<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Accounts Receivable</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Accounts receivable are reported at net realizable value. The Company has established an allowance for doubtful accounts based on an estimate of the amounts that may be uncollectible. On a monthly basis, the Company examines all significant past due amounts. The Company considers the age of the receivable, the financial standing and credit rating of the customer, and the history of payments or guarantee of payment made by the customer. Many of the Company's contracts are with large Chinese government-backed organizations with an excellent but slow payment history. Normal payment terms for custom contract sales are: (i) 30% of the contract price as advanced payment after signing of the contract which is used to buy materials and production; (ii) 30% of the contract price will be collected when production is finished and goods are inspected by the customer; (iii) 30% of the contract price will be received after the completion of refractory installation and testing by the customer; and (iv) the final installment of 10% retentions are usually due one to two years after the hot air stove is put into service to allow for quality guarantee. Such retentions are presented as retentions receivable or long-term retentions receivable on the consolidated balance sheets.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Estimated warranty costs, if material, are accrued at the time of sales. Such costs have not been material to date.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Accumulated Other Comprehensive Income</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company reports comprehensive income in accordance with the provisions of ASC Topic 220, Comprehensive Income, which establishes standards for reporting comprehensive income or loss and its components in the financial statements. The accumulated other comprehensive income represents foreign currency translation adjustments.</p> <!--EndFragment--></div> </div>
1
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Government Assistance</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company is currently the beneficiary of government grants that are generally intended to be used towards capital technology improvement with the end goal of increased production and energy efficiency. These grants are recorded as deferred income in the liabilities section of the balance sheet when cash is received and are accreted into non-operating income over the life of the asset, to the extent that the grant is related to an asset. For grants not related to any assets in certain cases, the Company records non-operating income when earned. The government grant income included in other income amounted to approximately $178,454 and $51,040 for the three month periods ended September 30, 2012 and 2011, respectively, and approximately $266,861 and $191,246 for the nine month periods ended September 30, 2012 and 2011.</p> <!--EndFragment--></div> </div>
250000
0.3
0.25
0.19
0.16
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> A summary of the conversion rates for the periods presented is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="6">Three Months Ended</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">September 30,</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt" colspan="2"> 31,</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 61%">Period end RMB: U.S. Dollar exchange rate</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.3190</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.4018</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.3647</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Average RMB: U.S. Dollar exchange rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.3200</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.4231</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.4735</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <!--EndFragment--></div> </div>
6.32
6.4231
6.4735
12839000
12839000
85695
42576
0.05
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Bank Notes Receivable</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Bank notes receivable consists of bank notes from various banks in the PRC, which generally have a maturity of one to six months. The bank notes are highly liquid and are given to or received by vendors and customers instead of the local currency ("Renminbi" or "RMB"). The bank notes can generally be presented to the bank before maturity and in such case are redeemable at a slight discount.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>9.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Bank Notes Payable</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's bank notes payable are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> September 30,</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,136,414</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,571,166</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Bank notes payable represent bank notes paid to the Company's vendors for purchase of inventory. At September 30, 2012, the Company had bank notes payable with two different banks with maturity dates of nine months. All are noninterest-bearing notes. The notes payable require cash to be held in reserve of 100% of the total outstanding notes payable balance. Cash held by the bank as a collateral is included in restricted cash.</p> <!--EndFragment--></div> </div>
6
2
2
2
2
2
7
4
6340000
6340000
11
4
7
0.96
-233019
-225945
146246
-217922
P1Y
0.1
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Sales Returns Allowance</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company estimates future product returns related to current period product revenue. The Company analyzes historical returns, and changes in customer demand and acceptance of the Company's products when evaluating the adequacy of the sales returns allowance. Significant management judgment and estimates must be made and used in connection with establishing the sales returns allowance in any accounting period. Material differences may result in the amount and timing of the Company's revenue for any period if management made different judgments or utilized different estimates. Based on the Company's analysis, the Company did not record any provision for sales returns as of September 30, 2012 and 2011.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's bank notes payable are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> September 30,</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,136,414</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,571,166</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's other receivables are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 38pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> September 30,</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Other receivables-individuals and employees</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,284,504</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,713,371</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Other receivables-companies</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,081,245</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,097,453</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Security deposits</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 975,248</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,004,335</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt"> Total other receivables</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,340,997</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,815,159</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The following table shows the components of retentions receivable from long-term contracts:</p> <p style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; MARGIN-RIGHT: 0px"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">September 30, 2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">December 31, 2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Retentions<br /> receivable</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Long-term<br /> retention<br /> receivable</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Retentions<br /> receivables</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Long-term<br /> retention<br /> receivables</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Chinese government or province owned customers:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 48%">Amounts billed and due</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right">401,724</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right">1,089,846</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">794,088</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">3,368,750</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Amounts billed and not due</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 6,248,626</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,365,023</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 6,113,772</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 87,671</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6,650,350</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,454,869</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6,907,860</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3,456,421</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Commercial customers:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Amounts billed and due</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">345,693</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">872,120</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">178,392</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,470,435</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Amounts billed and not due</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,952,405</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 811,484</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,484,010</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,298,098</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,683,604</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,662,402</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,470,435</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt"> Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 11,948,448</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,138,473</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 11,570,262</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,926,856</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Depreciation is computed using the straight-line basis over the estimated useful lives of the related assets as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 40%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify; WIDTH: 70%">Plant and buildings</td> <td style="TEXT-ALIGN: right; WIDTH: 30%">20 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Machinery and equipment</td> <td style="TEXT-ALIGN: right">10 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Vehicles</td> <td style="TEXT-ALIGN: right">4 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Electronic equipment</td> <td style="TEXT-ALIGN: right">3 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Furniture and tools</td> <td style="TEXT-ALIGN: right">5 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Software</td> <td style="TEXT-ALIGN: right">5 years</td> </tr> </table> <!--EndFragment--></div> </div>
P5Y
P5Y
30% of the contract price will be received after the completion of refractory installation and testing by the customer; and (iv) the final installment of 10% retentions are usually due one year after the hot air stove is put into service to allow for quality guarantee.
