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EX-32.1 - EXHIBIT 32.1 - THT Heat Transfer Technology, Inc.exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10 Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2014

[  ]   TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to _____________

Commission File Number: 001-34812

THT HEAT TRANSFER TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)

Nevada 20-5463509
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)

     THT Industrial Park
No. 5 Nanhuan Road, Tiexi District
Siping, Jilin Province 136000
People’s Republic of China
(Address of principal executive offices, Zip Code)

86-434-3265241
(Registrant’s telephone number, including area code)

     _____________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes [ X ]                    No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [ X ]                   No  [  ]  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]   Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]                    No  [ X ]

The number of shares outstanding of each of the issuer’s classes of common stock, as of August 14, 2014 is as follows:

  Class of Securities   Shares Outstanding  
  Common Stock, $0.001 par value   20,453,500  


THT HEAT TRANSFER TECHNOLOGY, INC.
 
Quarterly Report on Form 10-Q
Period Ended June 30, 2014

TABLE OF CONTENTS

PART I 1
FINANCIAL INFORMATION 1
ITEM 1. FINANCIAL STATEMENTS. 1
ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

3
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.
9
ITEM 4. CONTROLS AND PROCEDURES. 9
PART II   10
OTHER INFORMATION 10
ITEM 1. LEGAL PROCEEDINGS. 10
   ITEM 1A. RISK FACTORS. 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 10
ITEM 4. MINE SAFETY DISCLOSURES. 10
ITEM 5. OTHER INFORMATION. 10
ITEM 6. EXHIBITS. 11

i


     PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

     

THT HEAT TRANSFER TECHNOLOGY, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013

  Pages(s)
Consolidated Balance Sheets  F-1
Consolidated Statements of Income and Comprehensive Income F-2
Consolidated Statement of Shareholders’ Equity F-3
Consolidated Statements of Cash Flows F-4
Notes to Consolidated Financial Statements F-5 - F-11

2


THT Heat Transfer Technology, Inc.
Consolidated Balance Sheets
(Stated in US dollars)

 

  June 30,     December 31,  

 

  2014     2013  

 

  (Unaudited)        

ASSETS

           

Current assets

           

 Cash and cash equivalents

$  2,383,841.0   $  9,082,137  

 Restricted cash

  609,473.0     1,451,884  

 Counter guarantee receivable

  -     245,483  

 Trade receivables, net

  43,380,862.0     44,316,445  

 Bills receivable

  3,564,444.0     1,716,223  

 Other receivables, prepayments and deposits, net

  17,482,790.0     14,489,152  

 Inventories, net

  23,349,849.0     25,303,711  

 Deferred tax assets

  168,646.0     169,916  

Total Current Assets

  90,939,905.0     96,774,951  

 

           

 

           

 Restricted cash, non-current

  288,862.0     276,471  

 Retention receivable

  1,093,797.0     2,208,751  

 Property, plant and equipment, net

  7,712,457.0     7,371,951  

 Land use rights, net

  6,079,315.0     6,190,059  

TOTAL ASSETS

$  106,114,336.0   $  112,822,183  

 

           

LIABILITIES & SHAREHOLDERS’ EQUITY

           

Current Liabilities

           

 Accounts payable

  5,784,827.0     8,912,229  

 Other payables and accrued liabilities

  27,522,249.0     22,330,746  

 Income tax payable

  72,156.0     599,781  

 Short-term bank loans

  7,796,764.0     16,038,230  

 Current maturities of long-term loan

  -     981,932  

Total Current Liabilities

  41,175,996.0     48,862,918  

 

           

Non-current liabilities

           

 Long-term loan

  568,514.0     572,794  

Total Long-term Liabilities

  568,514.0     572,794  

 

           

Total Liabilities

  41,744,510.0     49,435,712  

 

           

SHAREHOLDERS’ EQUITY

           

Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding Common stock, $.001 par value, 190,000,000 shares authorized, 20,453,500 shares issued and outstanding at June 30, 2014 and December 31, 2013

  20,454.0     20,454  

 Additional paid-in capital

  26,524,324.0     26,524,324  

 Statutory reserve

  3,795,730.0     3,652,538  

 Retained earnings

  28,310,121.0     27,043,638  

 Accumulated other comprehensive income

  5,719,197.0     6,145,517  

TOTAL SHAREHOLDERS’ EQUITY

  64,369,826.0     63,386,471  

 

           

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$  106,114,336.0   $  112,822,183  

The accompanying notes are an integrated part of these unaudited consolidated financial statements

F-1


THT Heat Transfer Technology, Inc.
Consolidated Statements of Income and Comprehensive Income
(Stated in US dollars)
(Unaudited)

    For Six months ended June 30,     For Three Months Ended June 30,  
    2014     2013     2014     2013  

 

                       

Sales revenue

$  20,998,072.00   $  18,822,808   $  12,709,160   $  10,912,373  

Cost of revenue

  (13,710,273.00 )   (11,819,982 )   (7,945,244 )   (6,900,145 )

Gross Profit

  7,287,799.00     7,002,826     4,763,916     4,012,228  

 

                       

Operating expenses

                       

