Management Plans

3 Months Ended

Mar. 31, 2013

Management Plans Disclosure [Abstract]

Management Plans

16. Management Plans

The Company experienced a net loss in the three months ended March 31, 2013. The Company provides integrated stove design, turnkey contracting, refractory production and sales. This quarter, sales were substantially low because of a decrease in orders stemming from the decline in demand for iron and steel industry production capacity.

During the three months ended March 31, 2013, the Company raised an additional short-term bank loan of $9.3 million, and the Company is negotiating with banks to obtain another $3.2 million of short-term bank loans in 2013. These funds are expected to be used to fund capital expenditures. This financing is expected to improve the Company’s capital position, which management believes will increase the Company’s cash flows to fund operations. As of March 31, 2013, the Company has unfinished sales contracts that are expected to be completed through December 2013. Once completed, these contracts are expected to generate revenue of approximately $47 million. In addition, subsequent to March 31, 2013, the Company entered into new sales contracts with a total amount of approximately $2 million as of May 2013. These new sales contracts are for projects expected to be completed through June 2013. The Company has also begun initiatives to develop new products and markets, which are expected to improve results of operations. This includes such initiatives as tracking and developing environment-friendly materials and products, and development of international markets. Management believes that these plans will lead to a greater amount of current and future sales contracts, and will also increase the Company’s cash flows from operating activities.