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EX-32.2 - EXHIBIT 32.2 - THT Heat Transfer Technology, Inc.exhibit32-2.htm
EX-32.1 - EXHIBIT 32.1 - THT Heat Transfer Technology, Inc.exhibit32-1.htm
EX-31.1 - EXHIBIT 31.1 - THT Heat Transfer Technology, Inc.exhibit31-1.htm
EX-31.2 - EXHIBIT 31.2 - THT Heat Transfer Technology, Inc.exhibit31-2.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, 2015

[  ] 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 (I.R.S. Employer Identification No.)
incorporation or organization)  

THTIndustrial 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 August14, 2015 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, 2015

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. 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 16
ITEM 4. CONTROLS AND PROCEDURES. 16
PART II 17
OTHER INFORMATION 17
ITEM 1. LEGAL PROCEEDINGS. 17
ITEM 1A. RISK FACTORS. 17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 18
ITEM 4. MINE SAFETY DISCLOSURES. 18
ITEM 5. OTHER INFORMATION. 18
ITEM 6. EXHIBITS. 20


PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

THT HEAT TRANSFER TECHNOLOGY, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014

  Pages(s)
Consolidated Balance Sheets 2
Consolidated Statements of Income and Comprehensive Income 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5-9

1


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

 

  June 30,     December 31,  

 

  2015     2014  

 

  (Unaudited)        

ASSETS

           

Current Assets

           

   Cash and cash equivalents

$  2,576,245   $  12,247,508  

   Restricted cash

  737,604     550,206  

   Trade receivables, net

  38,664,089     42,882,993  

   Bills receivable

  1,590,811     2,016,646  

   Other receivables, prepayments and deposits, net

  11,648,969     9,855,913  

   Due from related parties

  29,415     24,663  

   Inventories, net

  25,006,599     27,926,555  

   Deferred tax assets

  170,519     168,932  

Total Current Assets

  80,424,251     95,673,416  

 

           

   Restricted cash, non-current

  570,744     738,168  

   Retention receivable

  1,004,225     1,909,731  

   Property, plant and equipment, net

  8,952,724     8,890,946  

   Land use rights, net

  6,016,392     6,025,000  

TOTAL ASSETS

$  96,968,336   $  113,237,261  

 

           

LIABILITIES & SHAREHOLDERS’ EQUITY

           

Current Liabilities

           

   Accounts payable

  4,419,327     8,903,510  

   Other payables and accrued liabilities

  18,030,506     24,362,343  

   Income tax payable

  358,442     652,859  

   Short-term loans

  6,569,439     12,691,181  

   Due to related parties

  525,555     813,537  

Total Current Liabilities

  29,903,269     47,423,430  

 

           

Non-current liabilities

           

   Long-term loan

  574,826     569,476  

Total Long-term Liabilities

  574,826     569,476  

 

           

TOTAL LIABILITIES

  30,478,095     47,992,906  

 

           

SHAREHOLDERS’ EQUITY

           

   Preferred stock, $.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, 2015 and December 31, 2014

  20,454     20,454  

   Additional paid-in capital

  26,524,324     26,524,324  

   Statutory reserve

  3,960,898     3,879,564  

   Retained earnings

  29,503,731     28,944,535  

   Accumulated other comprehensive income

  6,480,834     5,875,478  

TOTAL SHAREHOLDERS’ EQUITY

  66,490,241     65,244,355  

 

           

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$  96,968,336   $  113,237,261  

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

2


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

    For Six Months Ended June 30,     For Three Months Ended June 30,  
    2015     2014     2015     2014  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Sales revenue $  15,304,833   $  20,998,072   $  7,130,943   $  12,709,160  
Cost of revenues   (11,081,229 )   (13,710,273 )   (5,312,819 )   (7,945,244 )
Gross Profit   4,223,604     7,287,799     1,818,124     4,763,916  
                         
Operating expenses                        
 General and administrative expenses   1,030,196     2,025,881     728,178     1,480,830  
 Research and development expenses   710,754     1,680,499     499,429     1,340,425  
 Selling expenses   1,737,923     2,100,267     925,366     1,130,316  
Total Operating Expenses   3,478,873     5,806,647     2,152,973     3,951,571  
                         