false
--12-31
Q2
2012
2012-09-30
10-Q
0001501162
19995701
Smaller Reporting Company
ANNEC GREEN REFRACTORIES CORP
ANNC
16576887
19315558
28414163
34410920
5773978
4597680
1911026
1647662
4046992
4046992
652000
792000
114642
11455
39393
38874
116144694
122954792
92457887
98671393
10000000
1
942305
343028
511381
1504971
645256
-996597
5000000
100
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>13.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Commitments and Contingencies</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Third Party Guarantees</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 24.75pt; FONT: 10pt Times New Roman, Times, Serif"> The Company entered into agreements as a debt guarantor during 2012 for four third parties. The maximum guaranteed amount is $15,984,000. The total outstanding borrowings by these parties were approximately $12,818,000 as of September 30, 2012.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> These parties also acted as debt guarantors for the Company during 2012 with a maximum guaranteed amount of $14,243,000. As of September 30, 2012, the Company's loans guaranteed by these parties were approximately $9,495,000. The Company has not historically incurred any losses due to such debt guarantees. Additionally, the Company has determined that the difference between fair value and the carrying amount of the guarantees is immaterial.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Leases</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company leases one factory and one office building under non-cancelable operating leases with the third parties through April 1, 2014 and May 31, 2013, respectively. Rent expense included in general and administrative expense is $67,093 and $18,259 for the three months end September 30, 2012 and 2011, and $232,694 and $77,807 for the nine months ended September 30, 2012 and 2011. A summary of future minimum lease payments as of September 30, 2012 is presented below.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">Minimum</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">Lease</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Payments</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Year ending September 30:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt; WIDTH: 87%"> 2013</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">250,729</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 22pt"> 2014</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 131,086</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 381,815</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
0.0001
0.0001
100000000
100000000
19995701
19995701
19995701
19995701
2000
2000
1418717
3490236
2849263
6798758
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Concentration of Credit and Other Risks</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Financial instruments which are potentially subject to concentrations of credit risk consist principally of cash, restricted cash, bank notes receivable, accounts receivable and other receivables. The Company holds all of its bank deposits with banks in China. In China, there is no equivalent federal deposit insurance as in the United States; as such, these amounts held in banks in China are not insured. The Company has not experienced any losses in such bank accounts through September 30, 2012. In an effort to mitigate any potential risk, the Company periodically evaluates the credit quality of the financial institutions which hold the bank deposits and the Company holds its cash in multiple banks supported by the local and Central Government of the PRC.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company does not require collateral or other security to support the trade receivables. The Company is exposed to credit risk in the event of nonpayment by customers to the extent of amounts recorded on the balance sheet. One customer accounted for 24% and 25% of our trade receivables balance as of September 30, 2012 and December 31, 2011 respectively. An additional customer accounted for 15% and 16% of the Company's trade receivables balance as of September 30, 2012 and December 31, 2011 respectively.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Two customers individually accounted for 25% and 15% of our revenue for the three months ended September 30, 2012, and two customers individually accounted for 38% and 13% of our revenue for the three months ended September 30, 2011, respectively. Two customers individually accounted for 26%, and 13% of our revenue for the nine month periods ended September 30, 2012. One customer individually accounted for 30% of our revenue in the nine month periods ended September 30, 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The operations of the Company are located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC. The Chinese Government controls its foreign currency reserves through restrictions on imports and conversion of Renminbi (RMB) into foreign currency. During January 2008 to September 2012, the exchange rate between RMB and U. S. Dollars (USD) has fluctuated from USD $1.00 to RMB 7.3141 and USD $1.00 to RMB 6.3190, respectively. There can be no assurance that the exchange rate will remain stable. The Renminbi could appreciate or depreciate against the U .S .Dollar. The Company's financial condition and results of operations may also be affected by changes in the value of certain currencies other than the Renminbi in which its earnings and obligations are denominated.</p> <!--EndFragment--></div> </div>
7972971
11415483
28675880
34780715
7972971
11415483
28675880
29945925
4834790
24153200
29726898
2014-12-13
2700994
2812556
674657
493402
422974
349201
1283965
1009377
1323358
1048251
1972693
1619827
681658
764461
488590
572779
193068
191682
0.07
0.16
0.13
0.3
0.15
0.25
0.25
0.15
0.15
0.15
0.25
0.25
0.15
0.15
0.15
0.15
-45979
3007
460621
530219
0.39
0.31
0.38
0.21
0.14
0.15
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Fair Value of Financial Instruments</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Fair Value Measurements and Disclosures (ASC 820-10) include a fair value hierarchy that is intended to increase the consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing an asset or liability based upon their own market assumptions. The fair value hierarchy consists of the following three levels:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Level 1 -inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Level 2- observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Level 3 -instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company's financial instruments consist mainly of cash, restricted cash, bank notes receivable, other receivables, and debt obligations. Other receivable are reflected in the accompanying financial statements at historical cost, which approximates fair value due to the short-term nature of these instruments. Based on the borrowing rates currently available to the Company for loans and similar terms and average maturities, the fair value of debt obligations also approximates its carrying value due to the short-term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company had no assets or liabilities measured at fair value and subject to the disclosure requirements based on the fair value hierarchy.</p> <!--EndFragment--></div> </div>
128807
88834
1968532
46758
46758
46758
46758
46758
2331129
2314389
2202322
2225555
P47Y1M6D
63647
64018
63190
63089
63647
64640
73141
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Foreign Currency Translation</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The accompanying financial statements are presented in United States Dollars. The functional currency of the Company is the Renminbi, the official currency of the PRC. Capital accounts of the financial statements are translated into United States Dollars from RMB at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of the balance sheet date. Income and expenditures are translated at the average exchange rates for the periods ended September 30, 2012 and 2011. Items in the Company's consolidated statement of cash flows are translated using a weighted average exchange rate, which approximates the exchange rate in effect at the time of the cash flows. For all periods reported, there were no transactions outside the PRC; thus, all of our transactions are in RMB, our functional currency. Currency translation adjustments from translation to U.S. Dollars for financial reporting purposes are recorded in other comprehensive income (loss) as a component of equity.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> A summary of the conversion rates for the periods presented is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="6">Three Months Ended</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">September 30,</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt" colspan="2"> 31,</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 61%">Period end RMB: U.S. Dollar exchange rate</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.3190</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.4018</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.3647</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Average RMB: U.S. Dollar exchange rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.3200</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.4231</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.4735</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <!--EndFragment--></div> </div>
0
2852
-141739
-31848
1352386
1289033
4280005
3970995
6951367
9868972
20036829
23833063
15984000
16009000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Impairment of Long-Lived Assets</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Long-lived assets held and used by the Company, including long-term investments, are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be recoverable (carrying amount exceeds the gross, undiscounted cash flows from use and disposition), then an impairment loss is recognized. The impairment loss is measured as the excess of the carrying amount over the asset's or asset group's fair value. Through September 30, 2012, there were no impairments of long-lived assets.</p> <!--EndFragment--></div> </div>
1808463
3806214
3426546
7184032
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>12.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Income Taxes</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company is subject to applicable local tax statutes and is governed by the Income Tax Law of the PRC and local income tax laws (the "PRC Income Tax Law").</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Zhengzhou Annec qualified as a hi-tech corporation and was accorded certain tax incentives for said designation. Accordingly, Zhengzhou Annec was subject to tax at a statutory rate of 15% for the three and nine month ended September 30, 2012 and 2011. Zhengzhou Annec will become subject to a rate of 25% after 2012 unless Zhengzhou Annec applies for and receives a further tax holiday for the succeeding five years.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Beijing Annec is subject to taxes at a statutory rate of 25%.</p> <!--EndFragment--></div> </div>
462722
622718
326549
598081
840647
1185972
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Income Taxes</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company adopted accounting policies in accordance to U.S. GAAP as its basis for computing the current income tax provision. Therefore, there were no significant deferred tax assets or liabilities during the quarter ended September 30, 2012 and 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company adopted the Interpretation provisions of ASC 740, Income Taxes, on January 1, 2009, that clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the Company's financial statements. The Interpretation also provides guidance for the measurement and classification of tax positions, interest and penalties, and requires additional disclosure on an annual basis. The adoption had no effect on the Company's financial statements. Following implementation, the ongoing recognition of changes in measurement of uncertain tax positions will be reflected as a component of income tax expense. Interest and penalties incurred associated with unresolved income tax positions will continue to be included in other income (expense).</p> <!--EndFragment--></div> </div>
-2797460
12092207
-1247054
-1396496
-5798323
19839514
-132123
-128112
-73555
106585
1887993
11991206
-596207
202389
499075
-510638
-2742741
10334699
-6384124
16186208
