces that it will use an equity interest swap with Union Energy as part of the acquisition of the LuoZhou Mine.
In June 2012, Union Energy entered into two MOUs to sell controlling interest in two of its mines to L&L. One of which, the LuoZhou mine ("LuoZhou, the Mine"), is scheduled to begin full production in fall of 2012.
DaXing Co., L&L's recently established wholesale subsidiary in Guizhou, has entered into thermal coal contracts with large end users including, Datang Power Co. By acquiring LuoZhou and the Lashu Mine in near future, both of which produce high quality thermal coal, L&L will increase the available thermal coal for its wholesale operations, further increasing efficiency.
To update, L&L will swap non-strategically held interests in its coking coal mine in Guizhou as payments-in-kind, the Zone Lin coking facility, shares of L&L common stock and a cash deposit, in exchange for 50% controlling interest of the operations of LuoZhou. LuoZhou is designed to meet the higher government mining standards and produces low sulfur, high BTU thermal coal. The Mine is currently in trial production and will reach its approved rate of 150,000 tons per annum by fall of 2012 (on reserves of 27 million tons), with targeted expansion to 450,000 tons. When at full production, LuoZhou is expected to generate approximately US $70M a year in revenues, with an estimated net profit margin of 31%. The specific terms for this transaction have not been finalized and are subject to final reviews.
Union Energy will diversify its product portfolio and expand its customer base by acquiring coking facilities and coking coal mines.
L&L's Chairman and CEO, Dickson Lee, commented: "When completed, the acquisition of LuoZhou will substantially upgrade our existing mining portfolio's operations and better align our product mix to help supply increasing demand for thermal coal in the region. Union Energy has been a strong partner for L&L and this transaction will further cement our relationship."
SEATTLE, June 22, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or "Company"), a Seattle-based company with a five-year track record of profitable coal operations in China, has signed MOU to acquire a 50% controlling interest of the LuoZhou Mine ("LuoZhou") in HeZhang County, Guizhou Province.
The acquisition of LuoZhou will mark the Company's third transaction with Union Energy, a local partner. Previous transactions include the acquisition of the Weishe Mine ("Weishe") and a recently announced MOU to acquire controlling interest of the LaShu Mine ("LaShu"). Weishe, currently in production, is now operated by L&L as a model mine in the community; LaShu is scheduled for production in the fall of 2012.
LuoZhou is currently in trial production and will reach its approved rate of 150,000 tons per annum by fall of 2012 (on reserves of 27 million tons), with targeted expansion to 450,000 tons. These three mines, all located in the HeZhang County, are expected to produce more than 1 million tons of low sulfur, high BTU, anthracite coal each year. L&L will pay an earnest deposit of approximately $349,000 (RMB 2,200,000) for LuoZhou. The remaining balance will be paid in installments under other consideration, including payment-in-kind of non-strategically held interests, stock and/or cash. Terms for the remaining balance are being finalized.
Dr. Syd Peng, a mining expert and Director of L&L, commented, "We are successfully implementing our consolidation strategy in HeZhang County with Union Energy. We aim to repeat the successes of Weishe, being designated as a model mine by local authorities, at other operations. LuoZhou and LaShu will upgrade our existing mining portfolio, increase our total accessible reserves, and provide added coal to expand our wholesale operation, driving profits and growth."
SEATTLE, June 18, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or "Company"), a Seattle-based company with five-year track record of profitable coal operations in China, announced today, consistent with its consolidation strategy, the entry into an MOU to acquire the Lashu Mine (the "Mine" or "Lashu") in HeZhang County, Guizhou Province.
The MOU, for 51% controlling stake in the Mine, is entered with Union Energy, previous owner of L&L's Weishe Mine, also in HeZhang County. The repeat transaction illustrates the confidence in the Company's mining operations and enhances the reputation of the Company as consolidator of mining operations in the region.
Upon production, scheduled for fall 2012 and fully implemented within 2013, the Mine will produce low-sulfur, high BTU, anthracite coal at the approved annual production rate of 300,000 tons on 7.17 million tons of reserves, with potential expansion to 450,000 tons and beyond on reconnaissance resources of 20 million tons.
L&L will pay an earnest deposit of approximately $314,000 (RMB 2,000,000) and the remaining balance, which is being finalized, will be paid in installments over time in accordance with the definitive agreement. Both L&L and Union Energy stand to profit from the enhanced mining operations supervised by L&L's professional team.
L&L's Chairman and CEO, Dickson Lee, commented, "The acquisition of the Mine is part of our consolidation strategy in HeZhang County. We are working with Union Energy and others to identify further opportunities. We are organizing our mining assets in a focused manner, to maximize return to our shareholders. "
SEATTLE, June 11, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or "the Company"), a U.S. company with a five-year track record of profitable businesses, showcased its Weishe Mine in HeZhang County, Guizhou Province, following designation by the HeZhang County Government as a model mine, further confirming the Company's mining operation and strategy as mining consolidator.
The official tour, on June 5, 2012, was led by county officials including the County Secretary, Huang Guangjiang, and L&L's Allen Liu. Over 170 visitors, including 30 mine operators, spent time visiting L&L's model operations, which drew the Secretary's praise in terms of Weishe's advanced mining techniques, commitment to safety and technology.
By way of background, prior to Weishe's acquisition, Dr. Syd Peng, L&L's Director and former Chairman of the Department of Mining Engineering at West Virginia University performed due diligence and thereafter assisted in supervising parts of its construction. The Company aims to repeat the successes with its leadership.