Income (loss) from operations   744,731     1,481,152     (334,849 )   812,345  
                         
Other Income (Expenses)                        
 Interest income   5,857     6,163     2,501     1,804  
 Other income   75,278     399,253     45,647     174,598  
 Finance costs   (41,805 )   (379,160 )   (3,197 )   (47,702 )
Total Other Income   39,330     26,256     44,951     128,700  
                         
Income (loss) before income taxes   784,061     1,507,408     (289,898 )   941,045  
Income tax benefit (expenses)   (143,531 )   (97,733 )   16,519     (12,779 )
Net Income (Loss)   640,530     1,409,675     (273,379 )   928,266  
                         
Net Income (Loss)   640,530     1,409,675     (273,379 )   928,266  
Other Comprehensive Income                        
 Foreign currency translation adjustments   605,356     (426,320 )   340,399     143,880  
Comprehensive Income   1,245,886     983,355     67,020     1,072,146  
                         
Earnings per share                        
 Basic and diluted $  0.03   $  0.07   $  (0.01 ) $  0.05  
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

3


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

 

  For the Six Months Ended June 30,  

 

  2015     2014  

 

  (Unaudited)     (Unaudited)  

CASH FLOWS FROM OPERATING ACTIVITIES

           

 

           

Net income

$  640,530   $  1,409,675  

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

   Depreciation and amortization

  648,180     521,727  

   Loss on disposal of property, plant and equipment

  22,337     (8,195 )

   Allowance for doubtful accounts

  (939,772 )   (270,722 )

Changes in operating assets and liabilities:

           

   Trade receivables

  5,543,386     876,555  

   Bills receivable

  443,034     (1,865,438 )

   Other receivables, prepayments and deposits

  (1,693,790 )   (3,469,506 )

   Due from shareholders

  (4,503 )   -  

   Inventories

  3,169,812     1,768,962  

   Retention receivable

  919,821     1,101,044  

   Accounts payable

  (5,031,135 )   (3,316,737 )

   Other payables and accrued expenses

  (6,560,191 )   5,371,006  

   Income tax payable

  (299,370 )   (524,379 )

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

  (3,141,661 )   1,593,992  

 

           

CASH FLOWS FROM INVESTING ACTIVITIES

           

   Change in restricted cash

  (7,840 )   819,035  

   Proceeds from disposal of property, plant and equipment

  -     9,769  

   Payments to acquire property, plant and equipment

  (58,306 )   (246,195 )

NET CASH FLOWS PROVIDED BY (USED IN) INVESTING

  (66,146 )   582,609  

 

           

CASH FLOWS FROM FINANCING ACTIVITIES

           

   Proceeds from short-term loans

  3,778,110     14,327,814  

   Repayment of short-term loans

  (9,994,574 )   (22,468,617 )

   Repayment to related parties

  (294,464 )   -  

   Repayment of long-term loans

  -     (980,745 )

   Refund of counter guarantee receivable

  -     245,186  

NET CASH FLOWS USED IN FINANCING ACTIVITIES

  (6,510,928 )   (8,876,362 )

 

           

 

           

Effect of foreign currency translation on cash and cash equivalents

  47,472     1,465  

 

           

NET DECREASE IN CASH AND CASH EQUIVALENTS

  (9,671,263 )   (6,698,296 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

$  12,247,508   $  9,082,137  

 

           

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$  2,576,245   $  2,383,841  

 

           

Supplementary Disclosures for Cash Flow Information:

           

 

           

   Interest paid

$  35,826   $  378,327  

   Income tax paid

$ 435,422   $ 815,658  

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

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 three companies, 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, 2014 filed with the SEC in the Company’s Form 10-K on March 31, 2015.

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.

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, 2015 and December 31, 2014, 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.

5


Recently issued accounting pronouncements

In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”. The amendments in ASU 2015-11 require an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. A reporting entity should apply the amendments prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements.

4. Trade receivables, net

 

  June 30,       December 31,  

 

  2015     2014  

 

  (Unaudited)        

 

           

Trade receivables

$  46,317,140   $  51,395,843  

Less: Allowance for doubtful accounts

  (7,653,051 )   (8,512,850 )

 

           

 

$  38,664,089   $  42,882,993  

An analysis of the allowance for doubtful accounts for the six months ended June 30, 2015 and 2014 is as follows:

 

  June 30,  

 

  (Unaudited)  

 

  2015     2014  

 

           

Balance at beginning of period

$  8,512,850   $  7,106,345  

Adjustment of bad debt expense

  (939,772 )   (270,722 )

Translation adjustments

  79,973     (52,460 )

 

           

Balance at end of period

$  7,653,051   $  6,783,163  

6


5. Inventories, net

    June 30, 2015     December 31, 2014  
    (Unaudited)        
             
Raw materials $  4,864,632   $  4,874,061  
Work-in-progress   9,580,838     22,887,134  
Finished goods   10,581,169     185,212  
    25,026,639     27,946,407  
Allowance for obsolete inventories   (20,040 )   (19,852 )
  $  25,006,599   $  27,926,555  

No further allowance for obsolete inventories was recognized during the six months ended June 30, 2015 and 2014.

