TIANJIN, China, April 16 /PRNewswire-Asia/ -- China New Energy Group Company (OTC Bulletin Board: CNER) ("China New Energy" or the "Company"), a natural gas network developer and distributor of natural gas to residential, industrial, and commercial users in small and medium sized cities in China, announced its financial results for the twelve months ended December 31, 2009.
Full Year 2009 Highlights
-- Revenue increased 114.4% to $11.8 million compared to 2008
-- Gross profit increased 139.8% to $8.6 million
-- Gross margin increased 780 basis points to 73.5%
-- Operating income increased 214.1% to $4.9 million
-- Operating margin increased to 42.0% from 28.7%
-- Net income from continuing operations was $6.8 million, or $0.04 per
diluted share, compared to a net loss from continuing operations of
$1.6 million, or ($0.09) per diluted share, last year
-- Adjusted net income from continuing operations, which excludes the
non-cash impact of the change in fair value of derivative financial
instruments, was $3.2 million, or $0.02 per diluted share, up 247.1%
from adjusted net income of $0.9 million, or $0.01 per share, last
year(*)
"We achieved strong growth in revenues, gross and operating margins, and earnings in 2009," said Mr. Yangkan Chong, Chief Executive Officer. "This performance was driven by both organic growth and growth via strategic acquisitions. We increased the number of households connected to our natural gas network, grew the number of industrial customers we service, and expanded into new and attractive markets. We expect to continue to benefit from the strong demand for natural gas in China in the current year and thereafter."
Full Year 2009 Results
For the twelve months ended December 31, 2009, revenues were $11.8 million, an increase of 114.4% from $5.5 million in 2008. The increase was primarily due to an increase in the number households and industrial users connected to the Company's natural gas network. The number of connected households almost doubled, increasing from 13,400 at the end of 2008 to 26,600 by the end of 2009. Revenues from connection fees were $11.1 million, an increase of 125.5% from $4.9 million last year. Revenues from natural gas sales were $0.7 million, an increase of 19.0% from $0.6 million last year.
Cost of sales was $3.1 million, an increase of 65.8% from $1.9 million last year. The increase was primarily due to a corresponding increase in the number of households and industrial users connected to the Company's distribution network as cost of sales consists primarily of connection costs and purchase of natural gas from the Company's suppliers. Gross profit was $8.6 million, an increase of 139.8% from last year. Gross margin was 73.5%, an increase of 780 basis points from 65.7% last year. The increase in gross margin was primarily due to the high margin involved in connection services provided to industrial users.
Operating expenses were $3.7 million, an increase of 82.2% from $2.0 million last year. This increase was primarily due to the corresponding increase in revenues generated during the year; expenses related to the Company preparing to expand its business, such as adding more resources in areas like business development, outside consultants, and the hiring of additional staff to help strengthen the Company's internal controls; and registration rights penalties. Operating income was $4.9 million, an increase of 214.1% from $1.6 million last year. Operating margin was 42.0% compared to 28.7% last year.
The Company's full year 2009 and 2008 financial statements include a non-cash impact from the change in fair value of derivative financial instruments of $3.6 million and ($2.5 million), respectively.
Net income from continuing operations was $6.8 million, or $0.04 per diluted share, compared to a net loss from continuing operations of $1.6 million, or ($0.09) per diluted share, last year. Excluding the non-cash impact from the change in fair value of derivative financial instruments, the Company's adjusted income from continuing operations was $3.2 million, or $0.02 per diluted share, up 247.1% from $0.9 million, or $0.01 per diluted share, last year.(*)
In December 2009, the Company sold its Acheng Division for RMB 40 million (approximately $6 million). In 2008, The Company disposed of its interest in its Hunchun Sing Ocean subsidiary. The results of Acheng Division and Hunchun Sing Ocean are classified as discontinued operations on the Company's financial statements.