"Weishe Mine being recognized by the government confirms L&L's position as a leader in efficient and safe mining operations," stated Dickson Lee, Chairman & CEO of L&L. "This endorsement further strengthens our reputation in the region and will prove beneficial as we continue to pursue opportunities to consolidate mines in Guizhou Province."
SEATTLE, May 21, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L or the Company"), a U.S. company with a five-year track record of profitable businesses, announced today that over the next 12 months the Company plans to begin a discretionary stock buyback program, purchasing up to $10 million of outstanding LLEN shares from the open market.
On May 18, 2012, LLEN shares closed at $1.38 representing an approximate 52% reduction in the Company's market value since April 5, 2012. During the same period, the Company's strategy and growth remains on track and the Company is not aware of any business reasons for the price decline.
In view of the perceived price and strength mismatch, the Company views it opportune to enhance the return to shareholders. Under the buyback all purchased stock will be retired, reducing the Company's outstanding shares and raising the attributable profit per unit to the shareholders.
The Company and insiders are currently prohibited from buying LLEN shares, as the Company's fiscal year has just ended on April 30, 2012. L&L's Audit Committee unanimously approved the Company's buyback and management is working with advisors to ensure all securities requirements are met prior to a repurchase and purchase by insiders, including the Company's founder, who has indicated a desire to acquire LLEN shares.
FOURTH QUARTER FY2012 Year end financial statements are currently being compiled and targeted for release in mid-July. Twelve months of earnings and operational profits from the recently sold Ping Yi Mine, attributable to FY2012, will be included in the year end results. The Company will incur no loss from the sales transaction. Source: PR Newswire (http://s.tt/1cp3O)
SEATTLE, May 4, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L"), a U.S.-based company with a five-year track record of profitable underground coal mining and distribution operations in China, has begun due diligence of targeted large-scale surface mines in Inner Mongolia, China for potential acquisition.
The eventual acquisition of surface mines and entry into long-term coal supply agreements in Inner Mongolia is expected to significantly expand and diversify L&L's existing underground coal operations from south China into a national presence. Mr. Jingcai Yang, a recently appointed director of L&L, is assisting the Company in sourcing suitable surface mines. Mr. Yang, the former Chief Engineer at Shenhua Group Corporation Ltd. and former Chairman & CEO of Shengdong Coal Corporation, is an expert in surface mining in China.
Dickson Lee, Chairman & CEO of L&L, stated, "We are now expanding our platform to target one million ton and larger surface mining operations in Inner Mongolia which will expand and diversify our mining portfolio. Our on-the-ground technical capabilities are in place, and we have built a strong team that includes Mr. Yang and Dr. Syd Peng, who bring industry connections in Inner Mongolia and U.S. mining technology, respectively, to our operations. "
To further strengthen shareholder value, L&L has reached an agreement to sell the underperforming Ping Yi mine, which is one of five L&L underground mines. Under the terms of the agreement, L&L sells Ping Yi back to its original owners, while securing an off-take agreement at a discounted price to take advantage of the mine's future production. The sale terms include, among others, a US $31 million sale price, payable in part as a prepayment on future coal purchased by L&L, and future use of the mine's coal washing facility. L&L purchased the mine in 2009 for approximately US $4 million.
Lee also commented, "We are committed to enjoying the long term benefits of consolidation in the Guizhou Province. Selling the Ping Yi mine is a healthy move and will allow us to focus our energy on purchasing additional mines, including those in Inner Mongolia. As L&L has developed more resources over the years, a diversification into larger, surface mining in Inner Mongolia, as well as upgrading our existing mining portfolio will ensure diversified growth with a positive impact on company's bottom line."
L & L Energy (NASDAQ:LLEN) last stock promotion:http://www.redchip.com/about/aboutmain.asp?page=vreport&reportid=406&from=HomePage
"On March 19, 2012, LLEN agreed to pay RedChip Companies Inc., 50,000 shares of common stock under Rule 144 and a monthly fee of $8,000 in cash for six (6) months of RedChip Visibility Program and investor relations services."
"Previously, on April 25, 2011, LLEN agreed to pay an affiliate of RedChip Companies, Inc., 12,500 shares of common stock under Rule 144 and a monthly fee of $6,500 in cash for twelve (12) months of investor relations services, with the option to terminate the agreement after six (6) months of service. On July 7, 2010, LLEN agreed to pay RedChip Companies, Inc., 15,000 shares of common stock under Rule 144 and a monthly fee of $8,000 in cash for twelve (12) months of RedChip Visibility Program and RedChip investor awareness services, with the option to terminate the agreement with RedChip after six (6) months of service. As of January 20, 2011, LLEN exercised its right to terminate its agreement with RedChip Companies, Inc., and RedChip Visibility. On July 7, 2009, L&L International Holdings, Inc. paidRedChip Visibility 35,000 shares of common stock under Rule 144 for the first six (6) months of investor awareness services and agreed to pay an additional 34,000 shares of common stock under Rule 144 for the second six (6) months of investor awareness services."
SEATTLE, April 19, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company since 1995 with coal mining and distribution businesses in China, has obtained approximately 32,292 square feet (3,000 square meters) of coal storage and rail loading space from Chengdu Railway Bureau in ShinPingBa, Guizhou.
The Chengdu Railway Bureau ("Chengdu Railway") is one of the largest rail bureaus in China, overseeing railway networks throughout the Sichuan, Guizhou, and Yunnan Provinces.