6. Income tax

The effective tax rate is 6% and 1% for the three months periods ended June 30, 2015 and June 30, 2014, respectively. The effective tax rate is 18% and 6% for the six months periods ended June 30, 2015 and June 30, 2014, respectively.

7. Property, plant and equipment, net

As of June 30, 2015 and December 31, 2014, property, plant and equipment with net book values of $nil and $4,621,156, respectively, were pledged as collateral under certain loan arrangements (see Note 9).

8. Land use rights

As of June 30, 2015 and December 31, 2014, land use rights with net book values of $nil and 986,145 were pledged as collateral under certain loan arrangements (see Note 9).

During the six months ended June 30, 2015 and 2014, amortization amounted to $64,952 and $64,645, respectively.

9. Short-term loans

 

  June 30, 2015     December 31, 2014  

 

  (Unaudited)        

 

           

Loan from unrelated party

$  6,569,439   $  6,508,298  

Secured bank loans

  -     6,182,883  

 

           

 

$  6, 569,439   $  12,691,181  

Short-term loans from unrelated party

In April 2014, the Company obtained a loan in the amount of $6,508,298 from a third party individual. The loan is unsecured, bearing no interest rate and due on demand.

7


Short-term bank loans

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, 2015     December 31, 2014  

 

  (Unaudited)        

 

           

Property, plant and equipment (Note 7)

$  -    $ 4,621,156  

Land use rights (Note 8)

        986,145  

 

           

 

$  -   $ 5,607,301  

As of March 31, 2015, the Company has repaid the secured short-term bank loan in full.

10. Long-term loans

Long-term loans include the following:

    June 30, 2015     December 31, 2014  
    (Unaudited)        
Unsecured loan $  574,826   $  569,476  
             
Total $  574,826   $  569,476  

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

11. 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, 2015 and 2014 were as follows:

          Six months ended June 30,        
    2015     %     2014     %  
    (Unaudited)           (Unaudited)        
                         
Plate heat exchanger $  4,278,495     28    $ 7,087,632     34  
Heat exchange unit   5,663,581     37     6,106,172     29  
Air-cooled heat exchanger   -     -     389,645     2  
Shell-and-tube heat exchanger   921,927     6     2,200,817     10  
Others   4,440,830     29     5,213,806     25  
                                                                                              $ 15,304,833     100   $  20,998,072     100  
 

8


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

12. Related party transactions

The related parties consist of as following:

Name of Related Party Nature of Relationship
Guohong Zhao Chairman, Chief Executive Officer and President
Zhigang Xu Interim Chief Financial Officer, Treasurer and Secretary
Fucai Zan Vice President of R&D and Director
Kai Liu Chief Engineer, Manager of Market development
Zhijun Ma Sales Director
Yongfu Tian Vice Sales Director
Feng Xu Factory Director, Manager of production

Due from related parties

As of June 30, 2015 and December 31, 2014, respectively, the Company advanced $29,415 and $24,663 to Guohong Zhao for handling selling and logistic activities for the Company in the ordinary course of business.

Due to related parties

Due to related parties consist of following:

    June 30, 2015     December 31, 2014  
    (Unaudited)        
Zhigang Xu $  82,118   $  81,354  
Fucai Zan   114,965     162,708  
Kai Liu   164,236     162,707  
Zhijun Ma   -     162,707  
Yongfu Tian   164,236     162,707  
Feng Xu   -     81,354  
  $  525,555   $  813,537  

Amounts owed by the Company represent non-secured and non-interest bearing loans obtained from related parties which are due on demand.

9



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, 2014, 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, SipingJuyuan 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;
  “SipingJuyuan” are to Siping City JuyuanHanyang Plate Heat Exchanger Co. Ltd., a PRC company;
  “Beijing Juyuan” are to Beijing JuyuanHanyang 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, GuangdongLinao nuclear plant and BASF Chemical plant in Germany.

