NF Energy Saving Corporation (NASDAQ: BIMI) (“BIMI” or the
"Company") today reported financial results for the third quarter
ended September 30, 2019.
Third Quarter 2019 Financial Highlights:
- Revenues were $208,402 and $1,120,804 for the three and nine
months ended September 30, 2019, respectively.
- Total cost of revenues was $281,014 and $1,030,862 for the
three and nine months ended September 30, 2019.
- Net loss for the three and nine months ended September 30, 2019
of was $547,689 and $1,973,382.
"The third quarter results only reflected our business ended
September 30, 2019. Our new acquisition of Boqi Zhengji Pharmacy
was not reflected in the current report." said Mr. Tiewei Song,
Chief Executive Officer and President of NF Energy Saving
Corporation. "With our ongoing strategic partnership, we are
confident to deliver compelling value to our customers and
investment community. Looking ahead, we believe that our strategy
of growing membership can unleash the full potential of our
consumer-centric health care model and create value for all
stakeholders."
Revenues
Revenues were $208,402 and $1,120,804 for the three and nine
months ended September 30, 2019, respectively, as compared to
$1,102,693 and $1,814,111 for the corresponding periods in
2018.
Total revenues decreased by $894,291 or 81.10% and $693,307 or
38.22% for the three and nine months ended September 30, 2019,
respectively, as compared to the corresponding periods in 2018.
The decrease in total revenues for the three and nine months
ended September 30, 2019 is mainly due to the decline in demand for
the Company’s products and services resulting from changes in the
overall market.
Cost of Revenues
Total cost of revenues was $281,014 and $1,030,862 for the three
and nine months ended September 30, 2019, as compared to $956,694
and $1,344,884 for the corresponding periods in 2018.
Total cost of revenues decreased by $675,680 and $314,022, or
approximately 70.63% and 23.35%, as compared to the corresponding
periods in 2018. The decrease in cost of revenues was primarily due
to the decrease in revenues.
As a result, the Company had a gross loss of $72,612, or 34.84%,
of total revenues and a gross profit $89,942, or 8.02%, of total
revenues for the three and nine months ended September 30, 2019,
respectively, as compared to a gross profit of $145,999, or 13.24%,
of total revenues and $469,277, or 25.87%, of total revenues, for
the corresponding periods in 2018, respectively.
Loss From Operations
As a result of the factors mentioned above, the Company incurred
losses from operations of $431,919 and $1,517,821 for the three and
nine months ended September 30, 2019, as compared to losses
of $224,704 and $2,185,046 for the corresponding period in
2018, an increase of $207,215, or 92.22%, for the three months
ended September 30, 2019 as compare to same period of 2018 and a
decrease of $667,225, or 30.53%, for the nine months ended
September 30, 2019 as compared to the same period of 2018.
Other Expense
Other expense for the three and nine months ended September 30,
2019 were $115,770 and $455,561, respectively, as compared to
$90,171 and $286,394 for the corresponding periods in 2018, an
increase of $25,599 and $169,167, or 28.39% and 59.07%,
respectively. This increase is primarily due to the increase in
interest expenses.
As a result, the Company incurred losses before income
taxes of $547,689 and $1,973,382 for the three and nine months
ended September 30, 2019, respectively, as compared to losses
before income taxes of $314,875 and $2,471,440 for the
corresponding periods in 2018, an increase in losses before income
taxes of $232,814, or 73.94% for the three months ended September
30, 2019 as compare to the same period of 2018, and a decrease in
loss before income taxed of $498,058, or 20.15% for the nine months
ended September 30, 2019 as compare to the same period of 2018.
Net Loss
As a result of the factors mentioned above, the Company incurred
a net loss for the three and nine months ended September 30, 2019
of $547,689 and $1,973,382, as compared to a net loss of $314,891
and $2,471,554 for the corresponding periods in 2018, an increase
in net loss of $232,798, or 73.93% for the three months ended
September 30, 2019 as compared to the same period of 2018, and a
decrease in net loss of $498,172, or 20.16% for the nine months
ended September 30, 2019 as compared to the same period of 2018.
The fluctuation in net loss reflect changes in the gross profit and
operation expenses for the three and nine months ended September
30, 2019 as discussed above.