The addition of this rail loading and storage space will help streamline L&L's Guizhou wholesale platform and distribution network, as well as assist in supplying the recently contracted 400,000 tons of thermal coal to Datang International Power Generation Co., Ltd. and Guodian Yongfu Power Generation Co. over the next year. The coal storage capacity of the space is approximately 50,000 tons.
Dickson Lee, Chairman and CEO of L&L commented, "L&L is working diligently to execute the wholesale contracts we recently signed with two large power companies in Guangxi. This storage and rail loading space with Chengdu Railway is an important link of the supply chain and will help reduce our transportation costs. In a region where a large portion of the coal is still delivered by truck, having a rail access point is an important strategic advantage. Cooperating with Chengdu Railway will provide positive impact for L&L and strengthen our wholesale segment going forward."
SEATTLE, April 11, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company since 1995 with coal mining and distribution businesses in China, has signed a long-term sales contract with Guodian Yongfu Power Generation Co., Ltd. ("Yongfu Power"), a large utility company located in Guangxi Province.
Under the agreement, L&L will provide 20,000 tons of thermal coal per month over the next eight months to Yongfu Power. The contract can be extended after the initial eight months. The average sales price under the agreement will be approximately $120 per ton, which is anticipated to generate approximately $19 million in revenues.
Yongfu Power is a wholly-owned subsidiary of China Guodian Corporation ("Guodian"), a Global Fortune 500 corporation and one of the five largest power producing companies in China. Guodian owns over 180 power plants covering 31 provinces. In 2011, Guodian's total assets exceeded $100 billion.
This is the second sales agreement that L&L has secured in the past two weeks, totaling 400,000 tons of coal and over $50 million in new revenues. Under the previously announced first agreement executed on April 4, 2012, L&L's DaXing subsidiary will supply 20,000 tons of coal per month for the next 12 months to Datang International Power Generation Co., Ltd. ("Datang"). Both Datang and Guodian are among China's top five power producers.
Dickson Lee, Chairman and CEO of L&L, stated, "I am very pleased with the progress our team has accomplished in recent weeks, adding two large wholesale supply contracts. Guodian Corporation is a giant in power generation and clean energy in China. We look forward to growing our relationship and exploring additional projects with them in the future."
SEATTLE, April 5, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L" or the "Company"), a U.S.-based company since 1995 with coal mining and distribution businesses in China, has signed a long-term sales contract with Datang International Power Generation Co., Ltd. ("Datang Utility"), a large, state-owned utility company based in China, to provide thermal coal for its HeShan power plant.
Under the agreement, L&L's DaXing wholesale subsidiary in Guizhou Province will provide 20,000 tons of thermal coal per month over 12 months to Datang Utility's HeShan power plant in neighboring Guangxi Province. Using an average sales price of $130 per ton, the contract is expected to generate approximately $31 million in revenues.
Datang Utility is one of China's largest power generation groups, with more than 100 subsidiaries in over 18 provinces throughout China. In 2011 Datang Utility's had an operating revenue of approximately $11.5 billion dollars.
Dickson Lee, Chairman and CEO of L&L, stated, "We are pleased to sign this sales contract with Datang Utility. This is the first step in expanding our coal network beyond Yunnan and Guizhou to other South China provinces. We will work with our new strategic partner, AVIC International, to seek additional wholesale opportunities in Guangxi as well as other neighboring provinces. Our new customer is a well-known, reputable organization with a wide-reaching network, and this contract aligns with our efforts to build business relationships with large institutions. We look forward to working with them on a continued basis going forward."
SEATTLE, April 2, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: LLEN) ("L&L"), a U.S.-based company since 1995 with coal mining and distribution businesses in China, today provided an update on its Weishe coal mine ("Weishe"), located in Guizhou Province.
After successfully completing a government inspection, which took place over the first few weeks of its test production, the recently acquired Weishe mine received regulatory formal approval to begin initial coal production. During the inspection, regulators tested Weishe's construction, air ventilation, safety equipment and coal extraction practices to ensure the newly constructed mine met various new safety standards. The inspection is the first of a series of tests over the next five months to gain final approval.
Dickson Lee, Chairman & CEO of L&L, stated, "The construction and testing of the mine has gone smoothly. Weishe's timely completion of the initial inspection is a testament to the excellent planning, hard work and dedication of our staff. On behalf of L&L, I thank them for the excellent work."
L&L also announced that it has appointed Zhi Xie as its Senior Sales Director in Guizhou Province, who will expand L&L's coal sales and marketing efforts at Weishe and throughout L&L's various wholesale outfits. Mr. Xie has 25 years of institutional coal sales experience. He was Assistant General Manager at AVIC International Coal Logistics Co. Prior to that, Mr. Xie worked as Coal Transportation Manager for the Guizhou Railroad Holdings Co., where he was responsible for 30 million tons of coal sales per year.
L&L also appointed two U.S.-trained bilingual financial managers to the Guizhou Operations. Mr. Hubert Chen, an MBA in Finance, previously worked at L&L's Seattle office. Mr. Lin Po, an MBA in Accounting and Operations, previously worked at Shanghai for a major US company. Both graduated from the Thunderbird School of Global Management in Arizona.