10


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

Second Quarter Financial Performance Highlights

The following summarizes certain key financial information for the second quarter of 2015:

Sales revenue: Sales revenue decreased by $5.6 million, or 43.89%, to $7.1 million for the three months ended June 30, 2015, from $12.71 million for the same period in 2014.
     
Gross profit: Gross profit decreased by $2.9 million, or 61.84%, to $1.8 million for the three months ended June 30, 2015, from $4.76 million for the same period in 2014.
     
Net income (loss) attributable to stockholders: Net income attributable to our stockholders decreased by $1.20 million, or 129.45%, to net loss of $0.27 million for the three months ended June 30, 2015, from net income of $0.93 million for the same period in 2014.
     
Fully diluted net income per share: Fully diluted net income per share was $(0.01)for the three months ended June 30, 2015, as compared to $0.05 for the same period in 2014.

Results of Operations

Comparison of Three Months Ended June 30, 2015 and 2014

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

 

  Three Months Ended June 30,      $     %  

 

  2015     2014     Change     Change  

Sales revenue

$  7,130,943   $  12,709,160   $  (5,578,217 )   (43.89 )

Cost of sales

  (5,312,819 )   (7,945,244 )   2,632,425     (33.13 )

Gross profit

  1,818,124     4,763,916     (2,945,792 )   (61.83 )

Operating expenses:

                       

       Administrative expenses

  728,178     1,480,830     (752,652 )   (50.83 )

       Research and development expenses

  499,429     1,340,425     (840,996 )   (62.74 )

       Selling expenses

  925,366     1,130,316     (204,950 )   (18.13 )

Total operating expenses

  2,152,973     3,951,571     (1,798,598 )   (45.52 )

Income (loss) from operations

  (334,849 )   812,345     (1,147,194 )   (141.22 )

Interest income

  2,501     1,804     697     38.64  

Other income

  45,647     174,598     (128,951 )   (73.86 )

Finance costs

  (3,197 )   (47,702 )   44,505     (93.30 )

Income (loss) before income taxes

  (289,898 )   941,045     (1,230,943 )   (130.81 )

Income taxes benefit (expense)

  16,519     (12,779 )   29,298     (229.27 )

Net Income (Loss)

$  (273,379 ) $  928,266   $  (1,201,645 )   (129.45 )

Sales revenue. Our sales revenue is generated from sales of heat exchange products. Sales revenue decreased by $5.6 million, or 43.89%, to $7.1 million for the three months ended June 30, 2015, from $12.71 million for the same period in 2014. Our sales volume in the three months ended June 30, 2015 amounted to 489 units, a decrease of 128 units, from 617 units for the same period in 2014. Sales revenue from plate heat exchangers decreased by $1.8 million, or 41.74%, to $2.5 million for the three months ended June 30, 2015, from $4.27 million for the same period in 2014. Chinese economic slowdown in 2015 affected several industries we serve, especially the industries with excessive capacity such as petrochemical, metallurgical and shipbuilding industries. Because of the energy conservation and emission reduction policies adopted in China, many projects in petrochemical industry were suspended and delayed with less order in 2015. Many orders from shipbuilding industry also declined drastically.

The following table shows our sales revenue by product for the three months ended June 30, 2015 and 2014:

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  Three Months Ended June 30,  

 

  2015     2014  

 

$      %    $     %  

Plate heat exchanger

$  2,485,862     34.86   $  4,266,484     33.57  

Heat exchange unit

  1,729,624     24.26     2,922,955     22.99  

Air-cooled heat exchanger

  -     -     389,645     3.07  

Shell-and-tube heat exchanger

  938,619     13.16     1,091,374     8.59  

Others

  1,976,838     27.72     4,038,702     31.78  

TOTAL

$  7,130,943     100   $  12,709,160     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 decreased by $2.63 million, or 33.13%, to $5.31 million for the three months ended June 30, 2015, from $7.95 million for the three months ended June 30, 2014. The decrease in the cost of sales was generally in line with the decrease in our sales revenue. Cost of sales as a percentage of sales revenue were 74.50% and 62.52% for the three months ended June 30, 2015 and 2014, respectively, an increase of 11.99 percentage points. The increase was mainly attributable to increased labor costs and raw material costs.