 Administrative expenses

  2,025,881.00     2,504,628     1,480,830     1,473,514  

 Research and development expenses

  1,680,499.00     634,076     1,340,425     425,290  

 Selling expenses

  2,100,267.00     2,497,702     1,130,316     1,455,038  

Total Operating Expenses

  5,806,647.00     5,636,406     3,951,571     3,353,842  

 

                       

Income from operations

  1,481,152.00     1,366,420     812,345     658,386  

 

                       

Other Income (Expenses)

                       

 Interest income

  6,163.00     14,774     1,804     5,181  

 Other income

  399,236.00     292,928     175,055     161,697  

 Finance costs

  (379,160.00 )   (669,307 )   (47,702 )   (216,884 )

 Other expense

  17.00     (604 )   (457 )   (39 )

Total Other Expense

  26,256.00     (362,209 )   128,700     (50,045 )

 

                       

Income before income taxes and noncontrolling interests

  1,507,408.00     1,004,211     941,045     608,341  

Income tax expenses

  (97,733.00 )   (283,476 )   (12,779 )   (223,088 )

Net Income

  1,409,675.00     720,735     928,266     385,253  

 

                       

Net loss (income) attributable to noncontrolling interests

  -     (53,092 )   -     (31,273 )

Net income attributable to THT Heat Transfer Technology, Inc. common stockholders

$  1,409,675.00   $  667,643   $  928,266   $  353,980  

 

                       

Net Income

  1,409,675.00     720,735     928,266     385,253  

Other Comprehensive Income

                       

 Foreign currency translation adjustments

  (426,320.00 )   1,230,335     143,880     905,491  

Comprehensive Income

  983,355.00     1,951,070     1,072,146     1,290,744  

Comprehensive income attributable to noncontrolling interests

  -     (25,690 )   -     (31,273 )

Comprehensive income attributable to THT Heat Transfer

                       

Technology, Inc. common stockholders

$  983,355.00   $  1,925,380   $  1,072,146   $  1,259,471  

 

                       

Earnings per share attributable to THT Heat Transfer Technology, Inc. common stockholders

               

 Basic and diluted

$  0.07   $  0.03   $  0.05   $  0.02  

Weighted average number of shares outstanding

                       

 Basic and diluted

  20,453,500     20,453,500     20,453,500     20,453,500  

The accompanying notes are an integrated part of these unaudited consolidated financial statements

F-2


THT Heat Transfer Technology, Inc.
Consolidated Statement of Shareholders’ Equity
(Stated in US dollars)
(Unaudited)

                THT Heat Transfer Technology, Inc.                          
                                                 
    Common Stock                 Accumulated Other                    
                Additional Paid-in           Comprehensive           Noncontrolling     Total Shareholders'  
    No. of Shares     Amount     Capital     Statutory Reserve     Income     Retained Earnings     Interest     Equity  

Balance, December 31, 2013

  20,453,500     20,454     26,524,324     3,652,538     6,145,517     27,043,638.0     -     63,386,471  

Net income

1,409,675.0 0 1,409,675

Foreign currency translation adjustment

                  (426,320 )       0     (426,320 )

Appropriation to reserve

                    143,192           (143,192.0 )         -  

Balance, June 30, 2014

20,453,500 $ 20,454 $ 26,524,324 3,795,730 $ 5,719,197 $ 28,310,121.0 $ - $ 64,369,826

The accompanying notes are an integrated part of these unaudited consolidated financial statements

F-3


THT Heat Transfer Technology, Inc.
Consolidated Statements of Cash Flows
(Stated in US dollars)
(Unaudited)

    For the Six Months Ended June 30,  
    2014     2013  
             

CASH FLOWS FROM OPERATING ACTIVITIES

           

 

           

Net income

$  1,409,675   $  720,735  

Adjustments to reconcile net income to net cash provided by (used in)

           

   Depreciation and amortization

  521,727     597,067  

   Gain from disposal of property, plant and equipment

  (8,195 )      

   Allowance for doubtful accounts

  (270,722 )   203,027  

 

           

Changes in operating assets and liabilities:

           

   Trade receivables

  876,555     2,003,633  

   Bills receivable

  (1,865,438 )   248,325  

   Other receivables, prepayments and deposits

  (3,469,506 )   (5,989,129 )

   Inventories

  1,768,962     (2,955,091 )

   Retention receivable

  1,101,044     607,666  

   Trade payables

  (3,316,737 )   (1,082,251 )

   Other payables and accrued expenses

  5,371,006     1,722,691  

   Tax payable

  (524,379 )   (575,524 )

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

  1,593,992     (4,498,851 )

 

           

CASH FLOWS FROM INVESTING ACTIVITIES

           

   Change in restricted cash

  819,035     142,914  

   Proceeds from disposal of property, plant and equipment

  9,769     -  

   Payments to acquire property, plant and equipment

  (246,195 )   (83,184 )

NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES

  582,609     59,730  

 

           

Cash flows from financing Activities

           

   Proceeds from bank loans

  14,327,814     12,812,915  

   Repayment of bank loans

  (22,468,617 )   (16,016,144 )

   Repayment of long-term loan

  (980,745 )   (960,969 )

   Refund of Counter guarantee receivable

  245,186     240,243  

   Cash paid for acquisition of non-controlling interest

  -     (404,485 )

