Delaware
|
98-0233941 |
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
42
Mercantile Way
|
|
P.O.
Box 3087 Malaga D C 6945
|
|
Western
Australia
|
|
(Address
of principal executive offices)
|
|
Issuer’s
telephone number: +61 (8) 9248 3188
|
|
Securities
registered under Section 12(b) of the Exchange Act:
|
None
|
Securities
registered under Section 12(g) of the Exchange Act:
|
Common
stock, $0.01 par value
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated filer ¨ (Do not check if a smaller reporting company) |
Smaller
reporting company S
|
Item
1.
|
Description
of Business.
|
|
·
|
the
tendency to separate into chips or fragments when subjected to high
impact;
|
|
·
|
uneven
base metal dilution resulting in uneven alloy content;
and
|
|
·
|
rough
surfaces which result in poor material
flow.
|
|
·
|
the
mining of iron, gold, nickel, coal, copper and other
ores;
|
|
·
|
brick
and cement works;
|
|
·
|
power
stations;
|
|
·
|
the
manufacture of ore feed bins, transfer chutes, dredging systems and
conveyor side skirts;
|
|
·
|
bulldozer
blades; and
|
|
·
|
truck
tray and bucket loader liners.
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Item
1A.
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Risk
Factors.
|
|
·
|
With
a price of less than $5.00 per
share;
|
|
·
|
That
are not traded on a “recognized” national
exchange;
|
|
·
|
Whose
prices are not quoted on the Nasdaq automated quotation system (Nasdaq
listed stock must still have a price of not less than $5.00 per share);
or
|
|
·
|
In
issuers with net tangible assets less than $2.0 million (if the issuer has
been in continuous operation for at least three years) or $5.0 million (if
in continuous operation for less than three years), or with average
revenues of less than $6.0 million for the last three
years.
|
|
·
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Establish
and develop such a sales force;
|
|
·
|
Gain
market acceptance for our products;
|
|
·
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Obtain
and retain qualified sales personnel on acceptable terms;
and
|
|
·
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Meet
our proposed marketing schedules or
plans.
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Item
1B.
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Unresolved
Staff Comments.
|
Item
2.
|
Description
of Property.
|
Item
3.
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Legal
Proceedings.
|
Item
4.
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Submission
of Matters to a Vote of Security
Holders.
|
Item
5.
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Market
for Common Equity and Related Stockholders Matters and Issuer Purchases of
Equity Securities
|
Bid
Price Per Share
|
||||||||
Year
ended September 30, 2009
|
High
|
Low
|
||||||
October 1
– December 31, 2008
|
$ | 1.36 | $ | 0.35 | ||||
January 1
– March 31, 2009
|
$ | 0.52 | $ | 0.26 | ||||
April 1
– June 30, 2009
|
$ | 0.48 | $ | 0.23 | ||||
July 1
– September 30, 2009
|
$ | 2.85 | $ | 0.32 | ||||
Year
ended September 30, 2008
|
High
|
Low
|
||||||
October 1
– December 31, 2007
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$ | 0.72 | $ | 0.49 | ||||
January 1
– March 31, 2008
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$ | 1.97 | $ | 1.22 | ||||
April 1
– June 30, 2008
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$ | 2.50 | $ | 1.25 | ||||
July 1
– September 30, 2008
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$ | 2.76 | $ | 1.35 |
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
(a)
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(b)
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(c)
|
|
Equity
compensation plans approved by security holders (1)
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None
|
None
|
2,000,000
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Equity
compensation plans not approved by security holders
|
—
|
—
|
—
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Total
|
None
|
None
|
2,000,000
|
Item
6.
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Selected
Financial Data
|
Item
7.