Gross profit. Our gross profit is equal to the difference between our sales revenue and our cost of sales. Our gross profit decreased by $2.9 million, or 61.84%, to $1.8 million for the three months ended June 30, 2015, from $4.76 million for the same period in 2014. The decrease in our gross profit was mainly attributable to decreased revenue and increased cost of sales. The average unit selling price of our products decreased 66.59% to $14,570 in the three months ended June 30, 2015 in comparison with $20,598 in the same period in 2014. Gross profit margin for the three months ended June 30, 2015 decreased to 25.50% from 37.48% for the same period in 2014. The decrease in our gross profit margin was mainly attributable to the increase in labor costs and raw material costs.

Administrative expenses. Our administrative expenses consist of the costs associated with staff and support personnel who manage our business activities. Our administrative expenses decreased by $0.75 million, or 50.83%, to $0.73 million for the three months ended June 30, 2015, from $1.48 million for the same period in 2014. As a percentage of sales revenue, administrative expenses decreased to 10.21% for the three months ended June 30, 2015, as compared to 11.65% for the same period in 2014. The decrease of administrative expenses was attributable to the decrease in bad debt expense. The decrease in bad debt expense was mainly because we adopted methods to improve the collection of overdue receivable. 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.

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 decreased to $0.50 million for the three months ended June 30, 2015, from $1.34 million for the same period in 2014. The decrease in research and development expenses was mainly attributable to fewer new products in the process of research and development in the second quarter of 2015.

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 $0.20 million, or 18.13%, to $0.93 million for the three months ended June 30, 2015, from $1.13 million for the same period in 2014. As a percentage of sales revenue, selling expenses increased to 12.98% for the three months ended June 30, 2015, as compared to 8.89% for the same period in 2014. The decrease in our selling expenses was mainly attributable to the decreased travelling expenses. Travelling expenses decreased by $0.20 million, or 49.31%, to $0.20 million for the three months ended June30, 2015, from $0.40 million for the same period in 2014.

Income before income taxes. Income before income taxes decreased by $1.23 million, or 130.8%, to $0.29 million for the three months ended June 30, 2015, from $0.94 million for the same period in 2014. Such decrease was mainly attributable to the decrease in our sales revenue.

Income taxes. Our income taxes decreased to income tax benefit of $0.02 million for the three months ended June 30, 2015, from income tax expense of $0.01 million for the same period in 2014, as a result of the decreased taxable income. Such decrease was mainly attributable to the decrease in our sales revenue.

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Net income (loss) attributable to common stockholders. As a result of the cumulative effect of the foregoing factors, our net income attributable to common stockholders decreased by $1.2 million, or 129.45%, to net loss of $0.27 million for the three months ended June 30, 2015, from net income of $0.93 million for the same period in 2014. As a percentage of sales revenue, our net income (loss) was (3.83) % and 7.30% for the three months ended June 30, 2015 and 2014, respectively.

Comparison of Six Months Ended June 30, 2015 and June 30, 2014

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

 

  Six Months Ended June 30,    $     %  

 

  2015     2014     Change     Change  

Sales revenue

$  15,304,833   $  20,998,072   $  (5,693,239 )   (27.11 )

Cost of sales

  (11,081,229 )   (13,710,273 )   2,629,044     (19.18 )

Gross profit

  4,223,604     7,287,799     (3,064,195 )   (42.05 )

Operating expenses:

                       

       Administrative expenses

  1,030,196     2,025,881     (995,685 )   (49.15 )

       Research and development expenses

  710,754     1,680,499     (969,745 )   (57.71 )

       Selling expenses

  1,737,923     2,100,267     (362,344 )   (17.25 )

Total operating expenses

  3,478,873     5,806,647     (2,327,774 )   (40.09 )

Income from operations

  744,731     1,481,152     (736,421 )   (49.72 )

Interest income

  5,857     6,163     (306)     (4.97 )

Other income

  75,278     399,253     (323,975 )   (81.15 )

Finance costs

  (41,805 )   (379,160 )   337,355     88.97  

Income before income taxes

  784,061     1,507,408     (723,347 )   (47.99 )

Income taxes

  (143,531 )   (97,733 )   45,798     46.86  

Net Income

  640,530     1,409,675     (769,145 )   (54.56 )

Sales revenue. Our sales revenue decreased by $5.7 million, or 27.11%, to $15.3 million for the six months ended June 30, 2015, from $21.00 million for the same period in 2014. Our sales volume in the six months ended June 30, 2015 amounted to 851 units, a decrease of 262 units, from 1,113 units for the same period in 2014. Chinese economic slowdown in 2015 affected several industries we serve, especially the industries with excessive capacity such as petrochemical, metallurgical and shipbuilding industries. Because of the energy conservation and emission reduction policies adopted in China, many projects in petrochemical industry were suspended and delayed with less order in 2015.

