(SDTH) research, news, and more from GeoInvesting

Company description

Tue, 15 Apr 2008 04:00:00 GMT

ShengdaTech is engaged in the business of manufacturing, marketing and selling nano-precipitated calcium carbonate ("NPCC") products and coal-based chemicals for use in various applications. The Company converts limestone into NPCC using its proprietary technology. The unique chemical and physical attributes make NPCC a valuable ingredient in tires, paints, polyvinyl chloride ("PVC") building materials and other products. NPCC enhances the durability of many products by increased strength, heat resistance, and dimension stabilization. The Company is also engaged in the manufacture and sale of coal-based chemical products namely ammonium bicarbonate, liquid ammonia, melamine and methanol. The Company markets and sells its coal-based products mainly for chemical fertilizers and raw materials in the production of organic and inorganic chemical products, including formaldehyde and pesticides.

Reverse Merger Filing

Investor Alert

Tue, 09 Oct 2012 04:00:00 GMT

Item 1.03 Bankruptcy or Receivership. As previously disclosed in a Current Report on Form 8-K filed August 23, 2011, on August 19, 2011, ShengdaTech, Inc., a Nevada corporation (the “Company” or the “Debtor”), pursuant to the provisions of the United States Bankruptcy Code (the “Bankruptcy Code”), filed a voluntary petition in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”) seeking relief under the provisions of Chapter 11 of Title 11 of the Bankruptcy Code (Case No. 11-52649).

On October 2, 2012 (the “Confirmation Date”), the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Company’s First Amended Chapter 11 Plan of Reorganization, As Modified, dated as of August 30, 2012 (as confirmed, the “Plan”). A copy of the Confirmation Order is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

The Plan is expected to become effective on or about October 17, 2012 (the “Effective Date”), subject to certain conditions that must be satisfied, including no modification or stay of the Confirmation Order or entry of other court order prohibiting the consummation of the transactions contemplated by the Plan, execution of the Liquidation Trust Agreement and creation of the Liquidating Trust pursuant to the Plan.

Investor Alert

Sun, 20 May 2012 04:00:00 GMT

Exhibit 99.3

SAN FRANCISCO, May 18, 2012 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. ("ShengdaTech" or the "Company") (SDTHQ) reported today that it has filed a Chapter 11 Plan of Reorganization (the "Plan") and proposed Disclosure Statement with the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court").

The Bankruptcy Court has set June 25, 2012 as the hearing date on the adequacy of the Disclosure Statement. Assuming the Disclosure Statement is approved on June 25, 2012, the Company is targeting August 30, 2012 for confirmation of the Plan.

If the Plan is confirmed, it would provide for the wind down of the U.S. public Company's affairs and the distribution of available assets to creditors. The Plan establishes, among other things, a liquidating trust that, in its discretion, will pursue the Company's outstanding litigation in the People's Republic of China, hold and ultimately sell the Company's shares of Faith Bloom Limited, the Company's wholly-owned subsidiary, execute, process and facilitate distributions to holders of claims and equity interests, and resolve disputed claims. Confirmation of the Plan is subject to a number of conditions, including Bankruptcy Court approval of the Plan and Disclosure Statement, the execution of definitive documentation, the establishment of a liquidating trust and appointment of a liquidating trustee pursuant to a liquidating trust agreement, and the receipt of necessary acceptances from creditor classes and equity interest holders. The Company believes that the Plan provides the best, most cost-effective and most prompt possible recovery to holders of claims or equity interests.

Investor Alert

Mon, 29 Aug 2011 04:00:00 GMT

SHANGHAI, August 27, 2011 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. ("ShengdaTech" or the "Company") (NASDAQ: SDTHQ), a leading manufacturer of nano-precipitated calcium carbonate ("NPCC") in China, reported today that the Company has received a determination indicating that the NASDAQ Listing and Hearing Review Council had affirmed the NASDAQ Listing Qualifications Panel's (the "Panel") June 8, 2011 decision to delist the Company's securities from the NASDAQ Global Market. The Company had previously appealed the Panel's June 8, 2011 decision. As such, the Company's common stock remains quoted on the over-the-counter market.