NET CASH FLOWS USED IN FINANCING ACTIVITIES

  (8,876,362 )   (4,328,440 )

 

           

Effect of foreign currency translation on cash and cash equivalents

  1,465     101,958  

 

           

NET DECREASE IN CASH AND CASH EQUIVALENTS

  (6,698,296 )   (8,665,603 )

 

           

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

$  9,082,137   $  10,703,199  

 

           

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$  2,383,841   $  2,037,596  

 

  -        

Supplementary Disclosures for Cash Flow Information:

           

   Interest paid

$  378,327   $  836,635  

   Income taxes paid

$  815,658   $  669,307  

The accompanying notes are an integrated part of these unaudited consolidated financial statements

F-4


THT Heat Transfer Technology, Inc.
Notes to Unaudited Consolidated Financial Statements
(Unaudited)
(Stated in US Dollars)

1.

Corporate information

   

THT Heat Transfer Technology, Inc. (the “Company” or “THT” or the “Surviving Corporation”) is a Nevada corporation with major operations in China. The Company’s shares are quoted for trading on the Nasdaq Global Market in the United States.

   
2.

Description of business

   

The Company is a holding company whose primary business are conducted through its subsidiaries, namely SipingJuyuan which is located in the Jilin Province and Beijing Juyuan which is located in Beijing City of the PRC. The Company is engaged in the manufacturing and trading of plate heat exchangers and various related products.

   

SipingJuyuan was established in the PRC on May 31, 2006 following the division (the “Division”) of Siping City Juyuan Heat Exchange Equipment Co., Ltd. (“Old Juyuan Company”) into threecompanies, namely SipingJuyuan, Siping City Juyuan Heat Exchange Equipment Co., Ltd. (“New Juyuan Company”) and Siping City JuyuanHanyang Pressure Vessels Co., Ltd (“JuyuanHanyang Pressure Vessels”).

   
3.

Summary of significant accounting policies

   

Basis of presentation and consolidation

   

The accompanying unaudited consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes thereto for the year ended December 31, 2013 filed with the SEC in the Company’s Form 10-K on March 31, 2014.

   

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the six-month period have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.


F-5


The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter- company balances and transactions have been eliminated on consolidation.

Fair value of financial instruments

Accounting Standards Codification (“ASC”) Topic 820 requires the disclosure of the estimated fair value of financial instruments including those financial instruments for which fair value option was not elected. As of June 30, 2014 and December 31, 2013, the carrying amounts of the Company’s financial assets and liabilities approximated their fair values due to short maturities or the applicable interest rates approximated the current market rates.

Reclassifications

Certain amounts in the consolidated financial statements for the prior period have been reclassified to conform to the presentation of the current period for the comparative purposes.

Recently issued accounting pronouncements

In April 2014, the FASB issued ASU 2014-08, “ Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption to have a significant impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

F-6


4.

Trade receivables, net


  June 30, December 31,
      2014     2013  
      (Unaudited)        
               
  Trade receivables $  50,164025    $  51,422,790   
  Less: Allowance for doubtful accounts   (6,783,163 )   (7,106,345 )
               
    $  43,380,862   $  44,316,445  

As of June 30, 2014 and December 31, 2013, the Company’s trade receivables of $321,961 and $501,536, respectively, were pledged as collateral under certain loan and guarantee arrangements (see Note 9).

An analysis of the allowance for doubtful accounts for the six months ended June 30, 2014 and 2013 is as follows:

      Six months ended  
      June 30,  
      (Unaudited)  
      2014     2013  
               
  Balance at beginning of period $  7,106,345   $  4,127,640  
  Adjustment of bad debt expense   (270,722 )   173,391  
  Translation adjustments   (52,460 )   87,182  
               
  Balance at end of period $  6,783,163   $  4,388,213  

5.

Inventories, net


  June 30, December 31,
      2014     2013  
      (Unaudited)        
               
  Raw materials $  4,625,256   $  5,412,793  
  Work-in-progress   19,025,223     18,966,311  

F-7



  Finished goods   (280,810 )   944,576  
      23,369,669     25,323,680  
  Allowance for obsolete inventories   (19,820 )   (19,969 )
                                                                                                                                            $  23,349,849   $  25,303,711  

No further allowance for obsolete inventories was recognized during the six months ended June 30, 2014 and 2013.

As of June 30, 2014 and December 31, 2013, respectively, the inventory of $0 and $3,600,419 were pledged under certain loan agreements (see Note 10).

6.

Income tax

   

The effective tax rate is 1% and 37% for the three months periods ended June 30, 2014 and June 30, 2013, respectively. The effective tax rate is 6% and 28% for the six months periods ended June 30, 2014 and June 30, 2013, respectively.

   
7.

Property, plant and equipment, net

   

As of June 30, 2014 and December 31, 2013, property, plant and equipment with net book values of $4,765,536 and $4,954,744, respectively, were pledged as collateral under certain loan arrangements (see Note 9).

   
8.

Land use rights

   

As of June 30, 2014 and December 31, 2013, certain land use rights were pledged as collateral under certain loan arrangements (see Note 9).

   

During the six months ended June 30, 2014 and 2013, amortization amounted to $64,645 and $63,591, respectively.

   
9.