LLEN Receives Affirmation of Ownership from Former Ping Yi Owners
In response to misleading and false allegations questioning L&L’s ownership of its Ping Yi Mine, the Company has contacted Ping Yi’s previous owners who confirmed L&L’s purchase of the Ping Yi Mine. In the attached affirmation letter, the three former owners, Mr. Baoguo Zhang, Mr. Honglin Chen, and Mr. Shauangyou Liu state they were controlling owners and gave Mr. Baoguo Zhang the authority to sign the agreement selling the mine to L&L and confirmed that Mr. Baoguo Zhang received payments from L&L for the purchase of the mine.
The former owners also signed a declaration stating that Mr. Hu Shiwei, who questioned L&L’s ownership on a video, was misled by a third party. His statements were also the subject of a series of statements and videos that included incorrect information. In the declaration, the former owners of the Ping YI mine, who now reaffirm that they sold the Ping Yi Mine to L&L, request that any information stemming from Mr. HuShiwei be removed.
SEATTLE, March 21, 2012 /PRNewswire/ -- L & L Energy, Inc. (Nasdaq: LLEN) ("L&L"), a U.S. based company since 1995 with coal mining and distribution businesses in China, announced today that it signed a strategic sales agreement with AVIC International Coal Logistics Co., Ltd. ("AVIC Logistics") to expand its efficiency and coal sales throughout the Guizhou province.
AVIC Logistics is a known logistics and supply chain management company based in Guizhou and is currently investing in building a coal trading and logistic system throughout the province. AVIC Logistics is a subsidiary and acts as the coal arm of the AVIC International (Aviation Industry Corporation of China International Co.), a major China Central Government-led enterprise which manufactures and markets fixed wing aircrafts for commercial and military purposes. AVIC International has annual sales in excess of US$ 10 billion.
Under the strategic agreement, L&L is to utilize AVIC Logistics' platform, wholesale, and railroad network, to jointly market one million to two-million tons of coal in the calendar 2012. Using US$ 150 per ton coal price, the agreement if executed, could generate over US$ 150 million in revenues. L&L and AVIC Logistics will also work together to develop a strong supply chain management system aimed at supporting the development strategy of both parties, grow domestic and international markets with the objective of mutual benefit and development, and work together going forward throughout consolidation process in Guizhou.
"I am very pleased with the caliber of partners L&L is working with in China. L&L is upgrading its operations from dealing with individual proprietors to working with large institutions in the China's coal industry," Dickson Lee, Chairman and CEO of L&L commented. "After entering into joint MOUs' with two large institutions, including China Chengtong Metal Corporation (the former China Ministry of Material), we are able to further improve operations with help from AVIC Logistics' resources and network. We look forward to a fruitful relationship with AVIC Logistics to generate additional sales, improve our operational efficiency, and help meet China's robust coal demands."
Third Quarter 2012 Results
Ian Robinson, Chief Financial Officer stated, "As we have stated in the past several quarters, the Guizhou consolidation would provide tremendous growth opportunities to acquire mines at highly accretive prices. However, in the short term, the operating environment would be challenging. The last four quarters have been difficult, but we seem to have turned the corner going forward."
"In this third quarter of FY2012, our mines produced 67,000 tons. This reduction was the result of two temporary setbacks which the Company does not anticipate will affect our fourth quarter. First, a government mandated slowdown as a result of a major accident in the early part of the third quarter near our DaPuAn mine caused its production to drop over 50%. However, during the early part of the fourth quarter the Chinese government notified the Company that DaPuAn has passed its safety inspection and was approved to ramp up production. The second contributor to the decreased production in the third quarter was the Chinese New Year holiday, which traditionally results in a two week idling of nearly all businesses throughout China. We estimate that this annual holiday celebration impacted the Company's quarterly revenues by approximately 15%. Our revenues, net income, gross profit and diluted EPS for the third quarter were as follows:"
-- Revenues were $30.2 million vs $65.8 million in prior year-- Gross profit was $8.8 million vs $21.3 million in prior year-- Net income was $4.9 million vs $14.5 million in prior year-- Earnings per share was $0.11 per diluted share vs $0.41 in prior year
Robinson continued, "We are optimistic that the fourth quarter of FY2012 will see significant improvements from the third quarter. Our DaPuAn, Su Tsong, and Da Ping mines are operating near or at their approved mining permits and our recently acquired Weishe mine began test production this February. Looking forward and assuming four mines at or near approved production, combined with even minimal production at Ping Yi, we believe our revenues next fiscal year would exceed those in FY2011, which for the most part was not impacted by Guizhou's accelerated consolidation. "
Dickson Lee, Chairman and CEO of L&L commented, "We are pleased with our progress in becoming a consolidator in Guizhou, targeting 2-3 million tons of production by the end of 2013. We have begun our execution plans and our acquisition of the Weishe Mine ("Weishe") was an important milestone. Weishe is a great addition to our portfolio and our new partners and former majority owners of Weishe, Union Energy, Co. are very experienced with strong connections throughout Guizhou."
Lee went on to say, "We have a pipeline of other acquisitions in place, including two additional Union Energy mines. These additional acquisitions will meet our standards for safety, scalability, and operational efficiency. With the support of the government and our new partnership with Union Energy, I anticipate a strong finish to our fiscal 2012 year and have an optimistic outlook for 2013."
SEATTLE, Jan. 30, 2012 /PRNewswire/ -- L & L Energy, Inc., (Nasdaq: LLEN) ("L&L" or the "Company"), a U.S.-based company founded in 1995 with coal mining and distribution businesses in China, announced today that it has entered an agreement acquiring 51% controlling interest of the Weishe coal mine ("The Mine" or "Weishe") in China.
