Related Party Transactions

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

11. Related Party Transactions

During the normal course of the business, the Company, from time to time, temporarily borrows money from its principal shareholders or officers to finance its working capital as needed. The amounts are usually unsecured, non-interest bearing and due on demand.

The following summarizes the Company’s related party transactions:

	September 30, 2013		December 31, 2012
An Fengbin, CFO	$	622,894	$	509,255
Wang Jing, wife of the CEO (1)		2,281,468		-
Chen Weiwen, legal representative of Xiangshan Nanlian (2)		81,481		-
Total	$	2,985,843	$	509,255

(1)

During third quarter of 2013, the Company’s subsidiary Lianyungang Fusheng borrowed RMB 14 million (equivalent to $2,281,468) from Ms. Wang Jing, wife of the CEO, to make a deposit for land use right with local government. Lianyungang Fusheng subsequently repaid this fund back to Ms. Wang Jing in October 2013.

(2)

Mr. Chen Weiwen was the former 37% minority shareholder of Xiangshan Nanlian and is currently the legal representative of Xiangshan Nanlian. Pursuant to the Share Transfer Agreement between Dalian Xingyuan and Chen Weiwen dated on March 18, 2013, Mr. Chen Weiwen agreed to transfer his 37% shares in Xiangshan Nanlian for RMB 11.2 million. The Company made most of the payment in cash to Chen Weiwen from April to September 30, 2013. The $81,481 remaining represented the unpaid balance as of September 30, 2013. On July 29,2013, Xiangshan Nanlian's change of registration application was approved by the SAIC and after this approval, Dalian Xingyuan 100% controls Xiangshan Nanlian. Mr. Chen Weiwen is currently still serving as the legal representative of Xiangshan Nanlian and accordingly this Share Transfer Transaction between Dalian Xingyuan and Chen Weiwen was treated as related party transaction. The ownership change in Xiangshan Nanlian was accounted for as an equity transaction and no gain or loss was recognized in the consolidated statements of net income (loss) and comprehensive income (loss).