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China Power Equipment, Inc.
10-K
--12-31
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Yes
No
Smaller Reporting Company
No
2012
FY
2012-12-31
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">China
Power Equipment, Inc. (“China Power”) was
incorporated in the State of Maryland on May 17, 2006 for
the purpose of acquiring an existing company with
continuing operations. China Power formed An Sen
(Xi’an) Power Science & Technology Co., Ltd.
(“An Sen”) which was granted a license as a
wholly-owned foreign enterprise in the city of
Xi’an under the laws of the People’s Republic
of China (“PRC”) on November 3, 2006. An Sen
is a wholly-owned subsidiary of China Power and a limited
liability company organized under the laws of the
PRC.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
November 8, 2006, An Sen entered into a Management
Entrustment Agreement (“the Agreement”) with
Xi’an Amorphous Alloy Zhongxi Transformer Co., Ltd.
(“Zhongxi”) whereby An Sen assumed financial
and operating control over Zhongxi. In exchange for
entering into this agreement, shareholders of Zhongxi
were issued 9,000,000 shares of China Power common stock,
resulting in a change of control of China Power. As
discussed in Principles of Consolidation in Note 2, An
Sen has been determined to have a controlling financial
interest in Zhongxi as a result of the Agreement,
requiring the accounts of Zhongxi to be consolidated with
those of An Sen. Applying the rules of Accounting
Standards Codification (“ASC”) 805, <font style="FONT-STYLE: italic; DISPLAY: inline">Business
Combinations,</font> Zhongxi was determined to be the
accounting acquirer and the transaction was accounted for
as a reverse acquisition resulting in the
recapitalization of Zhongxi. Costs and expenses incurred
by China Power and An Sen were made in anticipation of
the transaction with Zhongxi and have therefore been
pushed down and included in the consolidated financial
statements.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Zhongxi
was founded in Xi’an China under the laws of the
PRC on June 29, 2004, and currently manufactures 59
different products, including amorphous alloy core and
transformers.</font>
</div><br/>
9000000
59
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Principles
of Consolidation</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
accompanying consolidated financial statements have been
prepared in accordance with accounting principles
generally accepted in the United States (“US
GAAP”) and include the accounts of China Power, its
wholly owned subsidiary An Sen, and Zhongxi, a
contractually controlled entity (together “the
Company”). An Sen controls Zhongxi through the
Agreement dated November 8, 2006.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Under
the Agreement,</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.
Zhongxi agrees to irrevocably entrust the right of
operation management and the responsibilities and
authorities of its shareholders’ meeting and the
board of directors to An Sen.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.  The
contents of the entrusted operation shall include but not
be limited to the following:</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1)
An Sen shall be in charge of all aspects of
Zhongxi’s operations; nominate and replace the
members of Zhongxi’s board of directors, engage
Zhongxi’s management staff and decide their
compensation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2)
An Sen shall manage and control all the funds of
Zhongxi.  The account of Zhongxi shall be
managed and decided solely by An Sen.  The
seals and signatures for such account shall be the seals
and signatures of the personnel appointed and confirmed
by An Sen.  All the cash of Zhongxi shall be
kept in this entrusted account and shall be handled
through this account, including but not limited to
receipt of all Zhongxi’s business income, current
working capital, recovered accounts receivable, etc., and
the payment of all accounts payable and operation
expenses, employee salaries and asset purchases,
etc.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">3)
All the matters of Zhongxi, including internal financial
management, day-to-day operation, external contract
execution and performance, tax filing and payment, change
of rights and personnel, etc., shall be controlled and
managed by An Sen in all aspects.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">4)
An Sen shall enjoy all the other responsibilities and
rights enjoyed by Zhongxi’s shareholders’
meeting in accordance with the Company Law and the
articles of association of Zhongxi.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">5)
An Sen enjoys all the other responsibilities and rights
enjoyed by Zhongxi’s board of directors.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
of November 8, 2006, the date the Agreement became
effective, the Company determined to consolidate the
results of Zhongxi based on the ASC 810, <font style="FONT-STYLE: italic; DISPLAY: inline">Consolidation</font>.
According to that topic, the execution of the Agreement
is considered to be a business combination. Accordingly,
Zhongxi was determined to be the accounting acquirer and
the consolidation with China Power is considered to be a
recapitalization of Zhongxi. Periods prior to the
combination contain the accounts of Zhongxi and periods
subsequent to the combination include the accounts of
Zhongxi combined with those of China Power and An Sen.
Assets and liabilities are recorded at their historical
cost basis and the combination resulted in no gain, loss,
or goodwill. All inter-company accounts have been
eliminated in consolidation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
concluding that the accounts of Zhongxi should be
consolidated, the Company reviewed An Sen’s
relationship with Zhongxi under the provisions of the
Agreement and determined that there was a controlling
financial interest based on the criteria of ASC 810
relating to the term of the Agreement; An Sen’s
ability to exercise control over the operations of
Zhongxi and the relationship with its employees and
directors; and the fact that An Sen maintains a
significant financial interest in Zhongxi.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">ASC
810 requires the term of the Agreement be at least the
entire remaining life of Zhongxi or a period of 10 years
or more. The Company determined that it met the term
criteria because termination is prohibited by Zhongxi,
making termination within the control of the
Company.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
addition, the Company determined that the control
criteria under ASC 810 was met because the Agreement
assigns to An Sen the charge of normal business
operations as well as the ability to nominate and replace
the board of directors, hire and fire management staff,
and determine compensation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Finally,
the financial interest criteria under ASC 810 require
that An Sen be able to control the ability to sell or
transfer the operations of Zhongxi and the income
generated by Zhongxi. The Agreement specifically gives An
Sen the responsibility of formulating plans regarding
matters including merger, division, change of corporate
form and dissolution of Zhongxi and assigns the income
and operations of Zhongxi to An Sen.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Fair
Value of Financial Instruments</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company’s financial instruments consist of cash,
accounts receivable, accounts payable and accrued
liabilities.  The fair value of these financial
instruments approximate their carrying amounts reported
in the consolidated balance sheets due to the short term
maturity of these instruments.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Use
of Estimates</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
preparation of the Company’s consolidated financial
statements in conformity with US GAAP requires management
of the Company to make a number of estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the
reporting periods.  Actual results could differ
from those estimates.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign
Currency Translation</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
functional currency of China Power is the United States
dollar (USD).  The functional currency of An
Sen and Zhongxi is the Chinese Renminbi
(RMB).  The reporting currency of the Company
is the United States dollar.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
financial statements of An Sen and Zhongxi are translated
into USD in accordance with ASC 830, <font style="FONT-STYLE: italic; DISPLAY: inline">Foreign
Currency Matters</font>. According to the topic, all
assets and liabilities are translated at the current
exchange rate, stockholders equity transactions are
translated at the historical rates and income statement
items are translated at the average exchange rate for the
period. The resulting translation adjustments are
reported under other comprehensive income in accordance
with ASC 220, <font style="FONT-STYLE: italic; DISPLAY: inline">Comprehensive
Income</font>. Foreign exchange transaction gains and
losses are reflected in the consolidated statements of
operations and other comprehensive
income.  During the years ended December 31,
2012 and 2011, the foreign currency translation
adjustments to the Company’s comprehensive income
were $257,984 and $968,751 respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash
and Cash Equivalents</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Cash
and cash equivalents consist of cash on hand, cash on
deposit with banks, and highly liquid debt investments
with a maturity of three months or less when
purchased.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Accounts
Receivable</font></font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Accounts
receivable includes billings for the products delivered
and services rendered. The Company recognizes an
allowance for doubtful accounts to ensure accounts
receivable are not overstated due to uncollectibility.