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>7.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Land Use Rights, net</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's land use rights are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center">Estimated</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center">Remaining</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center"> Life</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 61%">Land use rights</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: center; WIDTH: 12%" nowrap="nowrap">47.1 years</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,331,129</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,314,389</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Less accumulated amortization</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (128,807</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (88,834</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total land use rights, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,202,322</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,225,555</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 27pt; FONT: 10pt Times New Roman, Times, Serif"> Amortization expense related to land use rights was $11,642 and $11,455 for the three month periods ended September 30, 2012 and 2011, respectively, and $39,393 and $38,874 for the nine month periods ended September 30, 2012 and 2011, respectively. The difference between the amortization expense and accumulated amortization is due to exchange rate differences as we translate expense using an average exchange rate for the fiscal year and translate the accumulated amortization using the fiscal year end exchange rate.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 27pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 22.5pt; FONT: 10pt Times New Roman, Times, Serif"> Amortization of land use rights attributable to future periods is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 73%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Period ending September 30:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt; WIDTH: 87%"> 2013</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">46,758</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2014</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2015</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2016</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2017</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 22pt"> Thereafter</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,968,532</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,202,322</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Land Use Rights</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> In the PRC there is no land ownership, but land use rights can be obtained. Land use rights are stated at cost less accumulated amortization. Amortization expense is recorded on a straight-line basis over the term of the land use rights. Land use rights are an intangible asset. The Company reviews intangible assets for impairment periodically and at least annually.</p> <!--EndFragment--></div> </div>
968587
638521
3249458
2331305
1143816
1959534
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>5.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Inventories</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's inventories are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Raw materials</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">3,452,167</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,100,556</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Work in process</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">292,474</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">692,465</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Finished goods</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 32,808,102</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 29,625,943</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total inventories</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 36,552,743</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 34,418,964</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
32808102
29625943
36552743
34418964
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Inventories</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Inventories are stated at the lower of cost or market. Cost is determined on an average cost basis, which approximates actual cost on a first-in, first-out (FIFO) method. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration, and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolescence and are charged to cost of revenues.</p> <!--EndFragment--></div> </div>
3452167
4100556
292474
692465
76509
72579
239553
257223
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Long-term Investment</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Long-term investment represents an investment the Company has in a regional bank within China. The Company does not hold a greater than a 5% interest and has determined that the Company does not have significant control or influence in the bank. Accordingly, the Company records the investment at cost. The Company's investment is in a private company where there is not a market to determine the value of the investment.</p> <!--EndFragment--></div> </div>
67093
18259
232694
77807
2014-04-01
2013-05-31
76287024
85946386
116144694
122954792
72888135
82209984
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>4.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Other Receivables</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's other receivables are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 38pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> September 30,</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Other receivables-individuals and employees</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,284,504</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,713,371</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Other receivables-companies</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,081,245</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,097,453</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Security deposits</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 975,248</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,004,335</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt"> Total other receivables</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,340,997</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,815,159</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Other receivables are comprised of three categories: receivables from individuals (both employees and other individuals), receivables from other companies and security deposits for large contracts and are generally unsecured. Security deposits are to be returned to the Company upon the completion of the projects. Receivables from employees include cash advanced to employees for purchased supplies and services and employees' travel and miscellaneous business expenses.</p> <!--EndFragment--></div> </div>
310176
77543
310176
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>10.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Long-Term Loan</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company's long-term loan is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 11pt; WIDTH: 74%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">697,895</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">923,846</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The long-term loan is due on December 13, 2015, and has an interest rate of 7.152% and is secured by one of the Company's office buildings.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Future minimum payments for the long-term loan are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in" cellspacing="0" cellpadding="0"> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Period ending September 30:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 13pt; WIDTH: 87%"> 2013</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">310,176</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 13pt">2014</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">310,176</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 13pt"> 2015</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 77,543</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 697,895</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
0.07152
158253
157117
697895
923846
-122441
374472
-1006675
-1246947
1774372
-124122
1481914
3208133
2585899
5998060
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Recent Accounting Pronouncements</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-05, comprehensive income (Topic 220): Presentation of Comprehensive Income. The objective of this Update is to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. The amendments require that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under the amendments to Topic 220, Comprehensive Income, in this Update, an entity has the option 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 of comprehensive income or in two separate but consecutive statements. The amendments in this Update should be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this standard on January 1, 2012. The adoption of this standard did not have a material impact on the Company's financial position, results of operations, or cash flows.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U. S. GAAP and IFRSs. The amendments in this Update are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs). The amendments in this Update apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity's shareholders' equity in the financial statements. The amendments in this Update are to be applied prospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this standard on January 1, 2012. The adoption of this standard did not have a material impact on our financial position, results of operations, or cash flows.</p> <!--EndFragment--></div> </div>
548527
-493389
-485263
-2640932
-1751640
243535
2026885
2136414
1571166
2
4649515
5577495
13969351
14897391
4532778
5476900
12917427
14088156
116737
100595
1051924
809235
2301852
4291477
6067478
8935672
381815
131086
250729
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="WIDTH: 27pt">1.</td> <td style="TEXT-ALIGN: justify"><strong>Basis of Presentation and Description of the Company</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The accompanying unaudited condensed consolidated financial statements of Annec Green Refractories Corporation (the Company) have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) for interim financial information in pursuant to the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the financial statements have been included. The financial information for December 31, 2011 has been derived from the consolidated audited financial statements included in our annual report filed on Form 10-K with the SEC for the year ended December 31, 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto, together with management's discussion and analysis of the Company's financial condition and results of operations, contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the Securities and Exchange Commission (SEC) on April 25, 2012. The results of operations for the nine-month period ended September 30, 2012 are not necessarily indicative of the results for the year ending December 31, 2012 or any other interim period. The accompanying condensed consolidated financial statements include all wholly-owned subsidiaries and all subsidiaries over which the Company exercises the power and control to direct activities significantly impacting financial performance. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified in the consolidated financial statements to conform to the current period presentation.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> On February 11, 2011, Annec Green Refractories Corporation, formerly E-Band Media, Inc. ("E-Band Media") entered and closed a Share Exchange Agreement ("Share Exchange Agreement"), with certain shareholders and warrant holders, Dean Konstantine, Muzeyyen Balaban, Bernieta Masters, and Linda Masters, and with China Green Refractories Limited, a BVI corporation ("China Green"), and its shareholders, New-Source Group Limited, a BVI company, High-Sky Assets Management Limited, a BVI company, Joint Rise Investments Limited, a BVI company, Giant Harvest Investment Limited, a BVI company, and Mr. QIAN Yun Ting (collectively the "China Green Shareholders"), pursuant to which E-Band Media acquired 100% of the issued and outstanding capital stock of China Green in exchange for 19,220 shares of E-Band Media's Series A Convertible Preferred Stock ("Series A Preferred Stock"). Pursuant to the terms of the Share Exchange Agreement, E-Band Media agreed to affect a 1-for-14.375 reverse stock split ("Reverse Split") of its outstanding common stock. The Reverse Stock Split was affected on April 18, 2011. In addition, pursuant to the Share Exchange Agreement, the China Green shareholders acquired all 10,000,000 shares of E-Band Media's common stock from Dean Konstantine ("Controlled Shares") and all outstanding warrants of E-Band Media from Muzeyyen Balaban, Bernieta Masters, and Linda Masters, representing warrants to purchase up to 5,000,000 shares of our common stock ("Warrants") for an aggregate purchase price of $250,000 and 100 shares of Series A Preferred Stock held by China Green shareholders. The Warrants were cancelled by the China Green shareholders pursuant to the Share Exchange Agreement. As a result of the Share Exchange Agreement, the China Green shareholders owned 96% of our issued and outstanding common stock on an as-converted common stock basis as of and immediately after the effectiveness of the Reverse Split as contemplated by the Share Exchange Agreement.