0001213900-12-005241.txt : 20120913 0001213900-12-005241.hdr.sgml : 20120913 20120913061157 ACCESSION NUMBER: 0001213900-12-005241 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20120630 FILED AS OF DATE: 20120913 DATE AS OF CHANGE: 20120913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: China Carbon Graphite Group, Inc. CENTRAL INDEX KEY: 0001284450 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 980550699 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 333-114564 FILM NUMBER: 121089010 BUSINESS ADDRESS: STREET 1: C/O XINGHE XINGYONG CARBON CO., LTD. STREET 2: 787 XICHENG WAI, CHENGGUANTOWN CITY: XINGHE COUNTY, INNER MONGOLIA, STATE: F4 ZIP: 00000 BUSINESS PHONE: (415) 389-1625 MAIL ADDRESS: STREET 1: C/O XINGHE XINGYONG CARBON CO., LTD. STREET 2: 787 XICHENG WAI, CHENGGUANTOWN CITY: XINGHE COUNTY, INNER MONGOLIA, STATE: F4 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: CHINA CARBON GRAPHITE GROUP, INC. DATE OF NAME CHANGE: 20080213 FORMER COMPANY: FORMER CONFORMED NAME: ACHIEVERS MAGAZINE INC DATE OF NAME CHANGE: 20040322 10-Q/A 1 f10q0612a1_chinacarbon.htm AMENDED QUARTERLY REPORT f10q0612a1_chinacarbon.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
Amendment No. 1

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012
or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                                                to                     
 
Commission File Number: 333-114564

China Carbon Graphite Group, Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
 
98-0550699
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
c/o Xinghe Yongle Carbon Co., Ltd.
787 Xicheng Wai
Chengguantown
Xinghe County
Inner Mongolia, China
  
N/A
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (86) 474-720-9723

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes   x    No   o
 
Indicate by a check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   x    No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  o
Accelerated Filer  o
Non-Accelerated Filer  o
Smaller Reporting Company  x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.   Yes   o    No   x

There were 24,231,708 shares of the Registrant’s Common Stock outstanding at August 14, 2012.
 
 
 
 
 
Explanatory Note

China Carbon Graphite Group, Inc.  (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (the “Amendment”) to the Company’s quarterly report on Form 10-Q for the period ended June 30, 2012 (the “Form 10-Q”), filed with the Securities and Exchange Commission on August 14, 2012 (the “Original Filing Date”), solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 consists of the following materials from the Company’s Form 10-Q, formatted in XBRL (eXtensible Business Reporting Language):

 
101.INS
XBRL Instance Document
 
101.SCH
XBRL Taxonomy Schema
 
101.CAL
XBRL Taxonomy Calculation Linkbase
 
101.DEF
XBRL Taxonomy Definition Linkbase
 
101.LAB
XBRL Taxonomy Label Linkbase
 
101.PRE
XBRL Taxonomy Presentation Linkbase

No other changes have been made to the Form 10-Q. This Amendment speaks as of the Original Filing Date, does not reflect events that may have occurred subsequent to the Original Filing Date, and does not modify or update in any way disclosures made in the Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files attached as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 
 
 
 
Item 6.      Exhibits

Exhibit Number
  
Exhibit Title
31.1*
  
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2*
  
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1*
  
Section 1350 Certification of Chief Executive Officer
32.2*  
Section 1350 Certification of Chief Financial Officer
101.INS **
  
XBRL Instance Document
101.SCH **
  
XBRL Taxonomy Schema
101.CAL **
  
XBRL Taxonomy Calculation Linkbase
101.DEF **
  
XBRL Taxonomy Definition Linkbase
101.LAB **
  
XBRL Taxonomy Label Linkbase
101.PRE **
  
XBRL Taxonomy Presentation Linkbase
 
* Previously filed or furnished, as applicable, with the Company’s quarterly report on Form 10-Q for the period ended June 30, 2012 (the “Form 10-Q”), filed with the Securities and Exchange Commission on August 14, 2012.
** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
 
 
 
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
 
 
CHINA CARBON GRAPHITE GROUP, INC.
     
