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FINANCIAL STATEMENT SCHEDULE I
 12 Months Ended
Dec. 31, 2018
Condensed Financial Information Disclosure [Abstract]  
FINANCIAL STATEMENT SCHEDULE I
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
BALANCE SHEET
 
DECEMBER 31, 2017 AND 2018
(In U.S. dollars, except share and per share data)
 
 
 
December 31,
 
 
 
2017
 
 
2018
 
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
4,536,809
 
 
$
1,487,517
 
Prepaid expenses and other current assets
 
 
700,064
 
 
 
186,641
 
Total current assets
 
 
5,236,873
 
 
 
1,674,158
 
Investments in subsidiaries
 
 
386,872,629
 
 
 
523,650,516
 
TOTAL ASSETS
 
$
392,109,502
 
 
$
525,324,674
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
Accrued expenses and other current liabilities
 
$
373,915
 
 
$
192,997
 
Total current liabilities
 
 
373,915
 
 
 
192,997
 
Equity:
 
 
 
 
 
 
 
 
Ordinary shares ($0.0001 par value 500,000,000 shares authorized as of December 31, 2017 and 2018; 279,214,103 shares issued and 270,918,702 shares outstanding as of December 31, 2017; 351,823,578 shares issued and 332,029,752 shares outstanding as of December 31, 2018)
 
 
27,328
 
 
 
33,439
 
Additional paid-in capital
 
 
247,076,428
 
 
 
368,681,449
 
Retained earnings
 
 
133,273,480
 
 
 
171,398,185
 
Accumulated other comprehensive income (loss)
 
 
13,107,187
 
 
 
(13,232,560
)
Treasury shares, at cost (4,643,150 shares as of December 31, 2017 and 2018)
 
 
(1,748,836
)
 
 
(1,748,836
)
Total shareholders’ equity
 
 
391,735,587
 
 
 
525,131,677
 
TOTAL LIABILITIES AND EQUITY
 
$
392,109,502
 
 
$
525,324,674
 
 
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, 2016, 2017 AND 2018
(In U.S. dollars)
 
 
 
Year ended December 31,
 
 
 
2016
 
 
2017
 
 
2018
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
General and administrative
 
$
(3,175,482
)
 
$
(4,987,820
)
 
$
(14,513,869
)
Total operating expenses
 
 
(3,175,482
)
 
 
(4,987,820
)
 
 
(14,513,869
)
Loss from operations
 
 
(3,175,482
)
 
 
(4,987,820
)
 
 
(14,513,869
)
Interest income
 
 
-
 
 
 
-
 
 
 
289,773
 
Net loss before share of results of subsidiaries
 
 
(3,175,482
)
 
 
(4,987,820
)
 
 
(14,224,096
)
Equity in earnings of subsidiaries
 
 
46,669,238
 
 
 
97,828,948
 
 
 
52,348,801
 
Net income attributable to Daqo New Energy Corp. ordinary shareholders
 
$
43,493,756
 
 
$
92,841,128
 
 
$
38,124,705
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
 
(17,502,133
)
 
 
21,829,007
 
 
 
(26,216,079
)
Total other comprehensive (loss) income:
 
 
(17,502,133
)
 
 
21,829,007
 
 
 
(26,216,079
)
Comprehensive income
 
$
25,991,623
 
 
$
114,670,135
 
 
$
11,908,626
 
 
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENT OF CHANGES IN EQUITY
 
FOR YEARS ENDED DECEMBER 31, 2016, 2017 AND 2018
(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, 2016
 
 
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
 
Options exercised
 
 
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
 
Net income
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
38,124,705
 
 
 
-
 
 
 
38,124,705
 
Other comprehensive loss
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
(26,216,079
)
 
 
(26,216,079
)
Share-based compensation
 
 
-
 
 
 
-
 
 
 
-
 
 
 
13,788,049
 
 
 
-
 
 
 
-
 
 
 
13,788,049
 
Options exercised
 
 
230,225
 
 
 
23
 
 
 
-
 
 
 
110,845
 
 
 
-
 
 
 
-
 
 
 
110,868
 
Restricted shares vested
 
 
9,271,350
 
 
 
927
 
 
 
-
 
 
 
(927
)
 
 
-
 
 
 
-
 
 
 
-
 
Follow-on equity offering, net of issuance costs of

$6,919,202
 
 
51,609,475
 
 
 
5,161
 
 
 
-
 
 
 
106,616,482
 
 
 
-
 
 
 
-
 
 
 
106,621,643
 
Acquisition of non-controlling interest
 
 
-
 
 
 
-
 
 
 
-
 
 
 
1,090,572
 
 
 
-
 
 
 
(123,668
)
 
 
966,904
 
Balance at December 31, 2018
 
 
332,029,752
 
 
$
33,439
 
 
$
(1,748,836
)
 
$
368,681,449
 
 
$
171,398,185
 
 
$
(13,232,560
)
 
$
525,131,677
 
 
FINANCIAL STATEMENT SCHEDULE I
DAQO NEW ENERGY CORP.
 
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENT OF CASH FLOWS
 
FOR THE YEARS ENDED DECEMBER 31, 2016, 2017 AND 2018
(In U.S. dollars)
 
 
 
Year ended December 31,
 
 
 
2016
 
 
2017
 
 
2018
 
OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
43,493,756
 
 
$
92,841,128
 
 
$
38,124,705
 
Equity in earnings of subsidiaries
 
 
(46,669,238
)
 
 
(97,828,948
)
 
 
(52,348,801
)
Share-based compensation
 
 
2,702,089
 
 
 
4,200,273
 
 
 
13,788,049
 
Adjustments to reconcile net income to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
Prepaid expenses and other current assets
 
 
(29,976
)
 
 
50,059
 
 
 
(62,305
)
Accrued expense and other current liabilities
 
 
(58,806
)
 
 
91,941
 
 
 
(80,418
)
Income tax payable
 
 
(108,992
)
 
 
-
 
 
 
-
 
Net cash used in operating activities
 
 
(671,167
)
 
 
(645,547
)
 
 
(578,770
)
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
 
 
Capital contributed to subsidiaries
 
 
-
 
 
 
-
 
 
 
(109,778,761
)
Net cash used in investing activities
 
 
-
 
 
 
-
 
 
 
(109,778,761
)
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from follow-on equity offering
 
 
-
 
 
 
-
 
 
 
113,540,845
 
Insurance cost for follow-on equity offering
 
 
-
 
 
 
-
 
 
 
(6,919,202
)
Proceeds from options exercised
 
 
1,051,586
 
 
 
2,238,854
 
 
 
686,596
 
Net cash provided by financing activities
 
 
1,051,586
 
 
 
2,238,854
 
 
 
107,308,239
 
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
380,419
 
 
 
1,593,307
 
 
 
(3,049,292
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
 
 
2,563,083
 
 
 
2,943,502
 
 
 
4,536,809
 
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
 
$
2,943,502
 
 
$
4,536,809
 
 
$
1,487,517
 
 
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 2018.
 
4.
 
As of December 31, 2018, 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 Statements, if any.