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The consolidated financial statements following unaudited combined condensed consolidated financial statements have been prepared with the effect of the merger of China Green and E-Band Media, Inc. as a reverse acquisition of assets and a recapitalization in accordance with accounting principles generally accepted in the United States. For accounting purposes, China Green was considered to be the acquirer of E-Band Media, Inc. in the merger and E-Band Media, Inc. did not meet the definition of a business in accordance with ASC Topic 805-10, Business Combinations, because E-Band Media, Inc. had no material assets or liabilities at the time of closing of the merger and these assets and liabilities did not constitute a business pursuant to ASC Topic 805. Consequently, all of the assets and liabilities of E-Band Media, Inc. were reflected in the financial statements at their respective fair values and no goodwill or other intangibles were recorded as part of acquisition accounting, and the cost of the merger was measured at net assets acquired.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Business Description</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Zhengzhou Annec is principally engaged in the manufacture, design, development, sale, installation, and maintenance of refractory materials and products. Zhengzhou Annec's primary products are heat shock bricks for internal, top, and external combustion hot air stoves, high alumina brick with heat shock, cordierite-mullite bricks, non-recasting, soft and high-heating andalusite brick, and silica bricks with high thermal conductivity and high density. Zhengzhou Annec produces refractory products through three factories in the Henan Province, PRC: Fuliang, Fuhua, and Fugang.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Beijing Annec's primary business is to design and build blast furnaces and hot air stoves. Beijing Annec acts as a general contractor and has outside construction companies serve as sub-contractors. Beijing Annec also derives revenue from technology research and development, graphic design, production, engineering and technical consulting, and sales of building material.</p> <!--EndFragment--></div> </div>
11948448
11570262
345693
178392
4952405
1470435
6248626
3368750
401724
794088
5798576
4662402
6907860
5462843
3368750
794088
4592753
4592753
4662402
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>3.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Retentions Receivable and Long-term Retentions Receivable</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company enters into sales contracts with customers whereas there is a retainage provision in which the customer can retain a portion of the payment, generally 10% of the contract price, until the completed stoves or refractory materials sold by the Company have been demonstrated to be of good quality. The retention period is usually one to two years from the date the stoves are placed into service. The current portion on the Balance Sheet represents amounts due within a year. The long-term portion represents the amount that are due over two years or that is already over a year old.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The following table shows the components of retentions receivable from long-term contracts:</p> <p style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; MARGIN-RIGHT: 0px"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">September 30, 2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">December 31, 2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Retentions<br /> receivable</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Long-term<br /> retention<br /> receivable</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Retentions<br /> receivables</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Long-term<br /> retention<br /> receivables</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Chinese government or province owned customers:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 48%">Amounts billed and due</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right">401,724</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right">1,089,846</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">794,088</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">3,368,750</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Amounts billed and not due</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 6,248,626</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,365,023</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 6,113,772</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 87,671</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6,650,350</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,454,869</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6,907,860</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3,456,421</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Commercial customers:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Amounts billed and due</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">345,693</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">872,120</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">178,392</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,470,435</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Amounts billed and not due</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,952,405</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 811,484</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,484,010</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,298,098</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,683,604</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,662,402</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,470,435</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt"> Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 11,948,448</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,138,473</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 11,570,262</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,926,856</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt; MARGIN-RIGHT: 0px"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The balances billed but not due by customers pursuant to retainage provisions in contracts will generally be due one year after the blast furnaces or hot air stoves are placed in service by the customers. Based on the Company's historical experience with similar contracts, all such retention amounts are expected to be collectible, and accordingly, no allowance has been recorded.</p> <!--EndFragment--></div> </div>
4138473
4926856
872120
4484010
811484
1089846
6113772
365023
87671
2601051
1470435
3456421
1882806
87671
3368750
2174572
2174572
1470435
-63197
282103
263364
800698
3111623
3680223
3648046
6481374
398689
80679
368973
322442
4340997
3815159
2284504
1713371
1713371
1081245
1097453
1097453
975248
1004335
1004335
177982
-127530
-79926
705276
828693
1454403
0.0001
0.0001
20000000
20000000
0
0
0
0
7852872
10515009
13500
2440000
2305000
-243000
-1278000
-1521000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong>Reclassification</strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Certain amounts reported in the 2011 consolidated statement of cash flows have been reclassified to conform to the 2012 presentation. The Company determined that the net change in bank notes receivable and payable should be reclassified from investing and financing activities, respectively, to operating activities, because such receivables and payables arise directly in connection with the sale of products and purchases of raw materials. The net change in restricted cash used to secure the related payables has also been reclassified from financing activities to operating activities. As a result of the reclassifications, net cash provided by operating activities decreased by $135,000, net cash used in investing activities decreased by $2,440,000, and net cash provided by financing activities decreased by $2,305,000 from the amounts previously presented in the September 30, 2011 statement of cash flows. There was no impact to the Company's September 30, 2012 consolidated balance sheet or statement of operations and no impact to the net decrease in cash for the period ended September 30, 2012.</p> <!--EndFragment--></div> </div>
-581261
1408896
554807
2305564
-2631754
2689031
1801001
-3849275
15677261
11523202
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>6.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Plant and Equipment, net</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's plant and equipment are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 75%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Plant and buildings</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">14,856,236</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">14,352,338</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Machinery and equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4,659,370</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4,499,602</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Vehicles</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,235,565</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,763,312</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Others</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 535,909</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 462,897</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">22,287,080</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">21,078,149</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Less accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (5,773,978</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (4,597,680</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total plant and equipment, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,513,102</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,480,469</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 22.5pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Depreciation expense related to property and equipment was $422,974 and $349,201 for the three month periods ended September 30, 2012 and 2011, respectively, and was $1,283,965 and $1,009,377 for the nine month periods ended September 30, 2012 and 2011, respectively. The Company recorded a gain on sale of property and equipment of $0 and $2,852 for the three month periods ended September 30, 2012 and 2011, respectively, and a loss of $141,739 and $31,848 for the nine month periods ended September 30, 2012 and 2011, respectively.</p> <!--EndFragment--></div> </div>
22287080
21078149
14856236
14352338
14352338
4659370
4499602
4499602
2235565
1763312
1763312
535909
462897
462897
16513102
16480469
13304912
13177027
3208190
3303442