In fiscal 2009 and 2008, the Company recorded non-cash deemed preferred stock dividends of $2.2 million and $7.0 million, respectively, related to issuance of its Series A and B preferred shares. Net income attributable to common shareholders was $5.2 million, or $0.05 per diluted share, compared to a net loss attributable to common shareholders of $8.6 million, or ($0.09) per diluted share, last year. Adjusted net income attributable to common shareholders, which excludes the non-cash impact of the change in fair value of derivative financial instruments and non-cash deemed preferred dividends, was $3.8 million, or $0.02 per diluted share, up 281.7% from adjusted net income attributable to common shareholders of $1.0 million, or $0.01 per diluted share, last year (*)
(*) See table following this press release for a reconciliation of income
from continuing operations and diluted EPS to exclude the non-cash
impact from the change in fair value of derivative financial
instruments and for a reconciliation of net income attributable to
common shareholders to exclude the non-cash impact from the change in
fair value of derivative financial instruments and non-cash deemed
preferred dividends.
Financial Condition
As of December 31, 2009, the Company had cash and cash equivalents of $2.7 million and working capital of $0.9 million. The Company has no long term debt. Shareholders' equity was $15.0 million as of December 31, 2009. Capital expenditures for 2009 were approximately $5.1 million, which was primarily for the construction of gas pipelines and stations.
Recent Developments
In March 2010, the Company sold its subsidiary, Yingkou Zhongneng Gas Development Co., Ltd., for RMB 21.9 million (approximately $3.2 million).
In March 2010, the Company entered into an agreement to acquire a 70% equity interest in Beijing Century Dadi Gas Co., Ltd. and its affiliated companies (collectively, "Dadi Gas"). Dadi Gas is primarily engaged in the business of the supply of natural gas and construction and development of a gas pipeline network in Northern China. The total purchase price has not yet been determined, but will be based on a multiple of Dadi Gas's net profits for the fiscal year ended December 31, 2009, and has been capped at RMB 392.2 million (approximately $57.5 million).
In January 2010, the Company entered into an agreement to acquire Fuzhou Flying Dragon Zhongran Gas Inc. ("Fuzhou Zhongran") for RMB 26 million (approximately $3.8 million). Fuzhou Zhongran has the exclusive operating license from the Dongxiang County government in Jiangxi Province for the construction and development of a natural gas pipeline network for 30 years.
In December 2009, the Company entered into an agreement to acquire Fuzhou City Lean Zhongran Gas Inc. ("Lean Zhongran") for RMB 4.8 million (approximately $0.7 million). The purchase price is based on an appraised value of Lean Zhongran as of September 30, 2009, and will be adjusted to reflect the appraised value of the assets as of the closing date.
In December 2009, the Company acquired Wuyuan County Zhongran Gas Ltd. ("Wuyuan Zhongran") for RMB 6 million (approximately $0.9 million). Wuyuan Zhongran has an exclusive operating license from the local government for the construction and development of a gas pipeline network and gas supply in the county for 30 years.
In December 2009, the Company acquired Zhanhua Jiutai Gas Co. Ltd. ("Zhanhua Jiutai") for RMB 16.5 million (approximately $2.4 million). Zhanhua Jiutai has a 50-year exclusive right and operating license from the local government to construct and develop a gas pipeline network and supply gas in Zhanhua County.
Business Outlook
China New Energy primarily operates in the northeastern cities of China, around Bohai Bay, which is one of the seven key areas in the PRC government's general plan for natural gas development. The Company plans to continue to capitalize on the rise in natural gas consumption in China as the country shifts away from oil and coal to cleaner fuels like natural gas, and as the natural gas pipeline infrastructure in China continues to improve. Improved living standards and real estate development are driving demand for natural gas consumption in China and local governments now often require new residential buildings to incorporate natural gas connections in their designs.
The Company's growth strategy is to focus on under-penetrated, growing small- and medium-sized cities and enter into favorable franchise agreements with local governments for long-term exclusive rights to develop the local natural gas distribution network and supply natural gas in their area. China New Energy looks at the following criteria when identifying attractive areas for geographic expansion: size and density of population, concentration of industrial/commercial activities, environmental policies of the regional government, potential for further development, exclusivity of distribution, and required methods of delivery. The Company is also focused on diversifying its revenue stream towards a greater focus on industrial customers and natural gas sales. The Company's recently completed and announced acquisitions are in line with these selection criteria.