Weishe Mine Acquisition Highlights
Estimated FY2013 (Ended April 30) Impact of Weishe
Weishe mine produces high quality, low sulfur, anthracite coal, and is one of three newly constructed mines owned by Union Energy located in Hezhang, Guizhou Province, China. The mine is expected to be expanded to its designed 450,000 tons of annual production over the next few years.
Dr. Syd Peng, L&L board member and world-renown mine expert, said, "I welcome the new Weishe mine, which is the first of many new mines we are targeting to upgrade our mining portfolio for better safety and mechanization." Mr. Po Shui, owner of Union Energy, a local Guizhou company, stated, "I believe in L&L and am pleased to take common shares as payment. I also look forward to the possibility of joint venturing with L&L on two other Union Energy mines, one of which is scheduled to begin producing in the spring and the other in the fall of this year."
Dickson Lee, Chairman and CEO of L&L Energy commented, "L&L Energy has been focused on executing our plan for the Guizhou consolidation. With the recently established Hong Gou operational office in Guizhou, the government's approval of our new wholesales license, and now the addition of the Weishe Mine, we are positioning ourselves well to fully execute the two one millions ton wholesale agreements negotiated in the fall of 2011," Lee continued. "The management team at the Weishe mine is very strong and will be excellent addition to L&L as we scale at a faster pace. To share in our excitement, we invite investors to visit our new operations this summer."
GeoInvesting Stands by its Claims that L&L Energy does not Own the Ping Yi Mine: More Color Provided
We understand that some investors have attempted to discredit our research, observing differences between the mining permit number/address on the official Ping Ying Mine chopped business license and Mining Permit compared to web sites posting disclosing the sale of the Ping Yi Mine. Conclusions based on this observation are baseless.
The Mining Permit number issue in no way unsubstantiates our findings. Our research is based on a mountain of findings.
We stand by our conclusion that LLEN does not and never did own the Ping Yi Mine. Investors who do not embrace this conclusion are grasping for strings and playing a dangerous game.
For more detail on the mining permit and issue about the address, please read the following explanation:
In this detailed sales post, the sale representative posted the map of Ping Yi Mine, the business license of Ping Yi Mine and the Mining Permit of the Ping Yi Mine (http://www.worldmr.net/Exhibition/ForeCastList/Info/2011-10-11/112458.shtml). The Mining Permit is as follows:
The first paragraph of the introduction of the Ping Yi Mine in the same sales post states:
"平关平迤煤矿位于盘县平关镇三道沟境内，距平关约10Km ，有简易的公路相通，距红果镇约25 Km，交通较为方便。根据贵州省国土资源厅颁布发的采矿许可证（证号：5200000711358）划定的矿界，采矿权范围由8个拐点圈定，矿区面积为2.2694平方公里，开采标高2250m�2100m。"
Translated into English:
"Pingguan Ping yi Mine locates at Sandaogou, Pinguan town, Pan County. It is around 10 km away from Pingguan and there is a low level paved road links Pingguan to the Mine. It is around 25 km away from Hongguo twon and the transportation is very convenient. Based on the mine map in the mining permit issued by Natural Resource Bureau of Guizhou province (No. 5200000711358), eight coordinates defines the scale of the mine with the 2.2694 m2 and the exploration depth is 2250-2210 m."
Apparently, there are two discrepancies between the web sales posting of the Ping Yi Mine and the posted business license and mining permit of Ping Yi Mine.
"Sandaogou Pingguan Town" vs. "Yiche village, Pingguan Town" in the Business License
In the SAIC file, there is a corporate change page as follows:
This corporate change clearly explained that the Ping Yi Mine moved from Sandaogou to the current address, Yiche village. It is reasonable to believe that when the owners wrote the sale posting, they made a mistake and used the old address on the sale post.
When the owners wrote the sale posting, they used the Mining Permit number "No. 5200000711358", rather than the , which Ping Yi Mine obtained on Aug. 2008 and is disclosed in the official mining permit in the same sale posting. There are several reasons for this mistake:
This does not debunk our finding that LLEN does not own Ping Yi Mine, which is clearly shown in the SAIC file.
Recordings and Transcripts Provide Conclusive Proof that L & L Int (LLEN) Never Purchased the Ping Yi Mine
Over the past few days, we have presented indisputable evidence that L&L Energy (LLEN: NASDAQ) has materially misled its investors and the SEC. For two years now, LLEN has unambiguously claimed to be a 100% owner of the Ping Yi mine, which allegedly provides almost 40% of its claimed capacity. As we explained in
our full report LLEN does not own the Ping Yi Mine.
After the report, some investors have stated that the SAIC file we pulled on Jan 13, 2012 showing that LLEN does not own the Ping Yi Mine is not the most up to date SAIC filing. They have also disputed what the sales agent of the mine, Mr. Wu, said.
We will now present the most compelling piece of evidence that we have, the recordings and transcripts. The conversations that you are about to read will make it crystal clear what actually happened in this story and that LLEN does not own the Ping Yi Mine.
The first conversation is a new conversation with Mr. Zhao Weijun (赵维君), the vice director of Company Registry of Guizhou SAIC Office on Jan 19. 2012 (Beijing Time). Mr. Zhao Weijun clearly explained what the examination date (核准日期) means and confirmed that there shall be no corporate change after the examination date shown on the SAIC file.
