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FINANCIAL STATEMENT SCHEDULE I
 12 Months Ended
Dec. 31, 2017
FINANCIAL STATEMENT SCHEDULE I [Abstract]  
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
BALANCE SHEET
 
DECEMBER 31, 2016 AND 2017
(In U.S. dollars, except share and per share data)
 
 
 
December 31,
 
 
 
2016
 
2017
 
ASSETS
 
 
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2,943,502
 
$
4,536,809
 
Prepaid expenses and other current assets
 
 
223,559
 
 
700,064
 
 
 
 
 
 
 
 
 
Total current assets
 
 
3,167,061
 
 
5,236,873
 
Investments in subsidiaries
 
 
267,322,549
 
 
386,872,629
 
 
 
 
 
 
 
 
 
TOTAL ASSETS
 
$
270,489,610
 
$
392,109,502
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
Accrued expenses and other current liabilities
 
$
389,849
 
$
373,915
 
 
 
 
 
 
 
 
 
Total current liabilities
 
 
389,849
 
 
373,915
 
 
 
 
 
 
 
 
 
EQUITY
 
 
 
 
 
 
 
Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2016 and 2017; 279,214,103 and 279,214,103 shares issued as of December 31, 2016 and 2017, respectively and 262,956,278 and 270,918,702 shares outstanding as of December 31, 2016 and 2017, respectively)
 
 
26,532
 
 
27,328
 
Additional paid in capital
 
 
240,111,533
 
 
247,076,428
 
Retained earnings
 
 
40,432,352
 
 
133,273,480
 
Accumulated other comprehensive income (loss)
 
 
(8,721,820)
 
 
13,107,187
 
Treasury shares
 
 
(1,748,836)
 
 
(1,748,836)
 
 
 
 
 
 
 
 
 
Total shareholders’ equity
 
 
270,099,761
 
 
391,735,587
 
 
 
 
 
 
 
 
 
TOTAL LIABILITIES AND EQUITY
 
$
270,489,610
 
$
392,109,502
 
 
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 
FOR THE YEARS ENDED DECEMBER 31, 2015, 2016 AND 2017
(In U.S. dollars)
 
 
Year ended December 31,
 
 
 
2015
 
2016
 
2017
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
 
General and administrative
 
$
(4,142,634)
 
$
(3,175,482)
 
$
(4,987,820)
 
 
 
 
 
 
 
 
 
 
 
 
Total operating expenses
 
 
(4,142,634)
 
 
(3,175,482)
 
 
(4,987,820)
 
 
 
 
 
 
 
 
 
 
 
 
LOSS FROM OPERATION
 
 
(4,142,634)
 
 
(3,175,482)
 
 
(4,987,820)
 
Interest income
 
 
1,641
 
 
-
 
 
-
 
Exchange gain
 
 
118,679
 
 
-
 
 
-
 
Income tax expense
 
 
(108,992)
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
NET LOSS BEFORE SHARE OF RESULTS OF SUBSIDIARIES
 
 
(4,131,306)
 
 
(3,175,482)
 
 
(4,987,820)
 
Equity in earnings of subsidiaries
 
 
17,088,195
 
 
46,669,238
 
 
97,828,948
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Daqo New Energy Corporation ordinary shareholders
 
$
12,956,889
 
$
43,493,756
 
$
92,841,128
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
 
(11,256,870)
 
 
(17,502,133)
 
 
21,829,007
 
Total other comprehensive income (loss):
 
 
(11,256,870)
 
 
(17,502,133)
 
 
21,829,007
 
Comprehensive income
 
$
1,700,019
 
$
25,991,623
 
$
114,670,135
 
 
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENT OF CHANGES IN EQUITY
 
FOR YEARS ENDED DECEMBER 31, 2015, 2016 AND 2017
(In U.S. dollars, except share and per share data)
 
 
 
Ordinary shares
 
Treasury
shares
 
Additional
paid in
capital
 
Retained
earnings
(accumulated
losses)
 
Accumulated
other
comprehensive
income (loss)
 
Total
 
 
 
Number
 
$
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2015
 
 
223,577,853
 
 
22,358
 
 
(398,672)
 
 
203,125,494
 
 
(16,018,293)
 
 
20,037,183
 
 
206,768,070
 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,956,889
 
 
 
 
 
12,956,889
 
Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(11,256,870)
 
 
(11,256,870
 
Share-based compensation
 
 
 
 
 
 
 
 
 
 
 
3,687,951
 
 
 
 
 
 
 
 
3,687,951)
 
Option exercised
 
 
1,115,625
 
 
112
 
 
 
 
 
275,671
 
 
 
 
 
 
 
 
275,783
 
Follow-on equity offering, net of issuance costs of $2,033,041
 
 
38,500,000
 
 
3,850
 
 
 
