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<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>1.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>ORGANIZATION, BASIS OF PRESENTATION, AND PRINCIPAL ACTIVITIES</b>
</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(a)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Organization history of American Lorain Corporation (formerly known as Millennium Quest, Inc.)</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">American Lorain Corporation (the “Company” or “ALN”) was originally a Delaware corporation incorporated on February 4, 1986. From inception through May 3, 2007, the Company did not engage in any active business operations other than in search and evaluation of potential business opportunity to become an acquiree of a reverse-merger deal. On May 3, 2007, the Company entered into a share exchange agreement as described under “Reverse-Merger” below. On November 12, 2009, the Company filed a statement of merger in the state of Nevada to transfer the Company’s jurisdiction from Delaware to Nevada.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(b)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Organization History of International Lorain Holding Inc. and its subsidiaries</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
ALN owns
100% of the equity of International Lorain Holding Inc. (“ILH”). ILH is a Cayman Islands company incorporated on August 4, 2006 and was wholly-owned by Mr. Hisashi Akazawa until May 3, 2007. ILH presently has two direct wholly-owned subsidiaries, Junan Hongrun and Luotian Lorain, and three indirectly wholly-owned subsidiaries through Junan Hongrun, which are Beijing Lorain, Dongguan Lorain, and Shandong Greenpia Foodstuff Co., Ltd. (“Shandong Greenpia”).
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
In addition, the Company directly and indirectly has
80.2% ownership of Shandong Lorain. The rest of the
19.8%, which is owned by the State under the name of Shandong Economic Development Investment Co. Ltd., is not included as a part of the Group.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On April 9, 2009, the Company, through its Junan Hongrun subsidiary, invested cash to establish Dongguan Lorain. Dongguan Lorain is indirectly
100% beneficially owned by the Company.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On June 28, 2010, the Company signed an equity transfer agreement with Shandong Greenpia. Shandong Greenpia was originally directly owned by Taebong Inc. and Shandong Luan Trade Company. The Company paid $2,100,000
to Korean Taebong Inc. for
50% equity of Shandong Greenpia on September 20, 2010. On September 23, 2010, the Company issued
731,707
shares of restricted stock at an agreed price of $2.87
per share to the owner of Shandong Luan Trade Company, Mr. Ji Zhenwei, for the remaining
50% equity of Shandong Greenpia. Since September 23, 2010, Shandong Greenpia was directly owned by both Junan Hongrun and ILH. As a result, Shandong Greenpia is
100% owned by the Company. Accordingly, the Company booked a gain of $383,482
which is included in the statement of income as other income.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(c)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Reverse-Merger</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On May 3, 2007, the Company entered into a share exchange agreement with ILH whereby the Company consummated its acquisition of ILH by issuance of
697,663
Series B voting convertible preferred shares to the shareholders of ILH in exchange of
5,099,503
ILH shares. Concurrently on May 3, 2007, the Company also entered into a securities purchase agreement with certain investors and Mr. Hisashi Akazawa and Mr. Si Chen (each a “beneficial owner”) whereby the Company issued
319,913
(after reverse-split at
32.84
from
10,508,643) common shares to its shareholders as consideration of the Company’s reverse-merger with Lorain.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The share exchange transaction is sometimes referred to hereafter as the “reverse-merger transaction.” The share exchange transaction has been accounted for as a recapitalization of ALN where the Company (the legal acquirer) is considered the accounting acquiree and ILH (the acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of ILH.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Accordingly, the accompanying consolidated financial statements are those of the accounting acquirer, ILH. The historical stockholders’ equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the share exchange transaction occurred as of the beginning of the first period presented. See also Note 13 Capitalization.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(d)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Business Activities</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company develops, manufactures, and sells convenience foods (including ready-to-cook (or RTC) foods; ready-to-eat (or RTE) foods and meals ready-to-eat (or MRE); chestnut products; and frozen foods, in hundreds of varieties. The Company operates through indirect Chinese subsidiaries. The products are sold in
26
provinces and administrative regions in China and
42
foreign countries. Food products are categorized into three types: (1) chestnut products, (2) convenience food, and (3) frozen food.
</p>
</td>
</tr>
</table>
1
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1
2100000
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731707
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1
383482
697663
5099503
319913
32.84
10508643
26
42
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>2.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(a)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Method of Accounting</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company regrouped certain accounts in its presentation of changes in assets and liabilities in the statement of cash flows for the period ended September 30, 2012 in order to be consistent with the presentation provided for the year ended December 31, 2011. There was no impact in earnings for the regrouping.</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(b)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Principles of consolidation</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The consolidated financial statements which include the Company and its subsidiaries are compiled in accordance with generally accepted accounting principles in the United States of America. All significant inter-company accounts and transactions have been eliminated. The consolidated financial statements include
100% of assets, liabilities, and net income or loss of those wholly-owned subsidiaries; ownership interests of minority investors are recorded as minority interests.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012, the detailed identities of the consolidating subsidiaries are as follows:</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Place of</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Attributable equity</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Registered</i>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<b>
<i>Name of Company</i>
</b>
</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>incorporation</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>interest %</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>capital</i>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Lorain Co., Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
80.2
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="10%">
 
12,801,032
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Luotian Lorain Co., Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
4,008,356
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Junan Hongrun Foodstuff Co., Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
47,349,264
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Beijing Lorain Co., Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
1,582,529
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Greenpia Foodstuff Co.,Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,430,764
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Dongguan Lorain Co,,Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
158,253
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">International Lorain Holding Inc.</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">Cayman Islands</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
49,246,321
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(c)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Use of estimates</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%">
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(d)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Cash and cash equivalents</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(e)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Investment securities</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All securities not included in trading securities are classified as available-for-sale.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">A decline in the market value of any available-for-sale security below cost that is deemed to be other-than- temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income and a new cost basis for the security is established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end, and forecasted performance of the investee.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(f)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Trade receivables</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(g)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Inventories</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Inventories consisting of finished goods and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor and an appropriate proportion of overhead.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(h)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Customer deposits and advances to suppliers</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Customer deposits were received from customers in connection with orders of products to be delivered in future periods.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Advance to suppliers is a good faith deposit paid to the supplier for the purpose of committing the supplier to provide product promptly upon delivery of the Company’s purchase order for raw materials, supplies, equipment, building materials etc. Pursuant to the Company’s arrangements with its suppliers, this deposit is generally
20% of the total amount contracted for. This type of transaction is classified as a prepayment category under the account name “Advance to Suppliers” until such time as the Company’s purchase order is delivered, at which point this account is reduced by reclassification of the applicable amount to the appropriate asset account such as inventory or fixed assets or construction in progress.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(i)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Property, plant and equipment</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Buildings</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
40
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Landscaping, plant and tree</td>
<td align="right" nowrap="nowrap" width="15%">
30
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Machinery and equipment</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
10
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Motor vehicles</td>
<td align="right" nowrap="nowrap" width="15%">
10
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Office equipment</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
5
years
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(j)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Construction in progress</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Construction in progress represents direct and indirect construction or acquisition costs. The construction in progress is transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided until the asset is completed and ready for intended use.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(k)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Land Use Rights</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Land use rights are carried at cost and amortized on a straight-line basis over a specified period. Amortization is provided using the straight-line method over 40-50 years.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(l)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Accounting for the Impairment of Long-Lived Assets</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The long-lived assets held by the Company are reviewed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 360-10-35, “Accounting for the Impairment or Disposal of Long-Lived Assets,” for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Impairment is present if carrying amount of an asset is less than its undiscounted cash flows to be generated.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company believes no impairment has occurred to its assets during 2011 and 2012 (through March).</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(m)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Advertising</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">All advertising costs are expensed as incurred.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(n)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Shipping and handling</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">All shipping and handling are expensed as incurred.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(o)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Research and development</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">All research and development costs are expensed as incurred.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(p)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Retirement benefits</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Retirement benefits in the form of contributions under defined contribution retirement plans to the relevant authorities are charged to the consolidated statement of income as incurred.</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(q)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Income taxes</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company has implemented ASC Topic 740, “Accounting for Income Taxes.” Income tax liabilities computed according to the United States and People’s Republic of China (PRC) tax laws are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Effective January 1, 2008, PRC government implemented a new
25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as "two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers. As a result of the new tax law of a standard
15% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises already started tax holidays before January 1, 2008, to continue enjoying the tax holidays until being fully utilized.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company is subject to United States Tax according to Internal Revenue Code Sections
951
and 957. Corporate income tax is imposed on progressive rates in the range of: -
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="center" colspan="4">
<b>Taxable Income</b>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<i>
<u>Rate</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>Over</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>But Not Over</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>Of Amount Over</u>
</i>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
15%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
0
</td>
<td align="right" bgcolor="#e6efff" width="22%">
50,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
0
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
25%
</td>
<td align="right" width="22%">
50,000
</td>
<td align="right" width="22%">
75,000
</td>
<td align="right" width="22%">
50,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
34%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
75,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
100,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
75,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
39%
</td>
<td align="right" width="22%">
100,000
</td>
<td align="right" width="22%">
335,000
</td>
<td align="right" width="22%">
100,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
34%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
335,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
10,000,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
335,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
35%
</td>
<td align="right" width="22%">
10,000,000
</td>
<td align="right" width="22%">
15,000,000
</td>
<td align="right" width="22%">
10,000,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
38%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
15,000,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
18,333,333
</td>
<td align="right" bgcolor="#e6efff" width="22%">
15,000,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
35%
</td>
<td align="right" width="22%">
18,333,333
</td>
<td align="right" width="22%">
-
</td>
<td align="right" width="22%">
-
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(r)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Statutory reserves</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. The Company transferred $2,636,160
and $0
from retained earnings to statutory reserves during 2011 and the period ended September 30, 2012. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to
10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to
50% of the enterprise’s PRC registered capital.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(s)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Foreign currency translation</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.</p>
</td>
</tr>
</table>
<br/>
<div>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>6/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>6/30/2011</u>
</i>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Year end RMB : US$ exchange rate</p>
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3190
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3089
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3523
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3885
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.463
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Average yearly RMB : US$ exchange rate</p>
</td>
<td align="center" valign="bottom" width="11%">
6.3085
</td>
<td align="center" valign="bottom" width="11%">
6.3027
</td>
<td align="center" valign="bottom" width="11%">
6.4544
</td>
<td align="center" valign="bottom" width="11%">
6.4884
</td>
<td align="center" valign="bottom" width="11%">
6.5316
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
</div>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(t)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Revenue recognition</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company's revenue consists of invoiced value of goods, net of a value-added tax (VAT). The Company allows its customers to return products if they are defective. However, this rarely happens and amounts returned have been de minimis.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company gradually switched its sales model from direct sales to third party distributor model and issues
1% sales incentive to distributors. The Company modified it accounting policy for the recognition of revenue accordingly. Given the circumstances of how the Company conducts its incentive program, the Company books the payments settled in cash as a contra account to Gross Revenue, and includes the amount in its reported “net revenue”. The Company has considered the guidance in FASB ASC 605-50 (EITF 01-9) and will account for its sales incentive program accordingly.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(u)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Earnings per share</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the sum of the weighted average number of ordinary shares outstanding and potential dilutive securities during the year. During the period ended September 30, 2012, no warrants were issued nor options were granted. For the year ended December 31, 2010,
81,155
warrants were issued to certain service providers. For the year ended December 31, 2009,
1,334,573
stock options were granted to employees pursuant to the Company’s equity incentive plan;
2,255,024
warrants were issued to investors in connection with a PIPE financing. These warrants and options could be potentially dilutive if the market price of the Company’s common stock exceeds the exercise price for these securities.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company computes earnings per share (“EPS”) in accordance with Statement of Financial Accounting Standards No. 128, “Earnings per share” (“SFAS No. 128”), and SEC Staff Accounting Bulletin No. 98 (“SAB
98
”). SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(v)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Financial Instruments</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:</p>
</td>
</tr>
</table>
<ul style="TEXT-ALIGN: justify">
<li style="font-family: times new roman,times,serif; font-size: 10pt;">
<p style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.</p>
</li>
<li style="font-family: times new roman,times,serif; font-size: 10pt;">
<p style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</p>
</li>
<li style="font-family: times new roman,times,serif; font-size: 10pt;">
<p style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.</p>
</li>
</ul>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012 and December 31, 2011, the Company did not identify any assets and liabilities that were required to be presented on the balance sheet at fair value.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(w)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Commitments and contingencies</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(x)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Comprehensive income</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid- in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the periods ended September 30, 2012 and 2011 included net income and foreign currency translation adjustments.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(y)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Recent accounting pronouncements</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On July 27, 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment. The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity concludes that it is more than
50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required. However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this pronouncement will not have a material impact on its financial statements.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012, there are no other recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(a)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Method of Accounting</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company regrouped certain accounts in its presentation of changes in assets and liabilities in the statement of cash flows for the period ended September 30, 2012 in order to be consistent with the presentation provided for the year ended December 31, 2011. There was no impact in earnings for the regrouping.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(b)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Principles of consolidation</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The consolidated financial statements which include the Company and its subsidiaries are compiled in accordance with generally accepted accounting principles in the United States of America. All significant inter-company accounts and transactions have been eliminated. The consolidated financial statements include
100% of assets, liabilities, and net income or loss of those wholly-owned subsidiaries; ownership interests of minority investors are recorded as minority interests.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012, the detailed identities of the consolidating subsidiaries are as follows:</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Place of</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Attributable equity</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Registered</i>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<b>
<i>Name of Company</i>
</b>
</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>incorporation</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>interest %</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>capital</i>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Lorain Co., Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
80.2
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="10%">
 