Short-term bank loans


  June 30, December 31,
      2014     2013  
      (Unaudited)        
               
  Secured bank loans $  7,796,764   $  16,038,230  
               
               
    $  7,796,764   $  16,038,230  

F-8


The Company’s bank loans carry annual interest from 100% to 120% of the benchmark interest rate published by the People’s Bank of China (the “PBOC”).

The secured bank loans were secured by the following assets of the Company:

June 30, December 31,
      2014     2013  
      (Unaudited)        
               
  Trade receivables (Note 4) $  321,961   $  501,536  
  Property, plant and equipment (Note 7)   4,765,536     4,954,744  
  Land use rights (Note 8)   995,824     1,014,947  
               
    $  6,083,321   $  6,471,227  

10.

Long-term loans

Long-term Loans includes the following:

  June 30, December 31,
      2014     2013  
      (Unaudited)        
  Secured loan $  -   $  981,932  
  Unsecured loan   568,514     572,394  
               
  Total   568,514   $  1,554,726  

The secured loan borrowed from China Development Bank Company bears interest at an annual rate of 15% over of the benchmark rate of the PBOC for three-year long-term loans and guaranteed by a third party. On January 6, 2014, the Company repaid the loan balance of $981,932 in full.

The loan was secured by the following assets of the Company:

    June 30, 2014     December 31, 2013  
      (Unaudited)        
               
  Inventories (Note 5) $  -   $  3,600,419  
               
    $  -   $  3,600,419  

F-9


As a condition of the guarantees for the loans, the Company paid 2.5% of the loan balance to the third party as compensation for acting as guarantor for the Company and made the counter guarantee deposits to the guarantor of $245,483 as of December 31, 2013. As of March 31, 2014, the deposits have been refunded to the Company upon the Company’s settlement of the loan on January 6, 2014.

In December 2013, the Company also obtained a 3-year entrusted loan from a non-financial institution bearing interest at 3% per annum granted by local government.

11.

Earnings per share

The basic earnings per share is calculated using the net income attributable to the Company’s common stockholders and the weighted average number of shares outstanding during the reporting periods. During the reporting periods, certain share-based awards were not included in the computation of diluted earnings per share because they were anti-dilutive. Accordingly, the basic and diluted earnings per share are the same.

12.

Segment information

The Company is solely engaged in the manufacturing and trading of plate heat exchangers and various related products. Since the nature of the products, their production processes, and their distribution methods are substantially similar, they are considered as a single reportable segment under ASC 280 “Segment Reporting”.

The Company’s sales revenues by products for the six months ended June 30, 2014 and 2013 were as follows:

      Six months ended June 30,        
      2014     %     2013     %  
      (Unaudited)           (Unaudited)        
                           
  Plate heat exchanger $  7,087,632     34   $  7, 713,483     41  
  Heat exchange unit   6,106,172     29     5,022,119     27  
  Air-cooled heat exchanger   389,645     2     1,463,539     8  
  Shell-and-tube heat exchanger   2,200,817     10     1,363,779     7  
  Others   5,213,806     25     3,259,888     17  
    $  20,998,072     100   $  18,822,808     100  

All of the Company’s long-lived assets and revenues classified based on the customers are located in the PRC.

F-10



13.

Related party transactions

As of June 30, 2014 and December 31, 2013, respectively, the Company advanced $9,746 and $14,987 to Mr. Zhao for handling selling and logistic activities for the Company in the ordinary course of business, which was included in "Other receivables, prepayments and deposits, net".

F-11



ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2013, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except where the context otherwise requires and for the purposes of this report only:

  • “THT,” “Company,” “we,” “us,” or “our” are to the combined business of THT Heat Transfer Technology, Inc., a Nevada corporation, and its consolidated subsidiaries: Megaway, Star Wealth, Siping Juyuan and Beijing Juyuan;
  • “Megaway” are to Megaway International Holdings Limited, a BVI company;
  • “Star Wealth” are to Star Wealth International Holdings Limited, a Hong Kong company;
  • “Siping Juyuan” are to Siping City Juyuan Hanyang Plate Heat Exchanger Co. Ltd., a PRC company;
  • “Beijing Juyuan” are to Beijing Juyuan Hanyang Heat Exchange Equipment Co., Ltd., a PRC company;
  • “BVI” are to the British Virgin Islands;
  • “Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China;
  • “PRC” and “China” are to the People’s Republic of China;
  • “SEC” are to the Securities and Exchange Commission;
  • “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
  • “Securities Act” are to the Securities Act of 1933, as amended;
  • “Renminbi” and “RMB” are to the legal currency of China; and
  • “U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.

Overview of our Business

We are a leading total solution provider in the heat exchange industry. Our major products are plate heat exchangers, heat exchanger units, air-cooled heat exchangers and shell-and-tube heat exchangers. Unlike most other heat exchanger manufacturers in China, we not only provide heat exchange products, but also provide total solutions to our customers. As a total solutions provider, we analyze the working condition of our customers, provide optimized designs based on analysis and simulation, offer high quality heat exchange products, and continuously assist our customers in improving the heat exchange process.