Date: September 11, 2012
By:
/s/ Donghai Yu
   
Donghai Yu
   
Chief Executive Officer
 
Date: September 11, 2012
By:
/s/ Zhenfang Yang
   
Zhenfang Yang 
   
Chief Financial Officer
 

 EX-101.INS 2 chgi-20120630.xml 0001284450 chgi:SincereInvestmentPtcLtdMember 2007-12-17 0001284450 chgi:ExclusiveTechnicalConsultingAndServicesAgreementMember 2007-01-01 2007-12-31 0001284450 chgi:OptionAgreementMember 2007-01-01 2007-12-31 0001284450 2008-01-22 0001284450 2010-01-13 0001284450 2010-03-29 0001284450 2010-04-01 0001284450 chgi:AgreementOneMember 2010-04-02 2010-04-30 0001284450 2010-12-01 2010-12-31 0001284450 us-gaap:SeriesBPreferredStockMember 2010-12-01 2010-12-31 0001284450 chgi:AgreementTwoMember 2010-12-01 2010-12-31 0001284450 chgi:FirstTrustGroupIncMember 2011-01-19 0001284450 chgi:MaximGroupLlcMember 2011-01-24 0001284450 chgi:SilverRockMember 2011-02-07 0001284450 chgi:AgreementOneMember 2011-01-01 2011-03-31 0001284450 2011-04-01 2011-06-30 0001284450 us-gaap:UseRightsMember 2011-04-01 2011-06-30 0001284450 us-gaap:WarrantMember 2011-04-01 2011-06-30 0001284450 chgi:AgreementOneMember 2011-04-01 2011-06-30 0001284450 chgi:AgreementTwoMember 2011-04-01 2011-06-30 0001284450 2011-01-01 2011-06-30 0001284450 chgi:CustomerOneMember 2011-01-01 2011-06-30 0001284450 chgi:CustomerTwoMember 2011-01-01 2011-06-30 0001284450 chgi:SupplierOneMember 2011-01-01 2011-06-30 0001284450 us-gaap:UseRightsMember 2011-01-01 2011-06-30 0001284450 chgi:SupplierTwoMember 2011-01-01 2011-06-30 0001284450 chgi:SupplierThreeMember 2011-01-01 2011-06-30 0001284450 us-gaap:WarrantMember 2011-01-01 2011-06-30 0001284450 chgi:AgreementOneMember 2011-01-01 2011-06-30 0001284450 chgi:AgreementTwoMember 2011-01-01 2011-06-30 0001284450 2011-07-14 0001284450 2011-11-01 2011-11-29 0001284450 us-gaap:DirectorMember 2011-11-01 2011-11-29 0001284450 chgi:EmployeeMember 2011-11-01 2011-11-29 0001284450 2011-01-01 2011-12-31 0001284450 us-gaap:SeriesBPreferredStockMember 2011-01-01 2011-12-31 0001284450 chgi:TwoThousandSevenWarrantsMember 2011-01-01 2011-12-31 0001284450 chgi:TwoThousandNineWarrantsMember 2011-01-01 2011-12-31 0001284450 chgi:TwoThousandNineSeriesBWarrantsMember 2011-01-01 2011-12-31 0001284450 chgi:TwoThousandTenSeriesBWarrantsMember 2011-01-01 2011-12-31 0001284450 2011-12-31 0001284450 chgi:CustomerOneMember 2011-12-31 0001284450 chgi:CustomerTwoMember 2011-12-31 0001284450 us-gaap:BuildingMember 2011-12-31 0001284450 chgi:TwoThousandNineWarrantsMember 2011-12-31 0001284450 us-gaap:MachineryAndEquipmentMember 2011-12-31 0001284450 chgi:TwoThousandNineSeriesBWarrantsMember 2011-12-31 0001284450 us-gaap:VehiclesMember 2011-12-31 0001284450 chgi:TwoThousandTenSeriesBWarrantsMember 2011-12-31 0001284450 chgi:TwoThousandSevenWarrantsMember 2011-12-31 0001284450 chgi:HuaxiaBankMember chgi:JuneFourteenTwoThousandElevenDueJuneFourteenTwoThousandTwelveMember chgi:AnnualInterestRateOfEightPointTwoHundredThreePercentMember us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2011-12-31 0001284450 chgi:ChinaEverbrightBankMember chgi:JulyElevenTwoThousandElevenDueJulyElevenTwoThousandTwelveMember chgi:AnnualInterestRateOfEightPointFiveHundredTwentyEightPercentMember us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2011-12-31 0001284450 us-gaap:SeriesAPreferredStockMember 2011-12-31 0001284450 chgi:ChinaConstructionBankMember chgi:JanuaryTenTwoThousandTwelveDueJanuaryElevenTwoThousandThirteenMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2011-12-31 0001284450 chgi:CreditUnionMember chgi:FebruaryOneTwoThousandElevenDueAugustTwoThousandTwelveMember chgi:AnnualInterestRateOfThirteenPointSixtySixPercentMember chgi:MajorShareholdersWifeMember 2011-12-31 0001284450 chgi:ChinaConstructionBankMember chgi:AugustTwentySevenTwoThousandElevenDueAugustTwentyEightTwoThousandTwelveMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:UseRightsMember 2011-12-31 0001284450 chgi:ChinaConstructionBankMember chgi:AugustThirteenTwoThousandElevenDueAugustFourteenTwoThousandTwelveMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:UseRightsMember 2011-12-31 0001284450 chgi:ChinaConstructionBankMember chgi:JuneSixTwoThousandTwelveDueJuneFiveTwoThousandThirteenMember chgi:AnnualInterestRateOfNinePointOneHundredEightyPercentMember us-gaap:UseRightsMember 2011-12-31 0001284450 chgi:ChinaConstructionBankMember chgi:SeptemberTwentySixTwoThousandElevenDueSeptemberTwentySevenTwoThousandTwelveMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:UseRightsMember 2011-12-31 0001284450 chgi:JulyElevenTwoThousandElevenDueJulyElevenTwoThousandTwelveMember chgi:ChinaEverbrightBankMember 2011-12-31 0001284450 chgi:JanuaryTenTwoThousandTwelveDueJanuaryElevenTwoThousandThirteenMember chgi:ChinaConstructionBankMember 2011-12-31 0001284450 chgi:AugustTwentySevenTwoThousandElevenDueAugustTwentyEightTwoThousandTwelveMember chgi:ChinaConstructionBankMember 2011-12-31 0001284450 chgi:AugustThirteenTwoThousandElevenDueAugustFourteenTwoThousandTwelveMember chgi:ChinaConstructionBankMember 2011-12-31 0001284450 chgi:JuneSixTwoThousandTwelveDueJuneFiveTwoThousandThirteenMember chgi:ChinaConstructionBankMember 2011-12-31 0001284450 chgi:SeptemberTwentySixTwoThousandElevenDueSeptemberTwentySevenTwoThousandTwelveMember chgi:ChinaConstructionBankMember 2011-12-31 0001284450 chgi:JuneFourteenTwoThousandElevenDueJuneFourteenTwoThousandTwelveMember chgi:HuaxiaBankMember 2011-12-31 0001284450 chgi:FebruaryOneTwoThousandElevenDueAugustTwoThousandTwelveMember chgi:CreditUnionMember 2011-12-31 0001284450 chgi:ConstructionOfFactoryMember 2011-12-31 0001284450 us-gaap:LandImprovementsMember 2011-12-31 0001284450 2012-01-12 0001284450 2012-03-08 0001284450 2012-01-01 2012-03-31 0001284450 chgi:TwoThousandNineWarrantsMember 2012-01-01 2012-03-31 0001284450 chgi:TwoThousandNineSeriesBWarrantsMember 2012-01-01 2012-03-31 0001284450 chgi:TwoThousandTenSeriesBWarrantsMember 2012-01-01 2012-03-31 0001284450 chgi:TwoThousandSevenWarrantsMember 2012-01-01 2012-03-31 0001284450 2012-03-31 0001284450 2012-04-10 0001284450 chgi:AgreementThreeMember 2012-04-01 2012-04-30 0001284450 2012-05-09 0001284450 2012-04-01 2012-06-30 0001284450 us-gaap:UseRightsMember 2012-04-01 2012-06-30 0001284450 chgi:TwoThousandNineWarrantsMember 2012-04-01 2012-06-30 0001284450 chgi:TwoThousandNineSeriesBWarrantsMember 2012-04-01 2012-06-30 0001284450 chgi:TwoThousandTenSeriesBWarrantsMember 2012-04-01 2012-06-30 0001284450 chgi:TwoThousandSevenWarrantsMember 2012-04-01 2012-06-30 0001284450 us-gaap:WarrantMember 2012-04-01 2012-06-30 0001284450 chgi:AgreementOneMember 2012-04-01 2012-06-30 0001284450 chgi:AgreementTwoMember 2012-04-01 2012-06-30 0001284450 chgi:AgreementThreeMember 2012-04-01 2012-06-30 0001284450 chgi:AgreementFourMember 2012-04-01 2012-06-30 0001284450 2012-01-01 2012-06-30 0001284450 us-gaap:SeriesBPreferredStockMember 2012-01-01 2012-06-30 0001284450 chgi:CustomerOneMember 2012-01-01 2012-06-30 0001284450 chgi:CustomerTwoMember 2012-01-01 2012-06-30 0001284450 chgi:SupplierOneMember 2012-01-01 2012-06-30 0001284450 us-gaap:UseRightsMember 2012-01-01 2012-06-30 0001284450 chgi:TwoThousandSevenWarrantsMember 2012-01-01 2012-06-30 0001284450 chgi:TwoThousandNineWarrantsMember 2012-01-01 2012-06-30 0001284450 chgi:TwoThousandNineSeriesBWarrantsMember 2012-01-01 2012-06-30 0001284450 chgi:TwoThousandTenSeriesBWarrantsMember 2012-01-01 2012-06-30 0001284450 us-gaap:LandMember 2012-01-01 2012-06-30 0001284450 chgi:TwoThousandFiftyTwoMember 2012-01-01 2012-06-30 0001284450 us-gaap:WarrantMember 2012-01-01 2012-06-30 0001284450 chgi:TwoThousandFiftyThreeMember 2012-01-01 2012-06-30 0001284450 us-gaap:BuildingMember 2012-01-01 2012-06-30 0001284450 chgi:SupplierTwoMember 2012-01-01 2012-06-30 0001284450 chgi:SupplierThreeMember 2012-01-01 2012-06-30 0001284450 us-gaap:WarrantMember 2012-01-01 2012-06-30 0001284450 us-gaap:MachineryAndEquipmentMember 2012-01-01 2012-06-30 0001284450 us-gaap:AutomobilesMember 2012-01-01 2012-06-30 0001284450 chgi:SupplierFourMember 2012-01-01 2012-06-30 0001284450 chgi:ConstructionOfFactoryMember 2012-01-01 2012-06-30 0001284450 us-gaap:LandImprovementsMember 2012-01-01 2012-06-30 0001284450 chgi:AgreementOneMember 2012-01-01 2012-06-30 0001284450 chgi:AgreementTwoMember 2012-01-01 2012-06-30 0001284450 chgi:AgreementThreeMember 2012-01-01 2012-06-30 0001284450 chgi:AgreementFourMember 2012-01-01 2012-06-30 0001284450 2012-06-30 0001284450 us-gaap:SeriesBPreferredStockMember 2012-06-30 0001284450 chgi:CustomerOneMember 2012-06-30 0001284450 chgi:CustomerTwoMember 2012-06-30 0001284450 us-gaap:BuildingMember 2012-06-30 0001284450 chgi:TwoThousandNineWarrantsMember 2012-06-30 0001284450 us-gaap:MachineryAndEquipmentMember 2012-06-30 0001284450 chgi:TwoThousandNineSeriesBWarrantsMember 2012-06-30 0001284450 us-gaap:VehiclesMember 2012-06-30 0001284450 chgi:TwoThousandTenSeriesBWarrantsMember 2012-06-30 0001284450 chgi:TwoThousandSevenWarrantsMember 2012-06-30 0001284450 chgi:HuaxiaBankMember chgi:JuneFourteenTwoThousandElevenDueJuneFourteenTwoThousandTwelveMember chgi:AnnualInterestRateOfEightPointTwoHundredThreePercentMember us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2012-06-30 0001284450 chgi:ChinaEverbrightBankMember chgi:JulyElevenTwoThousandElevenDueJulyElevenTwoThousandTwelveMember chgi:AnnualInterestRateOfEightPointFiveHundredTwentyEightPercentMember us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2012-06-30 0001284450 us-gaap:SeriesAPreferredStockMember 2012-06-30 0001284450 chgi:ChinaConstructionBankMember chgi:JanuaryTenTwoThousandTwelveDueJanuaryElevenTwoThousandThirteenMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2012-06-30 0001284450 chgi:CreditUnionMember chgi:FebruaryOneTwoThousandElevenDueAugustTwoThousandTwelveMember chgi:AnnualInterestRateOfThirteenPointSixtySixPercentMember chgi:MajorShareholdersWifeMember 2012-06-30 0001284450 us-gaap:FairValueInputsLevel2Member 2012-06-30 0001284450 us-gaap:FairValueInputsLevel3Member 2012-06-30 0001284450 us-gaap:FairValueInputsLevel1Member 2012-06-30 0001284450 us-gaap:WarrantMember 2012-06-30 0001284450 chgi:ChinaConstructionBankMember chgi:AugustTwentySevenTwoThousandElevenDueAugustTwentyEightTwoThousandTwelveMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:UseRightsMember 2012-06-30 0001284450 chgi:ChinaConstructionBankMember chgi:AugustThirteenTwoThousandElevenDueAugustFourteenTwoThousandTwelveMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:UseRightsMember 2012-06-30 0001284450 chgi:ChinaConstructionBankMember chgi:JuneSixTwoThousandTwelveDueJuneFiveTwoThousandThirteenMember chgi:AnnualInterestRateOfNinePointOneHundredEightyPercentMember us-gaap:UseRightsMember 2012-06-30 0001284450 chgi:ChinaConstructionBankMember chgi:SeptemberTwentySixTwoThousandElevenDueSeptemberTwentySevenTwoThousandTwelveMember chgi:AnnualInterestRateOfSixPointFiveSixPercentMember us-gaap:UseRightsMember 2012-06-30 0001284450 chgi:JulyElevenTwoThousandElevenDueJulyElevenTwoThousandTwelveMember chgi:ChinaEverbrightBankMember 2012-06-30 0001284450 chgi:JanuaryTenTwoThousandTwelveDueJanuaryElevenTwoThousandThirteenMember chgi:ChinaConstructionBankMember 2012-06-30 0001284450 chgi:AugustTwentySevenTwoThousandElevenDueAugustTwentyEightTwoThousandTwelveMember chgi:ChinaConstructionBankMember 2012-06-30 0001284450 chgi:AugustThirteenTwoThousandElevenDueAugustFourteenTwoThousandTwelveMember chgi:ChinaConstructionBankMember 2012-06-30 0001284450 chgi:JuneSixTwoThousandTwelveDueJuneFiveTwoThousandThirteenMember chgi:ChinaConstructionBankMember 2012-06-30 0001284450 chgi:SeptemberTwentySixTwoThousandElevenDueSeptemberTwentySevenTwoThousandTwelveMember chgi:ChinaConstructionBankMember 2012-06-30 0001284450 chgi:JuneFourteenTwoThousandElevenDueJuneFourteenTwoThousandTwelveMember chgi:HuaxiaBankMember 2012-06-30 0001284450 chgi:FebruaryOneTwoThousandElevenDueAugustTwoThousandTwelveMember chgi:CreditUnionMember 2012-06-30 0001284450 chgi:ConstructionOfFactoryMember 2012-06-30 0001284450 us-gaap:LandImprovementsMember 2012-06-30 0001284450 chgi:AgreementThreeMember 2012-06-30 0001284450 chgi:AgreementFourMember 2012-06-30 0001284450 chgi:AgreementFourMember 2012-06-01 2012-06-30 0001284450 2012-08-14 0001284450 2010-12-31 0001284450 2011-06-30 0001284450 us-gaap:WarrantMember 2011-12-31 0001284450 us-gaap:WarrantMember 2012-06-30 xbrli:shares iso4217:USD iso4217:USDxbrli:shares xbrli:pure iso4217:CNY China Carbon Graphite Group, Inc. 0001284450 10-Q 2012-06-30 false 2012 Q2 --12-31 Smaller Reporting Company 24231708 521450 1350890 296312 4071154 11694820 10703200 12541321 13095700 188880 444895 5921970 2410409 37430248 44151224 452730 234917 513000 544646 69264419 72935881 36719595 35742753 6220451 3427962 2792489 7518640 3607217 3911423 10699059 10359654 122903524 126556928 1340498 3866990 1360989 1552654 45488600 5509000 6296000 4722000 1259200 6296000 6296000 6296000 8814400 38720400 6296000 4722000 6296000 6296000 6296000 8814400 16763100 17786200 3032671 2951364 185610 28099 37742 68013957 65100960 5542855 5432675 174805 208605 73731617 75432760 511332 366972 22981 24231 17054045 18044688 7943542 7933485 23640007 24754792 48660575 50757196 122903524 126556928 2790662 2790662 2505867 0.001 0.001 0.001 20000000 3000000 3000000 426110 305810 426110 305810 0.001 0.001 0.001 100000000 100000000 100000000 9388172 22981408 24231708 22981408 24231708 12145024 23608359 11877543 21938753 9456762 18340023 8985125 16128731 2688262 5268336 2892418 5810022 57312 107175 29152 75950 1049666 2603728 1170462 2021861 47152 93754 46826 103830 1154130 2804657 1246440 2201641 1534132 2463679 1645978 3608381 693274 1406804 1220173 2449918 21 43 15670 76550 215190 215190 26540 82692 70934 345784 43290 19555 445763 65929 319045 39876 20913 -33800 -651829 -1248328 -774667 -2483953 882303 1215351 871311 1124428 6985 -17882 4625 9643 875318 1233233 866686 1114785 553200 821448 -433954 -10057 1435503 2036799 437357 1114371 0.04 0.05 0.04 0.05 0.04 0.05 0.04 0.05 22350263 21993435 23948851 23632248 23194542 22671285 24254661 23938058 870310 1360692 623450 374333 82692 -33800 4308178 557196 -173556 257316 1107235 31808 889008 -3529409 4121825 6755136 -226703 2719 -141785 2684917 2807114 192640 1476262 -444341 90132 353241 -3167845 1827804 27088 37756 2459521 1109403 -2486609 -1147159 472000 371714 32996 11176300 11074000 6047450 17876600 9162944 -145000 -6491440 996660 10410800 17876600 16848300 9386928 152980 39436 42368 -8005 -4185 3774842 829440 1406804 1643371 753 144 14993 1787600 153800 <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(1)&#160;Organization and Business</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">China Carbon Graphite Group, Inc. (the &#8220;Company&#8221;), through its subsidiaries, is engaged in the manufacture of graphite-based products in the People&#8217;s Republic of China (&#8220;China&#8221; or the &#8220;PRC&#8221;).&#160;The Company&#8217;s products are used in the manufacturing process of other products, particularly non-ferrous metals and steel, and are incorporated in various types of products or processes, such as atomic reactors.&#160;The Company manufactures and sells three types of products throughout China and internationally: graphite electrodes; fine grain graphite; and high purity graphite.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company was incorporated on February 13, 2003 in Nevada under the name Achievers Magazine Inc. In connection with the reverse merger transaction described below, the Company&#8217;s corporate name was changed to China Carbon Graphite Group, Inc. on January 30, 2008.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On December 17, 2007, the Company completed a share exchange pursuant to a share exchange agreement with Sincere Investment (PTC), Ltd. (&#8220;Sincere&#8221;), a British Virgin Islands corporation. Sincere was the sole stockholder of Talent International Investment Limited (&#8220;Talent&#8221;), a British Virgin Islands corporation, which is the sole stockholder of Xinghe Yongle Carbon Co., Ltd. (&#8220;Yongle&#8221;), a company organized under the laws of the PRC. Pursuant to the share exchange agreement, the Company issued 9,388,172 shares of common stock to Sincere in exchange for all of the outstanding common stock of Talent, and Talent became a wholly-owned subsidiary of the Company. Upon completion of the reverse merger, the Company&#8217;s business became the business of Talent, its subsidiaries and its affiliated variable interest entities.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Talent owns 100% of the stock of Yongle, which is a wholly foreign-owned enterprise organized under the laws of the PRC. Yongle is party to a series of contractual agreements with Xinghe Xingyong Carbon Co., Ltd. (&#8220;Xingyong&#8221;), a corporation organized under the laws of the PRC. These agreements allow the Company to operate its business in the PRC and to control the management of Xingyong and receive economic remuneration from Xingyong&#8217;s business. As a result, Xingyong is a variable interest entity and the operations of Xingyong are consolidated with those of the Company for financial reporting purposes. Xingyong&#8217;s principal stockholder is Mr. Denyong Jin, the General Manager of the Company&#8217;s China operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The relationship among the above companies is as follows:</font></div> <div style="text-indent: 0pt; display: block;">&#160;<font style="font-family: times new roman; font-size: 10pt;"><br /></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">ASC 810-10-45-25 calls for balance sheet disclosure of (a) assets of a consolidated variable interest entity (VIE) that can be used only to settle obligations of the consolidated VIE, and (b) liabilities of a consolidated VIE for which creditors (or beneficial interest owners) do not have recourse to the general credit of the primary beneficiary. The entire operating business of the Company is conducted by Xingyong and the balance sheet of the Company reflects Xingyong&#8217;s balance sheet.&#160;&#160;There are no such assets or liabilities on the balance sheet of Xingyong. The Operating Agreement dated December 7, 2007 provides that Yongle is a full-recourse guarantor of all obligations of Xingyong, and Xingyong has pledged all of its assets to Yongle. The Consulting Agreement of that date includes an assignment of all of the revenues of Xingyong to Yongle. Yongle is 100% owned by Talent and Talent is 100% owned by the Company. Accordingly, there are no assets or liabilities of Xingyong that in which the Company does not share.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The financial statements presented herein consolidate the financial statements of China Carbon Graphite, Inc. with the financial statements of its subsidiaries, Talent and Yongle. Also consolidated are the financial statements of an entity, Xingyong. The financial statements of Xingyong are consolidated with our financial statements because Xingyong is a variable interest entity.&#160;&#160;The entire operating business operations of the Company are located in the VIE, therefore the financial position and results of operations and cash flows are significantly influenced by the results of Xingyong, the VIE. Talent is party to 4 agreements dated December 7, 2007 with the owners of the registered equity of Xingyong .The agreements transfer to Talent benefits and all of the risk arising from the operations of Xingyong, as well as complete managerial authority over the operations of Xingyong.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="right" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> </div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following paragraphs briefly describe the key provisions of each contractual agreement that proscribes our relationship with Xingyong:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">Exclusive Technical Consulting and Services Agreement</font>.