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Plant and Equipment</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line basis over the estimated useful lives of the related assets as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 40%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify; WIDTH: 70%">Plant and buildings</td> <td style="TEXT-ALIGN: right; WIDTH: 30%">20 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Machinery and equipment</td> <td style="TEXT-ALIGN: right">10 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Vehicles</td> <td style="TEXT-ALIGN: right">4 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Electronic equipment</td> <td style="TEXT-ALIGN: right">3 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Furniture and tools</td> <td style="TEXT-ALIGN: right">5 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Software</td> <td style="TEXT-ALIGN: right">5 years</td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Repairs and maintenance costs are expensed as incurred. Gains or losses on disposals are included in other expense.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Occasionally the Company will settle outstanding accounts receivable and accounts payable balances through non-monetary exchanges such as receiving or signing over the title to vehicles. The Company accounts for these transactions in accordance with ASC 845, Nonmonetary Transactions.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's plant and equipment are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 75%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Plant and buildings</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">14,856,236</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">14,352,338</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Machinery and equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4,659,370</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4,499,602</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Vehicles</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,235,565</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,763,312</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Others</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 535,909</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 462,897</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">22,287,080</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">21,078,149</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Less accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (5,773,978</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (4,597,680</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total plant and equipment, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,513,102</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,480,469</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 22.5pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
P20Y
P10Y
P4Y
P3Y
P5Y
P5Y
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>11.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Related Party Transactions</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> At September 30, 2012, the Company had loans payable to the Chairman (Fuchao Li), and a minority shareholder (Yinling Fan) of the Company. The Company and the owners have not signed notes, there are no specific due dates, and no interest is paid on the loans. Money is transferred between the owners and the Company mainly for cash flow purposes. The amounts loaned to the Company are short-term in nature. The following amounts were payable to the owners as of September 30, 2012 and December 31, 2011:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Fuchao Li</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">488,590</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">572,779</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Yinling Fan</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 193,068</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 191,682</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 681,658</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 764,461</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.65pt; FONT: 10pt Times New Roman, Times, Serif"> During nine months ended September 30, 2012, the Company repaid $84,189 to Fuchao Li. There was no other activity in these payables during the nine months ended September 30, 2012.</p> <!--EndFragment--></div> </div>
84189
12934929
12906540
2162824
1571166
33897652
31311752
44000
88800
170500
140200
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Revenue Recognition</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company's principal revenue sources are from the sale of refractory materials and products and from sales generated from the designing and building of blast furnaces and hot-air stoves.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Zhengzhou Annec primarily generates revenue from the sale of a variety of refractory bricks and the sales from kits of pre-assembled hot-air ovens. Zhengzhou Annec recognizes such revenue when: (1) there is persuasive evidence of an arrangement; (2) customers have accepted receipt of the goods in accordance with the shipping terms; (3) the amount to be paid by the customer is fixed or determinable; and (4) collectability is reasonably assured. Zhengzhou Annec recognizes revenue from the sale of a kit when the kit has been delivered and accepted by the customer.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> During 2011, Zhengzhou ANNEC began entering into certain short-term contracts to build blast furnaces and hot blast stoves. These contracts have an average duration of approximately three to six months and do not exceed a period of one year. Zhengzhou ANNEC recognizes these revenues based on project completion and acceptance by the customer.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Beijing Annec enters into contracts to design and build blast furnaces and hot-air stoves and recognizes revenues during the construction period using the percentage of completion method. Most of the contracts are fixed-price contracts, which typically provide for a stated contract price and a specified scope of the work to be performed. Beijing Annec estimates the percentage of the job that is complete using variations of the cost-to-cost method. Cost is used as the primary indicator, but the Company also considers contract milestones and work in progress from subcontractor companies. If the estimate of costs left to be incurred plus actual costs already incurred exceeds the total revenue to be expected from a contract, then the full amount of the difference is recognized in the current period as a loss and presented on the consolidated balance sheet as a current liability. Beijing Annec also generates revenue from the sale of a variety of machines and equipment which the Company purchases from vendors. Beijing Annec recognized revenue from this type of sale when the machines and equipment have been delivered and accepted by the customer.</p> <!--EndFragment--></div> </div>
14924338
21284455
48712709
58613778
14924338
21284455
48712709
53037417
5576361
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company's long-term loan is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 11pt; WIDTH: 74%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">697,895</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">923,846</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 27pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 22.5pt; FONT: 10pt Times New Roman, Times, Serif"> Amortization of land use rights attributable to future periods is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 73%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Period ending September 30:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt; WIDTH: 87%"> 2013</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">46,758</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2014</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2015</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2016</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt">2017</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,758</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 22pt"> Thereafter</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,968,532</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,202,322</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's land use rights are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center">Estimated</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center">Remaining</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center"> Life</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 61%">Land use rights</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: center; WIDTH: 12%" nowrap="nowrap">47.1 years</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,331,129</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">2,314,389</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Less accumulated amortization</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (128,807</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (88,834</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total land use rights, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,202,322</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,225,555</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">Minimum</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">Lease</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">Payments</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Year ending September 30:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 22pt; WIDTH: 87%"> 2013</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">250,729</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 22pt"> 2014</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 131,086</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 381,815</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's inventories are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Raw materials</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">3,452,167</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,100,556</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Work in process</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">292,474</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">692,465</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Finished goods</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 32,808,102</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 29,625,943</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total inventories</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 36,552,743</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 34,418,964</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; TEXT-INDENT: 27.5pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Future minimum payments for the long-term loan are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in" cellspacing="0" cellpadding="0"> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Period ending September 30:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 13pt; WIDTH: 87%"> 2013</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">310,176</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 13pt">2014</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">310,176</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 13pt"> 2015</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 77,543</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 697,895</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%">Fuchao Li</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">488,590</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">572,779</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt">Yinling Fan</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 193,068</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 191,682</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 681,658</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 764,461</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Information on reportable segments for the three and nine months ended September 30, 2012 and 2011 is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Three Months Ended</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Nine Months Ended</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">September 30,</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">September 30,</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Revenues:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 9pt; WIDTH: 48%"> Zhengzhou Annec</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">14,924,338</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">21,284,455</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">48,712,709</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">53,037,417</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,576,361</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in"> Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 14,924,338</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 21,284,455</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 48,712,709</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 58,613,778</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Cost of revenues:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 9pt">Zhengzhou Annec</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7,972,971</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">11,415,483</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">28,675,880</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">29,945,925</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,834,790</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in"> Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 7,972,971</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,415,483</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 28,675,880</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 