Over the past ten years, we have successfully completed over 3,000 projects in more than 15 industries, including metallurgy, heat and power, petrochemical, food and beverage, pharmaceutical and shipbuilding. We have provided heat exchange solutions to Fortune 500 companies, including Shell, BP, BASF, LG, Sinopec and China Shenhua. We have also provided heat exchange products for important Chinese and international projects such as the Beijing 2008 Olympics Wukesong Sports Center, Guangdong Linao nuclear plant and BASF Chemical plant in Germany.

Our operations are headquartered in Siping, Jilin Province, PRC. Our primary Chinese operating subsidiaries are Siping Juyuan and Beijing Juyuan.

3


Second Quarter Financial Performance Highlights

The following summarizes certain key financial information for the second quarter of 2014:

  • Sales revenue: Sales revenue increased by $1.80 million, or 16.47%, to $12.71 million for the three months ended June 30, 2014, from $10.91 million for the same period in 2013.

  • Gross profit: Gross profit increased by $0.75 million, or 18.73 %, to $4.76 million for the three months ended June 30, 2014, from $4.01 million for the same period in 2013. As a percentage of sales revenue, gross profit increased by 0.72% to 37.48% for the three months ended June 30, 2014, from 36.77% for the same period in 2013.

  • Net income attributable to stockholders: Net income attributable to our stockholders increased by $0.60 million, or 162.24%, to $0.93 million for the three months ended June 30, 2014, from $0.35 million for the same period in 2013.

  • Fully diluted net income per share: Fully diluted net income per share was $0.05 for the three months ended June 30, 2014, as compared to $0.02 for the same period in 2013.

Results of Operations

Comparison of Three Months Ended June 30, 2014 and 2013

The following table sets forth key components of our results of operations for the periods indicated.

    Three Months Ended June 30,    $     %  
    2014     2013     Change     Change  
Sales revenue $  12,709,160   $  10,912,373   $  1,796,787     16.47  
Cost of sales   (7,945,244 )   (6,900,145 )   (1,045,099 )   15.15  
Gross profit   4,763,916     4,012,228     751,688     18.73  
Operating expenses:                        
       Administrative expenses   1,480,830     1,473,514     7,316     0.50  
       Research and development expenses   1,340,425     425,290     915,135     215.18  
       Selling expenses   1,130,316     1,455,038     (324,722 )   22.32  
Total operating expenses   3,951,571     3,353,842     597,729     17.82  
Income from operations   812,345     658,386     153,959     23.38  
Interest income   1,804     5,181     (3,377 )   (65.18 )
Other income   175,055     161,697     13,358     8.26  
Finance costs   (47,702 )   (216,884 )   169,182     (78.01 )
Other expense   (457 )   (39 )   (418 )   1071.79  
                         
Income before income taxes and noncontrolling   941,045                    
interests         608,341     332,704     54.69  
Income taxes   (12,779 )   (223,088 )   210,309     (94.27 )
Net income before noncontrolling interests   928,266     385,253     543,013     140.95  
Net loss attributable to noncontrolling interests   -     (31,273 )   31,273     (100.00 )
Net income attributable to THT common stockholders $  928,266   $  353,980   $  574,286     162.24  

Sales revenue. Our sales revenue is generated from sales of heat exchange products. Sales revenue increased by $1.80 million, or 16.47%, to $12.71 million for the three months ended June 30, 2014, from $10.91 million for the same period in 2013. Our sales volume in the three months ended June 30, 2014 amounted to 617 units, an increase of 18 units, from 599 units for the same period in 2013. Such increase was mainly due to the increased sales revenue from plate heat exchangers and heat change units in the 2014 period as compared with the 2013 period. Sales revenue from plate heat exchangers increased by $0.33 million, or 8.33%, to $4.27 million for the three months ended June 30, 2014, from $3.94 million for the same period in 2013. Sales from heat change units increased $0.16 million, or 5.69%, to $2.92 million for the three months ended June 30, 2014, from $2.77 million for the same period in 2013. The increase was a result of increased demand for our products and economy recovery in China in the first half of 2014 compared with previous years.

4


The following table shows our sales revenue by product for the three months ended June 30, 2014 and 2013:

    Three Months Ended June 30,  
    2014     2013  
  $      %   $      %  
Plate heat exchanger $  4,266,484     33.57   $  3,938,396     36.09  
Heat exchange unit   2,922,955     22.99     2,765,558     25.34  
Air-cooled heat exchanger   389,645     3.07     762,536     6.99  
Shell-and-tube heat exchanger   1,091,374     8.59     1,321,108     12.11  
Others   4,038,702     31.78     2,124,775     19.47  
TOTAL $  12,709,160     100   $  10,912,373     100  

Cost of sales. Our cost of sales is primarily comprised of the costs of our raw materials, labor and factory overhead. Our cost of sales increased by $1.05 million, or 15.15%, to $7.95 million for the three months ended June 30, 2014, from $6.90 million for the three months ended June 30, 2013. The increase in the cost of sales was generally in line with the increase in our sales revenue. Cost of sales as a percentage of sales revenue were 62.52% and 63.23% for the three months ended June 30, 2014 and 2013, respectively, a decrease of 0.71 percentage points. The decrease was mainly attributable to the decrease in the labor costs and raw material costs in the second quarter in 2014.