Mr. Chong concluded, "We are optimistic about our business and believe that with the acquisitions we made in 2009 and those that we have announced in 2010, China New Energy is well positioned to capitalize on the continued rising demand for natural gas consumption in China."
Conference Call
The Company will host a conference call at 9:00 a.m. Eastern Time on Friday, April 16, 2010, to discuss its financial results for the twelve months ended December 31, 2009. The call will be hosted by Mr. Yangkan Chong, Chief Executive Officer, and Mr. Eric Yu, Chief Financial Officer. To participate in this live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 775-2396. International callers should call +1 (702) 224-9924. The conference passcode is 68498286.
If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Friday, April 16, 2010, at 10:00 a.m. Eastern Time. To access the replay, call (800) 642-1687. International callers should call +1 (706) 645-9291. The conference passcode is 68498286.
Use of Non-GAAP Financial Information
GAAP results for years ended December 31, 2009 and 2008 include the significant non-cash charges which do not relate to the operation of the business including deemed preferred dividends related to the Company's Series A and B preferred stock and non-cash expenses related to the change in fair value of derivative financial instruments. These are non-cash events which do not affect the Company's operations. To supplement the Company's consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of these items in this release, which are adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations, adjusted net income attributable to common shareholders and adjusted earnings per share attributable to common shareholders. The Company's management believes that these non-GAAP measures provide investors with a better understanding of how the results relate to the Company's historical performance. The additional adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies. Management believes that these adjusted financial measures are useful to investors because they exclude non-cash expenses that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions as these measures provide a consistent method of comparison to historical periods. As a result, the provision of these adjusted measures allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. Moreover, management believes that these adjusted measures reflect the essential operating activities of the Company. Adjusted measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the adjusted financial measure. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded. A reconciliation of each adjusted measure to the nearest GAAP measure appears in the table at the end of this release.
About China New Energy Group Company
China New Energy Group Company ("China New Energy" or the "Company") is a vertically integrated natural gas company engaged in the development of natural gas distribution networks, and the distribution of natural gas to residential, industrial, and commercial users in small and medium sized cities in China. The Company generates revenues primarily from the connection fees it charges its customers for interconnecting to pipelines in its natural gas distribution networks, and fees for natural gas usage. For more information, please visit http://www.cnegc.com .
Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to access natural gas for distribution, and ability to identify and develop operational locations under favorable terms, changes in natural gas pricing mechanism imposed by the Chinese government, changes in the regulatory environment and future national or regional economic and competitive conditions, and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information, please contact:
Eric Yu, Chief Financial Officer
Email: ericyu@cnegc.com
Web: http://www.cnegc.com
Investor Relations Contact:
CCG Investor Relations
Mr. Athan Dounis, Account Manager
Phone: +1-646-213-1916
Email: athan.dounis@ccgir.com