Investor Alert

Mon, 22 Aug 2011 04:00:00 GMT

SHANGHAI, August 23, 2011 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. ("ShengdaTech" or the "Company") (NASDAQ: SDTH), a leading manufacturer of nano-precipitated calcium carbonate ("NPCC") in China, announced today that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Nevada. The Chapter 11 process will facilitate the Company's financial and operational restructuring, with the objective of restoring the Company to financial health

Auditor trail

Thu, 23 Jun 2011 04:00:00 GMT

SHANGHAI, June 23, 2011 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. ("ShengdaTech" or the "Company") (NASDAQ: SDTH), a leading manufacturer of nano-precipitated calcium carbonate in China, reported today that the Company has received a determination indicating that the NASDAQ Listing Qualifications Panel (the "Panel") has denied the Company's request for continued listing on NASDAQ and, accordingly, NASDAQ suspended trading of the Company's shares effective with the open of business, June 10, 2011 pending the formal delisting of the Company's securities from the exchange. As a result the Company's common stock commenced trading on the over-the-counter market at the opening of trading onJune 10, 2011. The Company intends to appeal the Panel's determination to the NASDAQ Listing and Hearing Review Council.

The Company remains committed to executing on the compliance plan previously presented to NASDAQ. The special committee, with the support and cooperation of the Company, is focused on completing the investigation and audit process so that any concerns about the Company can be properly addressed and the Company can provide accurate and complete information to its shareholders and the investing public.

In furtherance of those goals, the Company is pleased to announce that on June 8, 2011 the Company's audit committee approved the engagement of Marcum Bernstein & Pinchuk ("MBP") as its independent registered public accounting firm. Such engagement is subject to satisfactory completion of MBP's new client acceptance procedures. The Company believes that MPB will provide valuable assistance in helping it to achieve the requisite level of reporting compliance in a proactive and diligent manner. Accordingly, the Company intends to become compliant with its reporting obligations as soon as practicable.

Investor Alert

Fri, 10 Jun 2011 04:00:00 GMT

Pursuant to the terms of an Indenture, dated as of May 28, 2008 (the “Indenture”), between ShengdaTech, Inc. (the “Company”) and The Bank of New York (the “Trustee”), holders of the Company’s 6.0% Convertible Senior Notes due 2018 (the “Notes”) had the contractual right (the “Put Option”) to require the Company to purchase on June 1, 2011 (the “Purchase Date”) any or all of the outstanding Notes held by each such holder at a purchase price of 100% of the principal amount thereof, plus any accrued and unpaid interest up to but excluding the Purchase Date, payable in cash (the “Purchase Price”). In accordance with the terms of the Indenture and the Notes, a notice of the Put Option was sent to holders of the Notes. As of May 24, 2011, the deadline for holders to exercise the Put Option, holders of all of the Notes had exercised the Put Option in the aggregate sum of $25,578,000. The Company did not pay the Purchase Price for the Notes on the Purchase Date. Based on the nonpayment, the aggregate principal amount of the Notes, plus any accrued and unpaid interest and any other amounts due and owing on the Notes could be declared immediately due and payable by the Trustee or by holders of 25% or more of the aggregate principal amount of the Notes.

Auditor trail

Fri, 06 May 2011 04:00:00 GMT

On April 29, 2011, KPMG informed ShengdaTech, Inc. (the “Company”) of its resignation as the Company’s independent registered public accounting firm effective immediately. KPMG has served as the Company’s independent registered public accounting firm since November 11, 2008.

KPMG previously informed the Company’s Audit Committee of certain concerns arising during its incomplete audits of the Company’s consolidated financial statements as of and for the year ended December 31, 2010, and the effectiveness of internal control over financial reporting as of December 31, 2010. These concerns included serious discrepancies and unexplained issues relating to, among others: (i) the Company’s bank balances; (ii) transactions with major suppliers; (iii) VAT invoices and payments; (iv) sales and payments for sales by third parties; (v) sales to the Company’s second largest customer; (vi) discrepancies between KPMG’s direct calls to customers and confirmations returned by mail; and (vii) concerns raised by directly confirming customer sales and accounts receivables.