12,801,032
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Luotian Lorain Co., Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
4,008,356
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Junan Hongrun Foodstuff Co., Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
47,349,264
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Beijing Lorain Co., Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
1,582,529
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Greenpia Foodstuff Co.,Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,430,764
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Dongguan Lorain Co,,Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
158,253
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">International Lorain Holding Inc.</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">Cayman Islands</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
49,246,321
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(c)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Use of estimates</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(d)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Cash and cash equivalents</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(e)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Investment securities</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company classifies securities it holds for investment purposes into trading or available-for-sale. Trading securities are bought and held principally for the purpose of selling them in the near term. All securities not included in trading securities are classified as available-for-sale.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in the net income. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from net income and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">A decline in the market value of any available-for-sale security below cost that is deemed to be other-than- temporary results in a reduction in carrying amount to fair value. The impairment is charged as an expense to the statement of income and comprehensive income and a new cost basis for the security is established. To determine whether impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year end, and forecasted performance of the investee.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective-interest method. Dividend and interest income are recognized when earned.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(f)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Trade receivables</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(g)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Inventories</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Inventories consisting of finished goods and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor and an appropriate proportion of overhead.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(h)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Customer deposits and advances to suppliers</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Customer deposits were received from customers in connection with orders of products to be delivered in future periods.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Advance to suppliers is a good faith deposit paid to the supplier for the purpose of committing the supplier to provide product promptly upon delivery of the Company’s purchase order for raw materials, supplies, equipment, building materials etc. Pursuant to the Company’s arrangements with its suppliers, this deposit is generally
20% of the total amount contracted for. This type of transaction is classified as a prepayment category under the account name “Advance to Suppliers” until such time as the Company’s purchase order is delivered, at which point this account is reduced by reclassification of the applicable amount to the appropriate asset account such as inventory or fixed assets or construction in progress.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(i)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Property, plant and equipment</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Buildings</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
40
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Landscaping, plant and tree</td>
<td align="right" nowrap="nowrap" width="15%">
30
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Machinery and equipment</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
10
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Motor vehicles</td>
<td align="right" nowrap="nowrap" width="15%">
10
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Office equipment</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
5
years
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(j)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Construction in progress</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Construction in progress represents direct and indirect construction or acquisition costs. The construction in progress is transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided until the asset is completed and ready for intended use.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(k)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Land Use Rights</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Land use rights are carried at cost and amortized on a straight-line basis over a specified period. Amortization is provided using the straight-line method over 40-50 years.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(l)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Accounting for the Impairment of Long-Lived Assets</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The long-lived assets held by the Company are reviewed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 360-10-35, “Accounting for the Impairment or Disposal of Long-Lived Assets,” for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Impairment is present if carrying amount of an asset is less than its undiscounted cash flows to be generated.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company believes no impairment has occurred to its assets during 2011 and 2012 (through March).</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(m)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Advertising</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">All advertising costs are expensed as incurred.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(n)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Shipping and handling</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">All shipping and handling are expensed as incurred.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(o)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Research and development</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">All research and development costs are expensed as incurred.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(p)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Retirement benefits</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Retirement benefits in the form of contributions under defined contribution retirement plans to the relevant authorities are charged to the consolidated statement of income as incurred.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(q)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Income taxes</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company has implemented ASC Topic 740, “Accounting for Income Taxes.” Income tax liabilities computed according to the United States and People’s Republic of China (PRC) tax laws are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Effective January 1, 2008, PRC government implemented a new
25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as "two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers. As a result of the new tax law of a standard
15% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises already started tax holidays before January 1, 2008, to continue enjoying the tax holidays until being fully utilized.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company is subject to United States Tax according to Internal Revenue Code Sections
951
and 957. Corporate income tax is imposed on progressive rates in the range of: -
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="center" colspan="4">
<b>Taxable Income</b>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<i>
<u>Rate</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>Over</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>But Not Over</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>Of Amount Over</u>
</i>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
15%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
0
</td>
<td align="right" bgcolor="#e6efff" width="22%">
50,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
0
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
25%
</td>
<td align="right" width="22%">
50,000
</td>
<td align="right" width="22%">
75,000
</td>
<td align="right" width="22%">
50,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
34%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
75,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
100,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
75,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
39%
</td>
<td align="right" width="22%">
100,000
</td>
<td align="right" width="22%">
335,000
</td>
<td align="right" width="22%">
100,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
34%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
335,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
10,000,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
335,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
35%
</td>
<td align="right" width="22%">
10,000,000
</td>
<td align="right" width="22%">
15,000,000
</td>
<td align="right" width="22%">
10,000,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
38%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
15,000,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
18,333,333
</td>
<td align="right" bgcolor="#e6efff" width="22%">
15,000,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
35%
</td>
<td align="right" width="22%">
18,333,333
</td>
<td align="right" width="22%">
-
</td>
<td align="right" width="22%">
-
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(r)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Statutory reserves</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. The Company transferred $2,636,160
and $0
from retained earnings to statutory reserves during 2011 and the period ended September 30, 2012. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to
10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to
50% of the enterprise’s PRC registered capital.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(s)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Foreign currency translation</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.</p>
</td>
</tr>
</table>
<br/>
<div>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>6/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>6/30/2011</u>
</i>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Year end RMB : US$ exchange rate</p>
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3190
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3089
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3523
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3885
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.463
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Average yearly RMB : US$ exchange rate</p>
</td>
<td align="center" valign="bottom" width="11%">
6.3085
</td>
<td align="center" valign="bottom" width="11%">
6.3027
</td>
<td align="center" valign="bottom" width="11%">
6.4544
</td>
<td align="center" valign="bottom" width="11%">
6.4884
</td>
<td align="center" valign="bottom" width="11%">
6.5316
</td>
</tr>
</table>
</div>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(t)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Revenue recognition</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company's revenue consists of invoiced value of goods, net of a value-added tax (VAT). The Company allows its customers to return products if they are defective. However, this rarely happens and amounts returned have been de minimis.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company gradually switched its sales model from direct sales to third party distributor model and issues
1% sales incentive to distributors. The Company modified it accounting policy for the recognition of revenue accordingly. Given the circumstances of how the Company conducts its incentive program, the Company books the payments settled in cash as a contra account to Gross Revenue, and includes the amount in its reported “net revenue”. The Company has considered the guidance in FASB ASC 605-50 (EITF 01-9) and will account for its sales incentive program accordingly.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(u)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Earnings per share</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the sum of the weighted average number of ordinary shares outstanding and potential dilutive securities during the year. During the period ended September 30, 2012, no warrants were issued nor options were granted. For the year ended December 31, 2010,
81,155
warrants were issued to certain service providers. For the year ended December 31, 2009,
1,334,573
stock options were granted to employees pursuant to the Company’s equity incentive plan;
2,255,024
warrants were issued to investors in connection with a PIPE financing. These warrants and options could be potentially dilutive if the market price of the Company’s common stock exceeds the exercise price for these securities.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company computes earnings per share (“EPS”) in accordance with Statement of Financial Accounting Standards No. 128, “Earnings per share” (“SFAS No. 128”), and SEC Staff Accounting Bulletin No. 98 (“SAB
98
”). SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(v)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Financial Instruments</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:</p>
</td>
</tr>
</table>
<ul style="TEXT-ALIGN: justify">
<li style="font-family: times new roman,times,serif; font-size: 10pt;">
<p style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.</p>
</li>
<li style="font-family: times new roman,times,serif; font-size: 10pt;">
<p style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</p>
</li>
<li style="font-family: times new roman,times,serif; font-size: 10pt;">
<p style="margin-left: 10%; font-family: times new roman,times,serif; font-size: 10pt;">Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.</p>
</li>
</ul>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012 and December 31, 2011, the Company did not identify any assets and liabilities that were required to be presented on the balance sheet at fair value.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(w)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Commitments and contingencies</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(x)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Comprehensive income</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid- in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the periods ended September 30, 2012 and 2011 included net income and foreign currency translation adjustments.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td valign="top" width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td valign="top" width="5%">
<i>(y)</i>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<i>Recent accounting pronouncements</i>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On July 27, 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment. The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity concludes that it is more than
50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required. However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this pronouncement will not have a material impact on its financial statements.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012, there are no other recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Place of</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Attributable equity</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>Registered</i>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<b>
<i>Name of Company</i>
</b>
</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>incorporation</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>interest %</i>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<i>capital</i>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Lorain Co., Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
80.2
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="10%">
 