On multiple occasions in December, 2011 and January 2012, we contacted the sales representative for the Ping Yi Mine, Mr. Wu. Mr. Wu confirmed that the mine was up for sale by an investment group (four individuals) with no discernible ties to LLEN. When we asked him whether LLEN owned the mine, he answered an insistent no, and doubted that LLEN was even financially strong enough to make such an acquisition. He also told us that LLEN had discussed an acquisition in 2009, but no deal had happened.
We recorded two conversations with Mr. Wu, sales representative of the Ping Yi Mine on Jan 11, 2012 and Jan 16, 2012: The first one is a conversation prior to our first alert on Jan 13, 2012 and the second one is after our alert.
There is a confusion regarding the date on the SAIC file below.
There is a date of Aug. 20, 2008 as the examination date (核准日期) on the file we pulled on Jan 13, 2012. Some people regard that the file we pulled only explain the legal status of Ping Yi Mine up to Aug. 20, 2008. We already explained this issue as follows:
"The second date, "2008-08-20" highlighted above, is the date that the business license reflecting the last change in corporation information was issued or examined. On that date, the Ping Yi Mine changed its official information from Yidong Village, Pingguan Town, Pan County to Yiche Village, Pingguan Town, Pan County and obtained its most recent business license. The SAIC filing is telling us that since that date, no material aspect of the business structure has changed."
Key Points of conversations are below:
To clarify this issue, we called Mr. Zhao Weijun (赵维君), the vice director of Company Registry of Guizhou SAIC Office, which is in charge of the company registration of Guizhou province, picked up our call and confirmed our explanation. The key points of the conversation between our investigator and Mr. Zhao Weijun (赵维君) is as follows:
Geo: Here it is. This company is established on Aug. 2, 2000. There is an examination date (核准日期) which is Aug. 20, 2008. At the bottom of the file, there is a date, which is Jan 13, 2012. I want to know, what does the examination date (核准日期) mean? (是这样的，这个企业的成立日期是2000年8月2日。上面有一个核准日期是2008年8月20日。然后这个文件最底下是2012年1月13日。我想问你一下，那个核准日期是什么意思？)
Mr. Zhao: Examination date (核准日期), for example, if the company comes to our office to do the corporate change, such as business scope, and we exanimate the corporate change, that day shall be the examination date. There is only one establishment date, which shall not change at all. (核准日期，比方说，它今年来变更，我们核准以后，比方说它变更经营范围，我们核准以后，这就是核准日期。如果说成立日期，它只有一个，它不会变的。)
Mr. Zhao: To the examination date, if the company changes one item, such as company name, registered capital, there shall be an examination date for each change. (
Geo: ok. For example, the date on the bottom is Jan 13. On Jan 13, we obtained its partner information, as this is a partnership. Can we say that the partner information we obtained is as of today, right? (
Mr. Zhao: Yes. You are right. (
Geo: Can I also understand in this way that, after the examination date (
Mr. Zhao: Yes. Yes. There is no change. (
Geo: There is no change. OK. I understand. Additionally, annual inspection date and examination date are different, right?
Mr. Zhao: Yes.
Geo: ok. If so, when is the annual examination date?
Mr. Zhao: It is a date varying from March 1 to June 30.
Geo: Now, the examination date (
Geo: thank you very much. How can I call you? (
Mr. Zhao: My last name is Zhao. (
Geo: Are you vice director, Mr. Zhao? (
Mr. Zhao: Yes. (
Geo: thank you so much. Vice Director Zhao. (
Two conversations with Mr. Wu, the sales agent of Ping Yi Mine
After the GeoTeam found the sales post of Ping Yi Mine at the beginning of Dec. 2011, we contacted Mr. Wu on Dec 12, 2011 to talk about the possible acquisition of the Ping Yi Mine. Our GEO investigator pretended to be from an investment company from Beijing China. In our first talk, Mr. Wu confirmed that Ping Yi Mine was still for sale.
After that, we periodically contacted Mr. Wu regarding the acquisition of Ping Yi Mine and confirmed with him several times that the Ping Yi Mine was not acquired by Fuyuan County Baoxing Economic & Trade Co. Step by Step, GEO told Mr. Wu that it was LLEN that told us that Ping Yi Mine was acquired by Fuyuan County Baoxing Economic & Trade Co. for the consideration of around USD 4 million at the end of 2009. Mr. Wu denied this claim by LLEN. To build trust, the Geoteam told Mr. Wu that a group of people led by Mr. Zheng (郑总) from Beijing may visit Ping Yi Mine before the Chinese New Year.
On Jan 11, 2012 (Wed.) (Beijing Time), GEO called Mr. Wu again and made an excuse that the group of people cannot visit Ping Yi Mine as there are not available air tickets before the Chinese New Year. We recorded this call and confirmed relevant issues surrounding the ownership of Ping Yi Mine again with Mr. Wu. The key part of the conversation is as follows:
Geo: then. We will try to visit you before the Lantern Festival (Feb. 5, 2012). Is it ok?
Mr. Wu: OK. OK.
GEO: Additionally, we contacted Longteng Mining (龙腾矿业，LLEN's Chinese name) again. They told us that Baoxing Economic & Trade CO., Ltd. paid you tens of millions in RMB, or USD 4 million to purchase the mine at the end of 2009 or beginning of 2010. Did you have this deal or not?
Mr. Wu: No. No.
GEO: No? No for this deal?
Mr. Wu: the deal failed at last （最后没成啊）.
GEO: this deal failed at last, right?
Mr. Wu: Yes.
GEO: Oh. They said that, at that time, Baoxing did pay around USD 4 million, or RMB more than 20 million amount. It is to say that that deal failed at last?