In a letter dated April 19, 2011, KPMG informed the board of directors of the Company that in KPMG’s view the Company’s senior management has not taken, and the board of directors has not caused senior management to take, timely and appropriate remedial actions with respect to these discrepancies and/or issues, and KPMG stated that the continued lack of resolution of the issues would materially impact the financial statements for the year ended December 31, 2010 and possibly prior periods. The Company will authorize KPMG to respond fully to inquiries of the successor accountant, when hired, concerning the foregoing events.

Other than as set forth above, and except for the material weaknesses referred to below, from November 11, 2008, when KPMG was engaged, through KPMG’s resignation on April 29, 2011, there were (1) no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of KPMG would have caused KPMG to make reference to the subject matter of the disagreements in connection with its reports, and (2) no events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.

The audit reports of KPMG on the consolidated financial statements of the Company for the years ended December 31, 2008 and 2009 did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except as described in the following paragraph:

KPMG’s report dated March 15, 2010 on the consolidated financial statements of the Company as of and for the years ended December 31, 2009 and 2008 refers to a retrospective change in the method of accounting for convertible notes.

The audit reports of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2009 and 2008 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except as described in the following paragraphs:

KPMG’s report dated March 15, 2010 on effectiveness of internal control over financial reporting as of December 31, 2009 contains an explanatory paragraph that states “management excluded from its assessment of the effectiveness of ShengdaTech, Inc.’s internal control over financial reporting as of December 31, 2009, Chaodong’s internal control over financial reporting associated with total assets of $4,593,970 and nil revenue, included in the consolidated financial statements of the ShengdaTech, Inc. and subsidiaries as of and for the year ended December 31, 2009. Our audit of internal control over financial reporting of ShengdaTech, Inc. also excluded an evaluation of the internal control over financial reporting of Chaodong.”

Investor Alert

Fri, 29 Apr 2011 04:00:00 GMT

SHANGHAI, April 29, 2011 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. (the "Company") (Nasdaq: SDTH) today announced that it received a letter on April 20, 2011 from the Listing Qualifications Department of The NASDAQ Stock Market LLC ("Nasdaq") stating that based on the review of public documents and information provided by the Company, Nasdaq determined the continued listing of the Company's securities on Nasdaq is no longer warranted. The Nasdaq letter cited the following criteria as the reasons for the determination:

public interest concerns under Nasdaq Listing Rule 5101 raised by the serious accounting and operational issues uncovered by KPMG, the Company's independent registered public accounting firm; the deliberate and ongoing efforts of the Company's management to obstruct an internal investigation into these matters; the Company's failure to promptly disclose material information related to that investigation; and the Company's violation of the rules setting forth the responsibilities and authority of the Audit Committee;

the Company's failure to make prompt public disclosure of material developments relating to the investigation, as required by Nasdaq Listing Rule 5250(b)(1) and IM-5250-1;

the Company's violations of Nasdaq Listing Rule 5605(c)(3) and IM-5605 as well as the statutory responsibilities and authority of the Audit Committee set forth in Section 10A(m)(2) of the Securities and Exchange Act of 1934 caused by the obstructive conduct of the Company's executive management and failure to provide for payment of the advisors engaged to assist with the internal investigation; and

the Company's failures to timely file with the Securities and Exchange Commission its Annual Report on Form 10-K for the period ended December 31, 2010, as required by Nasdaq Listing Rule 5250(c)(1), and to present a definitive plan that demonstrates its ability to regain compliance within the time period permitted under Nasdaq's Listing Rules.

The Company requested an appeal of this determination by submitting a hearing request to the Hearings Department of Nasdaq and a hearing has been set for May 26, 2011. The delisting action is stayed pending the outcome of the hearing.