Gross profit. Our gross profit is equal to the difference between our sales revenue and our cost of sales. Our gross profit increased by $0.75 million, or 18.73%, to $4.76 million for the three months ended June 30, 2014, from $4.01 million for the same period in 2013. The increase in our gross profit was mainly attributable to increased sales revenue from plate heat exchangers and heat change units. The average unit selling price of our products increased 13.07% in the three months ended June 30, 2014 in comparison with the same period in 2013. Gross profit margin for the three months ended June 30, 2014 increased to 37.48% from 36.77% for the same period in 2013. The increase in our gross profit margin was mainly attributable to the decrease in labor costs and raw material costs as noted above.

Administrative expenses. Our administrative expenses consist of the costs associated with staff and support personnel who manage our business activities. Our administrative expenses increased by $0.01 million, or 0.50%, to $1.48 million for the three months ended June 30, 2014, from $1.47 million for the same period in 2013. As a percentage of sales revenue, administrative expenses decreased to 11.65% for the three months ended June 30, 2014, as compared to 13.50% for the same period in 2013. The increase in administrative expense was primarily due to overall increase of administrative expenses in every category in the second quarter of 2014.

Research and development expenses. Our research and development expenses consist of the costs associated with research and development personnel and expense in research and development projects. Our research and development expenses increased by $0.92 million, or 215.18%, to $1.34 million for the three months ended June 30, 2014, from $0.43 million for the same period in 2013. The increase in research and development expenses was mainly attributable to our research and development of new products such as Plate air cooler used in TMSR, Plate heat exchanger used in distributed energy resource and Plate evaporator and condenser used in ship generators.

Selling expenses. Our selling expenses include sales commissions, the cost of advertising and promotional materials, salaries and fringe benefits of sales personnel, after-sale support services and other sales-related costs. Our selling expenses decreased by $0.33 million, or 22.32%, to $1.13 million for the three months ended June 30, 2014, from $1.46 million for the same period in 2013. As a percentage of sales revenue, selling expenses decreased to 8.89% for the three months ended June 30, 2014, as compared to 13.33% for the same period in 2013. The decrease was mainly attributable to the decreased transportation costs. Transportation costs decreased by $0.59 million, or 83.30%, to $0.12 million for the six months ended June 30, 2014, from $0.71 million for the same period in 2013.

Income before income taxes. Income before income taxes increased by $0.33 million, or 54.69%, to $0.94 million for the three months ended June 30, 2014, from $0.61 million for the same period in 2013. Such increase was mainly attributable to the increase in our gross profit.

Income taxes. Our income taxes decreased to $0.01 million for the three months ended June 30, 2014, from $0.22 million for the same period in 2013.

5


Net income attributable to common stockholders. As a result of the cumulative effect of the foregoing factors, our net income attributable to common stockholders increased by $0.58 million, or 162.24%, to $0.93 million for the three months ended June 30, 2014, from $0.35 million for the same period in 2013. As a percentage of sales revenue, our net income attributable to common stockholders was 7.30% and 3.24% for the three months ended June 30, 2014 and 2013, respectively.

Comparison of Six Months Ended June 30, 2014 and June 30, 2013

The following table sets forth key components of our results of operations for the periods indicated.

    Six Months Ended June 30,   $      %  
    2014     2013     Change     Change  

Sales revenue

$  20,998,072   $  18,822,808   $  2,175,264     11.56  

Cost of sales

  (13,710,273 )   (11,819,982 )   1,890,291     15.99  

Gross profit

  7,287,799     7,002,826     284,973     4.07  

Operating expenses:

                       

       Administrative expenses

  2,025,881     2,504,628     (478,747 )   (19.11 )

       Research and development expenses

  1,680,499     634,076     1,046,423     165.03  

       Selling expenses

  2,100,267     2,497,702     (397,435 )   (15.91 )

Total operating expenses

  5,806,647     5,636,406     170,241     3.02  

Income from operations

  1,481,152                    

 

        1,366,420     114,732     8.40  

Interest income

  6,163     14,774     (8,611 )   (58.28 )

Other income /(expenses)

  399,236     292,928     106,308     36.29  

Finance costs

  (379,160 )   (669,307 )   (290,147 )   43.35  

Other expense

  17     (604 )   621     (102.81 )

 

                       

Income before income taxes and noncontrolling

  1,507,408                    

interests

        1,004,211     503,197     50.11  

Income taxes

  (97,733 )   (283,476 )   185,743     (65.52 )

Net income before noncontrolling interests

  1,409,675     720,735     688,940     95.59  

Net loss attributable to noncontrolling interests

  -     (53,092 )   53,092     (100.00 )

Net income attributable to THT common stockholders

$ 1,409,675   $  667,643   $  742,032     111.14  

Sales revenue. Our sales revenue increased by $2.18 million, or 11.56%, to $21.00 million for the six months ended June 30, 2014, from $18.82 million for the same period in 2013. Our sales volume in the six months ended June 30, 2014 amounted to 1,113 units, an increase of 131 units, from 982 units for the same period in 2013. Such increase was mainly due to the increased sales revenue from shell-and-tube heat exchangers and heat change units in the 2014 period as compared with the 2013 period. Sales revenue from shell-and-tube heat exchangers increased by $0.84 million, or 61.38%, to $2.20 million for the six months ended June 30, 2014 from $1.36 million for the same period in 2013. Sales revenue from heat exchange units increased $1.09 million, or 21.59%, to $6.11 million for the six months ended June 30, 2014 from $5.02 million for the same period in 2013. The increase was a result of increased demand for our products and economy recovery of China in the first half of 2014 compared with previous years.