Mr. Crocker Coulson, President
Phone: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
-FINANCIAL TABLES FOLLOW-
CHINA NEW ENERGY GROUP COMPANY
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2009 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,672,884 $ 5,612,356
Restricted cash 180,352 221,152
Accounts receivable, net of allowance
for doubtful accounts of $- and $- 6,137,403 1,501,431
Receivable from sale of subsidiary 5,119,055 --
Inventories, net 419,259 231,336
Prepaid expenses 280,337 128,748
Deemed receivable from former
shareholders of subsidiaries acquired
for settlement of certain liabilities 1,983,782 --
Net current assets of discontinued
operations -- 717,532
Total current assets 16,793,072 8,412,555
Property, plant and equipment, net 17,212,324 9,744,916
Other receivables 2,482,072 2,253,588
Deposits for acquisitions 197,696 --
Intangible assets, net 1,344,008 1,124,605
Deposits paid for acquisition of long
term assets 1,972,162 1,424,747
Goodwill 224,488 --
Net non-current assets of discontinued
operations -- 3,972,336
TOTAL ASSETS $ 40,225,822 $ 26,932,747
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 882,773 $ 105,573
Accruals and other payables 191,737 346,598
Acquisition consideration payable 1,651,888 1,838,946
Tax payable 1,600,683 228,933
Registration rights penalties payable 2,160,000 900,000
Related party payables 97,893 498,703
Dividends payable on preferred stock 509,381 194,000
Derivative financial instruments -
warrants 6,768,106 5,506,143
Liabilities to be settled by former
shareholders of subsidiaries acquired 1,983,782 --
Net liabilities of discontinued
operations -- 1,128,863
TOTAL CURRENT LIABILITIES 15,846,243 10,747,759
Commitments and contingencies
Preferred Stock: 10,000,000 shares
authorized, $0.001 par value Series A
Convertible Preferred Stock:
2,098,918 and 1,857,373 shares issued
and outstanding, liquidation preference
of $10,137,774 and $8,971,112,
respectively 7,031,818 7,031,818
Series B Convertible Preferred Stock:
1,116,388 and 0 shares issued and
outstanding, liquidation preference
of $5,399,969 and $0 2,153,307 --
CHINA NEW ENERGY GROUP COMPANY'S
STOCKHOLDERS' EQUITY
Common Stock: 500,000,000 shares
authorized, $0.001 par value,
101,788,199 and 100,000,041 shares
issued and outstanding, respectively 101,788 100,000
Additional paid in capital 10,152,971 9,396,046
Retained earnings (Accumulated deficit) 1,423,523 (3,809,149)
Statutory surplus reserve fund 1,746,890 1,746,890
Accumulated other comprehensive income 1,600,941 1,616,977
TOTAL CHINA NEW ENERGY GROUP COMPANY'S
STOCKHOLDERS' EQUITY 15,026,113 9,050,764
Non-controlling interest 168,341 102,406
TOTAL STOCKHOLDERS' EQUITY 15,194,454 9,153,170
TOTAL LIABILITIES, REDEEMABLE
CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY $ 40,225,822 $ 26,932,747
CHINA NEW ENERGY GROUP COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the year ended
December 31,
2009 2008
Revenues:
Connection services $ 11,093,444 $ 4,919,392
Natural gas 680,451 571,835
11,773,895 5,491,227
Cost of Revenues:
Connection services 2,468,537 1,386,320
Natural gas 655,686 498,377
3,124,223 1,884,697
Gross Profit 8,649,672 3,606,530
Operating Expenses:
General and administrative expenses 2,196,225 1,068,810
Selling expenses 245,692 62,668
Registration rights penalties 1,260,000 900,000
Total operating expenses 3,701,917 2,031,478
Operating Income 4,947,755 1,575,052
Other Income (Expenses):
Change in fair value of derivative
financial instruments - warrants 3,608,077 (2,553,870)
Gain on acquisition of Wuyuan 313,056 --
Interest income 69,560 11,777
Interest expense (10,719) (33,718)
Other income 13,022 4,972
Total other income (expenses) 3,992,996 (2,570,839)
Income (Loss) From Continuing
Operations, Before Income Tax 8,940,751 (995,787)
Income Tax 2,142,816 639,088
Income (Loss) From Continuing
Operations, net of Income Tax 6,797,935 (1,634,875)
Discontinued Operations:
Income from discontinued operations,
net of Income Tax 515,748 1,387,100
Gain (loss) on disposal of subsidiary 911,065 (1,098,253)