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Management's
Discussion and Analysis or Plan of
Operation
|
Less
Than
|
After
|
|||||||||||||||||||
Total
|
1
Year
|
1-3
Years
|
4-5
Years
|
5
Years
|
||||||||||||||||
Contractual
Obligations
|
||||||||||||||||||||
Long
term debt
|
239,711 | 93,868 | 145,843 | - | - | |||||||||||||||
Operating
leases
|
187,132 | 187,132 | - | - | ||||||||||||||||
Total
contractual obligations
|
$ | 426,843 | $ | 281,000 | $ | 145,843 | - | - |
Item
7B.
|
Quantitative
and Qualitative Disclosures About Market
Risk.
|
Item
8.
|
Financial
Statements.
|
Item
9.
|
Changes
In and Disagreements with Accountants on Accounting and Financial
Disclosure.
|
(a)
|
Evaluation
of disclosure controls and
procedures
|
(b)
|
Changes
in internal control over financial
reporting.
|
Item
9B.
|
Other
Information
|
Item
10.
|
Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section
16(a) of the Exchange Act
|
Name
|
Age
|
Position
|
||
Gene
Kostecki
|
64
|
President,
Chief Executive Officer and a Director
|
||
Alan
C. Winduss
|
68
|
Chief
Financial Officer, Secretary and a
Director
|
Item
11.
|
Executive
Compensation.
|
SUMMARY
COMPENSATION TABLE
|
||||||||||||||||||
Annual
Compensation
|
||||||||||||||||||
Name
and Position
|
Year
|
Salary
|
Bonus
|
Long-Term
Compensation
|
All
Other Compensation
|
|||||||||||||
Gene
Kostecki
|
2009
|
$ | 91,636 | $ | 0 | — | — | |||||||||||
President
and Chief
|
2008
|
$ | 113,453 | $ | 0 | — | — | |||||||||||
Executive
Officer
|
2007
|
$ | 121,301 | $ | 0 | — | — |
Item
12.
|
Security
Ownership of Certain Beneficial Owners and
Management.
|
|
·
|
each
person who we know beneficially owns more than 5% of the outstanding
shares of our common stock;
|
|
·
|
each
of our executive officers and directors;
and
|
|
·
|
all
of our officers and directors as a
group.
|
Name
of Beneficial Owner
|
Number
of Shares
|
Percentage
of Common Stock Beneficially Owned
|
||||||
Gene
Kostecki
|
10,313,300 | 59.4 | % | |||||
Alan
C. Winduss
|
1,893,250 | 10.9 | % | |||||
All
officers and directors as a group (two persons)
|
12,206,550 | 70.4 | % |
Item
13.
|
Certain
Relationships and Related
Transactions.
|
Item
14.
|
Principal
Accountant Fees and Services.
|
2009
|
2008
|
|||||||
Audit
Fees
|
52,793 | 51,744 | ||||||
Audit-Related
Fees
|
- | - | ||||||
Tax
Fees
|
- | - | ||||||
All
Other Fees
|
- | - |
Item
15.
|
Exhibits
|
Exhibit
No.