&#160;&#160;Technical consulting and services agreement entered into on December 7, 2007 between Xinghe Yongle Carbon Co., Ltd. (also referred to as Yongle) and Xinghe Xingyong Carbon Co., Ltd. (also referred to as Xingyong), Yongle has agreed to provide technical and consulting services related to the business operations of Xingyong. As consideration for such services, Xingyong has agreed to pay to Yongle a service fee equal to 80% to 100% of the profits of Xingyong. The exact fee is calculated and paid on a quarterly basis, and is determined based on a number of factors, including but not limited to the complexity of the services provided and the commercial value of the services provided.&#160;&#160;The term of the exclusive technical consulting and services agreement is 10 years from the date thereof. Yongle may extend the term of such agreement. The parties may terminate the agreement, prior to its expiration, upon the mutual consent of Yongle and Xingyong.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">Business Operations Agreement.</font>&#160;&#160;Pursuant to the business operations agreement entered into on December 7, 2007 between Yongle, Xingyong, and the shareholders of Xingyong, Xingyong has agreed not to conduct any material transaction or corporate action without obtaining the prior written consent of Yongle.&#160;&#160;Furthermore, Xingyong and its shareholders have agreed to implement proposals made by Yongle with respect to the operations of Xingyong&#8217;s business and the appointment of directors and officers of Xingyong.&#160;&#160;Yongle may terminate the business operations agreement at any time.&#160;&#160;The term of the business operations agreement is indefinite.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">Option Agreement</font>.&#160;&#160;Yongle entered into an option agreement on December 7, 2007 with each of the shareholders of Xingyong, as well as Xingyong itself, pursuant to which Yongle has an exclusive option to purchase, or to designate another qualified person to purchase, to the extent permitted by PRC law and foreign investment policies, part or all of the equity interests in Xingyong owned by the shareholders of Xingyong.&#160;&#160;To the extent permitted by the PRC laws, the purchase price for the entire equity interest shall equal the actual price designated by Yongle to the extent permitted by relevant laws and regulations. The option agreement has a 10 year term.&#160;&#160;Upon the request of Yongle, the parties shall extend the term of the option agreement.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; text-decoration: underline;">Equity Pledge Agreement</font>.&#160;&#160;Pursuant to an equity pledge agreement, dated December 7, 2007, each of the shareholders of Xingyong pledged his equity interest in Xingyong to Yongle to secure Xingyong&#8217;s obligations under the VIE agreements described above. In addition, the shareholders of Xingyong agreed not to transfer, sell, pledge, dispose of or create any encumbrance on any equity interests in Xingyong that would affect Yongle&#8217;s interests. The equity pledge agreement will expire when Xingyong fully performs its obligations under the various VIE agreements described above.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Because the relationship between Xingyong and Yongle is entirely contractual, our interest in Xingyong depends on the enforceability of those agreements under the laws of the PRC. We are not aware of any judicial decision as to the enforceability of similar agreements under PRC law. However, as the owner of the registered equity of Xingyong is Mr. Jin, our major shareholder and our General Manager, we do not believe that there is a significant risk that Xingyong will seek to terminate the relationship or otherwise breach the agreements. Accordingly, we believe that consolidation of the financial statements of Xingyong with those of the Company is appropriate.&#160;&#160;The shareholders of Xingyong do not have any kick-back rights.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Liquidity and Working Capital Deficit</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the past two fiscal years, the Company has managed to operate the business with a low net working capital. The Company&#8217;s low working capital is primarily due to substantial short-term loans from banks, notes payables to banks and borrowings from an unrelated party.&#160;The Company is able to operate with a low net working capital as discussed under land use rights, because of the continued support from local community and governments in Inner Mongolia. The Company is one of the largest manufactures in the area. Additionally, the length of time from purchase order to delivery our products to customers is on average three to nine months. Because of this length of the time it takes to complete purchase orders and the Company&#8217;s average collection time of 90 days based on historical experience, the Company is able to reasonably predict future operating cash flow needs six to twelve months in advance. The Company believes also its historical ability to roll over short-term debt and obtain additional financing when needed, taken together, provide adequate resources to fund ongoing operations in the foreseeable future. If the Company&#8217;s short-term cash flows decrease significantly and the Company is unable to rollover or pay its short-term liabilities, the Company&#8217;s business, financial condition and results of operations could be materially affected.</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company Law of the PRC applicable to Chinese companies provides that net after tax income should be allocated by the following rules:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" border="0" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;" valign="top"> <td style="width: 72pt;" width="6%"> <div><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></div> </td> <td style="width: 36pt;" width="4%"> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.</font></div> </td> <td style="text-align: justify;" width="90%"> <div style="text-align: justify;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10% of after tax income to be allocated to a statutory surplus reserve until the reserve amounts to 50% of the company&#8217;s registered capital.</font></div> </td> </tr> </table> </div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="center"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" border="0" cellspacing="0" cellpadding="0"> <tr valign="top"> <td style="width: 72pt;" width="6%"> <div><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></div> </td> <td style="width: 36pt;" width="4%"> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.</font></div> </td> <td style="text-align: justify;" width="90%"> <div style="text-align: justify;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">If the accumulate balance of statutory surplus reserve is not enough to make up the Company&#8217;s cumulative prior years&#8217; losses, the current year&#8217;s after tax income should be first used to make up the losses before the statutory surplus reverse is drawn.</font></div> </td> </tr> </table> </div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="center"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" border="0" cellspacing="0" cellpadding="0"> <tr valign="top"> <td style="width: 72pt;" width="6%"> <div><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></div> </td> <td style="width: 36pt;" width="4%"> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3.</font></div> </td> <td style="text-align: justify;" width="90%"> <div style="text-align: justify;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Allocation can be made to the discretionary surplus reserve, if such a reserve is approved at the meeting of the equity owners.</font></div> </td> </tr> </table> </div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Therefore, the Company is required to maintain a statutory reserve in China that limits any equity distributions to its shareholders. The maximum amount of the shareholders has not been reached. The company has never distributed earnings to shareholders and has no intentions to do so.</font></div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(2)&#160;Basis for Preparation of the Financial Statements</font></div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Management acknowledges its responsibility for the preparation of the accompanying interim condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its condensed consolidated financial position and the results of its operations for the interim period presented. These condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to consolidated financial statements included in the Company&#8217;s Form 10-K annual report for the year ended December 31, 2011. The condensed consolidated balance sheet as of December 31, 2011 has been derived from&#160;the audited financial statements. The results of the six-months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2012.</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The accompanying unaudited condensed consolidated financial statements for China Carbon Graphite Group, Inc. and its subsidiaries and variable interest entity, have been prepared in accordance with accounting principles generally accepted in the United States of America (&#8220;US GAAP&#8221;) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company maintains its books and accounting records in Renminbi (&#8220;RMB&#8221;), but its reporting currency is U.S. dollars.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The financial statements have been prepared in order to present the financial position and results of operations of the Company, its subsidiaries and Xingyong, a variable interest entity whose financial condition is consolidated with the Company pursuant to ASC Topic 810-10, Consolidation, in accordance with accounting principles generally accepted in the United States of America (&#8220;U.S. GAAP&#8221;).&#160;All significant intercompany accounts and transactions have been eliminated.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(3)&#160;Summary of Significant Accounting Policies</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Use of estimates</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reporting period.&#160;&#160;Some of the significant estimates include values and lives assigned to acquired property, equipment and intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, slow moving, obsolete and/or damaged inventory and stock warrant valuation. Actual results may differ from these estimates.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Cash and cash equivalents</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company considers all highly liquid debt instruments purchased with maturity periods of three months or less to be cash equivalents. The carrying amounts reported in the accompanying balance sheet for cash and cash equivalents approximate their fair value. Most of the Company&#8217;s cash is held in bank accounts in the PRC and is not protected by FDIC insurance or any other similar insurance. The Company&#8217;s bank account in the United States is protected by FDIC insurance.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Restricted cash</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Restricted cash represents amounts held by a bank as security for short-term bank notes payable and therefore is subject to withdrawal restrictions. As of June 30, 2012 and December 31, 2011, these amounts totaled $10,703,200 and $11,694,820, respectively. The restricted cash is expected to be released within the next twelve months after the bank notes have matured.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Accounts receivable</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Accounts receivable are recorded at the invoiced amount and do not bear interest. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer&#8217;s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Inventory</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Inventory is stated at the lower of cost or market. Cost is determined using the weighted average method. Market value represents the estimated selling price in the ordinary course of business less the estimated costs necessary to complete the sale. The Company periodically reviews historical sales activity to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The cost of inventories comprises all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include fixed and variable production overhead, taking into account the stage of completion.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Property and equipment</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Property and equipment is stated at the historical cost, less accumulated depreciation. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets for both financial and income tax reporting purposes as follows:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;" bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Buildings</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">25 - 40 years</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Machinery and equipment</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10 - 20 years</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Motor vehicles</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5 years</font></div> </td> </tr> </table> </div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expenditures for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss is recorded in the statements of income.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, there was no impairment recorded during the six months ended at June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Construction in progress</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Construction in progress represents the costs incurred in connection with the construction of buildings or additions to the Company&#8217;s plant facilities<font style="display: inline; color: #008000;">&#160;</font>and land improvements to the property adjacent to the plant.&#160;No depreciation is provided for construction in progress until such time as the assets are completed and placed into service. The Company has not capitalized any interest expenses for the six months ended at June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Land use rights</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has land use rights of 386,853 square meters used for operations in Xinghe County, Inner Mongolia, China. The land use rights have terms of 50 years, with the land use right relating to 130,220 square meters expiring in 2052 and the land use right with respect to 256,633 square meters expiring in 2053. In addition, in 2011, the local Chinese government and the Company agreed on terms for the land use rights of 387,838 square meters of land located adjacent to the Company&#8217;s facilities.&#160;The Company was not required to sign a land use right agreement or pay a fee.&#160;&#160;In exchange, the Company will allow public use of this 387,838 square meters of land, provide improvements to the land and keep the land in good condition.&#160;The land use right has a term of 50 years, with such term expiring in January 2060. The value of the land is estimated to be $14,000,000.&#160;The Company has not accrued the liability or recorded the land use right asset for this property in accordance with ASC 450, Contingencies.&#160;Because of the relationship and agreement with the local government to keep provide improvements to the land and keep it&#160;in good condition, the Company&#160;believes that it&#160;is unlikely to have to pay for the land use right.&#160;&#160;The bank allows, and the Company uses, this land use right as collateral for its short-term bank loans.&#160;&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Stock-based compensation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Stock-based compensation includes (i) common stock awards granted to employees and directors for services which are accounted for under FASB ASC 718, Compensation&#8211;Stock Compensation&#8221; and (ii) common stock awards granted to consultants which are accounted for under FASB ASC 505-50, Equity&#8211;Equity-Based Payments to Non-Employees.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">All grants of common stock awards and stock options to employees and directors are recognized in the financial statements based on their grant date fair values. The Company has elected to recognize compensation expense using the straight-line method for all common stock awards and stock options granted with service conditions that have a graded vesting schedule, with a corresponding charge to additional paid-in capital.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Common stock awards are granted to directors for services provided. The vested portions of common stock awards granted but not yet issued are recorded in common stock to be issued.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Common stock awards issued to consultants represent common stock granted to non-employees in exchange for services at fair value. The measurement dates for such awards are set at the dates that the contracts are entered into as the awards are non-forfeitable and vest immediately. The measurement date fair value is then recognized over the service period as if the Company has paid cash for such service.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company estimates fair value of common stock awards based on the number of shares granted and the quoted price of the Company&#8217;s common stock on the date of grant.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Foreign currency translation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The reporting currency of the Company is the U.S. dollars. The Company uses RMB as its functional currency. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders&#8217; equity. Translation adjustments for the three months ended June 30, 2012 and 2011 were $(433,954) and $553,200, respectively. Translation adjustments for the six months ended June 30, 2012 and 2011 were $(10,057) and $821,448, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash for the three months ended June 30, 2012 and 2011 were $(8,005) and $39,436, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash for the six months ended June 30, 2012 and 2011 were $(4,185) and $42,368, respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.</font></div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Assets and liabilities were translated at 6.31 RMB to $1.00 at both June 30, 2012 and December 31, 2011. The equity accounts were stated at their historical rates. The average translation rates applied to income statements for the six months ended June 30, 2012 and 2011 were 6.32 RMB and 6.46 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the period; therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Revenue recognition</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">We recognize revenue in accordance with ASC 605-25, Revenue Recognition, which states that revenue should be recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the service has been rendered; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. Sales represent the invoiced value of goods, net of value added tax (&#8220;VAT&#8221;), if any, and are recognized upon delivery of goods and passage of title.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In accordance with ASC 605-25, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectability is reasonably assured.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company derives revenues from the manufacturing and distribution of graphite based products. The Company recognizes its revenues net of VAT. The Company is subject to VAT, which is levied on a majority of the products, at a rate ranging from 13% to 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company recognizes revenue upon receipt of the delivery confirmation provided by the customer or distributor.