Income (loss) from Discontinued 1,426,813 288,847
Operations, net of Income Tax
Net Income (Loss) 8,224,748 (1,346,028)
Net Income Attributable to
Non-controlling Interest (65,935) (24,010)
Net Income (Loss) Attributable to China
New Energy Group 8,158,813 (1,370,038)
Dividends and Deemed Dividend on
Preferred Stock (2,926,141) (7,225,818)
Net Income (Loss) Attributable to
Common Stockholders $ 5,232,672 $ (8,595,856)
Other Comprehensive Income:
Net Income (Loss) 8,224,748 (1,346,028)
Foreign currency translation adjustment 16,036 924,621
Comprehensive income $ 8,240,784 $ (421,407)
Income (Loss) per share - Basic
Income (loss) from continuing
operations $ 0.05 $ (0.09)
Income (loss) from discontinued
operations 0.01 (0.00)
Total income (loss) per share $ 0.06 $ (0.09)
Income per share - Diluted
Income (loss) from continuing $ $
operations 0.04 (0.09)
Income (loss) from discontinued
operations 0.01 0.00
Total income (loss) per share $ 0.05 $ (0.09)
Weighted average Common Stock
outstanding
Basic 100,268,687 98,727,193
Diluted 209,282,696 124,375,102
CHINA NEW ENERGY GROUP COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended
December 31,
2009 2008
Cash flows from operating activities:
Net income (loss) $ 8,224,748 $ (1,346,028)
Net income from discontinued operations 1,426,813 288,847
Net income (loss) from continuing operations 6,797,935 (1,634,875)
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Change in fair value of derivative
financial instruments - warrants (3,608,077) 2,553,870
Gain on acquisition of Wuyuan (313,056) --
Registration rights penalties 1,260,000 900,000
Depreciation and amortization 358,226 387,443
Changes in operating assets and liabilities:
Accounts receivable (4,633,674) (287,336)
Other receivables (136,184) 561,356
Inventories (104,892) 76,903
Prepaid expenses (151,550) (1,521,871)
Accounts payable 776,795 (669,613)
Accruals and other payables (411,305) (1,481,756)
Tax payable 1,371,043 (647,387)
Cash provided by (used in) operating
activities - continuing operations 1,205,261 (1,763,266)
Cash provided by (used in) operating
activities - discontinued operations (360,372) 420,982
Net cash provided by (used in) operating
activities 844,889 (1,342,284)
Cash flows from investing activities
Proceeds from discontinued operations 730,900 --
Deposit paid and acquisition of
property, plant and equipment (5,136,626) (1,846,691)
Net cash received from exchange
of subsidiary -- 66,841
Deposits for acquisitions (197,696) --
Payment made to acquire subsidiary -
Chensheng (1,838,946) --
Payment made to acquire subsidiary -
Wuyuan (237,621) --
Payment made to acquire subsidiary -
Zhanhua Jiutai (1,398,766) --
Cash used in investing
activities-continuing operations (8,078,755) (1,779,850)
Cash used in investing
activities-discontinued operations (511,375) (915,403)
Net cash used in investing activities (8,590,130) (2,695,253)
Cash flows from financing activities
Net proceeds from issuance of
preferred stock 4,729,472 7,076,302
Contribution from former non-
controlling interest 441,827 --
(Repayment to) related parties (400,529) --
Proceeds from related parties -- 335,132
Change in restricted cash 40,800 (221,152)
Cash provided by financing
activities-continuing operations 4,811,570 7,190,282
Cash provided by financing
activities-discontinued operations -- --
Net cash provided by financing activities 4,811,570 7,190,282
Effect of exchange rate changes on
cash and cash equivalents (5,801) 148,583
Net (decrease) increase in cash and
cash equivalents (2,939,472) 3,301,328
Cash and cash equivalents - beginning
of year 5,612,356 2,311,028
Cash and cash equivalents - end of year $2,672,884 $5,612,356
Supplemental disclosures of cash flow
information:
Cash paid for interest -- --
Cash paid for income tax $1,302,664 $1,885,638
Supplemental disclosure of non-cash
investing and financing activities:
Preferred stock dividends payable $772,334 $194,000
Preferred stock dividends paid in
common stock 456,953 --
Registration rights penalties 1,260,000 900,000
Acquisition consideration payable
