The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Harbin Yifeng and Harbin Yifeng’s wholly owned subsidiary, Harbin Yifeng Zhiye Management Co., Ltd. (“Yifeng Zhiye”). All significant inter-company transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Accounts receivable are stated at net realizable value. Any allowance for doubtful accounts is established based on the management’s assessment of the recoverability of accounts. A considerable amount of judgment is required in assessing the realization of these receivables, including the current credit worthiness of each customer and the related aging analysis. The Company’s receivables that are due from the municipal government of Harbin City are considered by management to be fully collectible. The remainder of the Company’s receivables arise from its recycling of bottles and plastic and are considered fully collectible under contracts with the two recycling companies engaged for the disposal of the material. Therefore, no allowance for doubtful accounts was deemed necessary at June 30, 2011or December 31, 2010.

Inventories consist of (a) materials and supplies to be used in the regular day-to-day operations of the landfill and (b) PET plastics held by the Company or its consignees pending processing and delivery to customers of the consignees. Inventory is valued at the lower of cost or market with cost determined on a first-in first-out basis.

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of 5-10 years.

Landfill development costs, which also include advances to suppliers, represent payments made for labor, machinery, supplies and equipment related to the construction of the landfill. Landfill development costs are stated at cost, net of accumulated amortization. Amortization is computed on a units of measure basis: the Company’s estimate of the total cost of the landfill when complete is multiplied by a fraction, the numerator being the total tonnage disposed during the period and the denominator being the total anticipated capacity of the landfill. The anticipated total cost of the landfill is reviewed quarterly, based on costs incurred to date and updated projections. Conversion of expenses already incurred is based on the reported historical conversion rate; the estimate of future costs is converted based on the conversion rate on the measurement date.

The Company, in accordance with FASB Accounting Standards Codification (“ASC”) 360, records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

For revenue associated with waste disposal at the landfill, the Company recognizes revenue based on tonnage on the date it is disposed into the landfill. The Company discloses separately the actual tonnage disposed during each period in order to match the cost of revenue with the actual disposal activities.

The Company records revenue associated with the resale of bottles and caps based on the contract price that the Company’s consignee is required to pay to the Company upon its resale of the processed plastic. Revenue is recorded on the date when the consignee ships the processed plastic to its customer, at which time it is contractually obliged to pay the related fee to the Company.

The Company accounts for income tax under the provisions of ASC 740 "Income Taxes", which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Harbin Yifeng was granted the status of wholly foreign-owned entities (“WFOE”) in the fourth quarter of 2006 upon the reverse merger with USIP with a choice of starting the tax holiday immediately or the next calendar year. Harbin Yifeng elected for this tax holiday to commence in January 2007. Its two-year tax exemption period was from January 1, 2007 to December 31, 2008 and the three-year 50% income tax reduction period will be from January 1, 2009 to December 31, 2011.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of accounts receivable and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its clients' financial condition and customer payment practices to minimize collection risk on accounts receivable.

The Company adopted the provisions of ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

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Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

The carrying amounts of certain financial instruments, including cash, accounts receivable, other receivables, accounts payable, accrued expenses, taxes payable and bank loans payable approximate fair value due to the short-term nature of these items. The Company uses the Level 3 method to measure fair value of its bank loan. The carrying amount of the bank loan approximates the fair value based on the Company's expected borrowing rate for debt with similar remaining maturities and comparable risk in market.

The Company’s functional and reporting currency is the U.S. dollar (“US$”) and its principal country of operations is the PRC. The financial position and results of operations of the Company are determined using the local currency (“RMB”) as the functional currency. The results of operations and the statement of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated Other Comprehensive Income”.

The value of RMB against US$ and other currencies may fluctuate and is affected by, among other things, changes in China's political and economic conditions, Any significant revaluation of RMB may materially affect the Company's financial condition in terms of US$ reporting.

The Company records stock based compensation expense pursuant to ASC 718, which establishes the accounting for employee stock-based awards. Under the above provisions, stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant). For the three months ended June 30, 2011 and 2010, $41,688 and $90,076 stock based compensation expenses were recorded in selling, general and administrative expenses. For the six months ended June 30, 2011and 2010, $83,375 and $185,764 stock based compensation expenses were recorded in selling, general and administrative expenses.

Earnings per share are calculated in accordance with the ASC 260, “Earnings Per Share.” Basic net earnings per share are based upon the weighted average number of common shares outstanding, but excluding shares issued as compensation that have not yet vested. Diluted net earnings per share are based on the assumption that all dilutive convertible shares and stock options were converted or exercised, and that all unvested shares have vested. Dilution is computed by applying the treasury stock method. Under this method, stock-based compensation is assumed to be vested at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

	Three months ended June 30,
	2011		2010
Net income	$	1,101,972	$	2,212,620
Shares (denominator):
Weighted average common shares outstanding - basic		12,683,103		12,186,074
Earnings per share - basic	$	0.09	$	0.18
Plus: effect of diluted securities - unvested compensation
Shares		2,287,083		2,784,112
Weighted average common shares outstanding - diluted		14,970,186		14,970,186
Earnings per share - diluted	$	0.07	$	0.15

	Six months ended June 30,
	2011		2010
Net income	$	2,228,268	$	3,085,945
Shares (denominator):
Weighted average common shares outstanding - basic		12,641,459		12,078,590
Earnings per share - basic	$	0.18	$	0.26
Plus: effect of diluted securities - unvested compensation
Shares		2,328,727		2,891,596
Weighted average common shares outstanding - diluted		14,970,186		14,970,186
Earnings per share - diluted	$	0.15	$	0.21