CONCENTRATIONS AND CREDIT RISKS

6 Months Ended

Jun. 30, 2012

CONCENTRATIONS AND CREDIT RISKS [Text Block]

NOTE 17– CONCENTRATIONS AND CREDIT RISKS

The Company’s operations are carried out in the PRC and are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other matters.

The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for its bank accounts located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for its bank accounts located in Hong Kong. Cash balances maintained at financial institutions or state-owned banks in the PRC are not covered by insurance. Total cash in banks as of June 30, 2012 and December 31, 2011 amounted to $104,360,092 and $88,957,826, respectively, of which $166,689 and $236,373 are insured, respectively. The Company has not experienced any losses in uninsured bank deposits and does not believe that it is exposed to any significant risks on cash held in bank accounts.

The Company’s major product, human albumin, accounted for 38.7% and 51.3% of the total sales for the three months ended June 30, 2012 and 2011, respectively, and 46.4% and 54.0% of the total sales for the six months ended June 30, 2012 and 2011, respectively. If the market demands for human albumin cannot be sustained in the future or the price of human albumin decreases, the Company’s operating results could be adversely affected.

All of the Company’s customers are located in the PRC and India. As of June 30, 2012 and 2011, the Company had no significant concentration of credit risk. There were no customers that individually comprised 10% or more of the sales during the three months and six months ended June 30, 2012 and 2011, respectively. No individual customer represented 10% or more of trade receivables at June 30, 2012 and December 31, 2011, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers.

There were no supplier that comprised 10% or more of the total purchases for the three months and six months ended June 30, 2012 and 2011, respectively. There was no supplier that represented more than 10% of accounts payables at June 30, 2012 and 2011, respectively.