Bad debt reserves are maintained for all customers based
on a variety of factors, including historical collection
experience, customer creditworthiness, and current
economic trends. An allowance for doubtful accounts has
been established in amounts of $154,629 and $153,400 at
December 31, 2012 and 2011, respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Inventory</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Inventories
are stated at the lower of cost (weighted-average method)
or market value.  Inventory quantities on-hand
is regularly reviewed, and where necessary, reserves for
excess and unusable inventories are recorded. Once the
inventories are written-down to the lower of cost or
market, the new inventory cost basis cannot subsequently
be marked up based on changes in underlying facts and
circumstances.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Property,
Plant and Equipment</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Property,
plant and equipment are stated at cost less accumulated
depreciation.  Depreciation is calculated on a
straight-line basis over the estimated useful lives of
the respective assets. Depreciation of property, plant
and equipment is provided using the straight-line method
for substantially all assets with estimated lives as
follows:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="45%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Property,
plant and office building</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 20
years</font>
</div>
</td>
</tr>
<tr>
<td align="left" valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Machinery
and production equipment</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 10
years</font>
</div>
</td>
</tr>
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Automobile</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 10
years</font>
</div>
</td>
</tr>
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Office
equipment</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 5
years</font>
</div>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Intangible
and Other Long-Lived Assets</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Intangibles
and other long-lived assets are stated at cost, less
accumulated amortization and impairments.  The
Company’s intangible assets are being amortized
over their expected useful economic lives of 10
years.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that
the carrying amount of an asset may no longer be
recoverable. When these events occur, the Company
measures impairment by comparing the carrying value of
the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the
assets and their eventual disposition.  If the
sum of the expected undiscounted cash flow is less than
the carrying amount of the assets, the Company would
recognize an impairment loss based on the fair value of
the assets. There was no impairment write-off in 2012 and
2011.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Revenue
Recognition</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Revenue
is recognized when product is shipped to customers and a
formal arrangement exists, the price is fixed or
determinable, no other significant obligations of the
Company exist and cash collection is reasonably assured.
Payments received before all of the relevant criteria for
revenue recognition are recorded as advance from
customers. The Company is subject to value added tax
(VAT) withholdings and payments. Sales are recorded net
of VAT.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
material terms of the Company’s sales include the
following.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Sales
contract for Amorphous Metal Distribution Transformer
Core:</font></font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Payment
term: complete the payment within one month after
delivery.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Responsibility
of any breach: if the buyer cannot pay on time, the fine
for any breach should be paid by the buyer, the fine is
20% of the part of the contract not executed.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Time
for quality guarantee and raising an objection: within 10
days if find defective after receiving the goods.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Sales
contract for transformer:</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Method,
time and venue for settlement: complete the payment
within three months after delivery or pay after check and
accept upon delivery.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
ownership of goods: will be transferred upon the shipping
of goods.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Seller's
obligation related to the quality: warranty for one year
from delivery.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
transformer core, the customer can make a return or
exchange within 10 days after receiving the goods if the
goods are found to be defective.  As the
historical return was very minimal, no sales return and
allowance is estimated based on the historical return
rate.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
transformer, there’s no specific return or
exchange policy because in the transformer industry,
transformer is purchased according to careful project
design and planning, thus return or exchange rarely
happens. The Company provides a one-year warranty from
delivery for product defects. As there has been almost
no historical warranty claim, no anticipated warranty
liability is accrued based on the historical warranty
claim rate.</font></font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Shipping
Costs</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company’s shipping and handling costs are included
in selling, general and administrative expenses. For the
years ended December 31, 2012 and 2011, the shipping
costs were $417,256 and $394,159, respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Income
Taxes</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Income
taxes are accounted for under the asset and liability
method. Deferred income taxes are recognized for
temporary differences between the tax basis of assets and
liabilities and their reported amounts in the financial
statements, net of operating loss carry forwards and
credits, by applying enacted statutory tax rates
applicable to future years.  Deferred tax
assets are reduced by a valuation allowance when, in the
opinion of management, it is not more likely than not
that some portion or all of the deferred tax assets will
be realized.  Current income taxes are provided
for in accordance with the laws of the relevant taxing
authorities.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Earnings
per share</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Basic
earnings per share is computed by dividing net income to
common stockholders by the weighted average number of
shares outstanding for the year. Dilutive earnings per
share includes the effect of outstanding stock options,
warrants and shares issuable pursuant to convertible
debt, convertible preferred stock and certain stock
incentive plans under the treasury stock method, if
including such instruments is dilutive.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Stock-Based
Compensation</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has elected to use the Black-Scholes-Merton (BSM)
pricing model to determine the fair value of stock
options on the dates of grant.  Also, the
Company recognizes stock-based compensation using the
straight-line method over the vesting period<font style="FONT-STYLE: italic; DISPLAY: inline">.</font></font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
the years ended December 31, 2012 and 2011, the
Company recognized stock-based compensation of $54,991
and $107,504, respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Concentration
of Credit Risk</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Financial
instruments that potentially subject the Company to
concentrations of credit risk are cash and accounts
receivable arising from its normal business activities.