|
Description
|
|
3.1
|
Certificate
of Incorporation*
|
|
3.2
|
By-laws*
|
|
4.1
|
Specimen
Certificate*
|
|
10.1
|
2000
Stock Option Plan*
|
|
10.2
|
License
Agreement, dated May 4, 2000, between Alloy Steel and Kenside Investments,
Ltd.*
|
|
10.3
|
Employment
Agreement, dated October 2, 2000, between Alloy Steel and Gene
Kostecki*
|
|
10.4
|
Employment
Agreement, dated October 2, 2000, between Alloy Steel and Alan
Winduss*
|
|
10.5
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Berryhill
Investments, Ltd.*
|
|
10.6
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Chartreuse
Nominees Pty. Ltd.*
|
|
10.7
|
Amended
and Restated Consulting Agreement, dated October 2, 2000, between Alloy
Steel and Persia Consulting Group, Inc.*
|
|
10.8
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Ragstar
Investments, Ltd.*
|
|
10.9
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss
Pty. Ltd.*
|
|
10.10
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Ames Nominees
Pty. Ltd.*
|
|
10.11
|
Lease
Agreement, dated July 1, 2000, between Alloy Steel and Raglan Securities
Pty. Ltd.*
|
|
10.12
|
Asset
Purchase Agreement, dated October 2, 2000 between Alloy Steel and Collier
Unit Trust*
|
|
10.13
|
Equipment
Purchase Agreement, dated October 2, 2000, between Alloy Steel and Collier
Unit Trust*
|
|
10.14
|
Asset
Purchase Agreement, dated October 2, 2000, by and among Alloy Steel and
Gene Kostecki and Alan Winduss*
|
|
10.15
|
Amendment
dated July 1, 2004, to Employment Agreement between Alloy Steel and Gene
Kostecki*
|
|
10.16
|
Amendment
dated July 1, 2004, to Employment Agreement between Alloy Steel and Alan
Winduss*
|
|
31.1
|
Certification
of the Chief Executive Officer required by Rule 13a-14(a) or Rule
15d-14(a)**
|
|
31.2
|
Certification
of the Chief Financial Officer required by Rule 13a-14(a) or Rule
15d-14(a)**
|
|
32.1
|
Certification
of the Chief Executive Officer required by Rule 13a-14(b) or Rule
15d-14(b) and 18 U.S.C. 1350**
|
|
32.2
|
Certification
of the Chief Financial Officer required by Rule 13a-14(b) or Rule
15d-14(b) and 18 U.S.C. 1350**
|
*
|
Previously filed. See Exhibit Index.
|
|
**
|
Filed herewith.
|
Dated:
December 23, 2009
|
ALLOY
STEEL INTERNATIONAL, INC.
|
|||
(Registrant)
|
||||
By:
|
/s/ Gene Kostecki | |||
Gene
Kostecki
|
||||
President
and Chief Executive Officer
|
/s/ Gene Kosetcki
|
Director
and
|
|||
Gene
Kostecki
|
President
and Chief Executive Officer (Principal Executive Officer)
|
December 23,
2009
|
||
/s/ Alan Winduss
|
Director
and
|
|||
Alan
C. Winduss
|
Chief
Financial Officer and Secretary (Principal Financial and Accounting
Officer)
|
December 23,
2009
|
Exhibit
No.
|
Description
|
|
3.1
|
Certificate
of Incorporation [Incorporated by reference to Exhibit 3.1 to our
Registration Statement on Form SB-2, SEC File No. 333-49146, filed on
November 2, 2000, as amended (the “Registration
Statement”).]
|
|
3.2
|
By-laws
[Incorporated by reference to Exhibit 3.2 to the Registration
Statement.]
|
|
4.1
|
Specimen
Certificate [Incorporated by reference to Exhibit 4.1 to the Registration
Statement.]
|
|
10.1
|
2000
Stock Option Plan [Incorporated by reference to Exhibit 10.1 to the
Registration Statement.]
|
|
10.2
|
License
Agreement, dated May 4, 2000, between Alloy Steel and Kenside Investments,
Ltd. [Incorporated by reference to Exhibit 10.2 to the Registration
Statement.]
|
|
10.3
|
Employment
Agreement, dated October 2, 2000, between Alloy Steel and Gene Kostecki
[Incorporated by reference to Exhibit 10.3 to the Registration
Statement.]
|
|
10.4
|
Employment
Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss
[Incorporated by reference to Exhibit 10.4 to the Registration
Statement.]
|
|
10.5
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Berryhill
Investments, Ltd. [Incorporated by reference to Exhibit 10.5 to the
Registration Statement.]
|
|
10.6
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Chartreuse
Nominees Pty. Ltd. [Incorporated by reference to Exhibit 10.6 to the
Registration Statement.]
|
|
10.7
|
Amended
and Restated Consulting Agreement, dated October 2, 2000, between Alloy
Steel and Persia Consulting Group, Inc. [Incorporated by reference to
Exhibit 10.7 to the Registration Statement.]