The following table shows our sales revenue by product for the six months ended June 30, 2015 and 2014:

 

  Six Months Ended June 30,  

 

  2015     2014  

 

 $     %    $     %  

Plate heat exchanger

$  4,278,495     27.96   $  7,135,054     33.98  

Heat exchange unit

  5,663,581     37.01     6,106,172     29.08  

Air-cooled heat exchanger

  -     -     389,645     1.86  

Shell-and-tube heat exchanger

  921,927     6.02     2,200,817     10.48  

Others

  4,440,830     29.02     5,166,384     24.60  

TOTAL

$  15,304,833     100   $  20,998,072     100  

Cost of sales. Our cost of sales decreased by $2.63 million, or 19.18%, to $11.08 million for the six months ended June 30, 2015, from $13.71 million for the six months ended June 30, 2014. The decrease in the cost of sales was generally in line with decreased sales revenue. Cost of sales as a percentage of sales revenue were 72.4% and 65.29% for the six months ended June 30, 2015 and 2014, respectively, an increase of 7.11 percentage points. The increase was mainly attributable to increased labor costs and raw materials costs.

Gross profit. Our gross profit decrease by $3.06 million, or 42.05%, to $4.22 million for the six months ended June 30, 2015, from $7.29 million for the same period in 2014. The decrease in our gross profit was mainly attributable to decreased in unit price. The average unit selling price of our products decrease by 28.57% to $15,000 in the six months ended June 30, 2015 in comparison with $21,000 in the same period in 2014. Gross profit margin for the six months ended June 30, 2015 dropped to 27.6% from 34.71% for the same period in 2014. The decrease in our gross profit margin was mainly attributable to the increased labor cost and materials costs.

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Administrative expenses. Our administrative expenses decreased by $1.0 million, or 49.15%, to $1.03 million for the six months ended June 30, 2015, from $2.03 million for the same period in 2014. As a percentage of sales revenue, administrative expenses decreased to 6.73% for the six months ended June 30, 2015, as compared to 9.65% for the same period in 2014. The decrease of administrative expenses was attributable to the decrease in bad debt expense. The decrease in bad debt expense was mainly because we adopted some methods to improve the collection of overdue receivable. 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.

Research and development expenses. Our research and development expenses decreased by $0.97 million, or 57.71%, to $0.71 million for the six months ended June 30, 2015, from $1.68 million for the same period in 2014. The decrease in research and development expenses was mainly attributable to fewer new products in the process of research and development in the six months ended June 30, 2015.

Selling expenses. Our selling expenses decreased by $0.36 million, or 17.25%, to $1.74 million for the six months ended June 30, 2015, from $2.10 million for the same period in 2014. As a percentage of sales revenue, selling expenses increased to 11.36 % for the six months ended June 30, 2015, as compared to 10.00% for the same period in 2014. The decrease was mainly attributable to decreased sales revenue.

Income before income taxes. Income before income taxes decreased by $0.72 million, or 47.99%, to $0.78 million for the six months ended June 30, 2015, from $1.51 million for the same period in 2014. Such decrease was mainly attributable to the decreased revenue.

Income taxes. Our income taxes increased to $0.14 million for the six months ended June 30, 2015, from $0.10 million for the same period in 2014, as a result of failure to accrue enough tax expense for the same period in 2014.

Net income attributable to common stockholders. As a result of the cumulative effect of the foregoing factors, our net income attributable to common stockholders decreased by $0.77 million, or 54.56%, to $0.64 million for the six months ended June 30, 2015, from $1.41 million for the same period in 2014. As a percentage of sales revenue, our net income attributable to common stockholders was 4.19% and 6.71% for the six months ended June 30, 2015 and 2014, respectively.

Liquidity and Capital Resources

As of June 30, 2015, we had cash and cash equivalents of $2.58 million, primarily consisting of cash on hand and demand deposits. In addition, we have an approximately $20 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. The current economic slowdown and Chinese tightened credit policy led to delayed payments and delayed delivery schedules by our customers, which in turn caused us to decrease our allowance for doubtful accounts from a reversal of allowance of $0.27 million in the six months ended June 30, 2014 to $0.85 million in the same period in 2015. 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.