GEO: Oh. They said that, at that time, Baoxing did pay around USD 4 milion, or RMB more than 20 million. It is to say that that deal failed at last?
GEO: OK. We are not clear about their stance. Whatever, we just disregard this [LLEN's stance].
After we released our initial alert on Jan 13, 2012, we knew that some investors may call Mr. Wu during the long holiday weekend and that LLEN may also contact Mr. Wu regarding this issue. On Jan 16, 2012 (Monday) GEO's investigator called Mr. Wu to once again confirm the relevant issues surrounding the ownership of Ping Yi Mine. Mr. Wu confirmed again that Ping Yi Mine is still owned by four individuals and LLEN did not acquire the mine. He also said that LLEN did contact them to acquire Ping Yi Mine but that deal never went through. Mr. Wu also told us that several guys called him during the weekend with "private numbers" or "oversea numbers". Furthermore, Mr. Wu did not mention whether LLEN contacted him or not after we release this press release. The key part of this conversation is as follows:
Mr. Wu: Now, our biggest boss is Mr. Zhang, Zhang Baoguo. The mine is owned by individuals. (我们最大的老板姓张，张保国。我们现在是私有的。)
GEO: What? （现在是什么？）
Mr. Wu: owned by individuals. At the beginning, LLEN (龙腾矿业) did discuss this deal with us. At last we did not reach a final deal. （私有的。最初，龙腾矿业谈是谈过，但是最终没成交易。）
Mr. Wu: LLEN did not pay money to us at all. （他们也没有付钱。）
GEO: signed a contract but not pay any money? So the claimed agreement is a void contract?
GEO: Oh. The agreement on the hand of my boss is a void contract?
Mr. Wu: Yes. Even mentioned something called like Baoxing Group. （还说那个什么宝兴集团）
GEO: Yes. Baoxing Economic & Trade Company. Therefore, my boss complained about Mr. Zhang a lot and said he did not do a good job. As this is a big issue, we also pulled the SAIC file of Ping Yi Mine. Based on the SAIC file, we realized that Ping Yi Mine is owned by four individuals as a partnership. (the voice is disturbed) Hello?
Mr. Wu: I am listening.
GEO: This is owned by four individuals as a partnership, not owned by LLEN, right?
Mr. Wu: Yes. Now, it is owned by four individuals and it is not sold to any other. （是的。现在是四个自然人所有的，没有卖给任何人。）
GEO: Yes. I read the SAIC file and it says that it is owned by four individuals.（是的，我知道，我看了工商档案，是说四个自然人。）
Mr. Wu: No such a thing (acquisition by LLEN) at all. （没有这个事情）
GEO: no such a thing (acquisition by LLEN) at all, right? （根本没有这个事情，对不对？）
Mr. Wu: There was this thing. But, there is no reached deal. （有是有过，但是最后没有成交。）
GEO: We know. If the deal is not done, we know what we can do. Then, I can report to Mr. Zheng, my boss, to arrange the following things and possible trip. After our arrangement, I will give you a call. Is that ok?
Mr. Wu: You already know the information of the mine, right?
GEO: Yes. This is the only thing in doubt. Even though I am already on my vacation, my boss still asked me to call you to confirm this.
Mr. Wu: There are several guys that called me in these days to enquire about this issue. There was no phone number reflected on my cell phone. Sometime, it reflects "private phone number" or "oversea phone number". （这两天有好几个人打电话给我，来问这个事情。他那个号码没有来电显示，还有就是显示为私人号码或者海外号码。）
GEO: Oh. Really?
Mr. Wu: they all called me for this issue. I thought they were from your company. （他们打电话都是问这个事情，我还以为是你们公司的人。） [...]
See our full report
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SEATTLE, Jan. 17, 2012 /PRNewswire/ -- L & L Energy, Inc. (Nasdaq: LLEN) ("L&L" or the "Company"), a U.S. based company since 1995 with coal mining and distribution businesses in southwest China, announced today it is concentrating greater efforts in the Guizhou Province, specifically, on new acquisitions that will focus on larger mines, as well as newer mines that meet anticipated enhanced safety and mechanization regulations . The Company will also explore geographical diversification from southwestern China by looking at new coal resources in other provinces.
L&L recently signed two joint sales/marketing agreements with two giants; China Chengtong Metals Co. and Tianjin Fuhao Industrial Co. Ltd to expand its wholesale operation in addition to its existing sales operations in South China. If fully executed, the agreements collectively will generate approximately $US 300 million in revenues throughout 2012.
L&L also recently added Mr. Jingcai Yang as an advisor. He is a former senior executive from China Shenhua Group Corporation Limited, the world largest coal producer and will assist the Company to explore coal sales on a national level. As an executive who ran one of the largest surface mines in the world, Mr. Yang will also help the Company evaluate potential surface mines, which have experienced fewer disruptions than underground mines.
The Company also recently signed an MOU with three newly built mines Guizhou and is in active negotiations to acquire all three.
Dr. Syd Peng commented, "What I learned from my recent extensive visit to inspect potential mine acquisitions is that the Company should take advantage of the new availability of larger mines with stronger management teams as well as some new mines that meet anticipated enhanced safety and mechanization regulations."
Dickson Lee, Chairman and CEO added, "As a company with 16 years of experience in China we have consistently sought to take our operations to the next level. Our partnerships with companies of CCMC and Tianjin Fuhao's caliber have exposed us to many new opportunities. We believe our vision and hard work have helped us to navigate this somewhat turbulent past year and we are positioning ourselves to bring solid results to our shareholders."