&#160;The Company does not provide chargeback or price protection rights to the distributors. The distributor only places purchase orders with the Company once it has confirmed the sale with a third party because this is a specialized business, which dictates that the Company will not manufacture the products until the purchase order is received. The Company allows its customers to return products only if its products are later determined by the Company to be defective. Based on the Company&#8217;s historical experience, product returns have been insignificant throughout all of its product lines. Therefore, the Company does not estimate deductions or allowances for sales returns. If sales returns occur, they are taken against revenue when products are returned from customers. Sales are presented net of any discounts given to customers. Interest income is recognized when earned. The Company experienced no returns for the six months ended June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Taxation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Taxation on profits earned in the PRC has been calculated based on the estimated assessable profits for the year at the rates of taxation prevailing in the PRC after taking into account the benefits from any special tax credits or &#8220;tax holidays&#8221; allowed in the county of operations.</font></div> <div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company does not accrue U.S. income tax since it has no operations in the United States. Its operating subsidiaries are organized and located in the PRC and do not conduct any business in the United States.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company recognizes that virtually all tax positions in the PRC are not free from some degree of uncertainty due to tax law and policy changes by the state. The Company cannot reasonably quantify political risk factors and thus must depend on guidance issued by current government officials.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Based on all known facts and circumstances and current tax law, the Company believes that the total amount of unrecognized tax benefits as of June 30, 2012 is not material to its results of operations, financial condition or cash flows. The Company also believes that the total amount of unrecognized tax benefits as of June 30, 2012, if recognized, would not have a material effect on its effective tax rate. The Company further believes that there are no tax positions, including the Enterprise Income Tax holiday from Xing He District Local Tax Authority, for which it is reasonably possible, based on current Chinese tax law and policy, that the unrecognized tax benefits will significantly increase or decrease over the next twelve months producing, individually or in the aggregate, a material effect on the Company&#8217;s results of operations, financial condition or cash flows.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Enterprise income tax</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has been recognized as a high technology and science company by the Ministry of Science and Technology of the PRC. Therefore, Xing He District Local Tax Authority in the Inner Mongol province granted the Company a 100% tax holiday from the enterprise income tax for 10 years from 2008 through 2017. When the tax holiday ends, based on the present tax law and the Company&#8217;s status as a high technology and science company, the Company will be subject to a corporate income tax rate of 15% effective in 2018.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Value added tax</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Provisional Regulations of the PRC Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax (&#8220;VAT&#8221;) is imposed on goods sold in or imported into the PRC and on processing, repair and replacement services provided within the PRC.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">VAT payable in the PRC is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of VAT included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year. VAT payable (recoverable), which is included in other payables, was $71,846 and $16,542 as of June 30, 2012 and December 31, 2011, respectively.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Fair value of financial instruments</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has adopted ASC Topic 820, Fair Value Measurement and Disclosure, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" valign="top" width="2%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="top" width="3%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman;">&#9679;</font></font></div> </td> <td style="text-align: justify;" valign="top" width="65%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" valign="top" width="2%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="top" width="3%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman;">&#9679;</font></font></div> </td> <td style="text-align: justify;" valign="top" width="65%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" valign="top" width="2%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="top" width="3%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman;">&#9679;</font></font></div> </td> <td style="text-align: justify;" valign="top" width="65%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of the 2007 Warrants to purchase 125,000 shares of common stock was $1,344 and $2,702 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $19,555 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $20,913 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of the 2009 Warrants to purchase 200,000 shares of common stock was $27,825 and $22,820 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $70,934 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $65,929 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of the 2009 Series B Warrants to purchase 804,200 shares of common stock was $159,259 and $132,521 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $345,784 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $319,045 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of 2010 Series B warrants to purchase 100,000 shares of common stock was $20,176 and $16,762 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $43,290 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $39,876 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In summary, the Company recorded a gain of $445,763 and loss of $33,800 of changes in fair value of warrants in the condensed consolidated statement of income and comprehensive income for the three months and six months ended June 30, 2012, respectively.&#160;Each reporting period, the change in fair value is recorded into other income (expense).</font></font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrants referred to in the preceding paragraphs do not trade in an active securities market, and as such, the Company estimates the fair value of these warrants using the Black-Scholes option pricing model using the following assumptions:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2007 Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.54</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2009 Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.21</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.71</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2009 Series B Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.48</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.98</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2010 Series B Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.53</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3.03</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The carrying amount of restricted cash, other receivables, advance to vendors, advances from customers, other payables, accrued liabilities and short-term loans are reasonable estimates of their fair value because of the short term nature of these items.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following table sets forth by level within the fair value hierarchy of the Company&#8217;s financial assets and liabilities that was accounted for at fair value on a recurring&#160;basis or for purposes of disclosures as of June 30, 2012:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Carrying Value at<br />June 30,</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: center;" valign="bottom" width="1%" colspan="10"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Fair Value Measurement at</font></font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30, 2012</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 1</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 2</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: center;" valign="bottom" width="1%" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 3</font></font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrant liability</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">208,605</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">208,605</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Notes receivables</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">444,895</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">444,895</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Notes payable</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">17,786,200</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">17,786,200</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company uses the black-scholes valuation method approach when determining fair values of its Level 3 recurring fair value measurements.&#160;&#160;Certain unobservable units for these assets are offered quotes, lack of marketability and volatility.&#160;&#160;For Level 3 measurements, significant increases or decreases in either of those inputs in isolation could result in a significantly lower or higher fair value measurement.&#160;&#160;In general, a significant change in the calculated volatility of the Company&#8217;s stock price could negatively affect the fair value of the warrant liability.</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;Summary of warrants outstanding:</font></div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrants</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted Average Exercise Price</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Outstanding as of December 31, 2011</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,229,200</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.51</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Granted</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Exercised</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Cancelled</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: black 2px solid;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: black 2px solid;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Outstanding as of June 30, 2012</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 4px double;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: black 4px double;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,229,200</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 4px double;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: black 4px double;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.51</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Earnings per share</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive shares of common stock consist of the common stock issuable upon the conversion of convertible debt, preferred stock and warrants. The Company has outstanding warrants to purchase 1,229,200 shares of common stock at an exercise price in the range of $1.30 - $2.00 per share. The Company uses if-converted method to calculate the dilutive preferred stock and treasury stock method to calculate the dilutive shares issuable upon exercise of warrants.</font></div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following table sets forth the computation of the number of net income per share for the six months ended June 30, 2012 and 2011:</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" width="10%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (basic)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,632,248</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">21,993,435</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon conversion of Series B Preferred Stock</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">305,810</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">472,160</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon exercise of warrants</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">205,690</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,938,058</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,671,285</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income available to common shareholders</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,114,786</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,233,233</font></font></div> </div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (basic)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the six months ended June 30, 2012, <font style="background-color: #ffffff; display: inline;">the Company excluded the shares of common stock issuable upon exercise of 1,229,200 warrants, because such issuance would be anti-dilutive.</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="background-color: #ffffff; display: inline; font-family: times new roman; font-size: 10pt;">For the six months ended June 30, 2011, the Company excluded the shares of common stock issuable upon exercise of 125,000 warrants, because such issuance would be anti-dilutive.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following table sets forth the computation of the number of net income per share for the three months ended June 30, 2012 and 2011:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (basic)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,948,851</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,350,263</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon conversion of Series B Preferred Stock</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">305,810</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">472,160</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon exercise of warrants</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">372,119</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">24,254,661</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,194,542</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income available to common shareholders</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">866,687</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">875,318</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (basic)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the three months ended June 30, 2012, <font style="background-color: #ffffff; display: inline;">the Company excluded the shares of common stock issuable upon exercise of 1,229,200 warrants, because such issuance would be anti-dilutive.</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="background-color: #ffffff; display: inline;">For the three months ended June 30, 2011, the Company excluded the shares of common stock issuable upon exercise of 125,000 warrants, because such issuance would be anti-dilutive.</font></font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Reclassification</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Certain 2011 amounts have been reclassified to conform to the current year&#8217;s financial statements presentation. These reclassifications had no impact on the previously reported financial position, results of operations or cash flows.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Recent accounting pronouncements</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In December 2011, FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments contained in ASU 2011-11 require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. This amendment is effective for annual reporting periods beginning on or after January 1, 2013. The adoption of ASU 2011-11 results in changes to presentation and disclosure only and is not expected to have an impact on the Company&#8217;s consolidated results of operations and financial condition.</font></font></div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During June 2011, the FASB issued ASU 2011-05, &#8220;Presentation of Comprehensive Income.&#8221; ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in&#160;stockholders&#8217; equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements.&#160;&#160;The Company has adopted ASU No. 2011-05, which resulted in the components of comprehensive income to be presented within the consolidated statements of operations and comprehensive income (loss).</font></div> <div>&#160;<font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During May 2011, the FASB issued ASU No.&#160;2011-04, &#8220;Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (&#8220;IFRS&#8221;).&#8221; This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December&#160;15, 2011. The adoption of ASU 2011-04 did not have an impact to our consolidated financial position or results of operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(4) Concentration of Business and Credit Risk</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Most of the Company&#8217;s bank accounts are in banks located in the PRC and are not covered by any type of protection similar to that provided by the Federal Deposit Insurance Corporation (&#8220;FDIC&#8221;) on funds held in U.S. banks. The Company&#8217;s bank account in the United States is covered by FDIC insurance.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, trade accounts receivables and inventories, the balances of which are stated on the balance sheet. The Company places its cash in banks located in China. Concentration of credit risk with respect to trade accounts receivables is limited due to the diversity of the Company&#8217;s customers who are located in different regions of China. The Company does not require collateral or other security to support financial instruments subject to credit risk.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the six months ended June 30, 2012, two customers accounted for 10% or more of sales revenues, representing 32.4%, and 24.9%, respectively of the total sales. For the six months ended June 30, 2011, two customers accounted for 10% or more of sales revenues, representing 34.0%, and 24.0%, respectively of the total sales. As of June 30, 2012, there were two customers that constituted 43.2%, and 26.3% of the accounts receivable. As of December 31, 2011, there were two customers that constituted 41.2% and 16.3% of the accounts receivable.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the six months ended June 30, 2012, four suppliers accounted for 10% or more of our total purchases, representing 35.7%, 15.4%, 14.2% and 10.7%, respectively. For the six months ended June 30, 2011, three suppliers accounted for 10% or more of our total purchases, representing 45.0%, 19.0% and 10.2% of our total purchase, respectively.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(5)&#160;Income Taxes</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Under the Provisional Regulations of The People&#8217;s Republic of China Concerning Income Tax on Enterprises promulgated by the PRC, domestic and foreign companies pay a unified corporate income tax of 25%, except for a 15% corporate income tax rate for qualified high technology and science enterprises. The Company has been granted a 100% tax holiday from enterprise income tax from the Xing He District Local Tax Authority for 10 years from 2008 through 2017.