The Company places its cash in what it believes to be
credit-worthy financial institutions, but at times, the
amount may exceed the federally insured limit. As of
December 31, 2012, cash of $19,990,697 was maintained
with one single financial institution in the
PRC.  In common with local practice, such
amount is not insured or otherwise protected should this
financial institution be unable to meet its liabilities.
There has been no history of credit losses. Management
believes the Company is not exposed to any significant
credit risk on those accounts.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company controls credit risk related to accounts
receivable through credit approvals, credit limits and
monitoring procedures. The Company routinely assesses the
financial strength of its customers and, based upon
factors surrounding the credit risk, establishes an
allowance, if required, for uncollectible accounts and,
as a consequence, believes that its accounts receivable
credit risk exposure beyond such allowance is
limited.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Segment
Reporting</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">ASC
280, <font style="FONT-STYLE: italic; DISPLAY: inline">Segment
Reporting,</font> requires the use of the management
approach model for segment reporting. The management
approach model is based on the way a company's management
organizes segments within the company for making
operating decisions and assessing performance. Reportable
segments are based on products and services, geography,
legal structure, management structure, or any other
manner in which management disaggregates a
company.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the years ended December 31, 2012 and 2011, all revenues
of the Company represented net sales of amorphous alloy
core and transformers. No financial information by
business segment is presented. Furthermore, as all
revenues are derived from the PRC, no geographic
information by geographical segment is
presented.  In addition, all tangible and
intangible assets are located in the PRC.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Recent
Accounting Pronouncements</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
December 2011, the FASB issued ASU 2011-11, Balance Sheet
(Topic 210): Disclosures about Offsetting Assets and
Liabilities. This ASU requires an entity to disclose both
gross and net information about instruments and
transactions eligible for offset in the statement of
financial position as well as instruments and
transactions executed under a master netting or similar
arrangement and was issued to enable users of financial
statements to understand the effects or potential effects
of those arrangements on its financial position. This ASU
is required to be applied retrospectively and is
effective for fiscal years, and interim periods within
those years, beginning on or after January 1, 2013. As
this ASU only requires enhanced disclosure, the adoption
is not expected to have an impact on the Company’s
financial position or results of operations.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
February 2013, the FASB issued Accounting Standards
Update ("ASU") 2013-02, Comprehensive
Income—Reporting of Amounts Reclassified Out of
Accumulated Other Comprehensive Income ("ASU 2013-02").
This ASU requires an entity to provide information about
the amounts reclassified out of accumulated other
comprehensive income ("AOCI") by component. In addition,
an entity is required to present, either on the face of
the statement where net income is presented or in the
notes, significant amounts reclassified out of AOCI by
the respective line items of net income but only if the
amount reclassified is required under US GAAP to be
reclassified to net income in its entirety in the same
reporting period. For other amounts that are not required
under US GAAP to be reclassified in their entirety to net
income, an entity is required to cross-reference to other
disclosures required under US GAAP that provide
additional detail about those amounts. ASU 2013-02 will
be effective prospectively for reporting periods
beginning after December 15, 2012. Early adoption is
permitted. As this ASU only requires enhanced disclosure,
the adoption is not expected to have an impact on the
Company’s financial position or results of
operations.</font>
</div><br/>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Principles
of Consolidation</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
accompanying consolidated financial statements have been
prepared in accordance with accounting principles
generally accepted in the United States (“US
GAAP”) and include the accounts of China Power, its
wholly owned subsidiary An Sen, and Zhongxi, a
contractually controlled entity (together “the
Company”). An Sen controls Zhongxi through the
Agreement dated November 8, 2006.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Under
the Agreement,</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.
Zhongxi agrees to irrevocably entrust the right of
operation management and the responsibilities and
authorities of its shareholders’ meeting and the
board of directors to An Sen.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.  The
contents of the entrusted operation shall include but not
be limited to the following:</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1)
An Sen shall be in charge of all aspects of
Zhongxi’s operations; nominate and replace the
members of Zhongxi’s board of directors, engage
Zhongxi’s management staff and decide their
compensation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2)
An Sen shall manage and control all the funds of
Zhongxi.  The account of Zhongxi shall be
managed and decided solely by An Sen.  The
seals and signatures for such account shall be the seals
and signatures of the personnel appointed and confirmed
by An Sen.  All the cash of Zhongxi shall be
kept in this entrusted account and shall be handled
through this account, including but not limited to
receipt of all Zhongxi’s business income, current
working capital, recovered accounts receivable, etc., and
the payment of all accounts payable and operation
expenses, employee salaries and asset purchases,
etc.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">3)
All the matters of Zhongxi, including internal financial
management, day-to-day operation, external contract
execution and performance, tax filing and payment, change
of rights and personnel, etc., shall be controlled and
managed by An Sen in all aspects.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">4)
An Sen shall enjoy all the other responsibilities and
rights enjoyed by Zhongxi’s shareholders’
meeting in accordance with the Company Law and the
articles of association of Zhongxi.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">5)
An Sen enjoys all the other responsibilities and rights
enjoyed by Zhongxi’s board of directors.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
of November 8, 2006, the date the Agreement became
effective, the Company determined to consolidate the
results of Zhongxi based on the ASC 810, <font style="FONT-STYLE: italic; DISPLAY: inline">Consolidation</font>.
According to that topic, the execution of the Agreement
is considered to be a business combination. Accordingly,
Zhongxi was determined to be the accounting acquirer and
the consolidation with China Power is considered to be a
recapitalization of Zhongxi. Periods prior to the
combination contain the accounts of Zhongxi and periods
subsequent to the combination include the accounts of
Zhongxi combined with those of China Power and An Sen.