related to the acquisition of Chensheng -- 1,838,946
Acquisition consideration payable
related to the acquisition of Wuyuan 636,850 --
Acquisition consideration payable
related to the acquisition of Zhanhua Jiutai 1,015,038 --
Receivable for disposal of
discontinued operations $5,119,055 $--
CHINA NEW ENERGY GROUP COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Retained
Additional Earnings
Common Stock Paid-in (Accumulated
Shares Amount Capital Deficit)
BALANCE, December 31, 2007 94,908,650 $94,909 $5,277,108 $4,786,707
Recapitalization 7,091,391 7,091 (7,091) --
Cancellation of stock in
recapitalization (2,000,000) (2,000) 2,000 --
Warrants issued in
connection with
private placement -- -- (984,091) --
Cost of raising capital -- -- (1,923,698) --
Deemed dividend on
issuance of
preferred stock -- -- 7,031,818 (7,031,818)
Preferred stock dividend -- -- -- (194,000)
Disposal of non-
controlling interest -- -- -- --
Net income (loss) -- -- -- (1,370,038)
Currency translation
adjustment -- -- -- --
BALANCE,
December 31, 2008 100,000,041 $100,000 $9,396,046 $(3,809,149)
Warrants issued in
connection with
private placement -- -- (1,623,346) --
Cost of raising capital -- -- (670,528) --
To record deemed
dividend due to
beneficial conversion
feature of preferred
shares -- -- 2,153,807 (2,153,807)
Contribution from non-
controlling interest -- -- 441,827 --
Preferred stock dividend -- -- -- (772,334)
Dividend paid by Common
Stock 1,788,158 1,788 455,165 --
Net income -- -- -- 8,158,813
Currency translation
adjustment -- -- -- --
BALANCE,
December 31, 2009 101,788,199 $101,788 $10,152,971 $1,423,523
CHINA NEW ENERGY GROUP COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Accumulated
Statutory Other Non- Total
Surplus Compre- cont- Stock
Reserve hensive rolling -holders'
Fund Income Interest Equity
BALANCE, December 31, 2007 $1,746,890 $692,356 $97,875 $12,695,845
Recapitalization -- -- -- --
Cancellation of stock in
recapitalization -- -- -- --
Warrants issued in
connection with
private placement -- -- -- (984,091)
Cost of raising capital -- -- -- (1,923,698)
Deemed dividend on issuance
of preferred stock -- -- -- --
Preferred stock dividend -- -- -- (194,000)
Disposal of non-controlling
interest -- -- (19,479) (19,479)
Net income (loss) -- -- 24,010 (1,346,028)
Currency translation
adjustment -- 924,621 -- 924,621
BALANCE, December 31, 2008 $1,746,890 $1,616,977 $102,406 $9,153,170
Warrants issued in
connection with private
placement -- -- -- (1,623,346)
Cost of raising capital -- -- -- (670,528)
To record deemed dividend
due to beneficial
conversion feature of
preferred shares -- -- -- --
Contribution from non-
controlling interest -- -- -- 441,827
Preferred stock dividend -- -- -- (772,334)
Dividend paid by
Common Stock -- -- -- 456,953
Net income -- -- 65,935 8,224,748
Currency translation
adjustment -- (16,036) -- (16,036)
BALANCE, December 31, 2009 $1,746,890 $1,600,941 $168,341 $15,194,454
CHINA NEW ENERGY GROUP COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Twelve Months Ended December 31,
2009
Adjusted Net Income (Loss) and
Diluted EPS From Continuing Operations 2009 2008
GAAP Net Income (Loss) from
Continuing Operations $6,797,935 ($1,634,875)
Change in fair value of derivative
financial instruments - warrants ($3,608,077) $2,553,870
Adjusted Amount Net Income from
Continuing Operations $3,189,858 $918,995
Weighted average number of shares -
Diluted 209,282,696 124,375,102
Adjusted Diluted EPS from Continuing
Operations $0.02 $0.01
Twelve Months Ended December 31,
2009
Adjusted Net Income (Loss) and
Diluted EPS Attributable to Common
Shareholders 2009 2008
GAAP Net Income (Loss) and
Attributable to Common Shareholders $5,232,672 ($8,595,856)
Non-cash Deemed Preferred Dividend $2,153,807 $7,031,818
Change in fair value of derivative
financial instruments - warrants ($3,608,077) $2,553,870
Adjusted Amount $3,778,402 $989,832
Weighted average number of shares -
Diluted 209,282,696 124,375,102
Adjusted Diluted EPS Attributable to
Common Shareholders $0.02 $0.01