</font></div> <div>&#160;<font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">A reconciliation of the provision for income taxes with amounts determined by the PRC statutory income tax rate to income before income taxes is as follows:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="6"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Computed tax at the PRC statutory rate of 15%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">298,317</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">359,760</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Benefit of tax holiday</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(298,317</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(359,760</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Income tax expenses per books</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(6)&#160;Accounts Receivable, net</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, accounts receivable consisted of the following:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Amount outstanding</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">15,886,362</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">15,331,983</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less: Allowance for doubtful accounts</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2,790,662</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2,790,662</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net amount</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">13,095,700</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">12,541,321</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, allowance for doubtful accounts consisted of the following:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Beginning balance</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,790,662</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,505,867</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Provision for doubtful accounts</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">284,795</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Amounts written off</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Ending balance</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,790,662</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,790,662</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(7)&#160;Inventories</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, inventories consisted of the following:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Raw materials</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,902,152</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,299,372</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Work in process</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">38,617,984</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">32,926,480</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Finished goods</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,631,088</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,204,396</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">44,151,224</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">37,430,248</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="right" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> </div> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, the Company did not have any provision for inventory in regards to slow moving or obsolete items.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(8)&#160;Property and Equipment, net</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, property and equipment consisted of the following:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Building</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">26,259,432</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">26,241,768</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Machinery and equipment</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,690,201</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,670,300</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Motor vehicles</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;33,054</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;33,054</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">48,982,687</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">48,945,122</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less: accumulated depreciation</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">13,239,934</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">12,225,527</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">35,742,753</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">36,719,595</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the three months ended June 30, 2012 and 2011, depreciation expenses amounted to $508,984 and $389,802, of which $505,745 and $389,347 was charged to cost of goods sold. For the six months ended June 30, 2012 and 2011, depreciation expenses amounted to $1,019,563 and $776,556, of which $1,013,356 and $775,732 was charged to cost of goods sold. As of June 30, 2012 and December 31, 2011, a net book value of $17,549,101 and $16,694,000, respectively, of property and equipment were used as collateral for the Company&#8217;s short-term loans.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Construction in progress consists of two projects as follows:</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: center;" valign="bottom" colspan="2"> <div style="text-align: center; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div style="text-align: center; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: center;" valign="bottom" colspan="2"> <div style="text-align: center; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31, 2011</font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Estimated completion time</font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected capital needed to complete</font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr> <td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Construction of factory</font></div> </td> <td align="right" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,607,217</font></td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,427,962</font></td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: center;" valign="bottom" colspan="2"> <div style="text-align: center; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Depends on testing</font></div> </td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,574,000</font></td> <td style="text-align: left;" valign="bottom" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Land improvements</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,911,423</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,792,489</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: center;" valign="bottom" width="1%" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,148,000</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="border-bottom: 4px double black; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">7,518,640</font></td> <td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="border-bottom: 4px double black; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,220,451</font></td> <td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right; padding-bottom: 4px;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="border-bottom: 4px double black; text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">4,722,000</font></td> <td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> <div>&#160;<font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Construction in progress represents the costs incurred in connection with the construction of buildings or additions to the Company&#8217;s plant facilities&#160;and land improvements to the property adjacent to our plant.&#160;No depreciation is provided for construction in progress until such time as the assets are completed and placed into service.&#160;Construction in progress in the amount of $0 was transferred to fixed assets during the six months ended June 30, 2012.</font></div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(9)&#160;&#160;Land Use Rights</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Land use rights are amortized over 50 years.&#160;&#160;As of June 30, 2012 and December 31, 2011, land use rights consisted of the following:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">June 30,</font> <font style="display: inline; font-weight: bold;">2012</font></font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31, 2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Land Use Rights</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">11,135,130</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">11,371,230</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less: Accumulated amortization</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">775,476</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">672,171</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10,359,654</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10,699,059</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the three months ended June 30, 2012 and 2011, amortization expenses were $46,826 and $47,153, respectively. For the six months ended June 30, 2012 and 2011, amortization expenses were $103,830 and $93,754, respectively.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012, all land use rights were pledged as collateral for short-term bank loans.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(10)&#160;Stockholders&#8217; equity</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Restated Articles of Incorporation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On January 22, 2008, the Company changed its authorized capital stock to 120,000,000 shares of capital stock, of which 20,000,000 shares are shares of preferred stock, par value $0.001 per share, and 100,000,000 shares are shares of common stock, par value $0.001 per share. The restated articles of incorporation authorizes the board of directors of the Company to issue one or more series of preferred stock and to designate the rights, preferences, privileges and limitation of the holders of such preferred stock. The board of directors has authorized the issuance of two series of preferred stock, Series A Convertible Preferred Stock (&#8220;Series A Preferred Stock&#8221;) and Series B Convertible Preferred Stock (&#8220;Series B Preferred Stock&#8221;).</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Issuance of Common Stock</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(a) <font style="font-style: italic; display: inline;">Conversion of Series A Preferred Stock</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, no shares of Series A Preferred Stock are issued or outstanding.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(b) <font style="font-style: italic; display: inline;">Conversion of Series B Preferred Stock</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During the year ended December 31, 2011, the Company issued an aggregate of 736,389 shares of common stock to holders of Series B Preferred Stock upon the conversion of an aggregate of 798,890 shares of Series B Preferred Stock.&#160;&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During the six months ended June 30, 2012, the Company issued an aggregate of 120,300 shares of common stock to holders of Series B Preferred Stock upon the conversion of an aggregate of 120,300 shares of Series B Preferred Stock.&#160;The remaining 305,810 Series B Preferred Stock are redeemable by the holder as of June 30, 2012.&#160; The Company has reclassified these shares into Temporary Equity as of June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(c) <font style="font-style: italic; display: inline;">Exercise of Warrants</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On January 19, 2011, the Company issued 45,833 shares of common stock to First Trust Group, Inc. upon the cashless exercise of 100,000 warrants at an exercise price of $2.34 per share.&#160;&#160;On January 24, 2011, the Company issued 124,025 shares of common stock to Maxim Group LLC upon exercise of warrants at an exercise price of $1.32 per share. On February 7, 2011, the Company issued 160,000 shares of common stock to Silver Rock II, Ltd. upon exercise of warrants at an exercise price of $1.30 per share.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On March 29, 2010 and April 1, 2010, the Company issued an aggregate of 28,000 shares of common stock to holders of Series B Preferred Stock upon exercise of warrants at an exercise price of $1.30 per share and 100,000 shares of common stock upon exercise of warrants at an exercise price of $1.30 per share.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012, there are total 1,229,200 shares warrants outstanding.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(d) <font style="font-style: italic; display: inline;">Stock Issuances for Cash</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On July 14, 2011, the Company issued an aggregate of 250,000 shares of common stock at a price of $0.64 per share to unrelated parties to raise money for the Company&#8217;s operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On January 12, 2012, the Company issued 320,000 shares of common stock at a price of $0.50 per share to unrelated parties to raise money for the Company&#8217;s operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On March 8, 2012, the Company issued 100,000 shares of common stock at a price of $0.50 per share to unrelated parties to raise money for the Company&#8217;s operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On April 10, 2012, the Company issued 200,000 shares of common stock at a price of $0.50 per share to unrelated parties to raise money for the Company&#8217;s operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On May 9, 2012, the Company issued 200,000 shares of common stock at a price of $0.56 per share to unrelated parties to raise money for the Company&#8217;s operations.</font></div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="right" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> </div> </div> <div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On May 9, 2012, the Company issued 100,000 shares of common stock at a price of $0.50 per share to unrelated parties to raise money for the Company&#8217;s operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(e) <font style="font-style: italic; display: inline;">Stock Issuances to Consultants</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In April 2010, the Company issued an aggregate of 420,000 shares of common stock pursuant to three consulting agreements in exchange for consulting and investor relations services. A fair value of $659,400 was recorded. As of June 30, 2012, these consulting expenses were fully amortized.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In December 2010, the Company issued 90,000 shares of common stock to ChangeWave, Inc. in exchange for consulting and investor relations services.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During the first quarter of 2011, the Company issued an aggregate of 620,000 shares of common stock pursuant to three consulting agreements in exchange for consulting and investor relations services. A fair value of $1,240,100 was recorded for the consulting expenses relating to all three agreements, with the consulting expenses being amortized over one year for two agreements and one and a half years for the third agreement. $87,850 and $266,100 was amortized and recognized as a general and administrative expense for the six months ended June 30, 2012 and 2011, respectively. $175,700 and $532,200 was amortized and recognized as a general and administrative expense for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, these consulting expenses were fully amortized.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During the second quarter of 2011, the Company issued 365,000 shares of common stock pursuant to a consulting agreement in exchange for consulting and investor relations services. A fair value of $547,500 was recorded for the consulting expenses and amortized over one and a half years. $91,250 and $91,250 was amortized and recognized as a general and administrative expense for the three months ended June 30, 2012 and 2011, respectively. $182,500 and $91,250 was amortized and recognized as a general and administrative expense for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, $91,250 remained to be amortized and was recorded as a prepaid expense.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In April 2012, the Company issued an aggregate of 110,000 shares of common stock pursuant to a consulting agreement in exchange for investor relations services. A fair value of $96,800 was recorded for the expenses and amortized over one year. $16,133 was amortized and recognized as a general and administrative expense for the three and six months ended June 30, 2012. As of June 30, 2012, $80,667 remained to be amortized and was recorded as a prepaid expense.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In June 2012, the Company issued an aggregate of 100,000 shares of common stock pursuant to a consulting agreement in exchange for investor relations services. A fair value of $57,000 was recorded for the consulting expenses and amortized over four months. $0 was amortized and recognized as a general and administrative expense for the three and six months ended June 30, 2012. As of June 30, 2012, $57,000 remained to be amortized and was recorded as a prepaid expense.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(f) <font style="font-style: italic; display: inline;">Other Stock Issuances</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">On November 29, 2011, we issued an aggregate of 100,000 shares of common stock to four directors as compensation for services. On November 29, 2011, we issued 60,000 shares of common stock to an employee. The issuance of these shares was recorded at fair market value, or $104,000.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(g) <font style="font-style: italic; display: inline;">Shares Held in Escrow</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In a private placement that closed on December 22, 2009 and January 13, 2010, the Company sold an aggregate of 2,480,500 shares of Series B Preferred Stock and five-year warrants to purchase 992,000 shares of common stock at an exercise price of $1.30 per share, for an aggregate purchase price of $2,976,600. The Company also paid the private placement agent an aggregate of $298,000 and issued five-year warrants to purchase 124,025 shares of common stock at an exercise price of $1.32 per share. In connection with the private placement and pursuant to the transaction agreements, the Company deposited into escrow an aggregate of 1,240,250 shares of common stock, which are to be held in escrow to be returned to the Company or delivered to the investors, depending on whether the Company meets certain financial performance targets for the years ending December 31, 2010 and December 31, 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company did not meet the financial targets. The number of Escrow Shares payable to each Investor shall be equal to a fraction of the total number of Escrow Shares potentially issuable pursuant to the terms hereof, the numerator of which shall be the amount by which (i) the number of Conversion Shares issued or issuable upon Preferred Shares which was initially issued to the Investor exceeds (ii) the sum of (x) the number of Conversion Shares sold or otherwise transferred by the Investor plus (y) the number of shares of Conversion Shares issued or issuable sold or otherwise transferred by the Investor, and the denominator of which is the number of Conversion Shares issued or issuable by the Company in the Offering. Any Escrow Shares for either Fiscal Year 2011 or Fiscal Year 2010 which are not transferred to the Investors pursuant to this paragraph shall be returned to the Company for cancellation.