China Sure Water (USA) Inc.
CIK:0001510256|SEC Filings
Vulnerability due to Operations in PRC | 3 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Commitment and Contingencies | |
| Legal Matters and Contingencies [Text Block] | 15 VULNERABILITY DUE TO OPERATIONS IN PRC The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than twenty years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRCs political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. Substantially all of the Company’s business is transacted in RMB, which is not freely convertible. The People’s Bank of China or other banks are authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application together with suppliers’ invoices, shipping documents and signed contracts. Since the Company has its primary operations in the PRC, its revenues will be settled in RMB, not U.S. Dollars. Due to certain restrictions on currency exchanges that exist in the PRC, the Company’s ability to use revenue generated in RMB to pay any dividend payments to its shareholders outside of China may be limited. In September 2006, PRC changed the laws regarding transfer of equity in PRC companies in exchange for equity in non-PRC companies. Approvals and registrations for such transfers are required and penalties may be imposed if the requirements are not met. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
| NET INCOME | $ 4,760,658 | $ 3,550,416 |
| Depreciation | 69,084 | 44,052 |
| Deferred tax assets | (9,555) | (852) |
| Amortization of prepaid rent | 138,330 | 134,730 |
| Amortization of discount on convertible notes | 152,020 | |
| Amortization of deferred financing costs | 16,892 | |
| Change in Accounts receivable | 819,836 | (622,752) |
| Change in Inventories | (36,523) | (263,912) |
| Change in Prepaid expenses | (216,222) | (898,200) |
| Change in Taxes payable | 381,191 | 738,131 |
| Change in Accrued expenses | 77,131 | (143,523) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,152,842 | 2,538,090 |
| NET CASH PROVIDED BY INVESTING ACTIVITIES | 922,200 | |
| Loan from related party | 73,008 | 403,024 |
| Loan repayment from related party | (588,400) | |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 703,008 | (185,376) |
| EFFECT OF EXCHANGE RATES ON CASH | 189,511 | 113,238 |
| INCREASE IN CASH | 7,967,561 | 2,465,952 |
| CASH - BEGINNING OF PERIOD | 5,072,181 | 2,431,373 |
| CASH - END OF PERIOD | 13,039,742 | 4,897,325 |
| Cash paid for income taxes | $ 1,291,683 | $ 721,603 |
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
|---|---|---|
| Cash | $ 13,039,742 | $ 5,072,181 |
| Accounts receivable | 809,168 | |
| Inventories | 577,152 | 524,477 |
| Prepaid rent - current portion | 187,440 | 182,040 |
| Other prepaid expenses | 216,222 | |
| Investment deposit | 910,200 | |
| Deferred tax assets | 153,023 | 143,468 |
| TOTAL CURRENT ASSETS | 14,173,579 | 7,641,534 |
| Property and equipment, net of accumulated depreciation | 1,063,747 | 1,101,286 |
| Prepaid rent | 421,740 | 546,120 |
| TOTAL ASSETS | 15,659,066 | 9,288,940 |
| Taxes payable | 1,030,221 | 624,311 |
| Accrued expenses | 401,062 | 313,576 |
| Due to related party | 74,195 | |
| Convertible notes | 606,566 | |
| TOTAL CURRENT LIABILITIES | 2,112,044 | 937,887 |
| Common stock, par value $0.001, 400,000,000 shares authorized, 20,777,200 and 20,127,200 shares issued and outstanding at September 30, 2011 and December 31, 2010 | 20,777 | 20,127 |
| Additional paid-in capital | 629,321 | 440,530 |
| Retained earnings | 12,248,156 | 7,487,498 |
| Other comprehensive income | 648,768 | 402,898 |
| TOTAL STOCKHOLDERS' EQUITY | 13,547,022 | 8,351,053 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 15,659,066 | $ 9,288,940 |