SEATTLE, Jan. 17, 2012 /PRNewswire/ -- L & L Energy, Inc. (Nasdaq: LLEN) ("L&L" or the "Company"), a U.S. based company since 1995 with coal mining and distribution businesses in southwest China, announced today it reaffirms its ownership in Ping Yi Mine ("Ping Yi") and states it has not posted Ping Yi for sale.
A GeoInvesting blog/article recently cites three questions, regarding ownership of Ping Yi, availability of Ping Yi for sale, and coal production at DaPuAn Mine ("DaPuAn").
Regarding ownership, the Company reaffirms its ownership rights in Ping Yi Mine. As the Company has disclosed in its most recent 10-K, "effective November 1, 2009, KMC (a wholly owned subsidiary of L&L) through its subsidiary Baoxing Co., entered into an agreement to acquire 100% of Ping Yi mine operations." The disclosure is consistent with both legal opinion (issued by a large and reputable law firm in China) and audit opinion (issued by an independent auditing firm after its FY 2011 year-end audit on the Company.)
Ed Moy, L&L Board Director and Vice President commented, "Last April, I led investors on a tour of our operations in Yunnan and Guizhou Provinces of China, which included a visit to Ping Yi Mine. Investors had a chance to meet and talk with our staff and local mine management. I can therefore confirm our ownership of Ping Yi Mine."
Regarding the sale notices mentioned by GeoInvesting in its article, the Company never authorized or prepared such sale notices. Accordingly, the Company does not know the source of such notices.
As stated in the Company's last quarterly report, an accident that happened at a mine not owned by L&L (located a few miles from DaPuAn) had caused DaPuAn to be temporarily idled. The Company is currently working with the local government to reach full production. However, due to the way local governments and agencies operate, it is often extremely difficult to predict the overall impact of any governmentally initiated interruption on coal production. Therefore, as already stated in our most recent 10-Q, "we believe that the Company will continue to experience periodic to frequent idling or production slowdowns until the consolidation process reaches critical mass and closes down small or high risk mines that were not acquired by a consolidator."
Dickson Lee, Chairman and CEO of L&L further commented, "L&L made an officer available to GeoInvesting for interview and also offered to answer GeoInvesting's questions directed to me in writing. But GeoInvesting refused and insisted on speaking with me personally, at a time when I have been traveling extensively in Asia and frequently in very remote mining areas."
Given that GeoInvesting has made publication without proper verification, the Company with due respect, does not plan to respond to any of GeoInvesting's future publications.
We are offering conclusive proof that L & L International LLEN does not own the Ping Yi Mine:
As previously stated in our original report, and even more so after further due diligence, we believe that LLEN shares are not investable and pose an extreme risk to long investors.
We also take note of LLEN's two press releases this morning:
In the face of on the record, detailed accusations from researchers responsible for discovering a series of massive governance frauds at the like of YUII and PUDA, a press release promising a looming 25% revenue increase via expanded sales and marketing joint agreements should be seen as an attempt to distract investors from the grave matters at hand.
Similarly, as we continue to demonstrate, there is a large amount of conclusive documentary evidence from official sources that LLEN utterly ignores. Instead, its management appears unconcerned that someone is advertising one of their key assets for sale. In sum, we are being asked to trust their legal team and Auditor, Kabani and Co, a firm that has been involved in many of the most dubious reverse merger audits. We respectfully decline to give them our trust.
These evasions and tactics should be abundantly familiar to the burned investors of dozens of Chinese reverse mergers and bodes ill for the value of their capital.
Any long or short LLEN investor should read every page of the following report thoroughly.
See all the evidence! (and comment on slide share)
Disclosure: Short LLEN
January 13, 2012
In recent months, things have been pretty bad for Chinese coal company L&L Energy (LLEN). There have been public allegations of fraud, mine shutdowns and falling profits. The only bright spot has been the company�s valuation, which has stayed quite high relative to the rest of the China RTO sector (~$100 million market cap). As bad as things seem for LLEN, it could get much worse. That�s because the GeoTeam recently uncovered evidence that appears to indicate that LLEN does not own and never acquired the Ping Yi Mine. LLEN claims in its SEC filings that it acquired the Ping Yi Mine in January of 2010 and that the mine contributed close to 40% of the company�s total coal production for the financial year ended on April 30, 2011.
Red Flag Alert Summary
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Second Quarter 2012 Financial SummaryIan Robinson, Chief Financial Officer, stated, "Our earnings and revenues have seen improvements from our first quarter as a result of our mining operations beginning to ramp up production in accordance with the changing regulatory environment. Although second quarter results have improved, we are still seeing the effects of intermittent temporary slowdown and idling of all mines in our region by the government."
Dickson Lee, Chairman and CEO, commented, "I expect a challenging environment for our current operations to continue throughout the course of the consolidation process. However, we have positioned ourselves very well to benefit from the consolidation in the long run with the support we have received from the government and local banks. Additionally we are bolstering up our operations in Guizhou with the addition of new wholesale operations. This will increase our visibility throughout the region and create a strong revenue base."
Lee continued, "This past year has been challenging. The capital markets have also caused us to slow our acquisition plans, but as the business cycle turns, L&L will be well positioned to take advantage of this tremendous growth opportunity in Guizhou."
Need to raise capital has has become more explicit:
We will need to raise additional capital to expand our operations, both to fund additional invest