Production Capacity and Facilities - The company has a total annual production capacity of 55,000 metric tons from its manufacturing facilities in Xi'an, with an additional 500,000 metric tons capacity from Gufeng and Tianjuyuan facilities in Beijing [270][272]. - The company’s production facilities occupy approximately 30,947 square meters (333,111 square feet) of land in Xi'an, with additional facilities in Beijing totaling 65,063 square meters (700,885 square feet) [270][272]. - The company has land use rights for its manufacturing facilities in Xi'an for a term of 50 years from 2001, and for the research and development center in Hu County for a term of 50 years from 2009 [270][271]. Financial Performance - For the fiscal year ended June 30, 2019, total revenue was $294.32 million, an increase from $287.05 million in 2018, representing a growth of 0.4% [288]. - Gross profit for the fiscal year ended June 30, 2019, was $64.64 million, down from $74.11 million in 2018, reflecting a decrease of 12.7% [288]. - Net income for the fiscal year ended June 30, 2019, was $11.59 million, compared to a net loss of $6.93 million in 2018, marking a significant turnaround [288]. - Total net sales for the fiscal year ended June 30, 2019 were $294,320,803, an increase of $7,267,273 or 2.5% from $287,053,530 for the fiscal year ended June 30, 2018 [314]. - Jinong's sales decreased by $21,228,352 or 21.7% to $76,494,490 in 2019 compared to $97,722,842 in 2018 [313]. - Gufeng's sales increased by $23,301,663 or 20.6% to $136,285,236 in 2019 compared to $112,983,573 in 2018 [313]. - Net income from continuing operations was $11,590,395 in 2019, a significant increase of 266.3% compared to a loss of $6,971,619 in 2018 [313]. Shareholder Information - As of June 30, 2019, the company had 4,977,479 shares of common stock outstanding, with no preferred stock issued [276]. - As of October 9, 2019, there were approximately 484 shareholders of record for the company's common stock [277]. - Zhuoyu Li holds 971,891 shares, representing 19.5% of the total common stock [447]. Cash Flow and Assets - Total current assets as of June 30, 2019, were $414.95 million, slightly up from $407.43 million in 2018 [288]. - As of June 30, 2019, cash and cash equivalents were $72,259,804, a decrease of $78,545,835, or 52.1%, from $150,805,639 as of June 30, 2018 [338]. - Net cash used in operating activities for the fiscal year ended June 30, 2019, was $71,410,847, a decrease of $99,548,385, or 353.8% from $28,137,537 in 2018, primarily due to increased inventories [341]. - Accounts receivable decreased by $20,307,163, or 10.2%, to $178,705,570 as of June 30, 2019, compared to $199,012,733 in 2018 [344]. - Inventories increased by $108,229,075, or 201.2%, to $162,013,889 as of June 30, 2019, primarily due to Gufeng's inventory increase [347]. Management and Governance - The management team includes Zhuoyu Li as CEO and Chairman, Yongcheng Yang as CFO, and several directors with extensive experience in finance and agriculture [380][381]. - The company’s Board of Directors is composed of independent directors, with Mr. Daqing Zhu serving as the lead independent director [392]. - The Audit Committee held four meetings during the fiscal year ended June 30, 2019, overseeing corporate accounting and financial reporting practices [388]. - The company aims to provide competitive executive compensation programs to attract and retain qualified individuals, focusing on long-term performance and shareholder return [401]. Compensation and Equity Plans - The total compensation for Zhuoyu Li, the Chief Executive Officer, was $420,000 for the fiscal year ended June 30, 2019, which included a base salary of $300,000 and stock awards valued at $120,000 [420]. - Yongcheng Yang, the Chief Financial Officer, received a total compensation of $243,000 for the fiscal year ended June 30, 2019, which included a base salary of $180,000 and a bonus of $63,000 [420]. - The ESPP reserved a total of 3,750,000 shares of common stock, including an increase of 1,250,000 shares [412]. - The purchase price for shares under the ESPP is established by the Compensation Committee and cannot be less than the fair market value on the purchase date [413]. Internal Controls and Risk Management - As of June 30, 2019, the company's internal control over financial reporting was assessed as effective according to COSO criteria [375]. - The company has maintained adequate internal control over financial reporting to ensure reliability in financial statements [372]. - The assessment of internal controls is based on the likelihood of future events, indicating a proactive approach to risk management [374]. - The company has not experienced material impacts from inflation on its financial position to date [369].
CGA(CGA) - 2019 Q4 - Annual Report