The following table shows our sales revenue by product for the six months ended June 30, 2014 and 2013:

    Six Months Ended June 30,  
    2014     2013  
  $      %   $       %  
Plate heat exchanger $  7,135,054     33.98   $  7, 713,483     40.98  
Heat exchange unit   6,106,172     29.08     5,022,119     26.68  
Air-cooled heat exchanger   389,645     1.86     1,463,539     7.78  
Shell-and-tube heat exchanger   2,200,817     10.48     1,363,779     7.24  
Others   5,166,384     24.60     3,259,888     17.32  
TOTAL $  20,998,072     100   $  18,822,808     100  

6


Cost of sales. Our cost of sales increased by $1.89 million, or 15.99%, to $13.71 million for the six months ended June 30, 2014, from $11.80 million for the six months ended June 30, 2013. The increase in the cost of sales was generally in line with the increase in our sales revenue. Cost of sales as a percentage of sales revenue were 65.29% and 62.80% for the six months ended June 30, 2014 and 2013, respectively, an increase of 2.49 percentage points. The increase was mainly attributable to the significant increase in labor costs and raw material costs in the first quarter in 2014.

Gross profit. Our gross profit increased by $0.29 million, or 4.07%, to $7.29 million for the six months ended June 30, 2014, from $7.00 million for the same period in 2013. The increase in our gross profit was mainly attributable to increased sales revenue from shell-and-tube heat exchangers and heat change units. The average unit selling price of our products decreased 1.57% in the six months ended June 30, 2014 in comparison with the same period in 2013. Gross profit margin for the six months ended June 30, 2014 dropped to 34.71% from 37.20% for the same period in 2013. The decrease in our gross profit margin was mainly attributable to the increase in labor costs and raw material costs as noted above.

Administrative expenses. Our administrative expenses decreased by $0.48 million, or 19.11%, to $2.03 million for the six months ended June 30, 2014, from $2.50 million for the same period in 2013. As a percentage of sales revenue, administrative expenses decreased to 9.65% for the six months ended June 30, 2014, as compared to 13.31% for the same period in 2013. The decrease in administrative expense was primarily due to the decrease in the allowance for doubtful accounts in the first half of 2014.

Research and development expenses. Our research and development expenses increased by $1.05 million, or 165.03%, to $1.68 million for the six months ended June 30, 2014, from $0.63 million for the same period in 2013. The increase in research and development expenses was mainly attributable to our research and development of new products such as Plate air cooler used in TMSR, Plate heat exchanger used in distributed energy resource and Plate evaporator and condenser used in ship generators in the first half in 2014.

Selling expenses. Our selling expenses decreased by $0.40 million, or 15.91%, to $2.10 million for the six months ended June 30, 2014, from $2.50 million for the same period in 2013. As a percentage of sales revenue, selling expenses increased to 10.00% for the six months ended June 30, 2014, as compared to 13.28% for the same period in 2013. The decrease was mainly attributable to the decreased transportation costs. Transportation costs decreased by $0.59 million, or 71.72%, to $0.23 million for the six months ended June 30, 2014, from $0.82 million for the same period in 2013.

Income before income taxes. Income before income taxes increased by $0.50 million, or 50.11%, to $1.51 million for the six months ended June 30, 2014, from $1.00 million for the same period in 2013. Such increase was mainly attributable to increased gross profit.

Income taxes. Our income taxes decreased to $0.10 million for the six months ended June 30, 2014, from $0.28 million for the same period in 2013.

Net income attributable to common stockholders. As a result of the cumulative effect of the foregoing factors, our net income attributable to common stockholders increased by $0.74 million, or 111.14%, to $1.41 million for the six months ended June 30, 2014, from $0.67 million for the same period in 2013. As a percentage of sales revenue, our net income attributable to common stockholders was 6.71% and 3.55% for the six months ended June 30, 2014 and 2013, respectively.

Liquidity and Capital Resources

As of June 30, 2014, we had cash and cash equivalents of $2.38 million, primarily consisting of cash on hand and demand deposits. We can use our land as collateral to borrow approximately $4.76 million. In addition, we have an approximately $32.13 million credit line from Bank of Communications. We anticipate that cash on hand and borrowing capacity under our bank loans will be sufficient to satisfy our ongoing obligations.

We believe our allowance for doubtful accounts is appropriate. We have an installment payment arrangement with our customers. China’s tightened credit policy led to delayed payments and delayed delivery schedules by our customers, which in turn caused us to increase our allowance for doubtful accounts from a reversal of allowance of $0.20 million in the six months ended June 30, 2013 to $0.27 million in the same period in 2014. To control inflation after a massive stimulus plan, the Chinese government tightened its credit policy. As a result, state-owned banks limited their lending to large state-owned corporations and privately held companies continue to have difficulty accessing capital. Most of our customers have been affected by the tightened credit policy and have limited access to capital. The Company records an allowance for doubtful accounts at a rate of 25% for receivables aged between 1 to 2 years, 50% for receivables aged between 2 to 3 years and 100% for receivables aged over 3 years.