|
|
10.8
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Ragstar
Investments, Ltd. [Incorporated by reference to Exhibit 10.8 to the
Registration Statement.]
|
|
10.9
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss
Pty. Ltd. [Incorporated by reference to Exhibit 10.9 to the Registration
Statement.]
|
|
10.10
|
Consulting
Agreement, dated October 2, 2000, between Alloy Steel and Ames Nominees
Pty. Ltd. [Incorporated by reference to Exhibit 10.10 to the Registration
Statement.]
|
|
10.11
|
Lease
Agreement, dated July 1, 2000, between Alloy Steel and Raglan Securities
Pty. Ltd. [Incorporated by reference to Exhibit 10.11 to the Registration
Statement.]
|
|
10.12
|
Asset
Purchase Agreement, dated October 2, 2000 between Alloy Steel and Collier
Unit Trust [Incorporated by reference to Exhibit 10.12 to the Registration
Statement.]
|
|
10.13
|
Equipment
Purchase Agreement, dated October 2, 2000, between Alloy Steel and Collier
Unit Trust [Incorporated by reference to Exhibit 10.13 to the Registration
Statement.]
|
|
10.14
|
Asset
Purchase Agreement, dated October 2, 2000, by and among Alloy Steel and
Gene Kostecki and Alan Winduss [Incorporated by reference to Exhibit 10.14
to the Registration Statement.]
|
|
10.15
|
Amendment
dated July 1, 2004, to Employment Agreement between Alloy Steel and Gene
Kostecki.
|
|
10.16
|
Amendment
dated July 1, 2004, to Employment Agreement between Alloy Steel and Alan
Winduss.
|
|
Certification
of the Chief Executive Officer required by Rule 13a-14(a) or Rule
15d-14(a)
|
||
Certification
of the Chief Financial Officer required by Rule 13a-14(a) or Rule
15d-14(a)
|
||
Certification
of the Chief Executive Officer required by Rule 13a-14(b) or Rule
15d-14(b) and 18 U.S.C. 1350
|
||
Certification
of the Chief Financial Officer required by Rule 13a-14(b) or Rule
15d-14(b) and 18 U.S.C. 1350
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Financial Statements
|
|
Consolidated
Balance Sheet September
30, 2009 and 2008
|
F-3
|
Consolidated
Statements of Operations Years
ended September 30, 2009 and 2008
|
F-4
|
Consolidated
Statements of Stockholders' Equity Years
ended September 30, 2009 and 2008
|
F-5
|
Consolidated
Statements of Cash Flows Years
ended September 30, 2009 and 2008
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7
– 16
|
/s/
UHY Haines Norton
|
|
Chartered
Accountants
|
Sep-09
|
Sep-08
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 424,090 | $ | 664,054 | ||||
Accounts
receivable
|
3,104,393 | 2,290,147 | ||||||
Inventories
|
2,247,759 | 2,365,049 | ||||||
Prepaid
expenses and other current assets
|
82,948 | 70,161 | ||||||
Total
current assets
|
5,859,190 | 5,389,411 | ||||||
Property and equipment,
net
|
3,350,600 | 2,976,290 | ||||||
Other
assets
|
||||||||
Investments
|
222,702 | 173,422 | ||||||
Other
assets
|
17,863 | 17,863 | ||||||
Total
other assets
|
240,565 | 191,285 | ||||||
$ | 9,450,355 | $ | 8,556,986 | |||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities
|
||||||||
Notes
payable, current portion
|
$ | 93,868 | $ | 75,739 | ||||
Accrued
officers' salaries
|
11,745 | 14,998 | ||||||
Royalties
payable, related party
|
936,829 | 763,176 | ||||||
Current
tax payable
|
- | 1,100,129 | ||||||
Accounts
payable and other current liabilities
|
2,338,297 | 1,026,329 | ||||||
Total
current liabilities
|
3,380,739 | 2,980,371 | ||||||
Long-term
liabilities
|
||||||||
Notes
payable, less current portion
|
