Hongli Clean Energy Technologies (CETC) 10-Q 2015 Q2 Quarterly report

Exhibit 99.1

FOR IMMEDIATE RELEASE

SINOCOKING ANNOUNCES SECOND FISCAL QUARTER RESULTS

PINGDINGSHAN, China –February 12, 2015 - SinoCoking Coal and Coke Chemical Industries, Inc.(NasdaqCM:SCOK), a vertically integrated producer of clean energy products located in Henan Province, today announced that for the second fiscal quarter of 2015 ended December 31, 2014, the company had income from operations of $523,305 on revenue of $12,677,319 compared to income from operations of $1,540,556 on revenue of $13,208,253 in the like year-ago quarter.

Due primarily to a noncash gain of $5,452,865 recorded for the change in fair value on revaluation of its warrant liability, the company reported fiscal Q2 2015 net income of $3,981,858, or $.17 per share, versus a net loss of $106,658, or $(.01) per share, for the same year-ago period. Weighted average number of shares for the 2015 second fiscal quarter was 23,960,217 compared to 21,121,372 for fiscal Q2 in 2014.

The four percent decrease in second quarter revenue compared to the same period last year resulted primarily from the slowdown in sales of most of SinoCoking’s traditional coal and coke products. However, the decrease in revenue from these products was offset in part by revenue of $2,139,171 from the company’s clean-burning syngas, generated and sold beginning in October 2014.

Gross profit margin in fiscal Q2 ’15 increased to 21.2 percent from 15.6 percent in fiscal Q2 ’14, resulting mainly from the higher profit margin of syngas.

For the six-months ended December 31, 2014, the company reported income from operations of $1,882,688 on revenue of $26,251,155 compared to income from operations of $3,993,402 on revenue of $30,684,223 in the corresponding prior year period. An adjustment of $3,425,703 for change in fair value of warrants in the fiscal 2015 six-month period resulted in net income of $1,428,601, or $.06 per share, versus net income of $1,054,226, or $.05 per share, in the comparable year-ago period. Weighted average number of shares for the six-month periods was 22,642,611 versus 21,121,372, respectively.

Revenue for the first six months of fiscal 2015 decreased 14.4 percent year-over-year, as there was no Syngas production and sales during Q1 ’15 to help offset declining sales of SinoCoking’s traditional products. However, gross profit margin for the first half of fiscal 2015 increased to 18.9 percent from 16.8 percent in the first half of fiscal 2014.

“This has been a highly constructive quarter,” said SinoCoking CEO Mr. Jianhua Lv. “The rapid and successful launch of our aboveground syngas facility has demonstrated SinoCoking’s ability to redefine itself as a producer of clean energy products. With this transition into the clean energy space, we are creating new revenue and profit centers that we expect to improve the company’s financial results going forward, and at the same time mitigate negative impact on operations related to softness in the traditional coal and coking businesses.”

Now under construction at the site of SinoCoking’s first aboveground facility, which currently produces 25,000 cubic meters of syngas per hour, is a second facility with a similar capacity target. When completed and operating at full capacity – expected toward the end of March 2015 - the two facilities’ combined syngas output of 50,000 cubic meters per hour is expected to rank among the highest syngas production for any coking plant in China. Additionally, the company believes these first two facilities are the only ones in China that, to date, combine coking and syngas in parallel.

SinoCoking also said that completion of the first phase of its underground coal gasification facility, expected later this month, should enable the company to produce an additional 60,000 cubic meters of syngas per hour, and that the ultimate goal is to expand output of that facility’s capacity to 880,000 cubic meters of syngas per hour by the end of fiscal year 2018.

Previously, during construction of the first aboveground facility last summer, Mr. Lv had estimated gross profit margin on syngas sales of between 45 and 50 percent based on a price of $0.139 per cubic meter. Since the company began selling syngas in October 2014, the actual gross profit margin has been 40.6 percent based on an average price of $.10 per cubic meter. “Even though the actual price and gross profit are below what we had anticipated initially, the gross profit margin from syngas revenue is significantly higher than that of any other current SinoCoking product. We do not expect the $.10 price per cubic meter to change for the near future as we continue to achieve higher and higher levels of production.”

For additional information on SinoCoking, please go to http://www.scokchina.com or refer to the company’s periodic reports filed with the Securities and Exchange Commission (http://www.scokchina.com/sec-filings.html). Investors wishing to receive SinoCoking’s corporate communications as they become available may go to the company’s Investor Relations site (http://www.scokchina.com/corporate-overview.html) and register underEmail Alerts.

Also, investors may submit questions directly to Mr. Lv and his staff to receive non-confidential information about the company’s operations and products at the company’s “Ask Management” blog (http://www.scokchina.com/ask-management.html).

