Bank Note Payable

9 Months Ended

Sep. 30, 2013

13. Bank Note Payable

The Company has credit facilities with Citic Bank, Fuxin Bank and Xingye Bank that provide for working capital in the form of the following bank acceptance notes at September 30, 2013:

Beneficiary	Endorser		Origination Date		Maturity Date		Interest rate			Amount
Dalian Xingyuan Marine Bunker Co. (1)		CITIC Bank		04-23-2013		10-18-2013		5.5	%	$	6,518,480
Dalian Xifa PetroChemical (1)		CITIC Bank		04-19-2013		10-11-2013		5.5	%		13,036,960
Dalian Xifa PetroChemical (1)		CITIC Bank		04-22-2013		10-17-2013		5.5	%		13,036,960
Dalian Xifa PetroChemical (1)		CITIC Bank		05-08-2013		11-16-2013		5.5	%		9,777,720
Dalian Xifa PetroChemical (1)		CITIC Bank		05-16-2013		11-13-2013		5.5	%		9,777,720
Dalian Haode PetroChemical (1)		CITIC Bank		05-16-2013		11-13-2013		5.5	%		13,036,960
Dalian Haode PetroChemical (1)		CITIC Bank		04-07-2013		10-16-2013		5.5	%		6,518,480
Dalian Fusheng PetroChemical (1)		CITIC Bank		04-17-2013		10-10-2013		5.5	%		9,777,720
Dalian Haode PetroChemical (2)		Fuxin Bank		09-27-2013		3-26-2014		3.6	%		4,074,050
Dalian Fusheng PetroChemical (3)		Xingye Bank		09-24-2013		03-23-2014		3.6	%		17,925,820
Dalian Fusheng PetroChemical (3)		Xingye Bank		09-25-2013		03-24-2014		3.6	%		6,251,222
Dalian Fusheng PetroChemical (3)		Xingye Bank		09-17-2013		03-16-2014		3.6	%		8,148,100
Total										$	117,880,192

	(1)	During the second quarter ended June 30, 2013, the Company’s subsidiary Dalian Fusheng borrowed $65.1 million (RMB 400 million) bank notes from CITIC bank, and the Company’s subsidiary Dalian Xingyuan also borrowed $16.2 million (RMB 100 million) bank notes from CITIC bank. In connection with the borrowings, Dalian Fusheng pledged fuel oil tanks valued at $19.6 million (RMB 120.3 million) as collateral. In addition, the Company is required to hold restricted cash of $55.4 million with CITIC Bank as additional collateral against these bank acceptance notes. These bank notes have been subsequently repaid upon maturity.

	(2)	On September 27, 2013, the Company’s subsidiary Dalian Xingyuan borrowed $4 million (RMB 25 million) bank notes from Fuxin Bank as working capital for six months. The Company is required to deposit restricted cash of $4 million with Fuxin Bank as collateral against this bank acceptance note.

	(3)	During the third quarter ended September 30, 2013, the Company’s subsidiary Dalian Xifa borrowed total of $32.3 million (RMB 198.3 million) of bank notes from Xingye Bank as working capital for six months. The Company pledged land use right of 46,142 square meters valued at $1,637,768, oil storage tank and other fixed assets valued at $21.1 million as collateral. In addition, two related parties Panjing Fusheng Petrol Co., Ltd. and Donggang Xingyuan Fishery Wharf Gas Station pledged land use right and fixed assets valued at $633,922 as additional collateral for these bank notes. The Company is also required to hold restricted cash of $9.69 million with Xingye Bank as additional collateral against these bank acceptance notes.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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