34,780,715</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Operating expenses:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 9pt">Zhengzhou Annec</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4,532,778</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5,476,900</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">12,917,427</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">14,088,156</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 116,737</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 100,595</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,051,924</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 809,235</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in"> Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,649,515</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,577,495</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 13,969,351</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 14,897,391</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Income from operations</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,301,852</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,291,477</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,067,478</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8,935,672</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> September 30,</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Plant and equipment, net:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 11pt; WIDTH: 74%"> Zhengzhou Annec</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">13,304,912</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">13,177,027</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 11pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,208,190</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,303,442</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total identifiable assets</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,513,102</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,480,469</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!-- Field: Page; Sequence: 20; Value: 2 --> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's short-term loans are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 11pt; WIDTH: 74%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">18,066,150</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">15,218,314</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> </table> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>14.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Segment Reporting</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company operates in two reportable segments: Zhengzhou Annec and Beijing Annec. The Zhengzhou Annec segment manufactures and sells a variety of refractory bricks and kits of pre-assembled hot-air ovens. The Beijing Annec segment designs and builds blast furnaces and hot-air stoves on a contract basis and uses subcontractors throughout the construction process.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> All revenues are related to end customers in China.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Information on reportable segments for the three and nine months ended September 30, 2012 and 2011 is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Three Months Ended</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Nine Months Ended</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">September 30,</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">September 30,</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Revenues:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 9pt; WIDTH: 48%"> Zhengzhou Annec</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">14,924,338</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">21,284,455</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">48,712,709</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">53,037,417</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,576,361</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in"> Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 14,924,338</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 21,284,455</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 48,712,709</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 58,613,778</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Cost of revenues:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 9pt">Zhengzhou Annec</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7,972,971</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">11,415,483</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">28,675,880</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">29,945,925</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,834,790</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in"> Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 7,972,971</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,415,483</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 28,675,880</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 34,780,715</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Operating expenses:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-LEFT: 9pt">Zhengzhou Annec</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4,532,778</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5,476,900</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">12,917,427</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">14,088,156</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 116,737</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 100,595</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,051,924</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 809,235</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in"> Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,649,515</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,577,495</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 13,969,351</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 14,897,391</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Income from operations</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,301,852</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,291,477</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,067,478</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8,935,672</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify" nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> September 30,</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Plant and equipment, net:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 11pt; WIDTH: 74%"> Zhengzhou Annec</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">13,304,912</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">13,177,027</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt; TEXT-INDENT: 11pt"> Beijing Annec</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,208,190</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,303,442</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt">Total identifiable assets</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,513,102</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,480,469</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
3297129
4288462
9689346
10926396
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Shipping and Handling Costs</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 24.75pt; FONT: 10pt Times New Roman, Times, Serif"> Shipping and handling costs billed to customers are recorded net of the amount collected. Shipping and handling expense included in selling expenses amounted to $647,066 and $1,532,903 for the three month periods ended September 30, 2012 and 2011, respectively, and $1,420,191 and $4,642,913 for the nine month periods ended September 30, 2012 and 2011, respectively.</p> <!--EndFragment--></div> </div>
279796
2307394
771074
3110010
647066
1532903
1420191
4642913
18066150
15218314
11584000
6482000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>8.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Short-Term Loans</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's short-term loans are as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">September 30,</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December 31,</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; TEXT-INDENT: 11pt; WIDTH: 74%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">18,066,150</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">15,218,314</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> At September 30, 2012, the Company has eleven loans with six different banks that are due within one year. The weighted average interest rates are 7.668% and 7.505% for the nine month periods ended September 30, 2012 and 2011. Seven of the short-term loans (with an outstanding balance of $11,584,000 at September 30, 2012) are guaranteed by third parties, Beijing Annec or Fuchao Li, the Company's Chairman. Four of the loans (with an outstanding balance of $6,482,000 at September 30, 2012) are collateralized by the Company's office building, land use rights, or machinery and equipment.</p> <!--EndFragment--></div> </div>
0.07668
0.07505
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: left; WIDTH: 27pt"><strong>2.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Summary of Significant Accounting Policies</strong></td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Significant Estimates</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and liabilities. Significant estimates and assumptions are used for, but not limited to: (1) allowance for doubtful accounts, (2) economic lives of property, plant, and equipment, (3) asset impairments, (4) percentage of completion on construction projects, and (5) contingency reserves. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Bank Notes Receivable</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Bank notes receivable consists of bank notes from various banks in the PRC, which generally have a maturity of one to six months. The bank notes are highly liquid and are given to or received by vendors and customers instead of the local currency ("Renminbi" or "RMB"). The bank notes can generally be presented to the bank before maturity and in such case are redeemable at a slight discount.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Accounts Receivable</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Accounts receivable are reported at net realizable value. The Company has established an allowance for doubtful accounts based on an estimate of the amounts that may be uncollectible. On a monthly basis, the Company examines all significant past due amounts. The Company considers the age of the receivable, the financial standing and credit rating of the customer, and the history of payments or guarantee of payment made by the customer. Many of the Company's contracts are with large Chinese government-backed organizations with an excellent but slow payment history. Normal payment terms for custom contract sales are: (i) 30% of the contract price as advanced payment after signing of the contract which is used to buy materials and production; (ii) 30% of the contract price will be collected when production is finished and goods are inspected by the customer; (iii) 30% of the contract price will be received after the completion of refractory installation and testing by the customer; and (iv) the final installment of 10% retentions are usually due one to two years after the hot air stove is put into service to allow for quality guarantee. Such retentions are presented as retentions receivable or long-term retentions receivable on the consolidated balance sheets.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Estimated warranty costs, if material, are accrued at the time of sales. Such costs have not been material to date.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Concentration of Credit and Other Risks</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Financial instruments which are potentially subject to concentrations of credit risk consist principally of cash, restricted cash, bank notes receivable, accounts receivable and other receivables. The Company holds all of its bank deposits with banks in China. In China, there is no equivalent federal deposit insurance as in the United States; as such, these amounts held in banks in China are not insured. The Company has not experienced any losses in such bank accounts through September 30, 2012. In an effort to mitigate any potential risk, the Company periodically evaluates the credit quality of the financial institutions which hold the bank deposits and the Company holds its cash in multiple banks supported by the local and Central Government of the PRC.