Liquidity And Capital Resources
As of September 30, 2019, we had $65,354 in cash and cash
equivalents and had a working capital deficit of ($9,344,148),
compared with $17,860 in cash and cash equivalents and a working
capital deficit of ($10,458,105) at December 31, 2018.
Net cash used in operating activities was $935,967 during the
nine months ended September 30, 2019 compared to $738,511 provided
by operating activities during the comparable period in 2018. Net
cash used in investing activities was $571,101 during the nine
months ended September 30, 2019 compared to $1,441 provided by
investing activities for the comparable period in 2018, mainly
related to a related party loan receivable. Net cash provided by
financing activities was $1,588,992 during the nine months ended
September 30, 2019, mainly related to loans from and advances by
our affiliates to support our daily operations, compared to
$811,413 used in financing activities during the comparable period
in 2018.
About NF Energy Saving CorporationNF Energy
Saving Corporation (NASDAQ: BIMI) is a China-based provider of
integrated energy conservation solutions utilizing energy-saving
equipment, technical services and energy management re-engineering
project operations to provide energy saving services to clients. In
February 2019, the Board of Directors of the company was
reorganized following efforts led by Mr. Yongquan Bi, the company’s
new Chairman, with a renewed focus on the health industry.
Safe Harbor StatementThe statements contained
herein that are not historical facts are considered
"forward-looking statements." Such forward-looking statements may
be identified by, among other things, the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should,"
or "anticipates" or the negative thereof or other variations
thereon or comparable terminology, or by discussions of strategy
that involve risks and uncertainties. In particular, statements
regarding the efficacy of investment in research and development
are examples of such forward-looking statements. The
forward-looking statements include risks and uncertainties,
including, but not limited to, the effect of political, economic,
and market conditions and geopolitical events; legislative and
regulatory changes that affect our business; the availability of
funds and working capital; the actions and initiatives of current
and potential competitors; investor sentiment; and our reputation.
We do not undertake any responsibility to publicly release any
revisions to these forward-looking statements to take into account
events or circumstances that occur after the date of this report.
Additionally, we do not undertake any responsibility to update you
on the occurrence of any unanticipated events, which may cause
actual results to differ from those expressed or implied by any
forward-looking statements. The factors discussed herein are
expressed from time to time in our filings with the Securities and
Exchange Commission available at http://www.sec.gov.
IR Contact:Dragon Gate Investment Partners
LLCTel: +1(646)-801-2803Email: BIMI@dgipl.com
|
NF ENERGY SAVING CORPORATION AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
September 30, |
|
|
December 31, |
|
|
2019 |
|
|
2018 |
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
65,354 |
|
|
$ |
17,860 |
|
Restricted cash |
|
180,525 |
|
|
|
179,496 |
|
Accounts receivable, net |
|
348,083 |
|
|
|
1,274,980 |
|
Retention receivable, net |
|
25,590 |
|
|
|
65,529 |
|
Loan to related party |
|
601,951 |
|
|
|
— |
|
Inventories |
|
1,531,728 |
|
|
|
937,966 |
|
Prepayments and other receivables |
|
2,459,845 |
|
|
|
131,442 |
|
|
|
|
|
|
|
|
|
Total current assets |
|
5,213,076 |
|
|
|
2,607,273 |
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
16,802,665 |
|
|
|
17,958,136 |
|
Land use right, net |
|
2,348,558 |
|
|
|
2,460,668 |
|
Construction in progress |
|
— |
|
|
|
24,722 |
|
|
|
|