Assets and liabilities are recorded at their historical
cost basis and the combination resulted in no gain, loss,
or goodwill. All inter-company accounts have been
eliminated in consolidation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
concluding that the accounts of Zhongxi should be
consolidated, the Company reviewed An Sen’s
relationship with Zhongxi under the provisions of the
Agreement and determined that there was a controlling
financial interest based on the criteria of ASC 810
relating to the term of the Agreement; An Sen’s
ability to exercise control over the operations of
Zhongxi and the relationship with its employees and
directors; and the fact that An Sen maintains a
significant financial interest in Zhongxi.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">ASC
810 requires the term of the Agreement be at least the
entire remaining life of Zhongxi or a period of 10 years
or more. The Company determined that it met the term
criteria because termination is prohibited by Zhongxi,
making termination within the control of the
Company.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
addition, the Company determined that the control
criteria under ASC 810 was met because the Agreement
assigns to An Sen the charge of normal business
operations as well as the ability to nominate and replace
the board of directors, hire and fire management staff,
and determine compensation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Finally,
the financial interest criteria under ASC 810 require
that An Sen be able to control the ability to sell or
transfer the operations of Zhongxi and the income
generated by Zhongxi. The Agreement specifically gives An
Sen the responsibility of formulating plans regarding
matters including merger, division, change of corporate
form and dissolution of Zhongxi and assigns the income
and operations of Zhongxi to An Sen.</font></div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Fair
Value of Financial Instruments</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company’s financial instruments consist of cash,
accounts receivable, accounts payable and accrued
liabilities.  The fair value of these financial
instruments approximate their carrying amounts reported
in the consolidated balance sheets due to the short term
maturity of these instruments.</font></div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Use
of Estimates</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
preparation of the Company’s consolidated financial
statements in conformity with US GAAP requires management
of the Company to make a number of estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the
reporting periods.  Actual results could differ
from those estimates.</font></div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign
Currency Translation</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
functional currency of China Power is the United States
dollar (USD).  The functional currency of An
Sen and Zhongxi is the Chinese Renminbi
(RMB).  The reporting currency of the Company
is the United States dollar.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
financial statements of An Sen and Zhongxi are translated
into USD in accordance with ASC 830, <font style="FONT-STYLE: italic; DISPLAY: inline">Foreign
Currency Matters</font>. According to the topic, all
assets and liabilities are translated at the current
exchange rate, stockholders equity transactions are
translated at the historical rates and income statement
items are translated at the average exchange rate for the
period. The resulting translation adjustments are
reported under other comprehensive income in accordance
with ASC 220, <font style="FONT-STYLE: italic; DISPLAY: inline">Comprehensive
Income</font>. Foreign exchange transaction gains and
losses are reflected in the consolidated statements of
operations and other comprehensive
income.  During the years ended December 31,
2012 and 2011, the foreign currency translation
adjustments to the Company’s comprehensive income
were $257,984 and $968,751 respectively.</font></div>
257984
968751
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash
and Cash Equivalents</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Cash
and cash equivalents consist of cash on hand, cash on
deposit with banks, and highly liquid debt investments
with a maturity of three months or less when
purchased.</font></div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Accounts
Receivable</font></font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Accounts
receivable includes billings for the products delivered
and services rendered. The Company recognizes an
allowance for doubtful accounts to ensure accounts
receivable are not overstated due to uncollectibility.
Bad debt reserves are maintained for all customers based
on a variety of factors, including historical collection
experience, customer creditworthiness, and current
economic trends. An allowance for doubtful accounts has
been established in amounts of $154,629 and $153,400 at
December 31, 2012 and 2011, respectively.</font></div>
154629
153400
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Inventory</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Inventories
are stated at the lower of cost (weighted-average method)
or market value.  Inventory quantities on-hand
is regularly reviewed, and where necessary, reserves for
excess and unusable inventories are recorded. Once the
inventories are written-down to the lower of cost or
market, the new inventory cost basis cannot subsequently
be marked up based on changes in underlying facts and
circumstances.</font></div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Property,
Plant and Equipment</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Property,
plant and equipment are stated at cost less accumulated
depreciation.  Depreciation is calculated on a
straight-line basis over the estimated useful lives of
the respective assets. Depreciation of property, plant
and equipment is provided using the straight-line method
for substantially all assets with estimated lives as
follows:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="45%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Property,
plant and office building</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 20
years</font>
</div>
</td>
</tr>
<tr>
<td align="left" valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Machinery
and production equipment</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 10
years</font>
</div>
</td>
</tr>
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Automobile</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 10
years</font>
</div>
</td>
</tr>
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Office
equipment</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 5
years</font></div></td></tr></table>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Intangible
and Other Long-Lived Assets</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Intangibles
and other long-lived assets are stated at cost, less
accumulated amortization and impairments.  The
Company’s intangible assets are being amortized
over their expected useful economic lives of 10
years.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that
the carrying amount of an asset may no longer be
recoverable. When these events occur, the Company
measures impairment by comparing the carrying value of
the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the
assets and their eventual disposition.  If the
sum of the expected undiscounted cash flow is less than
the carrying amount of the assets, the Company would
recognize an impairment loss based on the fair value of
the assets. There was no impairment write-off in 2012 and
2011.</font></div>
P10Y
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Revenue
Recognition</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Revenue
is recognized when product is shipped to customers and a
formal arrangement exists, the price is fixed or
determinable, no other significant obligations of the
Company exist and cash collection is reasonably assured.
