CONSTRUCTION LOAN FACILITY	9 Months Ended
Sep. 30, 2013
CONSTRUCTION LOAN FACILITY
CONSTRUCTION LOAN FACILITY	NOTE 9 – CONSTRUCTION LOAN FACILITY The Company drew down an aggregate of RMB 40,000,000 (approximately $6.52 million) from a construction loan facility dated June 21, 2013. The loan facility is for an eight-year term, which commenced on July 11, 2013, the initial draw-down date. The total loan facility amount is RMB 80,000,000 (approximately $13 million) from the same bank that provides the line of credit as discussed in Note 8. The proceeds of the loan were used for and are collateralized by the construction of the Company’s new production facility and production line equipment upgrades. The loan currently bears interest at 7.205%, based upon 110% of the PRC government’s eight-year term rate effective on the actual draw-down date, subject to annual adjustments based on 110% of the floating rate for the same type of loan on the anniversary from the draw-down date and its subsequent anniversary dates. The loan requires interest only payments for the first two years. Beginning July 11, 2015 the balance of the principal is due in installments over the next six years through July 11, 2021. The Company is required to draw down the entire loan amount by December 31, 2014. *Fair Value of* *Notes Payable and Construction Loan Facility* – Based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities, the carrying amounts of notes payable and the construction loan facility outstanding as of September 30, 2013 and December 31, 2012 approximated their fair value because of either the immediate or short-term maturity of these financial instruments or because the underlying instruments bear interest rates that approximated current market rates.

CONSTRUCTION LOAN FACILITY

9 Months Ended

Sep. 30, 2013

NOTE 9 – CONSTRUCTION LOAN FACILITY

The Company drew down an aggregate of RMB 40,000,000 (approximately $6.52 million) from a construction loan facility dated June 21, 2013. The loan facility is for an eight-year term, which commenced on July 11, 2013, the initial draw-down date. The total loan facility amount is RMB 80,000,000 (approximately $13 million) from the same bank that provides the line of credit as discussed in Note 8. The proceeds of the loan were used for and are collateralized by the construction of the Company’s new production facility and production line equipment upgrades. The loan currently bears interest at 7.205%, based upon 110% of the PRC government’s eight-year term rate effective on the actual draw-down date, subject to annual adjustments based on 110% of the floating rate for the same type of loan on the anniversary from the draw-down date and its subsequent anniversary dates. The loan requires interest only payments for the first two years. Beginning July 11, 2015 the balance of the principal is due in installments over the next six years through July 11, 2021. The Company is required to draw down the entire loan amount by December 31, 2014.

Fair Value of Notes Payable and Construction Loan Facility – Based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities, the carrying amounts of notes payable and the construction loan facility outstanding as of September 30, 2013 and December 31, 2012 approximated their fair value because of either the immediate or short-term maturity of these financial instruments or because the underlying instruments bear interest rates that approximated current market rates.