12,801,032
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Luotian Lorain Co., Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
4,008,356
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Junan Hongrun Foodstuff Co., Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
47,349,264
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Beijing Lorain Co., Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
1,582,529
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Greenpia Foodstuff Co.,Ltd</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">PRC</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
2,430,764
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Dongguan Lorain Co,,Ltd</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">PRC</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="center" width="10%">
100
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="10%">
158,253
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">International Lorain Holding Inc.</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" nowrap="nowrap" width="10%">Cayman Islands</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="center" bgcolor="#e6efff" width="10%">
100
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="10%">
49,246,321
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
80.2
12801032
100
4008356
100
47349264
100
1582529
100
2430764
100
158253
100
49246321
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Buildings</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
40
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Landscaping, plant and tree</td>
<td align="right" nowrap="nowrap" width="15%">
30
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Machinery and equipment</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
10
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">Motor vehicles</td>
<td align="right" nowrap="nowrap" width="15%">
10
years
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">Office equipment</td>
<td align="right" bgcolor="#e6efff" nowrap="nowrap" width="15%">
5
years
</td>
</tr>
</table>
40
30
10
10
5
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="center" colspan="4">
<b>Taxable Income</b>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<i>
<u>Rate</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>Over</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>But Not Over</u>
</i>
</td>
<td align="right" nowrap="nowrap" width="22%">
<i>
<u>Of Amount Over</u>
</i>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
15%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
0
</td>
<td align="right" bgcolor="#e6efff" width="22%">
50,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
0
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
25%
</td>
<td align="right" width="22%">
50,000
</td>
<td align="right" width="22%">
75,000
</td>
<td align="right" width="22%">
50,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
34%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
75,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
100,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
75,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
39%
</td>
<td align="right" width="22%">
100,000
</td>
<td align="right" width="22%">
335,000
</td>
<td align="right" width="22%">
100,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
34%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
335,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
10,000,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
335,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
35%
</td>
<td align="right" width="22%">
10,000,000
</td>
<td align="right" width="22%">
15,000,000
</td>
<td align="right" width="22%">
10,000,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
38%
</td>
<td align="right" bgcolor="#e6efff" width="22%">
15,000,000
</td>
<td align="right" bgcolor="#e6efff" width="22%">
18,333,333
</td>
<td align="right" bgcolor="#e6efff" width="22%">
15,000,000
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
35%
</td>
<td align="right" width="22%">
18,333,333
</td>
<td align="right" width="22%">
-
</td>
<td align="right" width="22%">
-
</td>
</tr>
</table>
0.15
0
50000
0
0.25
50000
75000
50000
0.34
75000
100000
75000
0.39
100000
335000
100000
0.34
335000
10000000
335000
0.35
10000000
15000000
10000000
0.38
15000000
18333333
15000000
0.35
18333333
0
0
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>6/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="11%">
<i>
<u>6/30/2011</u>
</i>
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Year end RMB : US$ exchange rate</p>
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3190
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3089
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3523
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.3885
</td>
<td align="center" bgcolor="#e6efff" valign="bottom" width="11%">
6.463
</td>
</tr>
<tr valign="top">
<td width="10%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Average yearly RMB : US$ exchange rate</p>
</td>
<td align="center" valign="bottom" width="11%">
6.3085
</td>
<td align="center" valign="bottom" width="11%">
6.3027
</td>
<td align="center" valign="bottom" width="11%">
6.4544
</td>
<td align="center" valign="bottom" width="11%">
6.4884
</td>
<td align="center" valign="bottom" width="11%">
6.5316
</td>
</tr>
</table>
6.319
6.3089
6.3523
6.3885
6.463
6.3085
6.3027
6.4544
6.4884
6.5316
1
0.2
0.25
0.15
2636160
0
0.1
0.5
0.01
81155
1334573
2255024
0.5
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>3.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>RESTRICTED CASH</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Restricted Cash represents interest bearing deposits placed with banks to secure banking facilities in the form of loans and notes payable. The restriction of funds is based on time. The funds that collateralize loans are held for
60
days in savings account that pay interest at the prescribed national daily savings account rate. For funds that underline notes payable, the cash is deposited in six month time deposits that pay interest at the national time deposit rate.
</p>
</td>
</tr>
</table>
60
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>4.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>TRADE ACCOUNTS RECEIVABLE</b>
</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 
</p>
</td>
<td align="left" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%">
 
</td>
<td align="center" nowrap="nowrap" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Trade accounts receivable</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 53,048,914
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 41,849,573
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>
<u>Less</u>
:
</i>
Allowance for doubtful accounts
</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(381,693
</td>
<td align="left" width="2%">)</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(379,693
</td>
<td align="left" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 
</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 52,667,221
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 41,469,880
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
 
</td>
<td align="left" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
 
</td>
<td align="center" nowrap="nowrap" width="2%">
 
</td>
<td align="center" nowrap="nowrap" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
 
</td>
<td align="left" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Allowance for bad debt:</p>
</td>
<td align="left" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%">
 
</td>
<td align="center" nowrap="nowrap" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Beginning balance</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
(379,693
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
(335,902
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Additions to allowance</p>
</td>
<td align="left" width="1%">
 
</td>
<td align="right" width="12%">
(2,000
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%">
 
</td>
<td align="right" width="12%">
(43,791
</td>
<td align="left" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Bad debt written-off</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Ending balance</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
(381,693
</td>
<td align="left" width="2%">)</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
(379,693
</td>
<td align="left" width="2%">)</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The Company offers credit terms of between
30
to
60
days to most of their domestic customers, including supermarkets and wholesalers, around
90
days to most of their international customers, and between
0
to
15
days for most of the third-party distributors the Company works with.
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 
</p>
</td>
<td align="left" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%">
 
</td>
<td align="center" nowrap="nowrap" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Trade accounts receivable</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 53,048,914
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 41,849,573
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>
<u>Less</u>
:
</i>
Allowance for doubtful accounts
</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(381,693
</td>
<td align="left" width="2%">)</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(379,693
</td>
<td align="left" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 
</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 52,667,221
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 41,469,880
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
 
</td>
<td align="left" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
 
</td>
<td align="center" nowrap="nowrap" width="2%">
 
</td>
<td align="center" nowrap="nowrap" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
 
</td>
<td align="left" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Allowance for bad debt:</p>
</td>
<td align="left" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%">
 
</td>
<td align="center" nowrap="nowrap" width="1%">
 
</td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Beginning balance</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
(379,693
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
(335,902
</td>
<td align="left" bgcolor="#e6efff" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Additions to allowance</p>
</td>
<td align="left" width="1%">
 
</td>
<td align="right" width="12%">
(2,000
</td>
<td align="left" width="2%">)</td>
<td align="left" width="1%">
 
</td>
<td align="right" width="12%">
(43,791
</td>
<td align="left" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Bad debt written-off</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
 