|
|
|
|
|
Total non-current assets |
|
19,151,223 |
|
|
|
20,443,526 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
24,364,299 |
|
|
$ |
23,050,799 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
Short-term bank borrowings |
$ |
5,652,561 |
|
|
$ |
5,816,961 |
|
Convertible promissory note, net |
|
3,647 |
|
|
|
— |
|
Derivative liability |
|
142,074 |
|
|
|
— |
|
Accounts payable, trade |
|
2,447,711 |
|
|
|
2,782,182 |
|
Accounts payable, trade-related parties |
|
386,879 |
|
|
|
416,547 |
|
Amount due to related parties |
|
2,464,568 |
|
|
|
918,033 |
|
Taxes payable |
|
1,110,621 |
|
|
|
1,086,589 |
|
Other payables and accrued liabilities |
|
2,349,163 |
|
|
|
2,045,066 |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
14,557,224 |
|
|
|
13,065,378 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
14,557,224 |
|
|
|
13,065,378 |
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
Common stock, $0.001 par value; 50,000,000 shares authorized;
8,073,289 and 7,573,289 shares issued and outstanding as of
September 30, 2019 and December 31, 2018, respectively |
|
8,073 |
|
|
|
7,573 |
|
Additional paid-in capital |
|
14,594,825 |
|
|
|
12,555,325 |
|
Statutory reserves |
|
2,227,634 |
|
|
|
2,227,634 |
|
Accumulated deficit |
|
(8,417,261 |
) |
|
|
(6,443,102 |
) |
Accumulated other comprehensive income |
|
1,547,401 |
|
|
|
1,788,302 |
|
Total NF Energy Saving Corporation’s equity |
|
9,960,672 |
|
|
|
10,135,732 |
|
|
|
|
|
|
|
|
|
NONCONTROLLING INTERESTS |
|
(153,597 |
) |
|
|
(150,311 |
) |
|
|
|
|
|
|
|
|
Total equity |
|
9,807,075 |
|
|
|
9,985,421 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
$ |
24,364,299 |
|
|
$ |
23,050,799 |
|
|
|
|
|
|
|
|
|
|
NF ENERGY SAVING CORPORATION AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS |
(UNAUDITED) |
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
Products |
$ |
178,599 |
|
|
$ |
1,052,130 |
|
|
$ |
950,773 |
|
|
$ |
1,550,119 |
|
Services |
|
29,803 |
|
|
|
50,563 |
|
|
|
170,031 |
|
|
|
263,992 |
|
Total revenues, net |
|
208,402 |
|
|
|
1,102,693 |
|
|
|
1,120,804 |
|
|
|
1,814,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products |
|
204,845 |
|
|
|
937,586 |
|
|
|
806,049 |
|
|
|
1,148,581 |
|
Cost of services |
|
76,169 |
|
|
|
19,108 |
|
|
|
224,813 |
|
|
|
196,303 |
|
Total cost of revenues |
|
281,014 |
|
|
|
956,694 |
|
|
|
1,030,862 |
|
|
|
1,344,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
(LOSS) |
|
(72,612 |
) |
|
|
145,999 |
|
|
|
89,942 |
|
|
|
469,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
33,096 |
|
|
|
6,153 |
|
|
|
119,820 |
|
|
|
22,542 |
|
General and administrative |
|
326,211 |
|
|
|
364,550 |
|
|
|
1,487,943 |
|
|
|
2,631,731 |
|
Total operating expenses |
|
359,307 |
|
|
|
370,703 |
|
|
|
1,607,763 |
|
|
|
2,654,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
(431,919 |
) |
|
|
(224,704 |
) |
|
|
(1,517,821 |
) |
|
|
(2,185,046 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(174,488 |
) |
|
|
(92,769 |
) |
|
|
(466,582 |
) |
|
|
(290,153 |
) |
Other income |
|
58,718 |
|
|
|
2,598 |
|
|
|
11,021 |
|
|
|
3,759 |
|
Total other expense, net |
|
(115,770 |
) |
|
|
(90,171 |
) |
|
|
(455,561 |
) |
|
|
(286,394 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES |
|
(547,689 |
) |
|
|
(314,875 |
) |
|
|
(1,973,382 |
) |
|
|
(2,471,440 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES |
|
— |
|
|
|
16 |
|
|
|
— |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
(547,689 |
) |
|
|
(314,891 |
) |
|
|
(1,973,382 |
) |
|
|
(2,471,554 |
) |
Less: net income (loss) attributable to noncontrolling
interest |
|
(3,220 |
) |
|
|
(4,776 |
) |
|
|
777 |
|
|
|
(12,233 |
) |
NET LOSS ATTRIBUTABLE
TO NF ENERGY SAVING CORPORATION |
$ |
(544,469 |
) |
|
$ |
(310,115 |
) |
|
$ |
(1,974,159 |
) |
|
$ |
(2,459,321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
$ |
(547,689 |
) |
|
$ |
(314,891 |
) |
|