As previously disclosed on March 15, 2011, the Company appointed a special committee of the board of directors, consisting of the Company's three independent directors, and granted such special committee full authority to investigate potentially serious discrepancies and unexplained issues relating to the Company and its subsidiaries' financial records identified by KPMG, the Company's independent registered public accounting firm, in the course of their audit of the consolidated financial statements for the fiscal year ended December 31, 2010. To assist with the internal investigation, the special committee engaged O'Melveny and Meyers, LLP which, in turn, engaged Price Waterhouse Coopers LLP to provide forensic accounting support. Due to the pendency of the internal investigation, the Company has been unable to file its Annual Report on Form 10-K for the year ended December 31, 2010 in a timely manner.

Additionally, on March 26, 2011, in connection with the internal investigation being conducted by the special committee, the Company's board of directors passed a resolution adopting a cash control and validation plan, which required the transfer of control over the Company's cash assets by consolidating cash into accounts over which only the chairman of the audit committee would have authority. The cash control and validation plan is a critical component of the internal investigation being conducted by the special committee, the scope of which includes assessing the circumstances surrounding the Company's relationships with vendors, customers, banks and potential related parties. Despite April 7 (request to comply) and April 22, 2011 (demand to comply) letters sent by the special committee, to management, this plan has not yet been executed by the Company.

On April 19, 2011, the board of directors of the Company received from KPMG, a Section 10A letter which indicated that in the view of KPMG, senior management of the Company has not taken, and the board of directors has not caused senior management to take, timely and appropriate remedial actions with respect to discrepancies and/or issues relating to the Company's financial records that were identified during the course of the audit for the year ended December 31, 2010, and that this failure to take remedial action is expected to warrant KPMG's resignation from the audit engagement. On April 20, 2011, as required under the Securities Exchange Act of 1934, the Company notified the SEC of receipt of the KPMG letter.

Separately, the Company is also announcing the resignation of Ms. Anhui Guo, the Company's Chief Operating Officer, Acting Chief Financial Officer and Director as of April 21, 2011. The Company is in the process of evaluating and identifying a replacement.

Additional Disclosures:

On April 21, 2011, Ms. Anhui Guo, the Company's Chief Operating Officer, Acting Chief Financial Officer and Director, resigned from her positions at the Company with immediate effect.

Investor Alert

Fri, 18 Mar 2011 04:00:00 GMT

On March 18, 2011, Shengdatech, Inc. issued a press release announcing that on March 16, 2011, it received a letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) advising the Company that due to its inability to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 with the Securities and Exchange Commission in a timely manner, the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1). The Company also received a request for information and documents from the Listing Investigation department of Nasdaq.

Nasdaq has requested that the Company submit, prior to March 31, 2011, a plan to regain compliance. If Nasdaq accepts the Company’s plan, Nasdaq can grant up to 180 calendar days from March 31, 2011, to regain compliance. The Company currently intends to submit a plan to regain compliance with the Listing Rules as soon as reasonably practicable.

Investor Alert

Wed, 16 Mar 2011 04:00:00 GMT

On March 15, 2011, Shengdatech Inc. issued a press release announcing that it had appointed a special committee of the Board of Directors to investigate potentially serious discrepancies and unexplained issues relating to the Company and its subsidiaries’ financial records identified by the Company’s auditors in the course of their audit of the consolidated financial statements for the fiscal year ended December 31, 2010. Due to the pendency of such investigation the Company will not be able to file its Annual Report on Form 10-K in a timely manner.

Conference Call Notes

Fri, 17 Dec 2010 05:00:00 GMT

ShengdaTech, Inc. outlines a detailed question and answers (“Q&A”) list in response to investor inquiries related to the offering of the Company’s 6.50% senior convertible notes due 2015.

1. ShengdaTech currently has approximately $120 million of cash on its balance sheet. Why did the Company decide to raise capital given such a strong cash position?