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%">
 
</td>
</tr>
<tr valign="top">
<td width="5%">
 
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Ending balance</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
(381,693
</td>
<td align="left" width="2%">)</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
(379,693
</td>
<td align="left" width="2%">)</td>
</tr>
</table>
160
160
-381693
-379693
160
160
-379693
-335902
-2000
-43791
0
0
-381693
-379693
30
60
90
0
15
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>5.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>OTHER RECEIVABLES</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Other receivables consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Advances to employees for job/travel disbursements</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
707,293
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
577,237
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Amount due by a non-related enterprise</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
439,944
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
157,424
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Other non-related receivables</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
146,791
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
319,639
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Other related receivables</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
99,812
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
213,128
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Short-term investment sale receivable</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,849,660
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,880,122
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
6,243,500
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
6,147,550
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Advances to employees for job/travel disbursements consisted of advances to employees for transportation, meals, client entertainment, commissions, and procurement of certain raw materials. The advances issued to employees may be carried for extended periods of time because employees may spend several months out in the field working to procure new sales contracts or fulfill existing contracts.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Specifically, the company uses every available employee to arrange purchases with desirable chestnut or other raw material growers. However, because many of these growers are in rural farming areas of China where traditional banking and credit arrangements are difficult to implement, the Company must utilize cash purchases and also must contract for its future needs by placing a good faith deposit in cash with the growers. However none of these advances to employees for delivery to the growers on behalf of the Company are “personal loans” to the employees. Advances to employees for purchase of materials in other receivables are adjusted to advances to suppliers as of September 30, 2012.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Related party receivable consisted of the following as of September 30, 2012 and December 31, 2011:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Chen, Si</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
67,523
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
133,070
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Lu, Yundong</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
187
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
896
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Liu, Lihua</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
78,712
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">You, Huadong</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
31,651
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
-
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Junan Hot & Roll Fast Food</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
453
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
450
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
99,812
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
213,128
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Related party receivable represented advances issued by management for job or travel disbursement in the normal course of business. The receivable had no impact on earnings. As with other employees, officers sign notes when cash is issued to them as job or travel disbursement.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
In order to satisfy certain criteria for obtaining the long-term loan with DEG, as noted in footnote
12, Junan Hongrun lent money to Mr. Chen, Si and Ms. Liu, Lihua to purchase life insurance.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Related party receivable amounts are disclosed as other related receivables in other receivables.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On March 13, 2011, the Company entered into an agreement with Jiangsu Heng An Industrial Investment Group Co., Ltd. to sell the Company’s short-term investment in the amount of $7,764,577
(RMB49,604,000) of a parcel of land located in Junan Town, Shandong Province, to construct residential buildings. The land was sold to Jiangsu Heng An at a total sale price of RMB69,604,000
and a guaranteed gross profit of RMB20,000,000
without consideration of profit/loss of the residential building project. The gain on the sale of the short-term investment excluding taxes payable is recorded as other income on the statements of income and comprehensive income. Title of the land transferred from the Company to Jiangsu Heng An with receipt of an initial deposit of RMB15,000,000. As of September 30, 2012, a total of RMB38,355,000
has been paid and RMB30,645,000
(USD4,849,660) is classified as Other Receivable. According to the contract, the Company will be entitled to receive RMB9,000,000
within
5
days after the title transfer and construction approval is complete, and RMB27,000,000
within
5
days after the residential building main frame is completed
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Advances to employees for job/travel disbursements</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
707,293
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
577,237
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Amount due by a non-related enterprise</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
439,944
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
157,424
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Other non-related receivables</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
146,791
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
319,639
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Other related receivables</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
99,812
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
213,128
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Short-term investment sale receivable</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,849,660
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4,880,122
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
6,243,500
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
6,147,550
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
707293
577237
439944
157424
146791
319639
99812
213128
4849660
4880122
6243500
6147550
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Chen, Si</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
67,523
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
133,070
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Lu, Yundong</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
187
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
896
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Liu, Lihua</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
78,712
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">You, Huadong</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
31,651
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
-
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Junan Hot & Roll Fast Food</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
453
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
450
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
99,812
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
213,128
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
67523
133070
187
896
0
78712
31651
0
453
450
99812
213128
7764577
49604000
69604000
20000000
15000000
38355000
30645000
4849660
9000000
5
27000000
5
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>6.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>INVENTORIES</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Inventories consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Raw materials</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
24,608,937
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
10,470,187
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Finished goods</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
27,340,570
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
23,878,810
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
51,949,507
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
34,348,997
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Raw materials</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
24,608,937
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
10,470,187
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Finished goods</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
27,340,570
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
23,878,810
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
51,949,507
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
34,348,997
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
24608937
10470187
27340570
23878810
51949507
34348997
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>7.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>PROPERTY, PLANT AND EQUIPMENT</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Property, plant, and equipment consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">At Cost:</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Buildings</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
 
78,588,510
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
 
75,509,164
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Landscaping, plant and tree</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
7,921,103
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
7,879,579
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Machinery and equipment</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
11,169,250
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
10,976,564
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Office equipment</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
359,570
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
618,558
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Motor vehicles</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
837,494
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
467,415
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
98,875,927
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
95,451,279
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<i>
<u>Less</u>
</i>
<i>:</i>
Accumulated depreciation
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Buildings</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(5,455,902
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(4,141,133
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Landscaping, plant and tree</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(1,904,660
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(1,303,707
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Machinery and equipment</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(5,602,946
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(4,988,873
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Office equipment</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(211,217
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(391,272
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Motor vehicles</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(506,178
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(248,987
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(13,680,904
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(11,073,972
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Construction in Progress</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
85,195,024
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
84,377,306
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Landscaping, plants, and trees accounts for the orchards that the Company has developed for agricultural operations. These orchards as well as the young trees which were purchased as nursery stock are capitalized into fixed assets. The depreciation is then calculated on a 30-year straight-line method when production in commercial quantities begins. The orchards have begun production in small quantities and the Company has accounted for depreciation commencing July 1, 2010.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">At Cost:</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Buildings</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
 
78,588,510
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="12%">
 
75,509,164
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Landscaping, plant and tree</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
7,921,103
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
7,879,579
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Machinery and equipment</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
11,169,250
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
10,976,564
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Office equipment</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
359,570
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
618,558
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Motor vehicles</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
837,494
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
467,415
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
98,875,927
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
95,451,279
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<i>
<u>Less</u>
</i>
<i>:</i>
Accumulated depreciation
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Buildings</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(5,455,902
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(4,141,133
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Landscaping, plant and tree</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(1,904,660
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(1,303,707
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Machinery and equipment</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(5,602,946
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
(4,988,873
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">     Office equipment</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(211,217
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(391,272
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">     Motor vehicles</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(506,178
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
(248,987
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(13,680,904
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(11,073,972
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Construction in Progress</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
85,195,024
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
84,377,306
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
78588510
75509164
7921103
7879579
11169250
10976564
359570
618558
837494
467415
98875927
95451279
-5455902
-4141133
-1904660
-1303707
-5602946
-4988873
-211217
-391272
-506178
-248987
-13680904
-11073972
0
85195024
84377306
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>8.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>LAND USE RIGHTS, NET</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Land use rights consisted of the following as of September 30, 2012 and December 31, 2011
<sup>:</sup>
</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
Land use rights,
<i>at cost</i>
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
6,275,427
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
6,242,530
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
   
<i>
<u>Less</u>
</i>
<i>:</i>
Accumulated amortization
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(944,562
</td>
<td align="left" width="2%">)</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(817,278
</td>
<td align="left" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
5,330,865
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
5,425,252
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
All lands are owned by the government in China. Land use rights represent the Company’s purchase of usage rights for a parcel of land for a specified duration of time, typically
50
years. The land use rights are then amortized over the period of usage. Amortization expense for the periods ended September 30, 2012 and 2011 were $127,284
and $141,997, respectively.
</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
Land use rights,
<i>at cost</i>
</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
6,275,427
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
6,242,530
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
   
