Sales for the three months ending June 30, 2010 totaled $31,295,154 compared to $30,018,428 for the three months ending June 30, 2009, a slight increase of 4.3%. Sales for the six months ending June 30, 2010 totaled $63,648,776 compared to $66,745,736 for the six months ending June 30, 2009, a slight decrease of 4.6%. Our revenue has slightly improved in the second quarter but is still restrained by the economic conditions in China. Almost all of the agricultural products we trade have stabilized at a higher market price compared to the previous year which results in our customers being more cautious with market conditions and placing fewer orders at a time.
The Company's gross profit for the three months ending June 30, 2010 was $8,243,284 (or approximately 26% of revenue) compared to $6,928,835 (or approximately 23% of revenue) for the three months ending June 30, 2009. The gross profit for the six months ending June 30, 2010 was $16,458,220 (or approximately 26% of revenue) compared to $15,314,629 (or approximately 23% of revenue) for the six months ending June 30, 2009. The increases in gross profit were attributable to the Company being able to order and purchase our agricultural products as prices were increasing. Therefore, our profits are slightly higher compared to previous periods. Although our blueberry products yield a higher profit margin, total sales derived from these products account for less than 5% of total revenue so they have not had a significant impact on our margins.
Selling, general and administrative expense for the three and six months ending June 30, 2010 reflected increase of $511,223 and $952,709, respectively from the comparable 2009 periods. These increases are largely due to higher professional fees and expenses for corporate activities in 2010 for US and China as well as the increase in maintenance and upkeep fees of Bellisimo Vineyard.
Currently, other Income consists almost entirely of income generated from Bellisimo Vineyard. Almost all of the income currently generated from Bellisimo is from casual rentals of buildings located on the vineyard. There was a slight increase of $1,665 or 2.4% of such revenue during the three months ended June 30, 2010, compared to the same period last year. The 83.8% decrease in other income from $683,067 to $110,681 for the six months ended June 30 2009 compared to June 30 2010 is due to the amendment of the contract with Far East Wine related to the distribution of Bellisimo wines in China. This agreement originally provided for quarterly installments of $500,000, but has been suspended until we begin distributing Bellisimo wines.
Interest expenses were $155,887 and $611,752 for the three and six month periods ending June 30, 2010 and $398,283 and $565,574 for the three and six month periods ending June 30, 2009. The decrease of 60.9% resulted from a decrease in our bank loans in China in the second quarter. Most of our interest expense is attributable to the $8.5 million loan used to finance Bellisimo Vineyard.
The Company is subject to the income tax laws of the People's Republic of China ("PRC"). The PRC’s Enterprise Income Tax is now at a statutory rate of 25%. For the three and six month periods ending June 30, 2010, the Company accrued $1,856,185 and $3,640,567 in income taxes. The effective tax rates of 25.9% and 25.7% represented by these accruals are higher than the statutory rate as expenses incurred in the US, including those pertaining to the Bellisimo Vineyard, are not deductible for PRC tax purposes.
The Company owns 60% of Dalian Huiming, Xinbin Ice Wine, and Changbai Eco-Beverage, and thus 40% of total net income pertaining to these three subsidiaries was recorded as income attributed to noncontrolling interest. Noncontrolling interest increased from $1,987,837 for the three months ended 2009 to $2,517,191 for the three months ended 2010 and increased from $4,459,450 for the six months ended 2009 to $4,761,159 for the six months ended 2010 due to growth in net income from Dalian Huiming and Xinbin Ice wine and the inclusion of Changbai Eco-Beverage in the second quarter of 2010.
Net income attributable to CNOA shareholders was $2,795,564 for the three months ending June 30, 2010, an increase of 12.7% compared to $2,481,090 for the three months ending June 30, 2009. Net income attributable to CNOA shareholders was $5,760,565 for the six months ending June 30, 2010, compared to net income of $6,406,281, a decrease of 10.1% compared to the 2009 period. As the Company owns only 60% of Dalian Huiming, Xinbin Ice Wine, and Changbai Eco-Beverage, 40% of total net income from these two entities was recorded as income attributed to noncontrolling interest.
At June 30, 2010, cash and cash equivalents were $23,826,265 as compared to $18,512,835 at December 31, 2009. Current assets totaled $141,536,611, and current liabilities were $72,588,004. The Company’s current assets include $50,593,679 of inventory and its current liabilities include $51,959,008 in accounts payable. Both of these figures are substantially higher than the prior quarter, reflecting the Company’s decision to buy a substantial quantity of product immediately prior to the end of the second quarter in anticipation of increased prices.
We anticipate that our available funds and cash flows generated from operations will be sufficient to meet our anticipated on-going operating needs for the next twelve months. However, we may need to raise additional capital in order to fund acquisitions and any substantive constructions. We would expect to raise those funds through credit facilities obtained from lending institutions, the issuance of equity, or a combination of both. However, there can be no guarantee that we will be able to obtain such funding, whether through the issuance of debt or equity, on terms satisfactory to management and our Board of Directors.
Our management, including our principal executive officer and our principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and our chief financial officer have concluded that as of June 30, 2010, our disclosure controls and procedures are not effective. Their conclusion was based upon the reasons set forth in the Company's Report on Form 10-K for the year ended December 31, 2009, although the efforts described therein to improve our disclosure controls and procedures are ongoing.
EPS Q2 was $0.04, for the first half this year $0.08. Our projection of $0.22 for 2010 will be hard to achieve. We revise our projection to $0.18. The stock is trading well below book value of $1.22.