19. Terminating the operation of subsidiaries

On January 7, 2013, the Company filed an application with the local government authority to terminate the operation of its subsidiary, Shandong Shengfu. The application was approved by the local government on March 7, 2013. Shandong Shengfu had limited operation since its inception. As of September 30, 2013, Shandong Shengfu’s total assets were $0.8 million, or 0.3% of the Company’s consolidated total assets. There was no reported revenue and net income for Shandong Shengfu since its inception. The assets were not reported as discontinued operations due to immateriality.

In addition, pursuant to a Board Resolution of Tianjin Hailong dated on January 18, 2013, Dalian Fusheng approved to sale its 51.952% ownership interest in Tianjin Hailong to Tianjin Hailong's two individual shareholders Mr. Niu Jinfu and Mr.Zhao Guohua for RMB 5.46 million (about $0.86 million). After such sale, Tianjin Hailong’s operations will no longer be consolidated. The formal sale agreement has not been completed as of September 30, 2013. As of September 30, 2013, Tianjin Hailong’s total assets was $2.4 million, accounting for only 0.9% of the Company’s consolidated total assets; and total liabilities was approximately $1.9 million, accounting for only 0.9% of the Company’s consolidated total liabilities. There was no revenue and net income reported for the three and nine months ended September 30, 2013. The assets were not reported as discontinued operations due to immateriality.