145,843 | 225,728 | ||||||
Notes
payable, officers, less current portion
|
255 | - | ||||||
Employee
entitlement provisions
|
11,916 | 9,402 | ||||||
Deferred
tax liabilities
|
212,338 | 19,342 | ||||||
Total
long-term liabilities
|
370,352 | 254,472 | ||||||
Commitments
and contingencies
|
||||||||
Stockholders'
equity
|
||||||||
Preferred
stock, $.01 par value, authorized 3,000,000 shares; issued and outstanding
- none
|
- | - | ||||||
Common
stock, $.01 par value, authorized 50,000,000 shares; issued and
outstanding 17,350,000 shares
|
173,500 | 173,500 | ||||||
Capital
in excess of par value
|
1,767,512 | 1,769,382 | ||||||
Accumulated
income
|
2,830,721 | 2,902,976 | ||||||
Accumulated
other comprehensive income
|
931,743 | 474,419 | ||||||
Non
Controlling Interest
|
(4,212 | ) | 1,866 | |||||
Total
stockholders' equity
|
5,699,264 | 5,322,143 | ||||||
$ | 9,450,355 | $ | 8,556,986 |
Sep-09
|
Sep-08
|
|||||||
Sales
|
$ | 8,819,217 | $ | 13,511,458 | ||||
Cost
of sales
|
5,747,172 | 6,541,427 | ||||||
Gross
profit
|
3,072,045 | 6,970,031 | ||||||
Selling,
general and administrative expenses
|
3,056,352 | 3,359,311 | ||||||
Profit
(Loss) from operations
|
15,693 | 3,610,720 | ||||||
Other
income (expense)
|
||||||||
Interest
income
|
26,306 | 64,424 | ||||||
Interest
expense
|
(39,363 | ) | (20,938 | ) | ||||
Dividend
income
|
6,785 | 6,387 | ||||||
Insurance
recovery
|
27,096 | 56,119 | ||||||
Sundry
Income
|
24,135 | 30,154 | ||||||
Writedown
for fair value adjustment
|
- | (12,195 | ) | |||||
Profit
on disposal of property and equipment
|
- | 39 | ||||||
Total
other income
|
44,959 | 123,990 | ||||||
Income
(loss) before income tax (expense) benefit
|
60,652 | 3,734,710 | ||||||
Income
tax (expense) benefit
|
(138,509 | ) | (1,164,368 | ) | ||||
Net
income (loss)
|
(77,857 | ) | 2,570,342 | |||||
Net
(income) loss attributable to non controlling interests
|
5,602 | 2,137 | ||||||
Net
income (loss) attributable to stockholders
|
$ | (72,255 | ) | $ | 2,572,479 | |||
Basic
and diluted income (loss) per common share
|
$ | (0.004 | ) | $ | 0.15 | |||
Weighted
average number of common shares used in computing basic and diluted income
(loss)per common share
|
17,350,000 | 17,350,000 |
Capital
in
|
|
|
Accumulated
Other
|
Non
|
Total
|
|||||||||||||||||||||||||||
Common
Stock
|
excess of |
Accumulated
|
Comprehensive
|
Comprehensive | controlling | Stockholders' | ||||||||||||||||||||||||||
Shares
|
Amount
|
par value | Income | Income | Income | Interests | Equity | |||||||||||||||||||||||||
Balances,
September 30, 2007
|
17,350,000
|
$
|
173,500
|
1,769,382
|
330,497
|
1,086,631
|
$
|
$
|
3,360,010
|
|||||||||||||||||||||||
Net
Loss
|
2,572,479
|
$
|
2,572,479
|
2,572,479
|
||||||||||||||||||||||||||||
Other comprehensive income, | ||||||||||||||||||||||||||||||||
Foreign
currency translation adjustment
|
(547,645
|
)
|
(547,645
|
)
|
(547,645
|
)
|
||||||||||||||||||||||||||
Fair
value adjustment for available for sale assets
|
(64,567
|
)
|
(64,567
|
)
|
(64,567
|
)
|
||||||||||||||||||||||||||
Total
comprehensive income - Year ended September 30, 2007
|
$
|
1,960,267
|
||||||||||||||||||||||||||||||
Non
controlling interest in subsidiary
|
||||||||||||||||||||||||||||||||
Issued
capital in subsidiary
|
4,000
|
|||||||||||||||||||||||||||||||
Accumulated
income (loss)
|
(2,137
|
)
|
||||||||||||||||||||||||||||||
Accumulated comprehensive
income
|
3
|
1,866
|
||||||||||||||||||||||||||||||