$ |
(1,973,382 |
) |
|
$ |
(2,471,554 |
) |
OTHER COMPREHENSIVE LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(271,289 |
) |
|
|
(1,049,846 |
) |
|
|
(244,964 |
) |
|
|
(1,445,691 |
) |
Total comprehensive loss |
|
(818,978 |
) |
|
|
(1,364,737 |
) |
|
|
(2,218,346 |
) |
|
|
(3,917,245 |
) |
Less: comprehensive income (loss) attributable to non-controlling
interests |
|
(1,260 |
) |
|
|
(7,001 |
) |
|
|
3,286 |
|
|
|
(6,232 |
) |
COMPREHENSIVE LOSS
ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION |
$ |
(817,718 |
) |
|
$ |
(1,357,736 |
) |
|
$ |
(2,221,632 |
) |
|
$ |
(3,911,013 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
8,073,289 |
|
|
|
7,573,289 |
|
|
|
7,871,824 |
|
|
|
7,445,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NF ENERGY SAVING CORPORATION AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
|
|
For the Nine Months Ended September 30, |
|
|
2019 |
|
|
2018 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
Net loss |
$ |
(1,973,382 |
) |
|
$ |
(2,471,554 |
) |
Adjustments to reconcile net loss to cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
716,433 |
|
|
|
695,162 |
|
Gain on disposal of property |
|
(43,712 |
) |
|
|
(730 |
) |
Provision (reversal) of allowance for doubtful accounts |
|
(75,203 |
) |
|
|
1,462,898 |
|
Change in fair value of derivative liability |
|
2,132 |
|
|
|
- |
|
Amortization of discount on convertible promissory note |
|
1,239 |
|
|
|
- |
|
Impairment loss in construction in progress |
|
24,803 |
|
|
|
- |
|
Change in operating assets and liabilities |
|
|
|
|
|
|
|
Accounts and retention receivable |
|
970,444 |
|
|
|
3,637,343 |
|
Inventories |
|
(634,860 |
) |
|
|
(2,506,962 |
) |
Prepayments and other receivables |
|
(67,709 |
) |
|
|
(459,222 |
) |
Accounts payable, trade |
|
(284,077 |
) |
|
|
218,853 |
|
Other payables and accrued liabilities |
|
371,982 |
|
|
|
162,723 |
|
Taxes payable |
|
55,943 |
|
|
|
- |
|
Net cash provided by (used in) operating activities |
|
(935,967 |
) |
|
|
738,511 |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
Proceeds from disposal of property, plant and equipment |
|
50,063 |
|
|
|
1,441 |
|
Loan to related party |
|
(1,161,458 |
) |
|
|
- |
|
Repayment from the related party loan |
|
540,294 |
|
|
|
- |
|
Net cash provided by (used in) investing activities |
|
(571,101 |
) |
|
|
1,441 |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
Issuance of share from placement |
|
- |
|
|
|
500,000 |
|
Amount from (to) related parties, net |
|
1,591,910 |
|
|
|
(282,478 |
) |
Repayment to bank demand notes |
|
- |
|
|
|
(1,028,935 |
) |
Proceeds from short-term bank borrowings |
|
5,835,897 |
|
|
|
6,614,583 |
|
Repayment on short-term bank borrowings |
|
(5,838,815 |
) |
|
|
(6,614,583 |
) |
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
1,588,992 |
|
|
|
(811,413 |
) |
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE ON
CASH |
|
(33,401 |
) |
|
|
(8,944 |
) |
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN
CASH |
|
48,523 |
|
|
|
(80,405 |
) |
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS,
RESTRICTED CASH, beginning of period |
|
197,356 |
|
|
|
282,154 |
|
|
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS,
RESTRICTED CASH, end of period |
$ |
245,879 |
|
|
$ |
201,749 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
|
|
|
|
Cash paid for income tax |
$ |
- |
|
|
$ |
114 |
|
Cash paid for interest expense |
$ |
434,198 |
|
|
$ |
290,477 |
|
|
|
|
|
|
|
|
|
NON-CASH TRANSACTIONS OF
INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Issuance of common share for subscription for potential equity
acquisition |
$ |
2,040,000 |
|
|
$ |
- |
|
Issuance of convertible promissory note that received after the
balance sheet date |
$ |
153,000 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
BIMI International Medical (NASDAQ:BIMI)
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