NOTE 7 – RECEIVABLE FROM UNAFFLIATED ENTITIES

	June 30,
	2011		December 31,
	(Unaudited)		2010

Receivable from unaffiliated entities	$	1,623,537	$	3,143,307

In May 2010, the Company made advances totaling approximately $4,129,115 (RMB 27,950,000) to four unaffiliated entities. The advances were initially made in anticipation of being equity investments and were subsequently restructured into term loans. At December 31, 2010, the aggregate outstanding balance was approximately $3,143,307 (RMB 20,782,920). During the six months ended June 30, 2011, an aggregate of approximately $1,587,295 (RMB 10,290,000) was repaid on the advances and at June 30, 2011, the aggregate outstanding balance was approximately $1,623,537 (RMB 10,492,920), including an exchange gain of approximately $67,000. The advances are unsecured, non-interest bearing, due in various installments, and any unpaid principal is due in full on September 30, 2011. Repayment of the advances is guaranteed by an unrelated commercial finance company.

In March 2011, the Company made two more advances totaling approximately $75,837 (RMB 496,740) to two potential suppliers which were fully repaid on April 12, 2011.

Advances to unaffiliated entities are reviewed periodically as to whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the balances becomes doubtful. Based upon management’s assessment at June 30, 2011 and December 31, 2010, there was no allowance necessary for potential uncollectible advances.