Balances,
September 30, 2008
|
17,350,000
|
173,500
|
1,769,382
|
2,902,976
|
474,419
|
1,866
|
5,322,143
|
|||||||||||||||||||||||||
Net
Income
|
(72,255
|
)
|
$
|
(72,255
|
)
|
(72,255
|
)
|
|||||||||||||||||||||||||
Other comprehensive income, | ||||||||||||||||||||||||||||||||
Foreign
currency translation adjustment
|
430,254
|
430,254
|
430,254
|
|||||||||||||||||||||||||||||
Fair
value adjustment for available for sale assets
|
27,070
|
27,070
|
27,070
|
|||||||||||||||||||||||||||||
Total
comprehensive income - Year ended September 30, 2009
|
$
|
385,069
|
||||||||||||||||||||||||||||||
Non
controlling interest in subsidiary
|
||||||||||||||||||||||||||||||||
Accumulated
income (loss)
|
(5,602
|
)
|
||||||||||||||||||||||||||||||
Current
year other comprehensive loss
|
(476
|
)
|
(6,078
|
)
|
||||||||||||||||||||||||||||
Reduction
in capital on incorporation of Subsidiaries
|
(1,870
|
)
|
(1,870
|
)
|
||||||||||||||||||||||||||||
Balances,
September 30, 2009
|
17,350,000
|
$
|
173,500
|
$
|
1,767,512
|
$
|
2,830,721
|
$
|
931,743
|
$
|
(4,212
|
)
|
$
|
5,699,264
|
Sep-09
|
Sep-08
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income (loss)
|
$ | (72,255 | ) | $ | 2,572,479 | |||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
|
187,877 | 198,080 | ||||||
Write
down of intangible assets and other assets
|
- | 12,195 | ||||||
Profit
on disposal of property and equipment
|
- | (39 | ) | |||||
Dividends
reinvested directly to investments
|
(5,129 | ) | (3,066 | ) | ||||
Loss
attributable to non controlling interests
|
(5,602 | ) | (2,137 | ) | ||||
Increase
(decrease) in cash and cash equivalents attributable to changes in
operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(1,144,751 | ) | 14,844 | |||||
Inventories
|
147,633 | (1,878,924 | ) | |||||
Income
taxes receivable
|
(833,490 | ) | - | |||||
Prepaid
expenses and other current assets
|
2,184 | 66,266 | ||||||
Accrued
officer's salaries
|
(3,253 | ) | (315,080 | ) | ||||
Accounts
payable and other current liabilities
|
1,921,860 | 129,793 | ||||||
Income
taxes payable
|
- | 633,276 | ||||||
Net
cash provided by operating activities
|
195,074 | 1,427,687 | ||||||
Cash
flows from investing activities
|
||||||||
Purchase
of property and equipment
|
(345,400 | ) | (644,903 | ) | ||||
Acquisition
of interest in subsidiary
|
- | (17,863 | ) | |||||
Purchase
of investments
|
- | (253,197 | ) | |||||
Net
cash used in investing activities
|
(345,400 | ) | (915,963 | ) | ||||
Cash
flows from financing activities
|
||||||||
Repayment
on notes and loans payable
|
(67,586 | ) | (296,305 | ) | ||||
Proceeds
from capital issued to non controlling interests
|
- | 4,000 | ||||||
Net
cash used in financing activities
|
(67,586 | ) | (292,305 | ) | ||||
Effect
of foreign exchange rate changes on cash and cash
equivalents
|
(22,052 | ) | (39,660 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
|
(239,964 | ) | 179,759 | |||||
Cash and cash
equivalents, beginning of year
|
664,054 | 484,295 | ||||||
Cash and cash
equivalents, end of year
|
$ | 424,090 | $ | 664,054 | ||||
Supplemental disclosures of
cash flow information,
|
||||||||
cash
paid during the years for:
|
||||||||
Income
taxes
|
$ | 971,999 | $ | 531,093 | ||||
Interest
|
$ | 39,568 | $ | (22,849 | ) | |||
Supplemental
disclosures of non-cash investing and financing
activities,
|
||||||||
Equipment
acquired under notes payable
|
$ | - | $ | 142,369 |
1.