About SinoCoking

SinoCoking Coal and Coke Chemical Industries, Inc. (www.scokchina.com), a Florida corporation, is an emerging producer of clean energy products located in Pingdingshan, Henan Province, China. The company has historically been a vertically-integrated coal and coke processor of basic and value-added coal products for steel manufacturers, power generators, and various industrial users. SinoCoking has been producing metallurgical coke since 2002, and acts as a key supplier to regional steel producers in central China. SinoCoking also produces and supplies thermal coal to its customers in central China. SinoCoking currently owns its assets and conducts its operations through its subsidiaries, Top Favour Limited and Pingdingshan Hongyuan Energy Science and Technology Development Co., Ltd., and its affiliated companies, Henan Province Pingdingshan Hongli Coal & Coke Co., Ltd., Baofeng Coking Factory, Baofeng Hongchang Coal Co., Ltd., Baofeng Hongguang Environment Protection Electricity Generating Co., Ltd., Zhonghong Energy Investment Company, Henan Hongyuan Coal Seam Gas Engineering Technology Co., Ltd., Baofeng Shuangri Coal Mining Co., Ltd., and Baofeng Xingsheng Coal Mining Co., Ltd.

Forward-Looking Statements

This press release contains forward-looking statements, particularly as related to, among other things, the business plans of the Company, statements relating to goals, plans and projections regarding the Company’s financial position and business strategy. The words or phrases “plans,” “would be,” “will allow,” “intends to,” “may result,” “are expected to,” “will continue,” “anticipates,” “expects,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “think,” “considers” or similar expressions are intended to identify “forward-looking statements.” These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of local, regional, and global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic reports and on documents we file from time to time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

Contact:

SinoCoking

Song Lv, Chief Financial Officer

+ 86-375-2882-999

lvsong@sinocoking.net

http://www.scokchina.com/

Investor Relations Counsel:

Jimmy Caplan, Asia IR-PR

+1-512-329-9505

jimmy@asia-irpr.com

http://asia-irpr.com/

SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,		June 30,
	2014		2014
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	316,967	$	191,992
Accounts receivable, trade		17,742,845		8,946,435
Other receivables and deposits		5,930,399		5,787,232
Loans receivable		3,732,037		8,032,037
Inventories		2,392,834		7,419,821
Advances to suppliers		8,585,181		8,700,022
Prepaid expenses		71,668		-
Total current assets		38,771,931		39,077,539
PLANT AND EQUIPMENT, net		21,787,531		14,426,319
CONSTRUCTION IN PROGRESS		46,964,267		40,389,961
OTHER ASSETS
Refundable deposit		4,881,224		4,873,928
Prepayments		61,908,164		61,815,632
Intangible assets, net		32,318,629		32,305,697
Long-term investments		2,902,572		2,898,233
Other assets		113,895		113,725
Total other assets		102,124,484		102,007,215
Total assets	$	209,648,213	$	195,901,034
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturity of long term loan	$	50,113,895	$	20,795,425
Accounts payable, trade		5,788		2,978,326
Other payables and accrued liabilities		4,332,559		2,460,113
Other payables - related party		2,548,117		526,699
Acquisition payable		4,718,516		4,711,463
Customer deposits		79,820		79,701
Taxes payable		2,031,256		765,421
Current portion of warrants liability		1,061,749		-
Total current liabilities		64,891,700		32,317,148
LONG TERM LIABILITIES
Long term loan		-		29,243,566
Warrants liability		5,560,681		16
Total long term liabilities		5,560,681		29,243,582
Total liabilities		70,452,381		61,560,730
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, $0.001 par value, 100,000,000 shares authorized,
23,960,217 shares and 21,121,372 shares issued and outstanding
as of December 31 and June 30, 2014, respectively		23,960		21,121
Additional paid-in capital		6,845,636		3,592,053
Statutory reserves		3,689,941		3,689,941
Retained earnings		113,724,008		112,295,407
Accumulated other comprehensive income		10,580,687		10,410,182
Total SinoCoking Coal and Coke Chemicals Industries, Inc's  equity		134,864,232		130,008,704
NONCONTROLLING INTERESTS		4,331,600		4,331,600
Total equity		139,195,832		134,340,304
Total liabilities and equity	$	209,648,213	$	195,901,034

SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

	For the Three Months Ended December 31,						For the Six Months Ended December 31,
	2014			2013			2014			2013
REVENUE	$	12,677,319		$	13,208,253		$	26,251,155		$	30,684,223
COST OF REVENUE		9,989,469			11,152,697			21,281,963			25,531,366
GROSS PROFIT		2,687,850			2,055,556			4,969,192			5,152,857
OPERATING EXPENSES:
Selling		35,091			39,754			69,255			80,628
General and administrative		2,129,454			475,246			3,017,249			1,078,827
Total operating expenses		2,164,545			515,000			3,086,504			1,159,455
INCOME FROM OPERATIONS		523,305			1,540,556			1,882,688			3,993,402
OTHER INCOME (EXPENSE)
Interest income		62,856			184,247			165,107			367,340
Interest expense		(1,502,341	)		(1,311,812	)		(2,999,554	)		(2,090,579	)
Other finance expense		(51,236	)		(87,717	)		(51,899	)		(150,260	)
Other income, net		-			-			-			-
Change in fair value of warrants		5,452,865			-			3,425,703			12
Total other income (expense), net		3,962,144			(1,215,282	)		539,357			(1,873,487	)
INCOME BEFORE INCOME TAXES		4,485,449			325,274			2,422,045			2,119,915
PROVISION FOR INCOME TAXES		503,591			431,932			993,444			1,065,689
NET INCOME (LOSS)		3,981,858			(106,658	)		1,428,601			1,054,226
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		175,539			756,310			170,505			1,601,757
COMPREHENSIVE INCOME	$	4,157,397		$	649,652		$	1,599,106		$	2,655,983
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted		23,960,217			21,121,372			22,642,611			21,121,372
EARNINGS (LOSS) PER SHARE
Basic and diluted	$	0.17		$	(0.01	)	$	0.06		$	0.05

SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended December 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,428,601		$	1,054,226
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation		652,208			578,000
Amortization and depletion		35,408			35,426
Write-off of other receivables and advances to suppliers		-			89,348
Change in fair value of warrants		(3,425,703	)		(12	)
Bad debt allowance of receivables		1,549,034			-
Amortization of prepaid expenses		33,332			-
Change in operating assets and liabilities
Accounts receivable, trade		(9,093,126	)		(3,951,856	)
Other receivables		(135,855	)		(1,494,537	)
Inventories		5,035,275			(543,788	)
Advances to suppliers		(1,106,222	)		1,989,148
Prepaid expenses		(5,000	)		(193,342	)
Accounts payable, trade		(2,975,332	)		1,464,233
Other payables and accrued liabilities		1,778,225			229,536
Customer deposits		-			(81,350	)
Taxes payable		1,263,983			61,188
Net cash used in operating activities		(4,965,172	)		(763,780	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of principal of loans receivable		4,500,000			-
Loan out pricipal of loans receivable		(200,000	)		-
Payments of construction in progress		(14,497,925	)		-
Purchase of equipment		-			-
Net cash used in investing activities		(10,197,925	)		-
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash		-			9,762,000
Payments of note payable		-			(9,762,000	)
Proceeds from short-term loans - others		-			162,700
Payment of short-term loans - others		-			(162,700	)
Proceeds from issuance of common shares		13,204,538			-
Proceeds from (payment to) related parties		2,019,836			(66,160	)
Net cash provided by (used in) financing activities		15,224,374			(66,160	)
EFFECT OF EXCHANGE RATE ON CASH		63,698			135,250
INCREASE (DECREASE) IN CASH		124,975			(694,690	)
CASH, beginning of period		191,992			782,018
CASH, end of period	$	316,967		$	87,328
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	$	827,448		$	859,388
Cash paid for interest expense, net of capitalized interest	$	2,127,570		$	1,906,313
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Recalsification of salary payable to related parties to other payable to related parties	$	-		$	190,000
Common share issued for the payment of a service fee	$	100,000		$	-
Issuance of warrants related to the sale of common stock	$	10,048,116		$	-
Transfer of construction in progress into plant and equipment	$	7,987,721		$	-

SINOCOKING COAL AND COKE CHEMICAL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

											Accumulated
					Additional		Retained earnings				other
	Common Stock				paid-in		Statutory				comprehensive		Noncontrolling
	Shares		Par Value		capital		reserves		Unrestricted		income		interest		Total
BALANCE, July 1, 2012		21,121,372	$	21,121	$	3,592,053	$	3,689,941	$	110,257,132	$	7,613,972	$	4,331,600	$	129,505,819
Net income										1,047,693						1,047,693
Foreign currency translation adjustments												2,289,251				2,289,251
BALANCE, June 30, 2013		21,121,372		21,121		3,592,053		3,689,941		111,304,825		9,903,223		4,331,600		132,842,763
Net income										990,582						990,582
Foreign currency translation adjustments												506,959				506,959
BALANCE, June 30, 2014		21,121,372		21,121		3,592,053		3,689,941		112,295,407		10,410,182		4,331,600		134,340,304
Issuance of common shares		2,838,845		2,839		3,253,583										3,256,422
Net income										1,428,601						1,428,601
Foreign currency translation adjustments												170,505				170,505
BALANCE, December 31, 2014 (UNAUDITED)		23,960,217	$	23,960	$	6,845,636	$	3,689,941	$	113,724,008	$	10,580,687	$	4,331,600	$	139,195,832