<i>
<u>Less</u>
</i>
<i>:</i>
Accumulated amortization
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(944,562
</td>
<td align="left" width="2%">)</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
(817,278
</td>
<td align="left" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
5,330,865
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
5,425,252
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
6275427
6242530
-944562
-817278
5330865
5425252
50
127284
141997
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>9.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>SHORT-TERM BANK LOANS</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Short-term bank loans consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="10%">
<u>Remark</u>
</td>
<td align="center" nowrap="nowrap" width="10%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from Junan County Construction Bank,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 1/25/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,479,779
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.100% per annum due 2/19/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
944,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 5/2/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.015% per annum due 6/7/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
3,337,374
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.435% per annum due 9/11/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.666% per annum due 11/5/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,091,945
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,086,221
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.666% per annum due 11/23/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
791,264
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
787,116
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 11/30/2012</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 12/24/2012</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1012818
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from Junan County Agriculture Bank,</i>
</p>
</td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.320% per annum due 1/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
3,148,466
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from Junan County Industrial and Commercial Bank of</i>
<i>China,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.405% per annum due 4/9/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,023,251
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.405% per annum due 4/24/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
550,982
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.410% per annum due 4/24/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
629,693
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.410% per annum due 5/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,338,098
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.410% per annum due 6/12/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,574,233
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 10/10/2012</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,107,770
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.71% per annum due 10/23/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1,028,644
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.71% per annum due 10/23/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
633,012
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 12/14/2012</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1,345,150
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.44% per annum; due 12/27/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,740,782
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.44% per annum; due 1/8/2013
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1,028,644
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from Linyi Commercial Bank,</i>
</p>
</td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.201% per annum due 1/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
708,405
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
11.152% per annum due 12/11/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
3,148,466
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.201% per annum due 12/13/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
791,264
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
787,116
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.136% per annum due 12/29/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
712,138
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
708,405
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
13.776% per annum due 12/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
791,264
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.136% per annum due 1/10/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
712,138
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from China Minsheng Bank Corporation, Linyi Branch</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.8% per annum due 8/29/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,373,793
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,361,349
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from China Agricultural Bank, Luotian Branch</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.372% per annum due 9/12/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
944,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Bank of Beijing,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.672% per annum due 11/16/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
633,012
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
629,693
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable Interest rate, due 6/29/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,266,023
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Shenzhen Development Bank,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 2/13/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
236,135
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 3/15/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
787,116
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.435% per annum due 6/8/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,361,349
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.37% per annum due 11/29/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
2,373,793
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable Interest rate, due 1/30/2013</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,107,770
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Interest rate at % per annum due 3/6/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
791,264
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.2% per annum due 5/24/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
633,012
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Luotian Sanliqiao Credit Union,</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
9.360% per annum due 1/6/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
949,517
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Beijing Rural Commercial Bank, Shilibao Branch,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.434% per annum due 9/6/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,344,182
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,046,503
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Beijing International Trust Co., Ltd.,</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate, due 9/16/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Weihai City Commercial Bank,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.90% per annum due 3/7/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Bank of Ningbo ,</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.71% per annum due 9/27/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Hankou Bank, Guanshan Branch,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.00% per annum due 9/6/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
791,264
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.60% per annum due 9/14/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>China Agricultural Bank, Shandong Branch</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.544% per annum due 12/23/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,574,233
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.544% per annum due 12/29/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
680,487
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
676,920
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Interest rate at % per annum due 7/16/2013</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Interest rate at % per annum due 8/29/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>China Everbright Bank, Qingdao Branch</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.930% per annum due 11/9/2012
</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
3,148,467
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">                                                                                                                                                                       </p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
49,468,885
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
36,018,450
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">The short-term loans, which are denominated in the functional currency Renminbi (RMB), were primarily obtained for general working capital.</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Remark:</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
A: A parcel of
12,726
square meters land use right and an
8,162
square meters building was used as collateral for this loan.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
B: Accounts Receivable in the amount of $1,650,000
was used as collateral for this loan
</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="10%">
<u>Remark</u>
</td>
<td align="center" nowrap="nowrap" width="10%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from Junan County Construction Bank,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 1/25/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,479,779
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.100% per annum due 2/19/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
944,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 5/2/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.015% per annum due 6/7/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
3,337,374
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.435% per annum due 9/11/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.666% per annum due 11/5/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,091,945
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,086,221
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.666% per annum due 11/23/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
791,264
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
787,116
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 11/30/2012</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 12/24/2012</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1012818
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from Junan County Agriculture Bank,</i>
</p>
</td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.320% per annum due 1/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
3,148,466
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from Junan County Industrial and Commercial Bank of</i>
<i>China,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.405% per annum due 4/9/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,023,251
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.405% per annum due 4/24/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
550,982
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.410% per annum due 4/24/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
629,693
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.410% per annum due 5/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,338,098
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.410% per annum due 6/12/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
1,574,233
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 10/10/2012</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,107,770
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.71% per annum due 10/23/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1,028,644
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.71% per annum due 10/23/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
633,012
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate; due 12/14/2012</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1,345,150
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.44% per annum; due 12/27/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
1,740,782
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.44% per annum; due 1/8/2013
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
1,028,644
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from Linyi Commercial Bank,</i>
</p>
</td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.201% per annum due 1/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
708,405
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
11.152% per annum due 12/11/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
3,148,466
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.201% per annum due 12/13/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
791,264
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
787,116
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.136% per annum due 12/29/2012
</p>
</td>
<td align="right" valign="bottom" width="10%"> </td>
<td align="right" valign="bottom" width="10%">
712,138
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
708,405
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
13.776% per annum due 12/10/2012
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
791,264
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="10%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
12.136% per annum due 1/10/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
712,138
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from China Minsheng Bank Corporation, Linyi Branch</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.8% per annum due 8/29/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,373,793
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,361,349
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loan from China Agricultural Bank, Luotian Branch</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.372% per annum due 9/12/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
944,540
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Bank of Beijing,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.672% per annum due 11/16/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
633,012
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
629,693
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable Interest rate, due 6/29/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,266,023
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Shenzhen Development Bank,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 2/13/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
236,135
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.710% per annum due 3/15/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
787,116
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.435% per annum due 6/8/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,361,349
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.37% per annum due 11/29/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
2,373,793
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable Interest rate, due 1/30/2013</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,107,770
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Interest rate at % per annum due 3/6/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
791,264
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.2% per annum due 5/24/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
633,012
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Luotian Sanliqiao Credit Union,</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
9.360% per annum due 1/6/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
949,517
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Beijing Rural Commercial Bank, Shilibao Branch,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.434% per annum due 9/6/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,344,182
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,046,503
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Beijing International Trust Co., Ltd.,</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Variable interest rate, due 9/16/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Weihai City Commercial Bank,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.90% per annum due 3/7/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Bank of Ningbo ,</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.71% per annum due 9/27/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Hankou Bank, Guanshan Branch,</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.00% per annum due 9/6/2013
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
791,264
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
6.60% per annum due 9/14/2013
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>China Agricultural Bank, Shandong Branch</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.544% per annum due 12/23/2012
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
1,574,233
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.544% per annum due 12/29/2012
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
680,487
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
676,920
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Interest rate at % per annum due 7/16/2013</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">       • Interest rate at % per annum due 8/29/2013</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,582,529
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>China Everbright Bank, Qingdao Branch</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
       • Interest rate at
7.930% per annum due 11/9/2012
</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
3,165,058
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
3,148,467
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">                                                                                                                                                                       </p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
49,468,885
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
36,018,450
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
0.0671
0
1479779
0.061
0
944540
0.0671
0
0
0.07015
0
3337374
0.06435
0
0
0.06666
1091945
1086221
0.06666
791264
787116
1582529
0
1012818
0.0732
0
3148466
0.06405
0
1023251
0.06405
0
550982
0.0641
0
629693
0.0641
0
1338098
0.0641
0
1574233
1107770
0
0.0671
1028644
0
0.0671
633012
0
1345150
0
0.0644
1740782
0
0.0644
1028644
0
0.12201
0
708405
0.11152
3165058
3148466
0.12201
791264
787116
0.12136
712138
708405
0.13776
791264
0
0.12136
712138
0
0.078
2373793
2361349
0.06372
1582529
944540
0.06672
633012
629693
1266023
0
0.0671
0
236135
0.0671
0
787116
0.06435
0
2361349
0.0737
2373793
1107770
0
791264
0
0.072
633012
0
0.0936
949517
0
0.07434
1344182
2046503
1582529
0
0.069
3165058
0
0.0671
1582529
0
0.06
791264
0
0.066
1582529
0
0.07544
1582529
1574233
0.07544
680487
676920
3165058
0
1582529
0
0.0793
3165058
3148467
49468885
36018450
12726
8162
1650000
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>10.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>TAXES PAYABLES</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Taxes payable consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Value added tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
207,923
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
255,327
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Corporate income tax payable</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,340,278
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,822,321
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Employee payroll tax withholding</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3,909
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
6,105
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Property tax payable</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
58,456
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
46,192
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Stamp tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,436
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
9,369
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Business tax payable</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
152,869
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Land use tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
52,339
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
23,988
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Import tariffs</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
153,675
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
4,956
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Capital gain tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
920,842
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
916,015
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
3,738,859
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
4,237,142
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Value added tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
207,923
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
255,327
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Corporate income tax payable</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,340,278
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,822,321
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Employee payroll tax withholding</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3,909
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
6,105
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Property tax payable</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
58,456
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
46,192
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Stamp tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,436
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
9,369
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Business tax payable</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
152,869
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Land use tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
52,339
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
23,988
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Import tariffs</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
153,675
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
4,956
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Capital gain tax payable</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
920,842
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
916,015
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
3,738,859
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
4,237,142
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
207923
255327
2340278
2822321
3909
6105
58456
46192
1436
9369
0
152869
52339
23988
153675
4956
920842
916015
3738859
4237142
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>11.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>ACCRUED EXPENSES AND OTHER PAYABLE</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Accrued expenses and other payables consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Accrued salaries and wages</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
88,013
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
774,206
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Accrued utility expenses</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
58,367
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
74,927
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Accrued interest expenses</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3,165
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
303,701
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Accrued transportation expenses</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
394,558
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
172,094
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Other accruals</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
34,850
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
95,371
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Business and other taxes</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
475,722
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
422,100
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Disbursement payable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
37,972
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
38,804
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Accrued staff welfare</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
317,423
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
57,554
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">                                                                                                           </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
1,410,070
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
1,938,759
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left"> </td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Accrued salaries and wages</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
88,013
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
774,206
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Accrued utility expenses</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
58,367
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
74,927
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Accrued interest expenses</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
3,165
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
303,701
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Accrued transportation expenses</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
394,558
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
172,094
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Other accruals</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
34,850
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
95,371
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Business and other taxes</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
475,722
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
422,100
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Disbursement payable</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
37,972
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
38,804
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Accrued staff welfare</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
317,423
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
57,554
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">                                                                                                           </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
1,410,070
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
1,938,759
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
88013
774206
58367
74927
3165
303701
394558
172094
34850
95371
475722
422100
37972
38804
317423
57554
1410070
1938759
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>12.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>LONG-TERM DEBT</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Current portions of long-term debt consisted of the following as of September 30, 2012 and December 31, 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from Luotian Agricultural Development Bank</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 • Interest rate at
0.6700% per annum were due 12/11/2010
</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
57,367
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
57,066
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">                                                                                                                                           </p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
  
57,367
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
57,066
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Although the above loans are past due, the bank has not requested the Company to repay its loan.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Non-current portions of long-term debt consisted of the following as of September 30, 2012 and December 31, 2011:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from Deutsche Investitions-und</i>
<i>Entwicklungsgesellschaft mbH (“DEG”)</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 • Interest rate at
5.510% per annum due 9/16/2016
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
13,808,114
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
15,597,831
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from China Development Bank</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
• Interest rate at RMB benchmark loan interest rate plus
15% annum due 9/24/2015
</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4747,587
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
18,555,701
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
15,597,831
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">The Company’s loan with DEG will be repaid in semi-annual installments beginning September 15, 2012. The loan was collateralized with the following terms:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">(a.)</td>
<td align="left" width="90%">
Create and register a first ranking mortgage in the amount of about USD12,000,000
on its land and building in favor of DEG.
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">(b.)</td>
<td align="left" width="90%">
Undertake to provide a share pledge of Mr. Si Chen shares in the sponsor in the amount of about USD12,000,000
and being the majority shareholder in the sponsor in form and substance satisfactory to DEG
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">(c.)</td>
<td align="left" width="90%">
The total amount of the first ranking mortgage as indicated in the Loan Agreement (Article 12(1)(a)) and the value of the pledged shares of Mr. Si Chen (Loan Agreement (Article 12(1)(a))) should be at least USD24,000,000.
</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">(d.)</td>
<td align="left" width="90%">Undertake to provide a guarantee from the Shareholder in form and substance satisfactory to DEG.</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">As of September 30, 2012, the value of the pledged shares has not fulfilled the required amount; therefore, the borrower and sponsor are in breach of the loan agreement and security contracts. Despite these breaches, DEG has not accelerated the loan.</p>
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from Luotian Agricultural Development Bank</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 • Interest rate at
0.6700% per annum were due 12/11/2010
</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
57,367
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
57,066
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">                                                                                                                                           </p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
  