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company does not require collateral or other security to support the trade receivables. The Company is exposed to credit risk in the event of nonpayment by customers to the extent of amounts recorded on the balance sheet. One customer accounted for 24% and 25% of our trade receivables balance as of September 30, 2012 and December 31, 2011 respectively. An additional customer accounted for 15% and 16% of the Company's trade receivables balance as of September 30, 2012 and December 31, 2011 respectively.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Two customers individually accounted for 25% and 15% of our revenue for the three months ended September 30, 2012, and two customers individually accounted for 38% and 13% of our revenue for the three months ended September 30, 2011, respectively. Two customers individually accounted for 26%, and 13% of our revenue for the nine month periods ended September 30, 2012. One customer individually accounted for 30% of our revenue in the nine month periods ended September 30, 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The operations of the Company are located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC. The Chinese Government controls its foreign currency reserves through restrictions on imports and conversion of Renminbi (RMB) into foreign currency. During January 2008 to September 2012, the exchange rate between RMB and U. S. Dollars (USD) has fluctuated from USD $1.00 to RMB 7.3141 and USD $1.00 to RMB 6.3190, respectively. There can be no assurance that the exchange rate will remain stable. The Renminbi could appreciate or depreciate against the U .S .Dollar. The Company's financial condition and results of operations may also be affected by changes in the value of certain currencies other than the Renminbi in which its earnings and obligations are denominated.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Inventories</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Inventories are stated at the lower of cost or market. Cost is determined on an average cost basis, which approximates actual cost on a first-in, first-out (FIFO) method. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration, and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolescence and are charged to cost of revenues.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Plant and Equipment</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line basis over the estimated useful lives of the related assets as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 40%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify; WIDTH: 70%">Plant and buildings</td> <td style="TEXT-ALIGN: right; WIDTH: 30%">20 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Machinery and equipment</td> <td style="TEXT-ALIGN: right">10 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Vehicles</td> <td style="TEXT-ALIGN: right">4 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Electronic equipment</td> <td style="TEXT-ALIGN: right">3 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Furniture and tools</td> <td style="TEXT-ALIGN: right">5 years</td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify">Software</td> <td style="TEXT-ALIGN: right">5 years</td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Repairs and maintenance costs are expensed as incurred. Gains or losses on disposals are included in other expense.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Occasionally the Company will settle outstanding accounts receivable and accounts payable balances through non-monetary exchanges such as receiving or signing over the title to vehicles. The Company accounts for these transactions in accordance with ASC 845, Nonmonetary Transactions.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Land Use Rights</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> In the PRC there is no land ownership, but land use rights can be obtained. Land use rights are stated at cost less accumulated amortization. Amortization expense is recorded on a straight-line basis over the term of the land use rights. Land use rights are an intangible asset. The Company reviews intangible assets for impairment periodically and at least annually.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Long-term Investment</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Long-term investment represents an investment the Company has in a regional bank within China. The Company does not hold a greater than a 5% interest and has determined that the Company does not have significant control or influence in the bank. Accordingly, the Company records the investment at cost. The Company's investment is in a private company where there is not a market to determine the value of the investment.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Impairment of Long-Lived Assets</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Long-lived assets held and used by the Company, including long-term investments, are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be recoverable (carrying amount exceeds the gross, undiscounted cash flows from use and disposition), then an impairment loss is recognized. The impairment loss is measured as the excess of the carrying amount over the asset's or asset group's fair value. Through September 30, 2012, there were no impairments of long-lived assets.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Fair Value of Financial Instruments</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Fair Value Measurements and Disclosures (ASC 820-10) include a fair value hierarchy that is intended to increase the consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing an asset or liability based upon their own market assumptions. The fair value hierarchy consists of the following three levels:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Level 1 -inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Level 2- observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Level 3 -instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company's financial instruments consist mainly of cash, restricted cash, bank notes receivable, other receivables, and debt obligations. Other receivable are reflected in the accompanying financial statements at historical cost, which approximates fair value due to the short-term nature of these instruments. Based on the borrowing rates currently available to the Company for loans and similar terms and average maturities, the fair value of debt obligations also approximates its carrying value due to the short-term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company had no assets or liabilities measured at fair value and subject to the disclosure requirements based on the fair value hierarchy.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Government Assistance</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company is currently the beneficiary of government grants that are generally intended to be used towards capital technology improvement with the end goal of increased production and energy efficiency. These grants are recorded as deferred income in the liabilities section of the balance sheet when cash is received and are accreted into non-operating income over the life of the asset, to the extent that the grant is related to an asset. For grants not related to any assets in certain cases, the Company records non-operating income when earned. The government grant income included in other income amounted to approximately $178,454 and $51,040 for the three month periods ended September 30, 2012 and 2011, respectively, and approximately $266,861 and $191,246 for the nine month periods ended September 30, 2012 and 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Foreign Currency Translation</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The accompanying financial statements are presented in United States Dollars. The functional currency of the Company is the Renminbi, the official currency of the PRC. Capital accounts of the financial statements are translated into United States Dollars from RMB at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of the balance sheet date. Income and expenditures are translated at the average exchange rates for the periods ended September 30, 2012 and 2011. Items in the Company's consolidated statement of cash flows are translated using a weighted average exchange rate, which approximates the exchange rate in effect at the time of the cash flows. For all periods reported, there were no transactions outside the PRC; thus, all of our transactions are in RMB, our functional currency. Currency translation adjustments from translation to U.S. Dollars for financial reporting purposes are recorded in other comprehensive income (loss) as a component of equity.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> A summary of the conversion rates for the periods presented is as follows:</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 26.95pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="6">Three Months Ended</td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">December</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="6">September 30,</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt" colspan="2"> 31,</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 61%">Period end RMB: U.S. Dollar exchange rate</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.3190</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.4018</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">6.3647</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify">Average RMB: U.S. Dollar exchange rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.3200</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.4231</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.4735</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Accumulated Other Comprehensive Income</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company reports comprehensive income in accordance with the provisions of ASC Topic 220, Comprehensive Income, which establishes standards for reporting comprehensive income or loss and its components in the financial statements. The accumulated other comprehensive income represents foreign currency translation adjustments.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Revenue Recognition</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company's principal revenue sources are from the sale of refractory materials and products and from sales generated from the designing and building of blast furnaces and hot-air stoves.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Zhengzhou Annec primarily generates revenue from the sale of a variety of refractory bricks and the sales from kits of pre-assembled hot-air ovens. Zhengzhou Annec recognizes such revenue when: (1) there is persuasive evidence of an arrangement; (2) customers have accepted receipt of the goods in accordance with the shipping terms; (3) the amount to be paid by the customer is fixed or determinable; and (4) collectability is reasonably assured. Zhengzhou Annec recognizes revenue from the sale of a kit when the kit has been delivered and accepted by the customer.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> During 2011, Zhengzhou ANNEC began entering into certain short-term contracts to build blast furnaces and hot blast stoves. These contracts have an average duration of approximately three to six months and do not exceed a period of one year. Zhengzhou ANNEC recognizes these revenues based on project completion and acceptance by the customer.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Beijing Annec enters into contracts to design and build blast furnaces and hot-air stoves and recognizes revenues during the construction period using the percentage of completion method. Most of the contracts are fixed-price contracts, which typically provide for a stated contract price and a specified scope of the work to be performed. Beijing Annec estimates the percentage of the job that is complete using variations of the cost-to-cost method. Cost is used as the primary indicator, but the Company also considers contract milestones and work in progress from subcontractor companies. If the estimate of costs left to be incurred plus actual costs already incurred exceeds the total revenue to be expected from a contract, then the full amount of the difference is recognized in the current period as a loss and presented on the consolidated balance sheet as a current liability. Beijing Annec also generates revenue from the sale of a variety of machines and equipment which the Company purchases from vendors. Beijing Annec recognized revenue from this type of sale when the machines and equipment have been delivered and accepted by the customer.