A: As of September 30, 2010, ShengdaTech had approximately $121 million in cash; however approximately $98 million of this cash position was held in RMB in Chinese banks, which was generated accumulatively from continuing operations. As disclosed in our public filings, it is cost prohibitive for the Company to convert the RMB cash balance into USD and make wire payments according to China’s financial laws and regulations and RMB restriction policy enforced by China State Administration of Foreign Exchange ("SAFE"). The Company can only wire USD out of China in the name of a dividend from subsidiaries of an overseas holding company. However, this would result in the Company incurring a 34% income tax expense.

The net proceeds from the offering of the Senior Convertible Notes issued in 2008, after deducting the related offering expenses, was approximately $110 million, of which $56 million were used for the new Zibo facility, $13 million for the repurchase of a portion of the convertible notes, approximately $18 million for interest payments of the convertible notes and other capital expenditures and working capital needs. As of September 30, 2010, the remaining balance of the proceeds was approximately $23 million and is being held in USD in Chinese banks.

The Company was obligated to expansion costs of approximately $60 million to the PRC government, which must be paid in USD by contract due to the preferential tax policies granted by the government, including $30 million for mining rights in Zibo, Shandong Province and $30 million for Anhui Yuanzhong by December 2010. In addition, the Company was obligated, if called by holders in June 2011, to purchase all or a portion of our outstanding convertible notes issued in 2008 and due 2018, for a potential additional cash demand of approximately USD $90 million.

2. Why did the Company choose to raise capital through a convertible debt offering and not conduct an equity offering?

A: The Company, its Board and financial advisors considered a number of alternatives for raising capital, including securing loans using our RMB bank deposits as collateral, an equity offering and a convertible debt offering. Given the near-term need for capital and prevailing market conditions, our financial advisors advised us that an equity offering would be difficult to achieve and advised a convertible debt offering. The Company, its Board and its financial advisors evaluated these options in detail before making a decision.

3. Given the surplus cash on its balance sheet, why did the Company not repurchase additional convertibles in 2009 at attractive market prices?

A: Our Board determined that the repurchases in 2009 offered a rare opportunity to reduce the debt, reduce the potential dilution to shareholders, and record a profit at attractive values. However, the Company decided not to repurchase additional convertibles due to unfavorable changes in market price and anticipated capital expenditures.

4. The new senior convertible debt raised is less favorable than the existing debt. Please explain the Company’s rationale behind raising additional debt at unfavorable terms to repurchase the existing debt and why did the Company need to raise $130 million when it had announced plans to raise $90 million?

A: As explained above, given the fact that market conditions prevented an equity offering, we were advised by our financial advisors (investment banks) to raise capital through a convertible debt offering. To attract sufficient investors, even for a smaller offering, for our convertible notes offering, our financial advisors determined that it was necessary to offer a “senior” convertible offering. According to the indenture for the notes due 2018, the Company could not issue new senior convertible notes unless the aggregate principal amount of the notes due 2018 outstanding is less than 25% of the initial aggregate principal amount issued. Therefore, the Company used approximately $67 million of the new proceeds to buy back the old debt and remove this restriction for issuance of new senior debt. We would like to note that the convertible debt due 2018 has a put option exercisable in June 2011, potentially reducing the term of the debt. Thus, we believe the new and the old debt are no different in terms of period to maturity. The pricing and terms of the new debt were driven by market conditions and investor demand.

5. There is a rumor in the market that there was some stock price manipulation on Thursday, December 9, 2010 to lower the conversion price on the new convertible debt offering. Please comment.

A: We are unable to comment on the trading activity in our stock.

6. Why is the Company holding surplus cash on its balance sheet?

A: In 2009, the Company found itself in a surplus cash position (held primarily in RMB) after we decided that the acquisition of Jinan Fertilizer Co., Ltd. was not in the best interests of the Company and its shareholders. Since then, we have been actively evaluating strategic acquisition opportunities. We also continued to aggressively expand our NPCC business.