57,367
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
57,066
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
</table>
0.0067
57367
57066
57367
57066
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>12/31/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from Deutsche Investitions-und</i>
<i>Entwicklungsgesellschaft mbH (“DEG”)</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
 • Interest rate at
5.510% per annum due 9/16/2016
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
13,808,114
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
15,597,831
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Loans from China Development Bank</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
• Interest rate at RMB benchmark loan interest rate plus
15% annum due 9/24/2015
</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
4747,587
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
18,555,701
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
15,597,831
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
0.0551
13808114
15597831
0.15
4747587
0
18555701
15597831
12000000
12000000
24000000
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>13.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>CAPITALIZATION</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
Dating back to May 3, 2007, the Company underwent a reverse-merger and a concurrent financing transaction that resulted in
24,923,178
shares of outstanding common stock that remained unchanged until through December 31, 2007. In connection with the financing, the Company also issued
1,037,858
and
489,330
warrants to the PIPE investors and placement agent, respectively. During 2008, several holders of warrants issued in connection with the financing transaction exercised their rights to purchase shares at the prescribed exercise price. The holders of the warrants exercised the right to purchase a total of
360,207
shares; however, because the holders did not pay in cash for the warrants,
110,752
of those shares were cancelled as consideration in lieu of the warrant holders paying in cash. Ultimately,
249,455
of new shares were issued to those who exercised their warrant. The Company also made an adjustment to its outstanding share count for rounding errors as result of the split and reverse splits made at the time of the reverse merger. The number of shares in the adjustment was an addition of seven shares. The Company believes the adjustment of seven shares is immaterial to both prior and current earnings per share calculation. As detailed in the table below, the total number of outstanding shares at September 30, 2012 was
34,507,874.
</p>
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
During the year 2009, the Company issued
56,393
shares of stock to its employees and vendors and
5,011,169
shares to investors. The Company issued
1,334,573
stock options to employees on July 28, 2009;
1,753,909
shares of Series A warrants and
501,115
shares of Series B warrants were issued to investors on October 28, 2009.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
During the year 2010, the Company issued 2,000 shares to a service provider on February 10, 2010 and
81,155
warrants to various service providers on January 5, 2010. The Company issued to investors
3,440,800
shares at an agreed price of $2.80
per share for a PIPE financing on September 10, 2010. This financing brought $8,955,730
net proceeds to the Company. The Company issued
5,000
shares to its employee on September 23, 2010.
731,707
shares of restricted stock were issued to the owner of Shandong Greenpia, Mr. Ji Zhenwei on September 24, 2010 as part of acquisition cost.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
For the year 2010, the Company transferred
5,161,176
from retained earnings to additional paid up capital and
2,445,262
from retained earnings to statutory reserve. These transfers are to be used for future company development, recovery of losses and increase of capital, as approved, to expand production or operations.
</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The total number of shares issued and outstanding is
34,507,874
as of December 31, 2011. For the period ended December 31, 2011, the Company transferred
2,636,160
from retained earnings to statutory reserve. These transfers are to be used for future company development, recovery of losses and increase of capital, as approved, to expand production or operations.
</p>
<p align="center" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
American Lorain Corporation
<br/>
Capitalization Reconciliation Table
</p>
<div align="right">
<table border="1" cellpadding="3" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="95%">
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="right" nowrap="nowrap" width="13%">Par value authorized</td>
<td align="right" nowrap="nowrap" width="13%">Issuance date</td>
<td align="right" nowrap="nowrap" width="13%">Shares outstanding</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Common stock at 1/1/2009</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
200,000,000
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
25,172,640
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employees and vendors during 2009</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">Various dates</td>
<td align="right" valign="bottom" width="13%">
56,393
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to PIPE investors</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">10/28/2009</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
5,011,169
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to service provider during 2010</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">2/10/2010</td>
<td align="right" valign="bottom" width="13%">
2,000
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to PIPE investors</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">9/10/2010</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
3,440,800
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employee</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">9/23/2010</td>
<td align="right" valign="bottom" width="13%">
5,000
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued as acquisition consideration</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">9/24/2010</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
731,707
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to service provider during 2011</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">5/5/2011</td>
<td align="right" valign="bottom" width="13%">
25,000
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employees per stock incentive plan</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">7/20/2011</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
27,092
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employees per stock incentive plan</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">11/21/2011</td>
<td align="right" valign="bottom" width="13%">
36,073
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Common stock at 9/30/2012</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
34,507,874
</td>
</tr>
<tr valign="bottom">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<br/>
Warrants and options
</p>
</td>
<td align="center" nowrap="nowrap" width="13%">
Number of warrants
<br/>
or options
</td>
<td align="center" nowrap="nowrap" width="13%">
<br/>
Issuance date
</td>
<td align="center" nowrap="nowrap" width="13%">
<br/>
Expiration date
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Warrants issued to investors in 2007 PIPE</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
1,037,858
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">5/3/2007</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">5/2/2010</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Warrants issued to placement agent in 2007 PIPE</p>
</td>
<td align="right" valign="bottom" width="13%">
489,330
</td>
<td align="right" valign="bottom" width="13%">5/3/2007</td>
<td align="right" valign="bottom" width="13%">5/2/2010</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Employee stock options</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
1,334,573
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">7/28/2009</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">7/27/2014</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Warrants issued to investors in 2009 PIPE
<br/>
- Series A
</p>
</td>
<td align="right" valign="bottom" width="13%">
<br/>
1,753,909
</td>
<td align="right" valign="bottom" width="13%">
<br/>
10/28/2009
</td>
<td align="right" valign="bottom" width="13%">
<br/>
4/28/2015
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Warrants issued to investors in 2009 PIPE
<br/>
- Series B
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
<br/>
501,115
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
<br/>
10/28/2009
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
<br/>
10/28/2012
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Issued to service provider A during 2010</p>
</td>
<td align="right" valign="bottom" width="13%">
50,722
</td>
<td align="right" valign="bottom" width="13%">1/5/2010</td>
<td align="right" valign="bottom" width="13%">1/2/2014</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Issued to service provider B during 2010</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
20,289
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">1/5/2010</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">1/2/2014</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Issued to service provider C during 2010</p>
</td>
<td align="right" valign="bottom" width="13%">
10,144
</td>
<td align="right" valign="bottom" width="13%">1/5/2010</td>
<td align="right" valign="bottom" width="13%">1/2/2014</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total warrants and options</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
5,197,940
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
</tr>
</table>
</div>
<table border="1" cellpadding="3" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="95%">
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="right" nowrap="nowrap" width="13%">Par value authorized</td>
<td align="right" nowrap="nowrap" width="13%">Issuance date</td>
<td align="right" nowrap="nowrap" width="13%">Shares outstanding</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Common stock at 1/1/2009</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
200,000,000
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
25,172,640
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employees and vendors during 2009</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">Various dates</td>
<td align="right" valign="bottom" width="13%">
56,393
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to PIPE investors</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">10/28/2009</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
5,011,169
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to service provider during 2010</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">2/10/2010</td>
<td align="right" valign="bottom" width="13%">
2,000
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to PIPE investors</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">9/10/2010</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
3,440,800
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employee</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">9/23/2010</td>
<td align="right" valign="bottom" width="13%">
5,000
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued as acquisition consideration</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">9/24/2010</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
731,707
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to service provider during 2011</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">5/5/2011</td>
<td align="right" valign="bottom" width="13%">
25,000
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employees per stock incentive plan</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">7/20/2011</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
27,092
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">New shares issued to employees per stock incentive plan</p>
</td>
<td align="right" valign="bottom" width="13%"> </td>
<td align="right" valign="bottom" width="13%">11/21/2011</td>
<td align="right" valign="bottom" width="13%">
36,073
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Common stock at 9/30/2012</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
34,507,874
</td>
</tr>
<tr valign="bottom">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<br/>
Warrants and options
</p>
</td>
<td align="center" nowrap="nowrap" width="13%">
Number of warrants
<br/>
or options
</td>
<td align="center" nowrap="nowrap" width="13%">
<br/>
Issuance date
</td>
<td align="center" nowrap="nowrap" width="13%">
<br/>
Expiration date
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Warrants issued to investors in 2007 PIPE</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
1,037,858
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">5/3/2007</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">5/2/2010</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Warrants issued to placement agent in 2007 PIPE</p>
</td>
<td align="right" valign="bottom" width="13%">
489,330
</td>
<td align="right" valign="bottom" width="13%">5/3/2007</td>
<td align="right" valign="bottom" width="13%">5/2/2010</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Employee stock options</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
1,334,573
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">7/28/2009</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">7/27/2014</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Warrants issued to investors in 2009 PIPE
<br/>
- Series A
</p>
</td>
<td align="right" valign="bottom" width="13%">
<br/>
1,753,909
</td>
<td align="right" valign="bottom" width="13%">
<br/>
10/28/2009
</td>
<td align="right" valign="bottom" width="13%">
<br/>
4/28/2015
</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Warrants issued to investors in 2009 PIPE
<br/>
- Series B
</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
<br/>
501,115
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
<br/>
10/28/2009
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
<br/>
10/28/2012
</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Issued to service provider A during 2010</p>
</td>
<td align="right" valign="bottom" width="13%">
50,722
</td>
<td align="right" valign="bottom" width="13%">1/5/2010</td>
<td align="right" valign="bottom" width="13%">1/2/2014</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Issued to service provider B during 2010</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
20,289
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">1/5/2010</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">1/2/2014</td>
</tr>
<tr valign="top">
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Issued to service provider C during 2010</p>
</td>
<td align="right" valign="bottom" width="13%">
10,144
</td>
<td align="right" valign="bottom" width="13%">1/5/2010</td>
<td align="right" valign="bottom" width="13%">1/2/2014</td>
</tr>
<tr valign="top">
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Total warrants and options</p>
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%">
5,197,940
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="13%"> </td>
</tr>
</table>
200000000
25172640
56393
5011169
2000
3440800
5000
731707
25000
27092
36073
34507874
1037858
489330
1334573
1753909
501115
50722
20289
10144
5197940
24923178
1037858
489330
360207
110752
249455
34507874
56393
5011169
1334573
1753909
501115
81155
3440800
2.8
8955730
5000
731707
5161176
2445262
34507874
2636160
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>14.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>NON-CONTROLLING INTERESTS</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The non-controlling interest represents the
19.8% equity of Shandong Lorain held by the Shandong Economic Development Investment Corporation, which is a state-owned interest.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
</table>
0.198
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>15.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>SALES BY PRODUCT TYPE</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Sales by categories of product consisted of the following as of September 30, 2012 and 2011:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<i>
<u>Category</u>
</i>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Chestnut</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
62,947,404
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
57,238,463
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Convenience food</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
50,913,992
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
45,100,128
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Frozen food</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
22,069,023
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
19,479,905
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Total</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
135,930,419
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
121,818,496
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">Revenue by geography consisted of the following as of September 30, 2012 and 2011:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<i>
<u>Country</u>
</i>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Australia</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
88,290
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
362,673
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Belgium</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
3,521,931
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,635,002
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Canada</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
110,298
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">China</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
102,058,747
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
93,497,740
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Denmark</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
53,878
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
22,853
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">France</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,725,334
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,138,793
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Germany</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
1,096,314
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
1,330,082
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Hong Kong</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
92,710
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
385,454
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Indonesia</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
20,950
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Israel</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
153,294
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
238,921
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Japan</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
15,262,559
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
12,295,910
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Malaysia</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,390,051
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,518,689
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Netherlands</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
175,015
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
584,981
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Philippines</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
248,615
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Poland</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
213,769
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
145,061
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Portugal</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
710,427
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Singapore</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
668,390
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
557,151
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">South Korea</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
6,756,501
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,933,657
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Spain</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
194,521
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
712,327
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Sweden</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
33,045
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Taiwan</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
371,362
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,057,119
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Thailand</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
116,272
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">United Kingdom</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,068,084
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
2,583,897
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">United States</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
179,925
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
207,144
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Others</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
33,656
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Total</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
135,930,419
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
121,818,496
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<i>
<u>Category</u>
</i>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Chestnut</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
62,947,404
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
57,238,463
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Convenience food</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
50,913,992
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
45,100,128
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Frozen food</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
22,069,023
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
19,479,905
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Total</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
135,930,419
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
 