&#160;As of June 30, 2012, no Escrow shears have been transferred to investors or returned to the Company.</font></font></div> <font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;<font style="font-style: italic; display: inline; font-weight: bold;">&#160;</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Dividend Distribution for Series B Preferred Stock</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Pursuant to the terms of a private placement that closed on December 22, 2009 and January 13, 2010, the Series B Preferred Stock offers a 6% dividend. The preferred stock dividend is payable quarterly commencing April 1, 2010. As a result, we declared a dividend for the Series B Preferred Stock in the amount of $37,742 as of June 30, 2012, compared to $28,099 as of December 31, 2011. For the three months ended June 30, 2012 and 2011, we paid $0 and $6,985, respectively, in cash for dividends declared. For the six months ended June 30, 2012 and 2011, we paid $0 and $15,114, respectively, in cash for dividends declared.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(11)&#160;&#160;Amount Due to a Related Party</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, we had related party notes payable in the amount of $5,432,675 and $5,542,855, respectively, to Mr. Dengyong Jin, who is General Manager of our China operations and chief executive officer and principal shareholder of Xingyong. These amounts are not due prior to June 30, 2013 and are&#160;made to the Company by Mr. Jin for business operating purposes. The advances are interest free, therefore the interest expenses of $129,806 and $221,733 calculated at an annual interest rate of 8.2% was recorded into additional paid in capital for the three and six months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(12)&#160;&#160;Loan from Unrelated Parties</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During the first quarter of 2012, the Company obtained short term borrowings of approximately $9,162,944 from three unrelated parties. The loans were all repaid by June 30, 2012. The interest rate is 8% and interest expenses of $185,610 was accrued as of June 30, 2012. The loans are unsecured.</font></font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(13)&#160;&#160;Short-term Bank Loans</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, short-term loans consisted of the following:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30, 2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31, 2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Everbright Bank, dated July 11, 2011, due and repaid on July 11, 2012, &#160;with an annual interest rate of 8.528% payable quarterly, secured by property and equipment and land use rights</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated January 10, 2012, due January 11, 2013, with an annual interest rate of 6.56% payable quarterly, secured by property and equipment and land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">4,722,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">4,722,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated August 27, 2011, due August 28, 2012, with an annual interest rate of 6.56% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated August 13, 2011, due August 14, 2012, with an annual interest rate of 6.56% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated June 6, 2012, due June 5, 2013 with an annual interest rate of 9.184% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated September 26, 2011, due September 27, 2012 with an annual interest rate of 6.56% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">8,814,400</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">8,814,400</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from Huaxia Bank, dated June 14, 2011, due and repaid on June 14, 2012, with an annual interest rate of 8.203% payable quarterly, secured by equipment and land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5,509,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify; padding-bottom: 2px;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from Credit Union, dated February 1, 2011, originally due in August 2012, repaid in April 2012, with an annual interest rate of 13.66% payable monthly, secured by guarantee from major shareholder&#8217;s wife</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,259,200</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">38,720,400</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">45,488,600</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Each of these loans is renewable at the lender&#8217;s discretion. As of June 30, 2012, all land use rights and certain property and equipment were pledged as collateral for our short-term bank loans.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Interest expenses were $1,220,173 and $693,274 for the three months ended June 30, 2012 and 2011, respectively. Interest expenses were $2,449,918 and $1,406,804 for the six months ended June 30, 2012 and 2011, respectively.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The weighted average interest rates for these loans were 7.31% and 6.73% as of June 30, 2012 and December 31, 2011, respectively.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">There was no capitalized interest for the six months ended June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(14)&#160;Subsequent events</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In accordance with ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated events and transactions for potential recognition or disclosure through the reporting date, the date the financial statements were available to be issued and disclose the following.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Use of estimates</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reporting period.&#160;&#160;Some of the significant estimates include values and lives assigned to acquired property, equipment and intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, slow moving, obsolete and/or damaged inventory and stock warrant valuation. Actual results may differ from these estimates.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Cash and cash equivalents</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company considers all highly liquid debt instruments purchased with maturity periods of three months or less to be cash equivalents. The carrying amounts reported in the accompanying balance sheet for cash and cash equivalents approximate their fair value. Most of the Company&#8217;s cash is held in bank accounts in the PRC and is not protected by FDIC insurance or any other similar insurance. The Company&#8217;s bank account in the United States is protected by FDIC insurance.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Restricted cash</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Restricted cash represents amounts held by a bank as security for short-term bank notes payable and therefore is subject to withdrawal restrictions. As of June 30, 2012 and December 31, 2011, these amounts totaled $10,703,200 and $11,694,820, respectively. The restricted cash is expected to be released within the next twelve months after the bank notes have matured.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Accounts receivable</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Accounts receivable are recorded at the invoiced amount and do not bear interest. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer&#8217;s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Inventory</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Inventory is stated at the lower of cost or market. Cost is determined using the weighted average method. Market value represents the estimated selling price in the ordinary course of business less the estimated costs necessary to complete the sale. The Company periodically reviews historical sales activity to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">As of June 30, 2012 and December 31, 2011, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The cost of inventories comprises all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include fixed and variable production overhead, taking into account the stage of completion.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Property and equipment</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Property and equipment is stated at the historical cost, less accumulated depreciation. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets for both financial and income tax reporting purposes as follows:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;" bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Buildings</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">25 - 40 years</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Machinery and equipment</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10 - 20 years</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Motor vehicles</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5 years</font></div> </td> </tr> </table> </div> <div>&#160;</div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="right" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> </div> </div> <div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expenditures for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss is recorded in the statements of income.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, there was no impairment recorded during the six months ended at June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Construction in progress</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Construction in progress represents the costs incurred in connection with the construction of buildings or additions to the Company&#8217;s plant facilities<font style="display: inline; color: #008000;">&#160;</font>and land improvements to the property adjacent to the plant.&#160;No depreciation is provided for construction in progress until such time as the assets are completed and placed into service. The Company has not capitalized any interest expenses for the six months ended at June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Land use rights</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has land use rights of 386,853 square meters used for operations in Xinghe County, Inner Mongolia, China. The land use rights have terms of 50 years, with the land use right relating to 130,220 square meters expiring in 2052 and the land use right with respect to 256,633 square meters expiring in 2053. In addition, in 2011, the local Chinese government and the Company agreed on terms for the land use rights of 387,838 square meters of land located adjacent to the Company&#8217;s facilities.&#160;The Company was not required to sign a land use right agreement or pay a fee.&#160;&#160;In exchange, the Company will allow public use of this 387,838 square meters of land, provide improvements to the land and keep the land in good condition.&#160;The land use right has a term of 50 years, with such term expiring in January 2060. The value of the land is estimated to be $14,000,000.&#160;The Company has not accrued the liability or recorded the land use right asset for this property in accordance with ASC 450, Contingencies.&#160;Because of the relationship and agreement with the local government to keep provide improvements to the land and keep it&#160;in good condition, the Company&#160;believes that it&#160;is unlikely to have to pay for the land use right.&#160;&#160;The bank allows, and the Company uses, this land use right as collateral for its short-term bank loans.&#160;&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Stock-based compensation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Stock-based compensation includes (i) common stock awards granted to employees and directors for services which are accounted for under FASB ASC 718, Compensation&#8211;Stock Compensation&#8221; and (ii) common stock awards granted to consultants which are accounted for under FASB ASC 505-50, Equity&#8211;Equity-Based Payments to Non-Employees.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">All grants of common stock awards and stock options to employees and directors are recognized in the financial statements based on their grant date fair values. The Company has elected to recognize compensation expense using the straight-line method for all common stock awards and stock options granted with service conditions that have a graded vesting schedule, with a corresponding charge to additional paid-in capital.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Common stock awards are granted to directors for services provided. The vested portions of common stock awards granted but not yet issued are recorded in common stock to be issued.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Common stock awards issued to consultants represent common stock granted to non-employees in exchange for services at fair value. The measurement dates for such awards are set at the dates that the contracts are entered into as the awards are non-forfeitable and vest immediately. The measurement date fair value is then recognized over the service period as if the Company has paid cash for such service.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company estimates fair value of common stock awards based on the number of shares granted and the quoted price of the Company&#8217;s common stock on the date of grant.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Foreign currency translation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The reporting currency of the Company is the U.S. dollars. The Company uses RMB as its functional currency. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of stockholders&#8217; equity. Translation adjustments for the three months ended June 30, 2012 and 2011 were $(433,954) and $553,200, respectively. Translation adjustments for the six months ended June 30, 2012 and 2011 were $(10,057) and $821,448, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash for the three months ended June 30, 2012 and 2011 were $(8,005) and $39,436, respectively. The cumulative translation adjustment and effect of exchange rate changes on cash for the six months ended June 30, 2012 and 2011 were $(4,185) and $42,368, respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.</font></div> <div>&#160;<font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Assets and liabilities were translated at 6.31 RMB to $1.00 at both June 30, 2012 and December 31, 2011. The equity accounts were stated at their historical rates. The average translation rates applied to income statements for the six months ended June 30, 2012 and 2011 were 6.32 RMB and 6.46 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the period; therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Revenue recognition</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">We recognize revenue in accordance with ASC 605-25, Revenue Recognition, which states that revenue should be recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the service has been rendered; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. Sales represent the invoiced value of goods, net of value added tax (&#8220;VAT&#8221;), if any, and are recognized upon delivery of goods and passage of title.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In accordance with ASC 605-25, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectability is reasonably assured.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company derives revenues from the manufacturing and distribution of graphite based products. The Company recognizes its revenues net of VAT. The Company is subject to VAT, which is levied on a majority of the products, at a rate ranging from 13% to 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company recognizes revenue upon receipt of the delivery confirmation provided by the customer or distributor.&#160;The Company does not provide chargeback or price protection rights to the distributors. The distributor only places purchase orders with the Company once it has confirmed the sale with a third party because this is a specialized business, which dictates that the Company will not manufacture the products until the purchase order is received. The Company allows its customers to return products only if its products are later determined by the Company to be defective. Based on the Company&#8217;s historical experience, product returns have been insignificant throughout all of its product lines. Therefore, the Company does not estimate deductions or allowances for sales returns. If sales returns occur, they are taken against revenue when products are returned from customers. Sales are presented net of any discounts given to customers. Interest income is recognized when earned. The Company experienced no returns for the six months ended June 30, 2012 and 2011.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Taxation</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Taxation on profits earned in the PRC has been calculated based on the estimated assessable profits for the year at the rates of taxation prevailing in the PRC after taking into account the benefits from any special tax credits or &#8220;tax holidays&#8221; allowed in the county of operations.</font></div> <div>&#160;<font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company does not accrue U.S. income tax since it has no operations in the United States. Its operating subsidiaries are organized and located in the PRC and do not conduct any business in the United States.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company recognizes that virtually all tax positions in the PRC are not free from some degree of uncertainty due to tax law and policy changes by the state. The Company cannot reasonably quantify political risk factors and thus must depend on guidance issued by current government officials.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Based on all known facts and circumstances and current tax law, the Company believes that the total amount of unrecognized tax benefits as of June 30, 2012 is not material to its results of operations, financial condition or cash flows. The Company also believes that the total amount of unrecognized tax benefits as of June 30, 2012, if recognized, would not have a material effect on its effective tax rate. The Company further believes that there are no tax positions, including the Enterprise Income Tax holiday from Xing He District Local Tax Authority, for which it is reasonably possible, based on current Chinese tax law and policy, that the unrecognized tax benefits will significantly increase or decrease over the next twelve months producing, individually or in the aggregate, a material effect on the Company&#8217;s results of operations, financial condition or cash flows.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Enterprise income tax</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has been recognized as a high technology and science company by the Ministry of Science and Technology of the PRC. Therefore, Xing He District Local Tax Authority in the Inner Mongol province granted the Company a 100% tax holiday from the enterprise income tax for 10 years from 2008 through 2017. When the tax holiday ends, based on the present tax law and the Company&#8217;s status as a high technology and science company, the Company will be subject to a corporate income tax rate of 15% effective in 2018.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Value added tax</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Provisional Regulations of the PRC Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax (&#8220;VAT&#8221;) is imposed on goods sold in or imported into the PRC and on processing, repair and replacement services provided within the PRC.