The existing cash of approximately $121 million (all but approximately $23 million held in RMB) will be used for additional planned capacity expansions, including production lines for Zibo Phase II of 40,000 metric tons, Anhui Phase II and for R&D upgrades. Such a cash position will allow us to finance a significant portion of the Company’s anticipated capital expenditures, working capital requirements and other general corporate activities.

7. Will there be additional future financing? Or does the Company feel it has sufficient capital to finance the expansion?

A: Given our strong balance sheet position, net proceeds from this convertible debt offering and positive and increasing cash flow generation from operating activities, we are confident in our ability to finance our existing near-term expansion plans, which includes the addition of 40,000 metric tons of NPCC capacity at our Zibo facility and an additional 100,000 metric tons of NPCC capacity expansion at our Anhui Yuanzhong facility along with R&D upgrades. However, the Company continues to actively identify attractive acquisition opportunities; consequently, in addition to the capital required to further expand NPCC production facilities as part of our longer-term strategy, there may be other investment opportunities that present themselves that will require more cash than we can generate from current operating cash flow.

8. Who is advising the Company on capital market financing? Management’s decision in terms of financing seems to have an adverse effect on shareholder value.

A: In addition to the Company’s internal finance team and Board oversight, ShengdaTech received professional and financial advice from qualified institutions like Morgan Stanley and Oppenheimer & Co. Inc, both of which are recognized worldwide as highly regarded and proven financial advisors in the area of raising capital. Engaging them for professional advice is consistent with the Company’s commitment to receiving the best possible advice in terms of its capital markets strategy.

9. Can you provide additional details on the Company’s further use of the remaining cash, which includes NPCC capacity expansion and R&D activities?

A: In addition to NPCC capacity expansion plans at our Zibo and Anhui Yuanzhong facilities mentioned, we plan to carry out a number of important R&D activities including the purchase of new state-of-the art equipment and further expansion of our R&D facilities. Such R&D investments are essential to our growth and will allow us to continue to create and develop value-added NPCC products for new and innovative applications and to accelerate the process of achieving successful market-ready R&D results.

Deal Flow

Thu, 09 Dec 2010 05:00:00 GMT

SHANGHAI, Dec. 9, 2010 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc., today announced that it intends, subject to market and other conditions, to offer an aggregate of $90.0 million of senior convertible notes due 2015 (the "Notes") in a private offering. The Company also intends to grant the initial purchasers an option to purchase an additional $30.0 million of Notes. The Notes will be issued at 100% of the principal amount. The Notes will be convertible into shares of ShengdaTech's common stock at terms and a conversion price to be determined at the time of pricing of the offering.

ShengdaTech currently intends to use at least $62.0 million of the net proceeds from the offering to repurchase a portion of the Company's existing convertible notes due 2018. The Company plans to use the remaining net proceeds to finance its NPCC production capacity expansion, the Company's research and development activities, and other working capital requirements.

Deal Flow

Thu, 18 Nov 2010 05:00:00 GMT

We are offering 10,000,000 shares of our common stock.

Comments & Business Outlook

Mon, 08 Nov 2010 05:00:00 GMT

Third Quarter 2010 Financial Highlights

Net sales from continuing operations rose 35.6% year-over-year to $34.4 million

Gross margin was 40.7% up from 39.7% in the third quarter of 2009

Earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measurement, was $13.2 million, up 40.4% from the same quarter in 2009

Operating income increased by 40.6% year-over-year to $11.5 million

Operating margin was 33.5% up from 32.2% in the third quarter of 2009

Net income from continuing operations for the third quarter of 2010 was $7.0 million, representing diluted EPS of $0.13, up 45.3% year-over year

Mr. Xiangzhi Chen, ShengdaTech's Chairman and CEO commented, "Our strong revenue and net income growth in the third quarter of 2010 was led by continued capacity expansion fueled by growth in customer demand. Demand for our NPCC products continues to rise as we further penetrate our existing end-markets and expand into new markets. We are aggressively ramping up capacity utilization at our new NPCC facility in Anhui Province and are in advanced negotiations with prospective customers in this high-potential, prospect-rich economic region."