121,818,496
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
62947404
57238463
50913992
45100128
22069023
19479905
135930419
121818496
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<i>
<u>Country</u>
</i>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Australia</td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
88,290
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%">$</td>
<td align="right" bgcolor="#e6efff" width="12%">
 
362,673
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Belgium</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
3,521,931
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,635,002
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Canada</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
110,298
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">China</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
102,058,747
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
93,497,740
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Denmark</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
53,878
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
22,853
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">France</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,725,334
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,138,793
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Germany</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
1,096,314
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
1,330,082
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Hong Kong</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
92,710
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
385,454
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Indonesia</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="12%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
20,950
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Israel</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
153,294
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
238,921
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Japan</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
15,262,559
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
12,295,910
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Malaysia</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,390,051
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
1,518,689
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Netherlands</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
175,015
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
584,981
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Philippines</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
248,615
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Poland</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
213,769
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
145,061
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Portugal</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
710,427
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Singapore</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
668,390
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
557,151
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">South Korea</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
6,756,501
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
2,933,657
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Spain</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
194,521
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
712,327
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Sweden</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
33,045
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Taiwan</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
371,362
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,057,119
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Thailand</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
116,272
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">United Kingdom</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
1,068,084
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
2,583,897
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">United States</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
179,925
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
207,144
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">Others</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
33,656
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">Total</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
135,930,419
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
 
121,818,496
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
88290
362673
3521931
1635002
0
110298
102058747
93497740
53878
22853
1725334
1138793
1096314
1330082
92710
385454
20950
153294
238921
15262559
12295910
1390051
1518689
175015
584981
0
248615
213769
145061
710427
0
668390
557151
6756501
2933657
194521
712327
33045
0
371362
1057119
116272
0
1068084
2583897
179925
207144
0
33656
135930419
121818496
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>16.</b></td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>INCOME TAXES</b></p>
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
All of the Company’s operations are in the PRC, and in accordance with the relevant tax laws and regulations of PRC, the corporate income tax rate is 25%.</p>
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
The following tables provide the reconciliation of the differences between the statutory and effective tax expenses for the periods ended September 30, 2012 and 2011:</p>
</td>
</tr>
</table>
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td align="left" width="1%">
</td>
<td align="center" nowrap="nowrap" width="12%">
<i><u>9/30/2012</u> </i></td>
<td align="center" nowrap="nowrap" width="2%">
</td>
<td align="center" nowrap="nowrap" width="1%">
</td>
<td align="center" nowrap="nowrap" width="12%">
<i><u>9/30/2011</u> </i></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Income attributed to PRC</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
18,078,289</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
18,674,583</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Loss attributed to US*</p>
</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="right" valign="bottom" width="12%">
(517,568</td>
<td align="left" valign="bottom" width="2%">
)</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="right" valign="bottom" width="12%">
(683,860</td>
<td align="left" valign="bottom" width="2%">
)</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Income before tax</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
17,560,721</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
17,990,723</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td valign="bottom" width="1%">
</td>
<td valign="bottom" width="12%">
</td>
<td valign="bottom" width="2%">
</td>
<td valign="bottom" width="1%">
</td>
<td valign="bottom" width="12%">
</td>
<td valign="bottom" width="2%">
</td>
</tr>
<tr>
<td width="5%">
</td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%">
</td>
<td bgcolor="#e6efff" valign="bottom" width="12%">
</td>
<td bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%">
</td>
<td bgcolor="#e6efff" valign="bottom" width="12%">
</td>
<td bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td valign="bottom" width="1%">
</td>
<td valign="bottom" width="12%">
</td>
<td valign="bottom" width="2%">
</td>
<td valign="bottom" width="1%">
</td>
<td valign="bottom" width="12%">
</td>
<td valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
PRC Statutory Tax at 25% Rate</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,631,730</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,061,371</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Effect of tax exemption granted</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">
</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-</td>
<td align="left" valign="bottom" width="2%">
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">
</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-</td>
<td align="left" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Income tax</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,631,730</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,061,371</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr>
<td width="5%">
</td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td valign="bottom" width="1%">
</td>
<td valign="bottom" width="12%">
</td>
<td valign="bottom" width="2%">
</td>
<td valign="bottom" width="1%">
</td>
<td valign="bottom" width="12%">
</td>
<td valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i><u>Per Share Effect of Tax Exemption</u> </i></p>
</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="left" valign="bottom" width="12%">
</td>
<td align="left" valign="bottom" width="2%">
</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="left" valign="bottom" width="12%">
</td>
<td align="left" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<i><u>9/30/2012</u> </i></td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%">
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%">
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<i><u>9/30/2011</u> </i></td>
<td align="left" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">
$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Effect of tax exemption granted</p>
</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="right" valign="bottom" width="12%">
-</td>
<td align="left" valign="bottom" width="2%">
</td>
<td align="left" valign="bottom" width="1%">
</td>
<td align="right" valign="bottom" width="12%">
-</td>
<td align="left" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Weighted-Average Shares Outstanding Basic</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
34,507,874</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
34,440,483</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Per share effect</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">
$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
-</td>
<td align="left" valign="bottom" width="2%">
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">
$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
-</td>
<td align="left" valign="bottom" width="2%">
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows for the periods ended September 30, 2012 and 2011:</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
</p>
</td>
<td align="left" width="1%">
</td>
<td align="center" width="12%">
<i><u>2012</u> </i></td>
<td align="center" width="2%">
</td>
<td align="center" width="1%">
</td>
<td align="center" width="12%">
<i><u>2011</u> </i></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
U.S. federal statutory income tax rate</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
35%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
35%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Lower rates in PRC, net</p>
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
-10%</td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
-10%</td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Tax holiday for foreign investments</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
1.38%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%">
</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
-2.43%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
The Company’s effective tax rate</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">
</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%">
26.38%</td>
<td align="left" width="2%">
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%">
</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%">
22.57%</td>
<td align="left" width="2%">
</td>
</tr>
</table>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
Effective January 1, 2008, the PRC government implemented a new 25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as “two-year exemption followed by three-year half exemption” hitherto enjoyed by tax payers. As a result of the new tax law of a standard 25% tax rate, tax holidays were terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises already started tax holidays before January 1, 2008, to continue enjoying the tax holidays until being fully utilized.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company has accrued a deferred tax asset as a result of its net operating loss in 2009 because the Company planned to setup operations in the United States. The company anticipates that the operations within the United States will generate income in the future so that it will be able to take full advantage of the accrued asset. Accordingly the Company has not provided a valuation allowances for the accrued tax asset.</p>
<p align="justify" style="margin-left: 5%; font-family: times new roman,times,serif; font-size: 10pt;">
The Company’s has detailed the tax rates for its subsidiaries for 2012 and 2011 in the following table.</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Income Tax Rate</p>
</td>
<td align="left" width="1%">
</td>
<td align="center" width="12%">
<i><u>2012</u> </i></td>
<td align="center" width="2%">
</td>
<td align="center" width="1%">
</td>
<td align="center" width="12%">
<i><u>2011</u> </i></td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
International Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
0%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
0%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Junan Hongran</p>
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
25%</td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
25%</td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Luotian Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
25%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
25%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Beijing Lorain</p>
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
25%</td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
15%</td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Shandong Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
25%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
25%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Shandong Greenpia</p>
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
25%</td>
<td align="left" width="2%">
</td>
<td align="left" width="1%">
</td>
<td align="right" width="12%">
25%</td>
<td align="left" width="2%">
</td>
</tr>
<tr valign="top">
<td width="5%">
</td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
Dongguan Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
25%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
<td align="left" bgcolor="#e6efff" width="1%">
</td>
<td align="right" bgcolor="#e6efff" width="12%">
25%</td>
<td align="left" bgcolor="#e6efff" width="2%">
</td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="12%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Income attributed to PRC</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
18,078,289
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
18,674,583
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Loss attributed to US*</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(517,568
</td>
<td align="left" valign="bottom" width="2%">)</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
(683,860
</td>
<td align="left" valign="bottom" width="2%">)</td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Income before tax</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
17,560,721
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
17,990,723
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
PRC Statutory Tax at
25% Rate
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,631,730
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
4,061,371
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Effect of tax exemption granted</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Income tax</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
4,631,730
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%">
 