Payments received before all of the relevant criteria for
revenue recognition are recorded as advance from
customers. The Company is subject to value added tax
(VAT) withholdings and payments. Sales are recorded net
of VAT.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
material terms of the Company’s sales include the
following.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Sales
contract for Amorphous Metal Distribution Transformer
Core:</font></font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Payment
term: complete the payment within one month after
delivery.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Responsibility
of any breach: if the buyer cannot pay on time, the fine
for any breach should be paid by the buyer, the fine is
20% of the part of the contract not executed.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Time
for quality guarantee and raising an objection: within 10
days if find defective after receiving the goods.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Sales
contract for transformer:</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Method,
time and venue for settlement: complete the payment
within three months after delivery or pay after check and
accept upon delivery.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
ownership of goods: will be transferred upon the shipping
of goods.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Seller's
obligation related to the quality: warranty for one year
from delivery.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
transformer core, the customer can make a return or
exchange within 10 days after receiving the goods if the
goods are found to be defective.  As the
historical return was very minimal, no sales return and
allowance is estimated based on the historical return
rate.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
transformer, there’s no specific return or
exchange policy because in the transformer industry,
transformer is purchased according to careful project
design and planning, thus return or exchange rarely
happens. The Company provides a one-year warranty from
delivery for product defects. As there has been almost
no historical warranty claim, no anticipated warranty
liability is accrued based on the historical warranty
claim rate.</font></font></div>
one-year warranty from delivery for product defects
<div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Shipping
Costs</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company’s shipping and handling costs are included
in selling, general and administrative expenses. For the
years ended December 31, 2012 and 2011, the shipping
costs were $417,256 and $394,159, respectively.</font></div>
417256
394159
19990697
<br />
Property, plant and equipment are stated at cost less
accumulated depreciation. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the
respective assets. Depreciation of property and equipment is
provided using the straight-line method for substantially all
assets with estimated lives as follows: <br />
<br /><table cellpadding="0" cellspacing="0" width="45%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Property,
plant and office building</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 20
years</font>
</div>
</td>
</tr>
<tr>
<td align="left" valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Machinery
and production equipment</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 10
years</font>
</div>
</td>
</tr>
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Automobile</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 10
years</font>
</div>
</td>
</tr>
<tr>
<td valign="middle" width="35%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Office
equipment</font>
</div>
</td>
<td valign="bottom" width="10%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 5
years</font>
</div>
</td>
</tr>
</table>
P20Y
P10Y
P10Y
P5Y
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
3 – INVENTORY</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Inventory
consists of:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Raw
materials</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">66,583</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">255,227</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Work
in progress</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">20,190</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,791</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Finished
goods</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">48,456</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">35,354</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
inventory</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">135,229</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">304,372</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/>
<br />
Inventory consists of:<br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Raw
materials</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">66,583</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">255,227</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Work
in progress</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">20,190</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,791</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Finished
goods</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">48,456</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">35,354</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
inventory</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">135,229</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">304,372</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
66583
255227
20190
13791
48456
35354
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
4 – PREPAID EXPENSES AND OTHER RECEIVABLES</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At
December 31, 2012, prepaid expenses and other
receivables include a performance bond of $2,306,313
for a highway construction project.</font>
</div><br/>
2306313
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
5 – PROPERTY, PLANT AND EQUIPMENT</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Property,
plant and equipment consist of:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Plant
and office building</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,681,503</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,628,405</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Machinery
and production equipment</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,692,387</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,652,406</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Automobile</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">128,685</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">127,662</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Office
equipment</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">54,746</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">44,151</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,557,321</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,452,624</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less:
accumulated depreciation</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,822,476</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,036,730</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Property,
plant and equipment, net</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8,734,845</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9,415,894</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/>
<br />
Property, plant and equipment consist of:<br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Plant
and office building</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,681,503</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,628,405</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Machinery
and production equipment</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,692,387</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,652,406</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Automobile</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">128,685</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">127,662</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Office
equipment</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">54,746</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">44,151</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,557,321</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,452,624</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less:
accumulated depreciation</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,822,476</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,036,730</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Property,
plant and equipment, net</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8,734,845</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9,415,894</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
6681503
6628405
4692387
4652406
128685
127662
54746
44151
11557321
11452624
2822476
2036730
<div style="TEXT-INDENT: 0pt; DISPLAY: block">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
6 – INTANGIBLE ASSETS</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Intangible
assets, consist of:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Technical
know-how</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">237,944</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">236,053</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amorphous
Transformer Technique</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">364,848</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">361,948</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">602,792</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">598,001</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less:
accumulated amortization</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(359,002</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(296,348</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Intangible
assets, net</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">243,790</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">301,653</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
June 18, 2009, Zhongxi purchased an amorphous transformer
aluminum wire technology for $237,944. The technology is
being amortized over 10 years based on estimated useful
life.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
April 14, 2005, Zhongxi purchased technical know-how from
Xi’an Northwest Industry University Gaoshang
Science & Technology Co., Ltd for $79,315. The
technical know-how is being amortized over 10 years based
on useful life estimation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
September 2, 2004, Zhongxi purchased technical know-how
from Xi'an Amorphous Alloy Science And Technology Co.,
Ltd. <font style="DISPLAY: inline; FONT-WEIGHT: bold">(“</font>Alloy
Science”), which is a related party of the Company,
with common owners and directors for $158,629. The
technical know-how is being amortized over 10 years based
on useful life estimation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
July 24, 2004, Zhongxi purchased amorphous transformer
core manufacturing technology from Advanced Technology
& Materials Co., Ltd. (“AT&M”) for
$126,904.  The technology is being amortized
over 10 years based on useful life estimation.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
estimated future amortization expenses related to
intangible assets as of December 31, 2012 are as
follows:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="50%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Years
Ending December 31,</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2013</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">60,278</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2014</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">54,990</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2015</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">37,666</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2016</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">31,368</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2017</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">23,794</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">35,694</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/>
237944
P10Y
79315
P10Y
158629
P10Y
126904
P10Y
<br />
Intangible assets consist of:<br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Technical
know-how</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">237,944</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">236,053</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amorphous
Transformer Technique</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">364,848</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">361,948</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font>
</div>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">602,792</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">598,001</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less:
accumulated amortization</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(359,002</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(296,348</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Intangible
assets, net</font>
</div>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">243,790</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">301,653</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
237944
236053
364848
361948
602792
598001
359002
296348
<br />
The estimated future amortization expenses related to
intangible assets as of December 31, 2012 are as follows:
<br />
<br /><table cellpadding="0" cellspacing="0" width="50%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Years
Ending December 31,</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2013</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">60,278</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2014</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">54,990</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2015</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">37,666</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2016</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">31,368</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2017</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">23,794</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">35,694</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
60278
54990
37666
31368
23794
35694
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
7 – CONTRACT RIGHTS DEPOSIT</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
contract right was purchased from AT&M for $1,427,665
(RMB9,000,000) to guarantee the supply of amorphous raw
material for 5 years starting from the first date of
supplying raw material by AT&M. The contract rights
deposit is amortized based on the proportion of actual
purchase quantity to the estimated total purchase
quantity over the 5-year period starting from the date of
first purchase from AT&M.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
the years ended December 31, 2012 and 2011, $283,185 and
$149,815 of the contract rights deposit were amortized
and recorded in cost of goods sold, respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company conducted the evaluation for the impairment of
the asset at December 31, 2012 and concluded that no
impairment is needed to be recorded as of the date of
evaluation.</font>
</div><br/>
1427665
9000000
P5Y
283185
149815
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
8 – SHORT-TERM LOAN</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
December 28, 2006, the Company signed a loan agreement
with Xi’an New City District Science &
Technology Bureau to borrow approximately $63,452
(RMB400,000) at 5% stated annual interest rate. The
loan is repayable on demand.</font>
</div><br/>
400000
0.05
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
9 –CAPITAL LEASES AND COMMITMENTS</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CAPITAL
LEASES</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company is currently leasing a factory from Zhongxi
Zhengliu Dianlu Transformer Co., Ltd.  The term
of the lease runs for a period of 24 years beginning
January 1, 2005. The lease agreement contains ownership
transfer terms at the end of the lease and calls for
annual rent payments in the amount of approximately
$3,164 for the year ending December 31, 2013 and annual
rent payments are expected to increase every year by at
least 10% until the expiration of the agreement.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
a result, approximately $150,747 (RMB 950,308) was
recorded as leased assets on January 1, 2005 when the
lease commenced based on the 10% discounted factor. The
lease was classified as a capital lease since a majority
of the useful life would be used by the Company. The net
leased asset amount was $103,010 and $108,111 as of
December 31, 2012 and 2011, respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Future
minimum lease payments as of December 31, 2012 are as
follows based on the 10% discounted factor:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="50%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">For
the period ending December 31:</font></font>
</div>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2013</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,164</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2014</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 3,499</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2015</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,870</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2016</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,280</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2017</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 4,734</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">100,236</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less
Current Portion</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
(3,164
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
)
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Long
Term Portion</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 116,619</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CAPITAL
COMMITMENTS</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
of December 31, 2012 and 2011, the Company had capital
commitments to acquire land use right of $111,041 and
$110,158, respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">OPERATING
LEASE</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company is committed to a lease for its office in
Xi’an, PRC expiring on August 31, 2014. Minimum
lease payments of $14,276 are required for the year
ending December 31, 2013.</font>
</div><br/>
P24Y
3164
0.10
150747
950308
0.10
111041
110158
14276
<br />
Future minimum lease payments as of December 31, 2012 are as
follows based on the 10% discounted factor: <br />
<br /><table cellpadding="0" cellspacing="0" width="50%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">For
the period ending December 31:</font></font>
</div>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2013</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,164</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2014</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 3,499</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2015</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,870</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2016</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,280</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2017</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 4,734</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left">
<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">100,236</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less
Current Portion</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
(3,164
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
)
</td>
</tr>
<tr>
<td valign="bottom" width="36%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Long
Term Portion</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> 116,619</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
3499
3870
4280
4734
100236
116619
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
10 – STOCKHOLDERS’ EQUITY</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Preferred
Stock</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Series
B Convertible Preferred Stock</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
a private placement closed on December 2, 2009, the
Company issued an aggregate of 4,166,667 shares of its
series B convertible preferred stock, par value $0.001
per share (the “Series B Preferred Stock”),
with attached warrants (the “Warrants”) to
purchase a total of 1,000,000 shares of its common stock,
par value $0.001 per share (the “Common
Stock”) to a number of accredited investors (the
“Buyers”), in consideration of an aggregate
purchase price of $5,000,000 (the “Private
Placement”). The Series B Preferred Stock is
convertible into 4,166,667 shares of Common
Stock.<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman"> </font>During
the year ended December 31, 2012, 47,667 shares of the
Series B Preferred stock were converted into 47,667
shares of common stock. At December 31, 2012 and 2011,
4,102,000 and 4,149,667 shares are outstanding
respectively.   </font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Series B Preferred Stock does not pay annual dividends
and shall not have any voting rights except as required
by law. In case of the liquidation, the holders of shares
of Series B Preferred Stock then outstanding are entitled
to receive $1.20 per share (out of available assets)
before any distribution or payment can be made to the
holders of any junior securities.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Common
Stock</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At
December 31, 2012, the Company has 100,000,000 shares of
common stock authorized and 19,522,557 shares issued and
outstanding at par value $0.001 per share.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Warrants</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
warrants issued in connection with the Series B Preferred
Stock Private Placement are exercisable for a period of
three years from the date of issuance at an initial
exercise price of $2.40.  The Company has the right,
on at least ten (10) day written notice, to
require that the holders of the warrants exercise
the warrants in full and in the event the holders fail to
do so, to redeem the outstanding warrants at a price of
one cent ($0.01) per share, provided that the market
price of the Company’s common stock shall equal or
exceed $3.50 on each trading day for the consecutive
twenty (20) trading days.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
warrants are equity classified and amounts attributable
to the warrants are classified within additional paid-in
capital.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
following table summarizes the activities for the
warrants for the year ended December 31, 2012:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
of</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Average</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Shares</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Exercise
Price</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Warrants
outstanding, December 31, 2011</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,000,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2.40</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expired</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,000,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2.40</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Warrants
outstanding, December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Stock
Options</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
following table summarizes the activities for the
Company’s options for the year ended December 31,
2012:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="10" valign="bottom" width="40%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Options
Outstanding</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
of Shares</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted-Average
Exercise Price</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted-Average
Remaining</font>
</div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Life
(in years)</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="33%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Balance
at December 31, 2011</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">150,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.26</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.8</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Cancelled</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(125,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.47</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.8</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Balance
at December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">25,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.23</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.5</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Vested
and exercisable as of December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">25,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.23</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.5</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
aggregate intrinsic value, which represents the
difference between the price of the Company’s
common stock at December 31, 2012 and the related
exercise price of the underlying options, was $9,250 for
outstanding and exercisable options as of December 31,
2012.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At
December 31, 2012, there was no unrecognized compensation
cost related to outstanding stock options.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
May 17, 2012, the Company granted 80,000 restricted stock
awards (RSAs) to an officer of the Company to replace
125,000 stock options previously granted to this officer.