7


Our allowance of obsolete inventory is also appropriate because we purchase raw materials after we receive purchase orders. Although our customers may delay their payment or delivery schedules, which increase our inventories, they do not cancel their orders so as to cause us to classify the delayed inventories as obsolete inventories.

We expect that the trend of delayed customer payments and delayed delivery schedules will continue in the future. We have been taking the following measures to mitigate the situation: 1) send the collection letters or call the customers to request payment; 2) appoint specialists to visit our customers to collect payment; 3) file law suits.

PRC legal restrictions permit payments of dividends by our PRC subsidiaries only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of their annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital. Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances, or cash dividends. Given that the Company and the PRC subsidiaries do not intend to pay dividends for the foreseeable future, we consider the impact of restrictions on our liquidity, financial condition and results of operations is not significant.

The following table provides a summary of our net cash flows from operating, investing, and financing activities.

Cash Flow

    Six Months Ended June 30,  
    2014     2013  

Net cash provided by (used in) operating activities

$  1,593,992   $  (4,498,851 )

Net cash provided by investing activities

  582,609     59,730  

Net cash used in financing activities

  (8,876,362 )   (4,328,440 )

Effects of exchange rate change in cash

  1,465     101,958  

Net decrease in cash and cash equivalents

  (6,698,296 )   (8,665,603 )

Cash and cash equivalents at beginning of the period

  9,082,137     10,703,199  

Cash and cash equivalent at end of the period

$  2,383,841   $  2,037,596  

Operating Activities

Net cash provided by operating activities was $1.59 million for the six months ended June 30, 2014, compared with $4.50 million used in operating activities for the same period in 2013. The decrease in net cash used in operating activities was mainly attributable to less payments made to acquire inventories, less payments made for other payable and accrued expenses, and less increase of other receivable, prepayments and deposits, offset by more payments made for trade payable, more increase in bill payable, and less decrease in trade receivables.

Investing Activities

Net cash provided by investing activities was $0.58 million for the six months ended June 30, 2014, compared with $0.06 million used in investing activities for the same period in 2013. The increases of cash provided by investing activities were mainly attributable to decreased restricted cash offset by more cash used in the purchase of equipment during the six months ended June 30, 2014.

Financing Activities

Net cash used in financing activities was $8.88 million for the six months ended June 30, 2014, compared with $4.33 million for the same period in 2013. The increase in net cash used in financing activities resulted from more net payments to bank loans for the six months ended June 30, 2014 compared to the same period last year.

8


Capital Expenditures

Our capital expenditures were used primarily for the purchase of equipment to expand our production capacity. The table below sets forth the breakdown of our capital expenditures by use for the periods indicated.

    Six Months Ended June 30,  
    2014     2013  
Construction costs $  48,331   $  -  
Purchase of equipment   197,863     83,184  
Prepayment for land use right   -        
Total capital expenditures $  246,194   $  83,184  

We estimate that our total capital expenditures in fiscal year 2014 will reach approximately $3.00 million to buy the equipment for necessary products used in the nuclear power industry.

Seasonality

Our operating results and operating cash flows historically have been subject to seasonal variations. Our revenues usually increase over each quarter of the calendar year with the first quarter usually the slowest quarter because fewer projects are undertaken during and around the Chinese spring festival.

Inflation

Inflation and changing prices have not had a material effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in the Chinese economy and our industry and continually maintain effective cost controls in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

Critical Accounting Policies

Critical accounting policies are those we believe are most important to portraying our financial conditions and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. See Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this report.

Recent Accounting Pronouncements

See Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

9


As required by Rule 13a-15(e), our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer, Mr. Guohong Zhao, and Interim Chief Financial Officer, Mr. Zhigang Xu, of the effectiveness of the design and operation of our disclosure controls and procedures, as of June 30, 2014. Based upon, and as of the date of this evaluation, Messrs. Zhao and Xu determined that because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2013, which we are still in the process of remediating as of June 30, 2014, our disclosure controls and procedures were not effective. Investors are directed to Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2013 for the description of these weaknesses.

Changes in Internal Control over Financial Reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

During its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2012, our management identified material weakness related to our lack of: (1) sufficient and adequately trained accounting and finance personnel; (2) qualified resources to perform the internal audit functions properly; and (3) an internal audit department which renders ineffective our ability to prevent and detect control lapses and errors in the accounting of certain key areas. As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, our management has identified the steps necessary to address the material weaknesses, and in the second quarter of 2014, we continued to implement these remedial procedures.

Other than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over financial reporting during the second quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, cash flows, financial condition or operating results.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the second quarter of 2014, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

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ITEM 6. EXHIBITS.

The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 14, 2014 THT HEAT TRANSFER TECHNOLOGY, INC.
     
  By: /s/ Guohong Zhao
    Guohong Zhao, Chief Executive Officer
    (Principal Executive Officer)
     
  By: /s/ Zhigang Xu
    Zhigang Xu, Interim Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)


EXHIBIT INDEX

Exhibit No. Description
31.1 Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 Interactive data files pursuant to Rule 405 of Regulation S-T (furnished herewith).