Mr. Chen further commented, "One of our leading competitive advantages in the NPCC market is our ability to introduce new, value-added product applications for NPCC. For example, in the third quarter of 2010, we recognized our first sales of our new NPCC application for asphalt and expect orders to accelerate in the coming months. We plan to patent protect this application to capitalize on this market opportunity and reap maximum benefits from our intensive and extensive research efforts."

Business Outlook

ShengdaTech has ramped up capacity utilization at its new 10,000 metric ton NPCC facility in Anhui, which is currently operating at 100% utilization. The total planned annual NPCC production capacity for 2010 is expected to reach approximately 300,000 metric tons by year end with the addition of new lines totaling 40,000 metric tons at the Company's Zibo facility.

The Company maintains its 2010 guidance for:

Revenue and net income from continuing operations to be in the range of $123.0 million to $126.0 million and $25.0 million to $27.0 million, respectively.

CFO Trail

Fri, 01 Oct 2010 04:00:00 GMT

On September 30, 2010, Mr. Andrew Chen resigned from the position of Chief Financial Officer (“CFO”) of ShengdaTech, Inc. (the “Company”) for personal reasons. The Company has engaged an international search firm to identify a replacement. The board of directors of the Company appointed Ms. Anhui Guo, existing Chief Operating Officer, to serve as acting Chief Financial Officer while as the same time retaining her duties as Chief Operating Officer,until such time as a new CFO is in place. Mr. Chen had no disagreements with the Company prior to his departure.

Comments & Business Outlook

Sun, 22 Aug 2010 04:00:00 GMT

2010 Second Quarter Highlights:

Net revenues increased by 27.7% to $33.2 million from $26.0 million.
Net income from continuing operations in the second quarter of 2010 increased to $7.1 million compared with $6.6 million in the same period last year.
Fully diluted earnings per share from continuing operations for the second quarter of 2010 were $0.13, compared with fully diluted earnings from continuing operations per share of $0.12 in the same quarter of 2009.

GeoTeam Note®: After adding back non-cash items EPS were $0.17 vs. $0.14.

Mr. Xiangzhi Chen, ShengdaTech's Chairman and CEO commented, "Our growth continued in the second quarter of 2010 as our enhanced R&D efforts have created much higher value-added products, which are generating robust sales. Our solid financial performance also comes from the economies-of-scale contributed by our increases in production capacity. We will continue to target the high-end markets and industries ideal for our nano-technology applications."

Mr. Chen further commented, "We believe that with our increased production capacity and on-going acquisition of limestone mining rights, along with our strong R&D support, we are well-positioned to achieve high gross margins. We remain confident in the industry's growth prospects and we are well positioned to sustain our demonstrated leadership and record of success in this sector."

Business Outlook:

ShengdaTech completed repairs and maintenance, as well as equipment and technological upgrades, at its recently acquired NPCC facility in Chaodong, Anhui Province. The facility began production in the second quarter of 2010 and the Company expects to ramp up production in the second half of 2010. This facility will have a planned annual capacity of 10,000 metric tons.

The total planned annual NPCC production capacity for 2010 is expected to reach approximately 300,000 metric tons by year end with the addition of new lines totaling 40,000 metric tons in Zibo and the 10,000 metric tons production facility in Anhui.

The Company maintains its 2010 guidance for revenue and net income from continuing operations to be in the range of $123.0 million to $126.0 million and $25.0 million to $27.0 million, respectively.

Liquidity Requirements

Mon, 09 Aug 2010 04:00:00 GMT

We believe, based on our current cash level, as well as the forecast operating cash flows of 2010, that we have sufficient funds to finance our current operations and planned capital expenditures for at least the next 12 months. However, we have also planned additional capital expenditures over the coming years to further expand our business. We anticipate that these expenditures will be funded from working capital and financing activities. We believe that the capital expenditures may be influenced by changes and there is no assurance that we will be able to obtain the necessary funds for such capital expenditures.