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.

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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,  

 

  2015     2014  

Net cash provided by (used in) operating activities

$  (3,141,661 ) $  1,593,992  

Net cash provided by(used in) investing activities

  (66,146 )   582,609  

Net cash used in financing activities

  (6,510,928 )   (8,876,362 )

Effects of exchange rate change in cash

  47,472     1,465  

Net decrease in cash and cash equivalents

  (9,671,263 )   (6,698,296 )

Cash and cash equivalents at beginning of the period

  12,247,508     9,082,137  

Cash and cash equivalent at end of the period

$  2,576,245   $  2,383,841  

Operating Activities

Net cash used in operating activities was $3.14 million for the six months ended June 30, 2015, compared with $1.59 million net cash provided by operating activities for the same period in 2014. The decrease in net cash used in operating activities was mainly attributable to decrease in other payables and accrued expenses, decreased net income, offset by increase in trade receivables.

Investing Activities

Net cash used in investing activities was $(0.07) for the six months ended June 30, 2015, compared with $0.58 million net cash provided by in the same period in 2014. The net cash used in investing activities during the six months ended June 30, 2015 was primarily used for purchase of equipment.

Financing Activities

Net cash used in financing activities was $6.5 million for the six months ended June 30, 2015, compared with $8.88 million for the same period in 2014. The decrease in net cash used in financing activities resulted from a decrease in net payment of short-term loans.

Capital Expenditures

Our capital expenditures were used primarily for the purchase of equipment to expand our production capacity and deposits for land use rights.

 

  Six Months Ended June 30,  

 

  2015     2014  

Construction costs

$  350,000   $  48,331  

Purchase of equipment

  8,601     197,863  

Prepayment for land use right

  -     -  

Total capital expenditures

$  358,601   $  246,194  

We estimate that our total capital expenditures in fiscal year 2015 will reach approximately $3 million to buy the equipment for necessary products used in the nuclear power industry.

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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 Note3 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.

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, 2015. 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, 2014, which we are still in the process of remediating as of June 30, 2015, 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, 2014 for the description of these weaknesses.

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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, 2014, our management has identified the steps necessary to address the material weaknesses, and in the second quarter of 2015, 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 2015 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.

If we fail to comply with the Nasdaq continued listing standards, our common stock could be delisted from the Nasdaq Stock Market, which could negatively impact the price of our common stock and our ability to access the capital markets.

On July 2, 2015, the Company received a letter from The Nasdaq Stock Market ("NASDAQ") notifying it of its failure to maintain a minimum closing bid price of $1.00 over the then preceding 30 consecutive trading days for its common stock as required by NASDAQ Listing Rule 5550(a)(2) (the "Bid Price Rule"). The letter stated that the Company has until December 29, 2015 to demonstrate compliance by maintaining a minimum closing bid price of at least $1.00 for a minimum of 10 consecutive trading days. The letter was issued in accordance with standard NASDAQ procedures. This notification has no immediate effect on the listing of the Company's common stock at this time. The Company intends to monitor the bid price of its common stock and consider available options if its common stock does not trade at a level likely to result in the Company regaining compliance with the Bid Price Rule by December 29, 2015.

The letter also disclosed that in the event the Company does not regain compliance with the Bid Price Rule by December 29, 2015, the Company may be eligible for additional time. The Company would be required to meet certain continued listing requirements and the initial listing criteria for The NASDAQ Capital Market except for the bid price requirement and will need to provide written notice of its intention to cure its deficiency during the second compliance period. If it meets these criteria, NASDAQ staff will notify the Company that it has been granted an additional 180 day compliance period. If the Company is not eligible for an additional compliance period, NASDAQ will provide the Company with written notification that its common stock will be subject to delisting.

If NASDAQ determines that we fail to satisfy the requirements for continued listing, we could be delisted from the exchange. The delisting of our common stock would significantly affect the ability of investors to trade our securities and could significantly negatively affect the value and liquidity of our common stock. In addition, the delisting of our common stock could materially adversely affect our ability to raise capital on terms acceptable to us or at all. Delisting from Nasdaq could also have other negative results, including the loss of potential investor interest and fewer business development opportunities.

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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 2015, 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.

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, 2015 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)
 

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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).
 

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