|
Nature
of operations
|
2.
|
Summary
of significant accounting policies
|
2.
|
Summary
of significant accounting policies
(continued)
|
Estimated
|
|
Asset
|
Useful
Lives
|
Plant
and equipment
|
5-20
years
|
Furniture
and fixtures
|
5-7
years
|
Vehicles
|
3-5
years
|
Office
and computer equipment
|
3-5
years
|
2.
|
Summary
of significant accounting policies
(continued)
|
2.
|
Summary
of significant accounting policies
(continued)
|
3.
|
Inventories
|
2009
|
2008
|
|||||||
Raw
materials
|
$ | 642,461 | $ | 1,564,030 | ||||
Work
in progress
|
124,343 | 35,573 | ||||||
Finished
goods
|
1,480,955 | 765,446 | ||||||
$ | 2,247,759 | $ | 2,365,049 |
4.
|
Prepaid
expenses and other current assets
|
2009
|
2008
|
|||||||
Prepaid
expenses
|
$ | 68,256 | $ | 63,992 | ||||
Deposit
paid to suppliers
|
14,692 | 2,660 | ||||||
Goods
and services tax receivable
|
- | 3,509 | ||||||
$ | 82,948 | $ | 70,161 |
5.
|
Property
and equipment
|
2009
|
2008
|
|||||||
Leasehold
Land
|
$ | 23,123 | $ | 23,123 | ||||
Less
accumulated amortization
|
3,894 | 2,352 | ||||||
$ | 19,229 | 20,771 | ||||||
Plant
and equipment
|
$ | 4,212,274 | $ | 3,586,645 | ||||
Furniture
and fixtures
|
43,235 | 40,603 | ||||||
Vehicles
|
278,287 | 261,772 | ||||||
Leasehold
Improvements
|
33,466 | 31,480 | ||||||
Office
and computer equipment
|
168,203 | 147,085 | ||||||
4,735,465 | 4,067,585 | |||||||
Less
accumulated depreciation
|
1,404,094 | 1,112,066 | ||||||
$ | 3,331,371 | $ | 2,955,519 | |||||
$ | 3,350,600 | $ | 2,976,290 |
6.
|
Investments
|
2009
|
2008
|
|||||||
Non-current
assets
|
$ | 222,702 | $ | 173,422 |
6.
|
Investments
(continued)
|
Fair
Value Measurements
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Marketable
Securities Long term
|
$ | 222,702 | - | - | $ | 222,702 |
7.