4,061,371
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="12%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>
<u>Per Share Effect of Tax Exemption</u>
</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="12%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<i>
<u>9/30/2012</u>
</i>
</td>
<td align="center" nowrap="nowrap" valign="bottom" width="2%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="1%"> </td>
<td align="center" nowrap="nowrap" valign="bottom" width="12%">
<i>
<u>9/30/2011</u>
</i>
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Effect of tax exemption granted</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="12%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Weighted-Average Shares Outstanding Basic</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">
34,440,483
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Per share effect</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" valign="bottom" width="12%">
 
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
18078289
18674583
-517568
-683860
17560721
17990723
0.25
4631730
4061371
0
0
4631730
4061371
0
0
34507874
34440483
0
0
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="left" width="1%"> </td>
<td align="center" width="12%">
<i>
<u>2012</u>
</i>
</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="12%">
<i>
<u>2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">U.S. federal statutory income tax rate</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
35%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
35%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Lower rates in PRC, net</p>
</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
-10%
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
-10%
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Tax holiday for foreign investments</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
1.38%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" width="12%">
-2.43%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">The Company’s effective tax rate</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%">
26.38%
</td>
<td align="left" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 3px double" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 3px double" width="12%">
22.57%
</td>
<td align="left" width="2%"> </td>
</tr>
</table>
0.35
0.35
-0.1
-0.1
0.0138
0.0243
0.2638
0.2257
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Income Tax Rate</p>
</td>
<td align="left" width="1%"> </td>
<td align="center" width="12%">
<i>
<u>2012</u>
</i>
</td>
<td align="center" width="2%"> </td>
<td align="center" width="1%"> </td>
<td align="center" width="12%">
<i>
<u>2011</u>
</i>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">International Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
0%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Junan Hongran</p>
</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
25%
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
25%
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Luotian Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
25%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
25%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Beijing Lorain</p>
</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
25%
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
15%
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
25%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
25%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Shandong Greenpia</p>
</td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
25%
</td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="right" width="12%">
25%
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Dongguan Lorain</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
25%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="right" bgcolor="#e6efff" width="12%">
25%
</td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
</table>
0
0
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
0.25
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>17.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>EARNINGS PER SHARE</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">Components of basic and diluted earnings per share were as follows:</p>
</td>
</tr>
</table>
<br/>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>
3
months ended
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>
9
months ended
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>September 30</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>September 30</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2012</u>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2011</u>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2012</u>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2011</u>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Basic Earnings Per Share Numerator</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">   Net Income</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
12,165,013
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
12,760,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">   Income Available to Common Stockholders</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
12,165,013
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,760,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Diluted Earnings Per Share Numerator</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">   Income Available to Common Stockholders</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,165,013
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,760,027
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Income Available to Common Stockholders on Converted Basis</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,165,013
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,760,027
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Original Shares:</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Additions from Actual Events</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Issuance of Common Stock</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,466,144
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,440,483
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Basic Weighted Average Shares Outstanding</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,466,144
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,440,483
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Dilutive Shares:</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Additions from Potential Events</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Exercise of Investor Warrants & Placement Agent</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Warrants</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">- Exercise of Employee & Director Stock Options</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
139,524
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
314,068
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Diluted Weighted Average Shares Outstanding:</p>
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,605,668
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,754,552
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Earnings Per Share</p>
</td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#E6EFFF">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Basic</p>
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
 
0.15
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
  
           0.21
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
0.35
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
0.37
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Diluted</p>
</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
 
0.15
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
  
           0.20
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
0.35
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
0.37
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#E6EFFF">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Weighted Average Shares Outstanding</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#E6EFFF">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Basic</p>
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,466,144
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,440,483
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Diluted</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,605,668
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,754,552
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>
3
months ended
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>
9
months ended
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>September 30</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" colspan="4" nowrap="nowrap" width="23%">
<b>September 30</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2012</u>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2011</u>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2012</u>
</b>
</td>
<td align="center" nowrap="nowrap" width="2%"> </td>
<td align="center" nowrap="nowrap" width="1%"> </td>
<td align="center" nowrap="nowrap" width="10%">
<b>
<u>2011</u>
</b>
</td>
<td align="left" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Basic Earnings Per Share Numerator</p>
</td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
<td align="left" bgcolor="#e6efff" width="1%"> </td>
<td align="left" bgcolor="#e6efff" width="10%"> </td>
<td align="left" bgcolor="#e6efff" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">   Net Income</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
12,165,013
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
12,760,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">   Income Available to Common Stockholders</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
12,165,013
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,760,027
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Diluted Earnings Per Share Numerator</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">   Income Available to Common Stockholders</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,165,013
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,760,027
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Income Available to Common Stockholders on Converted Basis</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
5,252,569
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
 
7,071,288
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,165,013
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
12,760,027
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
<td valign="bottom" width="1%"> </td>
<td valign="bottom" width="10%"> </td>
<td valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Original Shares:</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Additions from Actual Events</i>
</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Issuance of Common Stock</p>
</td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,466,144
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,440,483
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Basic Weighted Average Shares Outstanding</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,466,144
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
34,440,483
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Dilutive Shares:</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">
<i>Additions from Potential Events</i>
</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Exercise of Investor Warrants & Placement Agent</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Warrants</p>
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="10%"> </td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">- Exercise of Employee & Director Stock Options</p>
</td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
139,524
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
-
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td>
<td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%">
314,068
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#e6efff">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Diluted Weighted Average Shares Outstanding:</p>
</td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,605,668
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#e6efff" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" width="10%">
34,754,552
</td>
<td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Earnings Per Share</p>
</td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
<td align="left" width="1%"> </td>
<td align="left" width="10%"> </td>
<td align="left" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#E6EFFF">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Basic</p>
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
 
0.15
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
  
           0.21
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
0.35
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%">$</td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
0.37
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Diluted</p>
</td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
 
0.15
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
  
           0.20
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
0.35
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%">$</td>
<td align="right" valign="bottom" width="10%">
0.37
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr>
<td width="5%"> </td>
<td bgcolor="#E6EFFF">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;"> </p>
</td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="10%"> </td>
<td bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">Weighted Average Shares Outstanding</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="left" valign="bottom" width="10%"> </td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left" bgcolor="#E6EFFF">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Basic</p>
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,466,144
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="1%"> </td>
<td align="right" bgcolor="#E6EFFF" valign="bottom" width="10%">
34,440,483
</td>
<td align="left" bgcolor="#E6EFFF" valign="bottom" width="2%"> </td>
</tr>
<tr valign="top">
<td width="5%"> </td>
<td align="left">
<p style="text-indent: -15pt; margin-left: 15pt; font-family: times new roman,times,serif; font-size: 10pt;">-Diluted</p>
</td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,605,668
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,507,874
</td>
<td align="left" valign="bottom" width="2%"> </td>
<td align="left" valign="bottom" width="1%"> </td>
<td align="right" valign="bottom" width="10%">
34,754,552
</td>
<td align="left" valign="bottom" width="2%"> </td>
</tr>
</table>
5252569
7071288
12165013
12760027
5252569
7071288
12165013
12760027
5252569
7071288
12165013
12760027
5252569
7071288
12165013
12760027
34507874
34466144
34507874
34440483
34507874
34466144
34507874
34440483
0
139524
0
314068
34507874
34605668
34507874
34754552
0.15
160
0.35
0.37
0.15
160
0.35
0.37
34507874
34466144
34507874
34440483
34507874
34605668
34507874
34754552
<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%">
<tr>
<td valign="top" width="5%">
<b>18.</b>
</td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
<b>SHARE BASED COMPENSATION</b>
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
On July 27, 2009, the Company’s Board of Directors adopted the American Lorain Corporation 2009 Incentive Stock Plan (the “Plan”). The Plan provides that the maximum number of shares of the Company’s common stock that may be issued under the Plan is
2,500,000
shares. The Company’s employees, directors, and service providers are eligible to participate in the Plan.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
For the year ended December 31, 2009, the Company recorded a total of $166,346
of shared based compensation expense. The Company issued warrants that upon exercise would result in the issuance of
1,334,573
common shares. These stock options vest over three years, where
33.33% vest annually. The expense related to the stock options was $107,375. The Company also recorded expense of $58,971
for the issuance of
56,393
common shares to participants, respectively. The common shares vested immediately. Given the materiality and nature of share based compensation, the entire expense has been recorded as general and administrative expenses. For the year ended December 31, 2010, the Company recorded a total of $890,209
stock option and its related general and administrative expenses.
</p>
</td>
</tr>
<tr>
<td width="5%"> </td>
<td> </td>
</tr>
<tr>
<td width="5%"> </td>
<td>
<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;margin:inherit;">
During the period ended September 30, 2012 and December 31, 2011, the Company recorded a total of $380,504
and $644,243
stock option and its related general and administrati