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Sales Returns Allowance</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company estimates future product returns related to current period product revenue. The Company analyzes historical returns, and changes in customer demand and acceptance of the Company's products when evaluating the adequacy of the sales returns allowance. Significant management judgment and estimates must be made and used in connection with establishing the sales returns allowance in any accounting period. Material differences may result in the amount and timing of the Company's revenue for any period if management made different judgments or utilized different estimates. Based on the Company's analysis, the Company did not record any provision for sales returns as of September 30, 2012 and 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Shipping and Handling Costs</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 24.75pt; FONT: 10pt Times New Roman, Times, Serif"> Shipping and handling costs billed to customers are recorded net of the amount collected. Shipping and handling expense included in selling expenses amounted to $647,066 and $1,532,903 for the three month periods ended September 30, 2012 and 2011, respectively, and $1,420,191 and $4,642,913 for the nine month periods ended September 30, 2012 and 2011, respectively.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Income Taxes</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company adopted accounting policies in accordance to U.S. GAAP as its basis for computing the current income tax provision. Therefore, there were no significant deferred tax assets or liabilities during the quarter ended September 30, 2012 and 2011.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The Company adopted the Interpretation provisions of ASC 740, Income Taxes, on January 1, 2009, that clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the Company's financial statements. The Interpretation also provides guidance for the measurement and classification of tax positions, interest and penalties, and requires additional disclosure on an annual basis. The adoption had no effect on the Company's financial statements. Following implementation, the ongoing recognition of changes in measurement of uncertain tax positions will be reflected as a component of income tax expense. Interest and penalties incurred associated with unresolved income tax positions will continue to be included in other income (expense).</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong>Reclassification</strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> Certain amounts reported in the 2011 consolidated statement of cash flows have been reclassified to conform to the 2012 presentation. The Company determined that the net change in bank notes receivable and payable should be reclassified from investing and financing activities, respectively, to operating activities, because such receivables and payables arise directly in connection with the sale of products and purchases of raw materials. The net change in restricted cash used to secure the related payables has also been reclassified from financing activities to operating activities. As a result of the reclassifications, net cash provided by operating activities decreased by $135,000, net cash used in investing activities decreased by $2,440,000, and net cash provided by financing activities decreased by $2,305,000 from the amounts previously presented in the September 30, 2011 statement of cash flows. There was no impact to the Company's September 30, 2012 consolidated balance sheet or statement of operations and no impact to the net decrease in cash for the period ended September 30, 2012.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Recent Accounting Pronouncements</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-05, comprehensive income (Topic 220): Presentation of Comprehensive Income. The objective of this Update is to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. The amendments require that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under the amendments to Topic 220, Comprehensive Income, in this Update, an entity has the option 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 of comprehensive income or in two separate but consecutive statements. The amendments in this Update should be applied retrospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this standard on January 1, 2012. The adoption of this standard did not have a material impact on the Company's financial position, results of operations, or cash flows.</p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U. S. GAAP and IFRSs. The amendments in this Update are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs). The amendments in this Update apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in a reporting entity's shareholders' equity in the financial statements. The amendments in this Update are to be applied prospectively and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this standard on January 1, 2012. The adoption of this standard did not have a material impact on our financial position, results of operations, or cash flows.</p> <!--EndFragment--></div> </div>
39857670
37008406
0.0696
0.0696
19220
2080843
3301944
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> <strong><em>Significant Estimates</em></strong></p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 26.95pt; FONT: 10pt Times New Roman, Times, Serif"> The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and liabilities. Significant estimates and assumptions are used for, but not limited to: (1) allowance for doubtful accounts, (2) economic lives of property, plant, and equipment, (3) asset impairments, (4) percentage of completion on construction projects, and (5) contingency reserves. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results.</p> <!--EndFragment--></div> </div>
19995701
19995701
19995701
19995701
xbrli:pure
ISO4217:USD
xbrli:shares
ISO4217:USD
xbrli:shares
0001501162
annc:CustomerMember
2012-07-01
2012-09-30
0001501162
annc:CustomerTwoMember
2012-07-01
2012-09-30
0001501162
annc:CustomerOneMember
2012-07-01
2012-09-30
0001501162
annc:ThirdPartyGuaranteeMember
2012-07-01
2012-09-30
0001501162
annc:ExpectedFutureTaxRateMember
annc:ZhengzhouAnnecIndustrialCoMember
2012-07-01
2012-09-30
0001501162
annc:ExpectedFutureTaxRateMember
2012-07-01
2012-09-30
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2012-07-01
2012-09-30
0001501162
annc:BeijingAnnecMember
2012-07-01
2012-09-30
0001501162
2012-07-01
2012-09-30
0001501162
us-gaap:VehiclesMember
2012-01-01
2012-09-30
0001501162
us-gaap:SoftwareMember
2012-01-01
2012-09-30
0001501162
us-gaap:AccountsReceivableMember
2012-01-01
2012-09-30
0001501162
us-gaap:OfficeBuildingMember
2012-01-01
2012-09-30
0001501162
us-gaap:MachineryAndEquipmentMember
2012-01-01
2012-09-30
0001501162
us-gaap:LandAndBuildingMember
2012-01-01
2012-09-30
0001501162
us-gaap:GuaranteesMember
2012-01-01
2012-09-30
0001501162
us-gaap:GuaranteeObligationsMember
2012-01-01
2012-09-30
0001501162
us-gaap:FurnitureAndFixturesMember
2012-01-01
2012-09-30
0001501162
annc:CustomerMember
2012-01-01
2012-09-30
0001501162
annc:CashFlowFromFinancingActivitiesMember
us-gaap:AccountsReceivableMember
annc:CustomerTwoMember
2012-01-01
2012-09-30
0001501162
annc:CashFlowFromFinancingActivitiesMember
2012-01-01
2012-09-30
0001501162
annc:CashFlowFromInvestingActivitiesMember
us-gaap:AccountsReceivableMember
annc:CustomerTwoMember
2012-01-01
2012-09-30
0001501162
annc:CashFlowFromInvestingActivitiesMember
2012-01-01
2012-09-30
0001501162
annc:CashFlowFromOperatingActivitiesMember
us-gaap:AccountsReceivableMember
annc:CustomerTwoMember
2012-01-01
2012-09-30
0001501162
annc:CashFlowFromOperatingActivitiesMember
2012-01-01
2012-09-30
0001501162
annc:CustomerTwoMember
2012-01-01
2012-09-30
0001501162
annc:CustomerOneMember
2012-01-01
2012-09-30
0001501162
annc:FactoryStoresMember
2012-01-01
2012-09-30
0001501162
annc:ThirdPartyGuaranteeMember
annc:FactoryStoresMember
2012-01-01
2012-09-30
0001501162
annc:ThirdPartyGuaranteeMember
2012-01-01
2012-09-30
0001501162
annc:ExpectedFutureTaxRateMember
annc:ZhengzhouAnnecIndustrialCoMember
2012-01-01
2012-09-30
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2012-01-01
2012-09-30
0001501162
annc:BeijingAnnecMember
2012-01-01
2012-09-30
0001501162
annc:FuchaoLiMember
2012-01-01
2012-09-30
0001501162
annc:ChinaGreenMember
2012-01-01
2012-09-30
0001501162
annc:EBandMediaMember
2012-01-01
2012-09-30
0001501162
us-gaap:EquipmentMember
2012-01-01
2012-09-30
0001501162
2012-01-01
2012-09-30
0001501162
annc:CustomerMember
2011-07-01
2011-09-30
0001501162
annc:CustomerTwoMember
2011-07-01
2011-09-30
0001501162
annc:CustomerOneMember
2011-07-01
2011-09-30
0001501162
annc:ExpectedFutureTaxRateMember
annc:ZhengzhouAnnecIndustrialCoMember
2011-07-01
2011-09-30
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2011-07-01
2011-09-30
0001501162
annc:BeijingAnnecMember
2011-07-01
2011-09-30
0001501162
2011-07-01
2011-09-30
0001501162
annc:EBandMediaMember
us-gaap:SeriesAPreferredStockMember
2011-01-12
2011-02-11
0001501162
annc:EBandMediaMember
2011-01-12
2011-02-11
0001501162
annc:CustomerTwoMember
2011-01-01
2011-12-31
0001501162
annc:CustomerOneMember
2011-01-01
2011-12-31
0001501162
2011-01-01
2011-12-31
0001501162
annc:CustomerMember
2011-01-01
2011-09-30
0001501162
annc:ExpectedFutureTaxRateMember
annc:ZhengzhouAnnecIndustrialCoMember
2011-01-01
2011-09-30
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2011-01-01
2011-09-30
0001501162
annc:BeijingAnnecMember
2011-01-01
2011-09-30
0001501162
2011-01-01
2011-09-30
0001501162
2012-11-08
0001501162
us-gaap:BuildingMember
2012-09-30
0001501162
us-gaap:VehiclesMember
2012-09-30
0001501162
us-gaap:PropertyPlantAndEquipmentOtherTypesMember
2012-09-30
0001501162
us-gaap:MachineryAndEquipmentMember
2012-09-30
0001501162
us-gaap:GuaranteesMember
2012-09-30
0001501162
us-gaap:GuaranteeObligationsMember
2012-09-30
0001501162
annc:RetentionReceivableAmountsBilledAndNoteDueMember
annc:CommercialCustomerMember
2012-09-30
0001501162
annc:RetentionReceivableAmountsBilledAndNoteDueMember
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2012-09-30
0001501162
annc:CustomerMember
2012-09-30
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
annc:CommercialCustomerMember
2012-09-30
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2012-09-30
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
2012-09-30
0001501162
annc:ThirdPartyGuaranteeMember
2012-09-30
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2012-09-30
0001501162
annc:BeijingAnnecMember
2012-09-30
0001501162
annc:YinlingFanMember
2012-09-30
0001501162
annc:FuchaoLiMember
2012-09-30
0001501162
annc:ShortTermLoansMember
2012-09-30
0001501162
annc:SecurityDepositsMember
2012-09-30
0001501162
annc:CompaniesMember
2012-09-30
0001501162
annc:IndividualAndEmployeesMember
2012-09-30
0001501162
annc:CommercialCustomerMember
2012-09-30
0001501162
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2012-09-30
0001501162
annc:ChinaGreenMember
us-gaap:SeriesAPreferredStockMember
2012-09-30
0001501162
annc:ChinaGreenMember
2012-09-30
0001501162
annc:EBandMediaMember
2012-09-30
0001501162
2012-09-30
0001501162
us-gaap:BuildingMember
2011-12-31
0001501162
us-gaap:VehiclesMember
2011-12-31
0001501162
us-gaap:PropertyPlantAndEquipmentOtherTypesMember
2011-12-31
0001501162
us-gaap:MachineryAndEquipmentMember
2011-12-31
0001501162
annc:RetentionReceivableAmountsBilledAndNoteDueMember
annc:CommercialCustomerMember
2011-12-31
0001501162
annc:RetentionReceivableAmountsBilledAndNoteDueMember
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2011-12-31
0001501162
annc:CustomerMember
2011-12-31
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
annc:CommercialCustomerMember
2011-12-31
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2011-12-31
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
2011-12-31
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2011-12-31
0001501162
annc:BeijingAnnecMember
2011-12-31
0001501162
annc:YinlingFanMember
2011-12-31
0001501162
annc:FuchaoLiMember
2011-12-31
0001501162
annc:SecurityDepositsMember
2011-12-31
0001501162
annc:CompaniesMember
2011-12-31
0001501162
annc:IndividualAndEmployeesMember
2011-12-31
0001501162
annc:CommercialCustomerMember
2011-12-31
0001501162
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2011-12-31
0001501162
2011-12-31
0001501162
annc:CustomerMember
2011-09-30
0001501162
annc:ZhengzhouAnnecIndustrialCoMember
2011-09-30
0001501162
2011-09-30
0001501162
us-gaap:BuildingMember
2011-02-11
0001501162
us-gaap:VehiclesMember
2011-02-11
0001501162
us-gaap:PropertyPlantAndEquipmentOtherTypesMember
2011-02-11
0001501162
us-gaap:MachineryAndEquipmentMember
2011-02-11
0001501162
annc:RetentionReceivableAmountsBilledAndDueMember
2011-02-11
0001501162
annc:SecurityDepositsMember
2011-02-11
0001501162
annc:CompaniesMember
2011-02-11
0001501162
annc:IndividualAndEmployeesMember
2011-02-11
0001501162
annc:CommercialCustomerMember
2011-02-11
0001501162
annc:ChineseGovernmentOrProvinceOwnedCustomerMember
2011-02-11
0001501162
2010-12-31
0001501162
annc:CustomerMember
2008-01-31