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">VAT payable in the PRC is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of VAT included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year. VAT payable (recoverable), which is included in other payables, was $71,846 and $16,542 as of June 30, 2012 and December 31, 2011, respectively.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Fair value of financial instruments</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has adopted ASC Topic 820, Fair Value Measurement and Disclosure, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" valign="top" width="2%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="top" width="3%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman;">&#9679;</font></font></div> </td> <td style="text-align: justify;" valign="top" width="65%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" valign="top" width="2%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="top" width="3%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman;">&#9679;</font></font></div> </td> <td style="text-align: justify;" valign="top" width="65%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" valign="top" width="2%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="top" width="3%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman;">&#9679;</font></font></div> </td> <td style="text-align: justify;" valign="top" width="65%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of the 2007 Warrants to purchase 125,000 shares of common stock was $1,344 and $2,702 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $19,555 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $20,913 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of the 2009 Warrants to purchase 200,000 shares of common stock was $27,825 and $22,820 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $70,934 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $65,929 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of the 2009 Series B Warrants to purchase 804,200 shares of common stock was $159,259 and $132,521 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $345,784 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $319,045 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The fair value of 2010 Series B warrants to purchase 100,000 shares of common stock was $20,176 and $16,762 at June 30, 2012 and December 31, 2011, respectively. The Company recognized a loss of $43,290 from the change in fair value of these warrants for the three months ended March 31, 2012 and a gain of $39,876 for the three months ended June 30, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In summary, the Company recorded a gain of $445,763 and loss of $33,800 of changes in fair value of warrants in the condensed consolidated statement of income and comprehensive income for the three months and six months ended June 30, 2012, respectively.&#160;Each reporting period, the change in fair value is recorded into other income (expense).</font></font></div> </div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="right" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> </div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrants referred to in the preceding paragraphs do not trade in an active securities market, and as such, the Company estimates the fair value of these warrants using the Black-Scholes option pricing model using the following assumptions:</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2007 Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.54</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2009 Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.21</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.71</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2009 Series B Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.48</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.98</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2010 Series B Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.53</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3.03</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The carrying amount of restricted cash, other receivables, advance to vendors, advances from customers, other payables, accrued liabilities and short-term loans are reasonable estimates of their fair value because of the short term nature of these items.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following table sets forth by level within the fair value hierarchy of the Company&#8217;s financial assets and liabilities that was accounted for at fair value on a recurring&#160;basis or for purposes of disclosures as of June 30, 2012:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Carrying Value at<br />June 30,</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: center;" valign="bottom" width="1%" colspan="10"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Fair Value Measurement at</font></font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30, 2012</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 1</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 2</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: 2px solid black; text-align: center;" valign="bottom" width="1%" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 3</font></font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrant liability</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">208,605</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">208,605</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Notes receivables</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">444,895</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">444,895</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Notes payable</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">17,786,200</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">17,786,200</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company uses the black-scholes valuation method approach when determining fair values of its Level 3 recurring fair value measurements.&#160;&#160;Certain unobservable units for these assets are offered quotes, lack of marketability and volatility.&#160;&#160;For Level 3 measurements, significant increases or decreases in either of those inputs in isolation could result in a significantly lower or higher fair value measurement.&#160;&#160;In general, a significant change in the calculated volatility of the Company&#8217;s stock price could negatively affect the fair value of the warrant liability.</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;Summary of warrants outstanding:</font></div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrants</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted Average Exercise Price</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Outstanding as of December 31, 2011</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,229,200</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.51</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Granted</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Exercised</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Cancelled</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Outstanding as of June 30, 2012</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,229,200</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.51</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Earnings per share</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive shares of common stock consist of the common stock issuable upon the conversion of convertible debt, preferred stock and warrants. The Company has outstanding warrants to purchase 1,229,200 shares of common stock at an exercise price in the range of $1.30 - $2.00 per share. The Company uses if-converted method to calculate the dilutive preferred stock and treasury stock method to calculate the dilutive shares issuable upon exercise of warrants.</font></div> <div>&#160;<font style="font-family: times new roman; font-size: 10pt;">&#160; </font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following table sets forth the computation of the number of net income per share for the six months ended June 30, 2012 and 2011:</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" width="10%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (basic)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,632,248</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">21,993,435</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon conversion of Series B Preferred Stock</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">305,810</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">472,160</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon exercise of warrants</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">205,690</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,938,058</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,671,285</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income available to common shareholders</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,114,786</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,233,233</font></font></div> </div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (basic)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the six months ended June 30, 2012, <font style="background-color: #ffffff; display: inline;">the Company excluded the shares of common stock issuable upon exercise of 1,229,200 warrants, because such issuance would be anti-dilutive.</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="background-color: #ffffff; display: inline; font-family: times new roman; font-size: 10pt;">For the six months ended June 30, 2011, the Company excluded the shares of common stock issuable upon exercise of 125,000 warrants, because such issuance would be anti-dilutive.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div style="text-indent: 0pt; display: block;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The following table sets forth the computation of the number of net income per share for the three months ended June 30, 2012 and 2011:</font></div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (basic)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,948,851</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,350,263</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon conversion of Series B Preferred Stock</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">305,810</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">472,160</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon exercise of warrants</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">372,119</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">24,254,661</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,194,542</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income available to common shareholders</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">866,687</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">875,318</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (basic)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">For the three months ended June 30, 2012, <font style="background-color: #ffffff; display: inline;">the Company excluded the shares of common stock issuable upon exercise of 1,229,200 warrants, because such issuance would be anti-dilutive.</font></font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="background-color: #ffffff; display: inline;">For the three months ended June 30, 2011, the Company excluded the shares of common stock issuable upon exercise of 125,000 warrants, because such issuance would be anti-dilutive.</font></font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Reclassification</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Certain 2011 amounts have been reclassified to conform to the current year&#8217;s financial statements presentation. These reclassifications had no impact on the previously reported financial position, results of operations or cash flows.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;"></font>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="font-style: italic; display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">Recent accounting pronouncements</font></div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">In December 2011, FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments contained in ASU 2011-11 require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. This amendment is effective for annual reporting periods beginning on or after January 1, 2013. The adoption of ASU 2011-11 results in changes to presentation and disclosure only and is not expected to have an impact on the Company&#8217;s consolidated results of operations and financial condition.</font></font></div> <div align="justify" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During June 2011, the FASB issued ASU 2011-05, &#8220;Presentation of Comprehensive Income.&#8221; ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in&#160;stockholders&#8217; equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements.&#160;&#160;The Company has adopted ASU No. 2011-05, which resulted in the components of comprehensive income to be presented within the consolidated statements of operations and comprehensive income (loss).</font></div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="right" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> <font style="font-family: times new roman; font-size: 10pt;"></font></div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">During May 2011, the FASB issued ASU No.&#160;2011-04, &#8220;Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (&#8220;IFRS&#8221;).&#8221; This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December&#160;15, 2011. The adoption of ASU 2011-04 did not have an impact to our consolidated financial position or results of operations.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;" bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Buildings</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">25 - 40 years</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Machinery and equipment</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10 - 20 years</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Motor vehicles</font></div> </td> <td align="right" valign="bottom"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5 years</font></div> </td> </tr> </table> </div> <div>&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2007 Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.54</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2009 Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.21</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.71</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2009 Series B Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.48</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.98</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2010 Series B Warrants</font></div> </td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Annual dividend yield</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected life (years)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2.53</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3.03</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Risk-free interest rate</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.18</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Expected volatility</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">104</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">90</font></div> </td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">%</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div style="text-indent: 0pt; margin-left: 0pt; margin-right: 0pt;" > <div > <div align="left" style="width: 100%;" ><font style="display: inline; font-family: times new roman; font-size: 8pt;">&#160; </font></div> </div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Carrying Value at<br />June 30,</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: center;" valign="bottom" width="1%" colspan="10"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Fair Value Measurement at</font></font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">June 30, 2012</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="52%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2012</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 1</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: left;" valign="bottom" width="1%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 2</font></font></div> </td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="border-bottom: black 2px solid; text-align: center;" valign="bottom" width="1%" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Level 3</font></font></td> <td style="text-align: left; padding-bottom: 2px;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrant liability</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">208,605</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">208,605</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Notes receivables</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">444,895</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">444,895</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="52%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Notes payable</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">17,786,200</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">17,786,200</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td style="text-align: right;" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></td> <td style="text-align: left;" valign="bottom" width="1%" nowrap="nowrap"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Warrants</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted Average Exercise Price</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Outstanding as of December 31, 2011</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,229,200</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.51</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Granted</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Exercised</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160; &#160;Cancelled</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: black 2px solid;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 2px solid;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: black 2px solid;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Outstanding as of June 30, 2012</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 4px double;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: black 4px double;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,229,200</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: black 4px double;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: black 4px double;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1.51</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div> <div><font style="font-family: times new roman; font-size: 10pt;">&#160;</font>&#160;</div> </div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" width="10%" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (basic)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,632,248</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">21,993,435</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon conversion of Series B Preferred Stock</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">305,810</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">472,160</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon exercise of warrants</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">205,690</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,938,058</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,671,285</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income available to common