Yulong Eco-Materials Ltd

[1]	All shares outstanding for all periods have been retroactively restated to reflect the Company's 1-for-5 reverse stock split, which was effective on November 9, 2017.

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (7,429,581)	$ (53,190,023)	$ 8,679,571
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	632,319	2,114,469	1,697,465
Amortization	54,678	103,417	55,186
Deferred tax benefit	225,581	92,181	(328,761)
Change in fair value of warrant liabilities	(62,905)	(409,775)
Stock based compensation expenses	162,363	534,237
Allowance for doubtful accounts	1,995,887	4,067,144
Reserve for prepayments		2,860,642
Impairment loss on fixed assets & CIP	1,914,100	50,357,301
Impairment loss on intangible assets		2,328,014
Change in operating assets and liabilities
Accounts receivable	(1,350,912)	(1,124,425)	(4,089,754)
Restricted cash		(500,000)
Deposits and other receivables	(184,053)	(397,719)	(330,309)
Inventories	147,658	(30,984)	60,562
Advances to suppliers	43,984	(212,367)	52,659
Prepaid expense	24,378	209,698	(300,630)
Accounts payable, trade	623,805	127,937	(107,346)
Other payables and accrued liabilities	2,984,195	3,185,235	1,239,321
Customer deposits	1,919,003	2,656,337	(403,490)
Taxes payable	(150,665)	504,555	(23,631)
Net cash provided by operating activities	1,549,836	13,275,874	6,200,843
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for equipment and construction in progress	(1,923,083)	(20,375,923)	(514,924)
Proceeds from disposal of equipment		20,469
Prepayments for construction-in-progress	(5,871)	(16,244,390)	(1,500,468)
Repayments from related parties			26,674
Payment for land use rights		(591)	(9,774)
Net cash (used in) investing activities	(1,928,954)	(36,600,435)	(1,998,492)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loans - bank		4,197,115	4,479,750
Payments of short-term loan - bank	(17,478)	(5,907,051)	(4,316,850)
Proceeds from (payments to) related parties	(433,168)	1,416,849	(6,522,453)
Principal payments on capital lease obligations		(593,043)	(1,234,043)
Proceeds from issuance of IPO shares, net		11,510,157
Net cash provided by (used in) financing activities	(450,646)	10,624,027	(7,593,596)
EFFECT OF EXCHANGE RATE ON CASH	(90,868)	(1,035,225)	128,774
CHANGES IN CASH AND CASH EQUIVALENTS	(920,632)	(13,735,759)	(3,262,471)
CASH AND CASH EQUIVALENTS, beginning of year	2,734,540	16,470,299	19,732,770
CASH AND CASH EQUIVALENTS, end of year	1,813,908	2,734,540	16,470,299
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	547,059	2,596,981	3,195,373
Cash paid for interest		196,120	1,066,738
NON-CASH INVESTING AND FINANCING ACTIVITIES
Reclassification of construction-in-progress from prepayments-construction		675,425	3,266,054
Additions to fixed assets and construction-in-progress through other payables		853,445	2,333,976
Acquisition of machinery, equipment and intangible asset by capital leases		294,506	4,281,859
Repayments from related parties offset with other payable-related parties			912,240
Reclassification of intangible assets from prepayment-land use rights			379,434
Conversion of shareholders' debt to 1,593,538 ordinary shares		9,959,613
Issuance of ordinary shares for deferred compensation	37,500	75,068
Valuation of 112,500 warrants allocated to warrant liabilities from additional paid-in capital		475,380
Reclassification of payables for litigations from other payables - related parties		177,903
Other receivable-related parties offset with other payable-related parties	$ (463,749)	$ 229,878

Consolidated Balance Sheets - USD ($)

Jun. 30, 2017

Jun. 30, 2016

CURRENT ASSETS

Cash and cash equivalents

$ 1,813,908

$ 2,734,540

Restricted cash

500,000

Account receivable, net

4,965,193

5,728,334

Deposits and other receivables

1,167,483

1,002,713

Inventories

209,202

364,891

Advance to suppliers

173,581

222,239

Prepaid expenses

83,901

108,716

Total current assets

8,913,268

10,661,433

PLANT AND EQUIPMENT, net

6,636,021

7,414,088

OTHER ASSETS

Construction in progress, net

19,819

11,357

Other receivable, non-current

15,411,615

15,727,696

Prepayments, net

14,748

15,050

Prepaid expense, non-current

50,000

Intangible assets, net

2,065,369

2,163,791

Deferred tax assets - non current

156,809

388,970

Long-term deposit

10,501

10,716

Total other assets

24,364,882

18,367,580

Total assets

33,278,150

36,443,101

CURRENT LIABILITIES

Short-term loan- bank

5,542,420

5,674,011

Accounts payables, trade

2,303,247

1,710,881

Other payables and accrued liabilities

9,642,359

7,601,354

Other payables - related parties

1,498,865

1,965,237

Customer deposits

4,448,220

2,571,846

Tax payable

1,316,600

1,498,083

Capital lease obligation-current portion

4,804,770

4,062,291

Dividends payable

Warrant liabilities

2,700

Total current liabilities

29,559,181

25,149,308

LONG TERM LIABILITIES

Capital lease obligation-net of current portion

28,852

Total long term liabilities

28,852

Total liabilities

29,559,181

25,178,160

COMMITMENTS AND LIABILIRUES

EQUITY

Ordinary shares, $0.00625 par value, 100,000,000 shares authorized, 2,411,070 and 2,399,435 shares issued and outstanding, respectively *

^[1]

3,014

2,999

Subscription receivable

(10,000)

Additional paid-in capital

40,709,440

40,509,592

Statutory reserves

3,922,228

Stock to be issued

37,500

Retained earnings

(39,407,775)

(31,978,194)

Accumulated other comprehensive income

(1,497,938)

(1,219,184)

Total Yulong Eco-Materials Limited's equity

3,718,969

11,264,941

Total liabilities and equity

$ 33,278,150

$ 36,443,101

[1]	All shares outstanding for all periods have been retroactively restated to reflect the Company's 1-for-5 reverse stock split, which was effective on November 9, 2017.