The incremental compensation cost of $7,631 resulting
from the replacement of stock options by RSAs will be
amortized over the vesting periods of the newly granted
RSAs. The incremental compensation cost was measured as
the excess of the fair value of the RSAs over the fair
value of the options immediately before cancellation
based on the share price and other pertinent factors at
that date.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Restricted
stock awards</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has granted RSAs to certain officers of the
Company for their services provided to the
Company.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
following table summarizes the activities for the
Company’s unvested RSAs for the year ended December
31, 2012:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
of Shares</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted-Average
Grant-Date Fair Value per share</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Unvested
at December 31, 2011</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">32,500</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.84</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Granted</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">80,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.42</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Vested</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(72,500</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.61</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Unvested
at December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">40,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.42</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
of December 31, 2012, there was $3,816 of unrecognized
compensation cost related to unvested RSAs. This amount
is expected to be recognized over a weighted-average
period of 0.3 years.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has granted 202,877 RSAs (both vested and
unvested in aggregate). Out of 202,877 granted RSAs,
62,877 and 30,000 shares of restricted stock were issued
during the years ended December 31, 2012 and 2011
respectively.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
the years ended December 31, 2012 and 2011, stock-based
compensation expense of $54,991 and $107,504 respectively
was included in general and administrative
expenses.</font>
</div><br/>
4166667
5000000
47667
1.20
3
2.40
The Company has the right, on at least ten (10) day written notice, to requirethat the holders of the warrants exercise the warrants in full and in the event the holders fail to do so, to redeem the outstanding warrants at a price of one cent ($0.01) per share, provided that the market price of the Company's common stock shall equal or exceed $3.50 on each trading day for the consecutive twenty (20) trading days.
9250
80000
7631
3816
0.3
202877
62877
30000
<br />
The following table summarizes the activities for the warrants
for the year ended December 31, 2012: <br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
of</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Average</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Shares</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Exercise
Price</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Warrants
outstanding, December 31, 2011</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,000,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2.40</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expired</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,000,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2.40</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Warrants
outstanding, December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
1000000
2.40
-1000000
2.40
0
0
<br />
The following table summarizes the activities for the
Company’s options for the year ended December 31, 2012:
<br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="10" valign="bottom" width="40%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Options
Outstanding</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
of Shares</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted-Average
Exercise Price</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted-Average
Remaining</font>
</div>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Life
(in years)</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="33%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Balance
at December 31, 2011</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">150,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.26</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.8</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Cancelled</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(125,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.47</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.8</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Balance
at December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">25,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.23</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.5</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="33%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Vested
and exercisable as of December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">25,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.23</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1.5</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
150000
1.26
P1Y292D
-125000
1.47
P1Y292D
25000
0.23
P1Y6M
25000
0.23
P1Y6M
<br />
The following table summarizes the activities for the
Company’s unvested RSAs for the year ended December 31,
2012: <br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
of Shares</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted-Average
Grant-Date Fair Value per share</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Unvested
at December 31, 2011</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">32,500</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.84</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Granted</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">80,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.42</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Vested</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(72,500</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.61</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Unvested
at December 31, 2012</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">40,000</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.42</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
32500
0.84
80000
0.42
-72500
0.61
40000
0.42
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
11 – EARNINGS PER SHARE</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
following table sets forth the computation of basic and
diluted earnings per share of common stock:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="6" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Year
Ended December 31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Basic
earnings per share:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Numerator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
income used in computing basic earnings per
share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">6,407,072</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">5,925,981</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Denominator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Weighted
average common shares outstanding</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">19,454,326</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">19,388,260</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Basic
earnings per share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.33</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.31</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Diluted
earnings per share:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Numerator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
income used in computing diluted earnings per
share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">6,407,072</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">5,925,981</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Denominator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Weighted
average common shares outstanding</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">19,454,326</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">19,388,260</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Weighted
average effect of dilutive securities:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Convertible
preferred stocks</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,112,679</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,149,667</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Stock
warrants, options and awards</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">106,165</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">53,215</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Shares
used in computing diluted earnings per
share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">23,673,170</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">23,591,142</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Diluted
earnings per share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.27</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.25</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Dilutive
securities having an anti-dilutive effect on diluted
earnings per share are excluded from the
calculation.</font>
</div><br/>
<br />
The following table sets forth the computation of basic and
diluted earnings per share of common stock: <br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="6" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Year
Ended December 31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Basic
earnings per share:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Numerator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
income used in computing basic earnings per
share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">6,407,072</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">5,925,981</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Denominator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Weighted
average common shares outstanding</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">19,454,326</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">19,388,260</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Basic
earnings per share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.33</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.31</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Diluted
earnings per share:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Numerator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
income used in computing diluted earnings per
share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">6,407,072</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">5,925,981</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Denominator:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Weighted
average common shares outstanding</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">19,454,326</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">19,388,260</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Weighted
average effect of dilutive securities:</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Convertible
preferred stocks</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,112,679</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,149,667</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Stock