shareholders</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,114,786</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div style="text-align: right; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,233,233</font></font></div> </div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (basic)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.05</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: black 2px solid;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (basic)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,948,851</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,350,263</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon conversion of Series B Preferred Stock</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">305,810</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">472,160</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Shares issuable upon exercise of warrants</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">372,119</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Weighted average shares of common stock outstanding (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">24,254,661</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">23,194,542</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income available to common shareholders</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">866,687</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">875,318</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (basic)</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net income per shares of common stock (diluted)</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">0.04</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"></font>&#160;</div> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="6"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Computed tax at the PRC statutory rate of 15%</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">298,317</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">359,760</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Benefit of tax holiday</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(298,317</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(359,760</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Income tax expenses per books</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Amount outstanding</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">15,886,362</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">15,331,983</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less: Allowance for doubtful accounts</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2,790,662</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">(2,790,662</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">)</font></div> </td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Net amount</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">13,095,700</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">12,541,321</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" colspan="2"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> <td align="left" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Beginning balance</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,790,662</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,505,867</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Provision for doubtful accounts</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">284,795</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Amounts written off</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Ending balance</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,790,662</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">2,790,662</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Raw materials</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,902,152</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">3,299,372</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Work in process</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">38,617,984</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">32,926,480</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Finished goods</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,631,088</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,204,396</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">44,151,224</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">37,430,248</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31,</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Building</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">26,259,432</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">26,241,768</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Machinery and equipment</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,690,201</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">22,670,300</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Motor vehicles</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;33,054</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;33,054</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">48,982,687</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">48,945,122</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less: accumulated depreciation</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">13,239,934</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">12,225,527</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">35,742,753</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left; padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">36,719,595</font></div> </td> </tr> </table> </div> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left"> <table style="width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;"><font style="display: inline; font-weight: bold;">June 30,</font> <font style="display: inline; font-weight: bold;">2012</font></font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31, 2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Land Use Rights</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">11,135,130</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">11,371,230</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="76%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Less: Accumulated amortization</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">775,476</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 2px solid black;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">672,171</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10,359,654</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="border-bottom: 4px double black;" valign="bottom" width="1%"> <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">10,699,059</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160;</font></td> </tr> </table> </div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;">&#160;</div> <div align="left" style="text-align: justify;"> <table style="text-align: justify; width: 100%; font-family: times new roman; font-size: 10pt;" cellspacing="0" cellpadding="0"> <tr style="text-align: justify;"> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">June 30, 2012</font></div> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">(unaudited)</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 2px solid black;" valign="bottom" colspan="2"> <div align="center" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">December 31, 2011</font></div> </td> <td align="left" style="padding-bottom: 2px;" valign="bottom"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr> <td align="left" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Everbright Bank, dated July 11, 2011, due and repaid on July 11, 2012, &#160;with an annual interest rate of 8.528% payable quarterly, secured by property and equipment and land use rights</font></div> </td> <td align="left" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated January 10, 2012, due January 11, 2013, with an annual interest rate of 6.56% payable quarterly, secured by property and equipment and land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">4,722,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">4,722,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated August 27, 2011, due August 28, 2012, with an annual interest rate of 6.56% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated August 13, 2011, due August 14, 2012, with an annual interest rate of 6.56% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated June 6, 2012, due June 5, 2013 with an annual interest rate of 9.184% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">6,296,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from China Construction Bank, dated September 26, 2011, due September 27, 2012 with an annual interest rate of 6.56% payable quarterly, secured by land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">8,814,400</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">8,814,400</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from Huaxia Bank, dated June 14, 2011, due and repaid on June 14, 2012, with an annual interest rate of 8.203% payable quarterly, secured by equipment and land use rights</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="text-align: left;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">5,509,000</font></div> </td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td style="text-align: justify; padding-bottom: 2px;" valign="bottom" width="76%"> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Bank loan from Credit Union, dated February 1, 2011, originally due in August 2012, repaid in April 2012, with an annual interest rate of 13.66% payable monthly, secured by guarantee from major shareholder&#8217;s wife</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">-</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="1%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$&#160;</font></div> </td> <td align="right" style="border-bottom: 2px solid black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">1,259,200</font></div> </td> <td align="right" style="padding-bottom: 2px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="white"> <td align="right" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="9%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> <tr bgcolor="#cceeff"> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="76%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">38,720,400</font></div> </td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td align="right" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> <td style="border-bottom: 4px double black; text-align: left;" valign="bottom" width="1%"> <div style="text-align: left; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">$</font></div> </td> <td align="right" style="border-bottom: 4px double black;" valign="bottom" width="9%"> <div align="right" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">45,488,600</font></div> </td> <td align="left" style="padding-bottom: 4px;" valign="bottom" width="1%"><font style="display: inline; font-family: times new roman; font-size: 10pt;">&#160; </font></td> </tr> </table> </div> 1.00 4690520 P1Y14D P2Y8M16D P2Y11M23D P3Y11D P6M14D P2Y2M16D P2Y5M23D P2Y6M11D 0.0018 0.0018 0.0018 0.0018 0.0018 0.0018 0.0018 0.0018 0.90 0.90 0.90 0.90 1.04 1.04 1.04 1.04 208605 444895 17786200 1229200 1229200 1229200 1.51 1.51 472160 472160 305810 305810 372119 205690 386853 130220 256633 P50Y 125000 200000 804200 100000 125000 200000 804200 100000 22820 132521 16762 2702 27825 159259 20176 1344 387838 14000000 January 2060 6.31 1.00 6.31 1.00 6.46 1.00 6.32 1.00 P12M 0.1300 0.1700 0.17 16542 71846 1.30 2.00 100% tax holiday from enterprise income tax from the Xing He District Local Tax Authority for 10 years from 2008 through 2017. 0.15 0.340 0.240 0.324 0.249 0.412 0.163 0.432 0.263 0.450 0.190 0.102 0.357 0.154 0.142 0.107 2 2 2 2 359760 298317 359760 298317 0.25 1.00 0.15 15331983 15886362 284795 3299372 3902152 32926480 38617984 1204396 1631088 48945122 26241768 22670300 33054 48982687 26259432 22690201 33054 12225527 13239934 389347 775732 505745 1013356 16694000 17549101 0 0 11371230 11135130 672171 775476 10699059 10359654 P50Y 47153 93754 46826 103830 736389 120300 798890 120300 992000 28000 100000 45833 124025 160000 420000 90000 620000 365000 100000 60000 110000 100000 P1Y6M P1Y 91250 80667 57000 266100 91250 532200 91250 87850 91250 16133 0 175700 182500 16133 0 120000000 1229200 250000 320000 100000 200000 200000 0.64 0.50 0.50 0.50 0.56 4 2480500 P5Y 1.30 2976600 0.06 28099 37742 6985 15114 0 0 298000 P5Y 1240250 1240250 124025 1.32 129806 222860 0.082 0.082 3 185610 0.08528 0.0656 0.0656 0.0656 0.09184 0.0656 0.08203 0.1366 0.08528 0.0656 0.0656 0.0656 0.09184 0.0656 0.08203 0.1366 693274 1406804 1220173 2449918 0.0673 0.0731 765 766 215468 215468 4714360 9162944 31640 142380 1.00 25 - 40 years 10 - 20 years 5 years 125000 125000 1229200 1229200 2012-06-30 3 4 0.08 9162944 Depends on testing 2012 4722000 1574000 3148000 80% to 100% of the profits P10Y P10Y 10% of after tax income to be allocated to a statutory surplus reserve until the reserve amounts to 50% of the company's registered capital. P90D 389802 776556 508984 1019563 305810 1.30 1.30 2.34 1.32 1.30 100000 100000 0.50 659400 1240100 547500 104000 96800 57000 Over one year for two agreements and one and a half years. 80,667 P4M 24397 24397 EX-101.SCH 3 chgi-20120630.xsd 001 - Document - Document and Entity Information link:presentationLink link:definitionLink link:calculationLink 002 - Statement - Consolidated Balance Sheets link:presentationLink link:definitionLink link:calculationLink 003 - Statement - Consolidated Balance Sheets (Parenthetical) link:presentationLink link:definitionLink link:calculationLink 004 - Statement - Consolidated Statements of Income (Loss) and Comprehensive Income (Unaudited) link:presentationLink link:definitionLink link:calculationLink 005 - Statement - Consolidated Statements of Cash Flows (Unaudited) link:presentationLink link:definitionLink link:calculationLink 006 - Disclosure - Organization and Business link:presentationLink link:definitionLink link:calculationLink 007 - Disclosure - Basis of Preparation of Financial Statements link:presentationLink link:definitionLink link:calculationLink 008 - Disclosure - Summary of Significant Accounting Policies link:presentationLink link:definitionLink link:calculationLink 009 - Disclosure - Concentration of Business and Credit Risk link:presentationLink link:definitionLink link:calculationLink 010 - Disclosure - Income Taxes link:presentationLink link:definitionLink link:calculationLink 011 - Disclosure - Accounts Receivable, net link:presentationLink link:definitionLink link:calculationLink 012 - Disclosure - Inventories link:presentationLink link:definitionLink link:calculationLink 013 - Disclosure - Property and Equipment, net link:presentationLink link:definitionLink link:calculationLink 014 - Disclosure - Land Use Rights link:presentationLink link:definitionLink link:calculationLink 015 - Disclosure - Stockholders' Equity link:presentationLink link:definitionLink link:calculationLink 016 - Disclosure - Amount Due To A Related Party link:presentationLink link:definitionLink link:calculationLink 017 - Disclosure - Loan from Unrelated Parties link:presentationLink link:definitionLink link:calculationLink 018 - Disclosure - Short-Term Bank Loans link:presentationLink link:definitionLink link:calculationLink 019 - Disclosure - Subsequent Event link:presentationLink link:definitionLink link:calculationLink 020 - Disclosure - Summary of Significant Accounting Policies (Policies) link:presentationLink link:definitionLink link:calculationLink 021 - Disclosure - Summary of Significant Accounting Policies (Tables) link:presentationLink link:definitionLink link:calculationLink 022 - Disclosure - Income Taxes (Tables) link:presentationLink link:definitionLink link:calculationLink 023 - Disclosure - Accounts Receivable - net (Tables) link:presentationLink link:definitionLink link:calculationLink 024 - Disclosure - Inventories (Tables) link:presentationLink link:definitionLink link:calculationLink 025 - Disclosure - Property and Equipment, net (Tables) link:presentationLink link:definitionLink link:calculationLink 026 - Disclosure - Land Use Right, net (Tables) link:presentationLink link:definitionLink link:calculationLink 027 - Disclosure - Short-term Bank Loans (Tables) link:presentationLink link:definitionLink link:calculationLink 028 - Disclosure - Organization and Business (Details) link:presentationLink link:definitionLink link:calculationLink 029 - Disclosure - Summary of Significant Accounting Policies (Details) link:presentationLink link:definitionLink link:calculationLink 030 - Disclosure - Summary of Significant Accounting Policies (Details 1) link:presentationLink link:definitionLink link:calculationLink 031 - Disclosure - Summary of Significant Accounting Policies (Details 2) link:presentationLink link:definitionLink link:calculationLink 032 - Disclosure - Summary of Significant Accounting Policies (Details 3) link:presentationLink link:definitionLink link:calculationLink 033 - Disclosure - Summary of Significant Accounting Policies (Details 4) link:presentationLink link:definitionLink link:calculationLink 034 - Disclosure - Summary of Significant Accounting Policies (Details Textual) link:presentationLink link:definitionLink link:calculationLink 035 - Disclosure - Concentration of Business and Credit Risk (Details) link:presentationLink link:definitionLink link:calculationLink 036 - Disclosure - Income Taxes (Details) link:presentationLink link:definitionLink link:calculationLink 037 - Disclosure - Income Taxes (Details Textual) link:presentationLink link:definitionLink link:calculationLink 038 - Disclosure - Accounts Receivable - net (Details) link:presentationLink link:definitionLink link:calculationLink 039 - Disclosure - Accounts Receivable - net (Details 1) link:presentationLink link:definitionLink link:calculationLink 040 - Disclosure - Inventories (Details) link:presentationLink link:definitionLink link:calculationLink 041 - Disclosure - Inventories (Details Textual) link:presentationLink link:definitionLink link:calculationLink 042 - Disclosure - Property and Equipment, net (Details) link:presentationLink link:definitionLink link:calculationLink 043 - Disclosure - Property and Equipment, net (Details 1) link:presentationLink link:definitionLink link:calculationLink 044 - Disclosure - Property and Equipment, net (Details Textual) link:presentationLink link:definitionLink link:calculationLink 045 - Disclosure - Land Use Right, net (Details) link:presentationLink link:definitionLink link:calculationLink 046 - Disclosure - Land Use Right, net (Details Textual) link:presentationLink link:definitionLink link:calculationLink 047 - Disclosure - Stockholders' Equity (Details Textual) link:presentationLink link:definitionLink link:calculationLink 048 - Disclosure - Stockholders' equity (Details Textual 1) link:presentationLink link:definitionLink link:calculationLink 049 - Disclosure - Amount Due To A Related Party (Details) link:presentationLink link:definitionLink link:calculationLink 050 - Disclosure - Loan from Unrelated Parties (Details) link:presentationLink link:definitionLink link:calculationLink 051 - Disclosure - Short-term Bank Loans (Details) link:presentationLink link:definitionLink link:calculationLink 052 - Disclosure - Short-term Bank Loans (Details Textual) link:presentationLink link:definitionLink link:calculationLink 06 - Disclosure - Summary of Significant Accounting Policies (Details Textual) (Details: 1) link:presentationLink link:definitionLink link:calculationLink 07 - Disclosure - Summary of Significant Accounting Policies (Details Textual) (Details: 2) link:presentationLink link:definitionLink link:calculationLink 14 - Disclosure - Stockholders' Equity (Details Textual) (Details: 2) link:presentationLink link:definitionLink link:calculationLink