|
Notes
Payable
|
2009
|
2008
|
|||||||
Note
payable (a)
|
$ | 9,248 | $ | 12,377 | ||||
Note
payable (b)
|
93,924 | 130,472 | ||||||
Note
payable (c)
|
9,095 | 15,306 | ||||||
Note
payable (d)
|
35,358 | 42,672 | ||||||
Note
payable (e)
|
92,086 | 100,640 | ||||||
239,711 | 301,467 | |||||||
Less
current portion
|
93,868 | 75,739 | ||||||
$ | 145,843 | $ | 225,728 |
(a)
|
The
note is payable in monthly installments of $375 including interest at a
rate of 7.61% per annum, with a final payment in March 2010. The note is
collateralized by the underlying equipment and is guaranteed by the
officers of the Company.
|
(b)
|
The
note is payable in monthly installments of $4,420 including interest at a
rate of 7.25% per annum, with a final balloon payment in November 2010.
The note is collateralized by the underlying equipment and is guaranteed
by the officers of the Company.
|
(c)
|
The
note is payable in monthly installments of $681 including interest at a
rate of 7.61% per annum, with a final balloon payment in February
2010. The note is collateralized by the underlying equipment
and is guaranteed by the officers of the
Company.
|
(d)
|
The
note is payable in monthly installments of $962 including interest at a
rate of 9.22% per annum, with a final payment in March
2012. The note is collateralized by the underlying equipment
and is guaranteed by the officers of the
company.
|
(e)
|
The
note is payable in monthly installments of $2,226 including interest at a
rate of 9.65% per annum, with a final payment in June 2012. The
note is collateralized by the underlying equipment and is guaranteed by
the officers of the company.
|
Year
ending September 30,
|
||||
2010
|
93,868 | |||
2011
|
75,900 | |||
2012
|
69,943 | |||
$ | 239,711 |
8.
|
Income
taxes
|
2009
|
2008
|
|||||||
Australia
|
$ | 412,267 | $ | 3,929,921 | ||||
Mongolia
|
(8,404 | ) | (5,343 | ) | ||||
United
States
|
(337,609 | ) | (189,868 | ) | ||||
$ | 60,652 | $ | 3,734,710 |
2009
|
2008
|
|||||||
Current
|
||||||||
Foreign
|
$ | (14,692 | ) | $ | 1,100,129 | |||
Deferred
|
||||||||
Foreign
|
153,201 | 64,239 | ||||||
$ | 138,509 | $ | 1,164,368 |
2009
|
2008
|
|||||||
Deferred
tax assets
|
||||||||
Net
operating loss carryforwards
|
$ | 794,496 | $ | 676,333 | ||||
Other
|
176,781 | 92,894 | ||||||
911,127 | 769,227 | |||||||
Less
valuation allowance
|
(794,496 | ) | (676,333 | ) | ||||
176,781 | 92,894 | |||||||
Deferred
tax liabilities
|
||||||||
Other
|
(389,119 | ) | (112,236 | ) | ||||
Deferred
tax assets (liabilities), net
|
$ | (212,338 | ) | $ | (19,342 | ) |
8.
|
Income
taxes (continued)
|
2009
|
2008
|
|||||||
U.S.
federal statutory rate
|
35 | % | 35 | % | ||||
Change
in valuation allowance
|
195 | % | 2 | % | ||||
Benefit
of lower foreign effective tax rate/Other
|
(1 | %) | (5 | %) | ||||
Effective
tax rate
|
228 | % | 32 | % |
Jurisdiction
|
Open
Years
|
|||
United
States
|
2004-2009 | |||
Australia
|
2006-2009 |
9.
|
Stock
options
|
10.
|
Commitments
and contingencies
|
10.
|
Commitments
and contingencies (continued)
|
10.
|
Major
customers, suppliers and geographic
information
|
2009
|
2008
|
|||||||
Customer
A
|
20.4 | % | 21.6 | % | ||||
Customer
B
|
7.9 | % | 10.2 | % |
2009
|
2008
|
|||||||
Australia
|
85 | % | 70 | % | ||||
Americas
|
5 | % | 13 | % | ||||
Other
|
10 | % | 17 | % | ||||
100 | % | 100 | % |