warrants, options and awards</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">106,165</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">53,215</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Shares
used in computing diluted earnings per
share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">23,673,170</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">23,591,142</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Diluted
earnings per share</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.27</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">0.25</font></font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
4112679
4149667
106165
53215
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
12 – STATUTORY SURPLUS RESERVE FUND</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
stipulated by the new Corporate Law of the PRC effective
on January 1, 2006, net income after taxation can only be
distributed as dividends after appropriation has been
made for the following:</font>
</div><br/><div style="TEXT-INDENT: 18pt; MARGIN-LEFT: 18pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">i.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black"> </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">making
up cumulative prior years’ losses, if any;</font>
</div><br/><div style="TEXT-INDENT: 18pt; MARGIN-LEFT: 18pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">ii.</font><font id="TAB2-0" style="LETTER-SPACING: 9pt; COLOR: black"> </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">allocations
to the “Statutory surplus reserve” of at
least 10% of income after tax, as determined under PRC
accounting rules and regulations, until the fund amounts
to 50% of the Company’s registered capital;</font>
</div><br/><div style="TEXT-INDENT: 18pt; MARGIN-LEFT: 18pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">iii.</font><font id="TAB2-1" style="LETTER-SPACING: 9pt; COLOR: black"> </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">allocations
to the discretionary surplus reserve, if approved in
the stockholders’ general meeting.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has appropriated $2,415,732 and $1,914,074 as
reserve for the statutory surplus reserve requirement
as of December 31, 2012 and 2011 respectively.</font>
</div><br/>
0.10
0.50
<div style="TEXT-INDENT: 0pt; DISPLAY: block">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
13 – INCOME TAXES</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">China
Power was incorporated in the United States of America
(“USA”) and the Company has operations in two
tax jurisdictions - the USA and the PRC. The Company
generated substantially all of its net income from its
PRC operations for the years ended December 31, 2012 and
2011 and has recorded income tax provision for the
periods.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company’s China operation is subject to the PRC
standard enterprise income tax rate of 25% based on its
taxable net profit. However, due to its high technology
products status, the National Tax Bureau in Xi’an
High-Tech Development Zone granted Zhongxi the annual tax
exemptions for the years ended December 31, 2005 and 2004
and a reduced tax rate of 15% for the years ended
December 31, 2012 and 2011 and as long as Zhongxi meets
the high-tech enterprise qualification.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Current
PRC Tax Law also imposes a 10% withholding tax on all
dividends paid by PRC companies to non-PRC
shareholders  unless any foreign
shareholder’s jurisdiction has a tax treaty with
the PRC that provides for a different withholding
arrangement and contains rules governing such matters as
international transfer pricing.  No provision
for withholding nor other tax on the undistributed
earnings of the PRC companies has been made as the
earnings of these PRC companies, in the opinion of the
management, will be reinvested indefinitely.</font>
</div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
provision for income taxes consists of the
following:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="6" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Years
Ended December 31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Current
tax</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">PRC</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,340,909</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,277,126</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,340,909</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,277,126</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
reconciliation of USA statutory income tax rate to the
Company’s effective income tax rate is as
follows:</font>
</div><br/><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="6" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Year
Ended December 31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Income
tax at USA statutory rate (34%)</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,634,314</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,449,056</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">State
tax, net of federal effect</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Foreign
rate differential</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,566,653</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,474,341</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Change
in valuation allowance</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">273,248</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">302,411</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Provision
for income taxes</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,340,909</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,277,126</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
of December 31, 2012, the Company had federal and state
net operating loss carryforwards of approximately
$2,574,361 available to offset future taxable
income in the USA. The net operating loss carryforwards
will expire, if unused, in varying amounts through the
year ending December 31, 2032. The deferred tax
assets for the USA operation at December 31, 2012
consists mainly of net operating loss carryforwards and
for which a full valuation allowance has been provided,
as the management believes it is more likely than not
that these assets will not be realized in the
future.</font>
</div><br/><div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Uncertain
Tax Positions</font></font>
</div><br/><div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Interest
associated with unrecognized tax benefits are classified
as income tax and penalties are classified in selling,
general and administrative expenses in the consolidated
statements of operations and comprehensive income.</font>
</div><br/><div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
the year ended December 31, 2012 and 2011, the Company
had no unrecognized tax benefits and related interest and
penalties expenses.  Currently, the Company is
not subject to examination by major tax
jurisdictions.</font>
</div><br/>
2
0.25
0.15
0.15
0.10
2574361
<br />
The provision for income taxes consists of the following:
<br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="6" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Years
Ended December 31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Current
tax</font>
</div>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">PRC</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,340,909</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,277,126</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,340,909</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,277,126</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
1340909
1277126
1340909
1277126
<br />
The reconciliation of USA statutory income tax rate to the
Company’s effective income tax rate is as follows: <br />
<br /><table cellpadding="0" cellspacing="0" width="75%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="6" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Year
Ended December 31,</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2012</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"> </font>
</td>
<td colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2011</font>
</div>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td valign="bottom" width="47%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td colspan="2" valign="bottom" width="12%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Income
tax at USA statutory rate (34%)</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,634,314</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,449,056</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">State
tax, net of federal effect</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Foreign
rate differential</font>
</div>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,566,653</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
<td align="right" valign="bottom" width="1%">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,474,341</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">)</font>
</td>
</tr>
<tr>
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 2px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Change
in valuation allowance</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">273,248</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">302,411</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
<tr style="background-color: #CCEEFF;">
<td align="left" valign="bottom" width="47%" style="PADDING-BOTTOM: 4px">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Provision
for income taxes</font>
</div>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,340,909</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td align="right" valign="bottom" width="1%" style="PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
<td valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: left">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$</font>
</td>
<td valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double; TEXT-ALIGN: right">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,277,126</font>
</td>
<td nowrap="nowrap" valign="bottom" width="1%" style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px">
<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"> </font>
</td>
</tr>
</table>
2634314
2449056
0
0
-1566653
-1474341
273248
302411
0.34
0.34
<div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
14 – RELATED PARTY TRANSACTIONS</font>
</div><br/><div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
November 8, 2006, An Sen and Zhongxi entered into a
Management Entrustment Agreement with Zhongxi granting An
Sen the right to manage and control Zhongxi, receive the
financial benefits and be exposed to the financial risks
of Zhongxi. An Sen and Zhongxi share common officers and
directors. As a result, the Management Entrustment
Agreement was not entered into at an arm’s length
basis because the parties to the agreement are under
common control.</font>
</div><br/>
<div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
15 – CONCENTRATION</font>
</div><br/><div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For
the year ended December 31, 2012, three suppliers
accounted for 84% of the Company’s total purchases
and three customers accounted for 27% of the
Company’s total revenue. The loss of any of these
suppliers and customers could have a material adverse
effect on the Company’s financial position and
results of operations.</font>
</div><br/>
three suppliers
0.84
three customers
0.27
<div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
16 – SUBSEQUENT EVENT</font>
</div><br/><div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has evaluated subsequent events for potential
recognition and disclosure through the date the financial
statements were issued.</font>
</div><br/>