Segment Reporting

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

15. Segment Reporting

The Company has two reportable segments: Zhengzhou Annec and Beijing Annec. These segments operate in different geographical areas of China and employ separate management and sales teams. The Zhengzhou Annec segment primarily manufactures and sells a variety of refractory bricks and kits of pre-assembled hot-air ovens. In 2011, Zhengzhou Annec began to enter into contracts to design and build furnaces and stoves. These projects are generally for a term of one year or less. The Beijing Annec segment designs and builds blast furnaces and hot-air stoves on a contract basis and uses subcontractors throughout the construction process. Beijing Annec’s contracts are generally for projects with a term of one year or longer. The Beijing Annec segment purchases substantially all of its bricks and related products from Zhengzhou Annec. In addition, Beijing Annec also sells a variety of machines and equipment which are required as part of the entire blast furnace and hot-air stove package. The Company purchases these machines and equipment from outside vendors and generally sells them at cost plus a small mark-up.

All revenues are related to end customers in China.

Information on reportable segments for the three months ended March 31, 2013 and 2012 is as follows:

	Three Months Ended March 31
	2013			2012
Revenues:
Zhengzhou Annec	$	3,619,415		$	15,849,971
Beijing Annec		-			-
Total		3,619,415			15,849,971
Cost of revenues:
Zhengzhou Annec		2,294,112			10,277,356
Beijing Annec		-			-
Total		2,294,112			10,277,356
Operating expenses:
Zhengzhou Annec		2,560,633			4,629,645
Beijing Annec		114,970			125,910
Total		2,675,603			4,755,556
(Loss) income from operations	$	(1,350,300	)	$	817,059

	Three Months Ended March 31
	2013		2012
Depreciation expense
Zhengzhou Annec	$	404,819	$	333,042
Beijing Annec		48,122		38,350
Total	$	452,941	$	371,392

	March 31, 2013		December 31,2012
Plant and equipment, net:
Zhengzhou Annec	$	13,006,224	$	13,336,054
Beijing Annec		3,134,603		3,169,367
Total identifiable assets	$	16,140,827	$	16,505,421