 
 
27,993,109
 
 
 
 
 
 
 
 
27,996,959
 
Repurchase of ordinary shares
 
 
(2,356,900)
 
 
 
 
 
(1,350,164)
 
 
 
 
 
 
 
 
 
 
 
(1,350,164
 
Capital injection from non-controlling Shareholders
 
 
 
 
 
 
 
 
 
 
 
1,275,845
 
 
 
 
 
 
 
 
1,275,845
 
Balance at December 31, 2015
 
 
260,836,578
 
 
26,320
 
 
(1,748,836)
 
 
236,358,070
 
 
(3,061,404)
 
 
8,780,313
 
 
240,354,463
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
43,493,756
 
 
 
 
 
43,493,756)
 
Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(17,502,133)
 
 
(17,502,133)
 
Share-based compensation
 
 
 
 
 
 
 
 
 
 
 
2,702,089
 
 
 
 
 
 
 
 
2,702,089
 
Option exercises
 
 
2,119,700
 
 
212
 
 
 
 
 
1,051,374
 
 
 
 
 
 
 
 
1,051,586
 
Balance at December 31, 2016
 
 
262,956,278
 
 
26,532
 
 
(1,748,836)
 
 
240,111,533
 
 
40,432,352
 
 
(8,721,820)
 
 
270,099,761
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
92,841,128
 
 
 
 
 
92,841,128
 
Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,829,007
 
 
21,829,007
 
Share-based compensation
 
 
 
 
 
 
 
 
 
 
 
4,200,273
 
 
 
 
 
 
 
 
4,200,273
 
Options exercised
 
 
5,596,050
 
 
560
 
 
 
 
 
2,764,858
 
 
 
 
 
 
 
 
2,765,418
 
Restricted shares vested
 
 
2,366,374
 
 
236
 
 
 
 
 
(236)
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
 
270,918,702
 
 
27,328
 
 
(1,748,836)
 
 
247,076,428
 
 
133,273,480
 
 
13,107,187
 
 
391,735,587
 
 
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENT OF CASH FLOWS
 
FOR THE YEARS ENDED DECEMBER 31, 2015, 2016 AND 2017
(In U.S. dollars)
 
 
 
Year ended December 31,
 
 
 
2015
 
2016
 
2017
 
OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Net income
 
$
12,956,889
 
$
43,493,756
 
$
92,841,128
 
Equity in earnings of subsidiaries
 
 
(17,088,195)
 
 
(46,669,238)
 
 
(97,828,948)
 
Share-based compensation
 
 
3,687,951
 
 
2,702,089
 
 
4,200,273
 
Adjustments to reconcile net income to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
Prepaid expenses and other current assets
 
 
11,099
 
 
(29,976)
 
 
50,059
 
Changes in other current liabilities
 
 
(96,166)
 
 
(58,806)
 
 
91,941
 
Amount due to a related party
 
 
(286,526)
 
 
—
 
 
—
 
Income tax payable
 
 
108,992
 
 
(108,992)
 
 
—
 
Net cash used in operating activities
 
 
(705,956)
 
 
(671,167)
 
 
(645,547)
 
INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Capital contributed to subsidiaries
 
 
(33,256,774)
 
 
—
 
 
—
 
Disposition of minority interest in subsidiary
 
 
5,110,085
 
 
—
 
 
—
 
Net cash used in investing activities
 
 
(28,146,689)
 
 
—
 
 
—
 
FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Repurchase of ordinary shares
 
 
(1,350,164
 
 
—
 
 
—
 
Proceeds from follow-on equity offering
 
 
30,030,000
 
 
—
 
 
—
 
Insurance cost for follow-on equity offering
 
 
(2,033,041)
 
 
—
 
 
—
 
Proceeds from options exercised
 
 
275,783
 
 
1,051,586
 
 
2,238,854
 
Net cash provided by financing activities
 
 
26,922,578
 
 
1,051,586
 
 
2,238,854
 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
 
 
(1,930,067)
 
 
380,419
 
 
1,593,307
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
 
 
4,493,150
 
 
2,563,083
 
 
2,943,502
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
2,563,083
 
$
2,943,502
 
$
4,536,809
 
 
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
Notes to Financial Information of Parent Company
 
1.
 
Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year.
 
2.
 
The condensed financial information of Daqo New Energy Corp has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries.
 
3.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the Consolidated Financial Statements of the Group. No dividend was paid by the Company's subsidiaries to their parent company in 2017.
 
4.
 
As of December 31, 2017, there were no material contingencies, significant provisions of long-term obligations, and mandatory dividend or redemption requirements of redeemable shares or guarantees of the Company, except for those which have been separately disclosed in the Consolidated Financial Statement, if any.