(2) On or about March 3, 2006, Fushi Group, of which Mr. Li Fu, our chairman of Board and President, owns 85%, has transferred its entire equity interest in the Company to Mr. Li Fu. On about the same time, Mr. Fu has agreed to transfer out of his shares an aggregate of 2,939,774 shares to his immediate family members and 200,000 shares to Mr. Wenbing Chris Wang. Thus, Mr. Fu is the beneficial owner of a total of 12,796,421 shares (including Dalian Fushi's holdings) under Rule 13d-3 of the Exchange Act.

As a condition of the series B convertible preferred stock purchase agreements, Dalian Fushi deposited in escrow its 20,000,000 pre-reverse stock-split shares of common stock acquired from Glenn Little, which were converted into 81,542 shares of common stock at the reverse stock split, representing approximately 0.4% of our outstanding common stock. In addition, Dalian Fushi's management team, which includes Li Fu, Yue Mathus Yang, Xishan Yang and Chunyan Xu, deposited in escrow 746,254 shares of series A convertible preferred stock that have collectively converted into 14,719,578 shares of common stock, representing approximately 73.6% of our outstanding common stock, following the reverse stock-split. Out of the escrowed shares, up to 3,000,000 shares are to secure their indemnity obligations under the series B convertible preferred stock purchase agreements and our obligation to meet the net profit targets for the fiscal year ending December 31, 2005 as set forth in the series B convertible preferred stock purchase agreements. The remaining shares are to secure our obligation to complete the reverse stock-split within 120 days following December 13, 2005. Because we fulfilled our obligation to complete the reverse stock split on time, the escrowed shares (except for the 3,000,000 shares) were released from the escrow. Also, because we met the net profit targets for 2005, the 3,000,000 shares held in escrow serve the sole purpose of securing the indemnity obligations under the stock purchase agreements.

(3) Pope Asset Management LLC, a registered investment advisor, acquired these shares for the accounts of 139 of its clients and has sole voting power over these shares, but shares dispositive power with its clients over the shares in their respective accounts.

(4) Includes warrants to purchase 89,745 shares of common stock, as well as 199,589 shares of common stock owned by Kuhns Brothers and warrants hold by Kuhns Brothers to purchase 149,575 shares of common stock. Mr. Kuhns one of our directors, is the Chairman and 45% shareholder of Kuhns Brothers. Thus, Mr. Kuhns has the voting and investment power over the securities held by Kuhns Brothers and is deemed to be the beneficial owner of these securities under Rule 13d-3 of the Exchange Act.

MANAGEMENT

Our Directors and Executive Officers

In connection with the change of control described under "Security Ownership of Certain Beneficial Owners and Management - Change in Control," the following persons were appointed our executive officers and directors. Glenn A. Little, our former director and chief executive, resigned as our sole director and immediately following the initial closing of the series B convertible preferred stock private placement offering, resigned from all his officer positions. The same persons also have been elected as directors of DPI and Dalian DPI and hold similar positions with each of these entities. Except for John D. Kuhns, each of our current executive officers and directors is a resident of the PRC. As a result, it may be difficult for investors to effect service of process within the United States upon them or to enforce court judgments obtained against them in United States courts.

Directors and Executive Officers	Position/Title	Age
Li Fu	Chairman of Board and Chief Executive Officer	40
Yue Mathus Yang	President, Director	38
John D. Kuhns	Secretary, Director	56
Wenbing Chris Wang	Chief Financial Officer	35

There are no family relationships among our directors or executive officers.

All our directors hold office until the next annual meeting of shareholders, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of our Board of Directors.

Chinamerica Fund, LP ("CA") is a Texas limited partnership and was the lead investor for the Series B convertible preferred shares. Pursuant to the terms for the Series B stock purchase agreement, within 90 days following closing under the purchase of the series B convertible preferred shares, we, after consultation with CA and the Series B investors, were to nominate a seven person Board of Directors take all actions and obtain all consents, authorizations and approvals which are required to be obtained in order to effect the election of such persons. The nominations have not yet occurred and the Company is in the process of searching for qualified candidates with the assistance of CA.

Of such seven member Board of Directors, (i) two members shall be members of the current management of Dalian Fushi, (ii) one member shall represent Kuhns Brothers, Inc., our investment bankers, pursuant to an existing agreement, (iii) and at least four members shall be independent directors as determined pursuant to the American Stock Exchange Company Guide (which requirement may be waived or amended by investors representing a majority of the outstanding shares then held by investors if we are unable to obtain a listing of our common Stock on the American Stock Exchange within six months following the closing or such other period of time as acceptable to CA). The member to be elected chairman of the audit committee and the member to be elected vice-chairman of the board (who will also serve as chairman of the corporate governance committee) must be approved in advance by CA, which approval not to be unreasonably withheld. Each director's compensation shall be determined after consultation with the Investors.

We are also obligated to establish a five-member board of advisors, which we are in the process of forming with the assistance of CA.

There is no fixed term in the Series B stock purchase agreement for any directors or members of the board of advisors that are required to be elected or appointed and there is no provision providing for termination of the above requirements.

The aggregate percentage of our outstanding shares held by CA, and limited partners in CA, is approximately 4.7%. CA, and its limited partners also own warrants to purchase an additional 478,129 shares of common stock.

Directors and Executive Officers of Dalian Fushi

Dalian Fushi's current executive officers and directors are:

Directors and Executive Officers	Position/Title	Age
Li Fu	Chief Executive Officer	40
Yue Marthus Yang	President	38
Wenbing Chris Wang	Chief Financial Officer	35
Xishan Yang	Chief Engineer and Executive Vice President of R&D	68
Chunyan Xu	Supervisor Director	50

Under Dalian Fushi's Articles of Association, Dalian Fushi's corporate governance consists of one Executive Director, one Supervisor Director and one General Manager. The Executive Director is elected and appointed by the shareholders for a term of three years and can be re-elected for consecutive terms. During the terms of his service, the shareholders cannot discharge the Executive Director without cause. The appointment and termination of the General Manager is determined by the Executive Director. The Supervisor Director is elected by the shareholders for a term of three years and can be re-elected for consecutive terms.

The following is a description of the business experience for the last five years for each of the above named directors and executive officers of our company, DPI, Dalian DPI and Dalian Fushi.

Mr. Li Fu was appointed our Chairman and Chief Executive Officer on December 13, 2005. Mr. Fu is a founder of Dalian Fushi and has been the Chief Executive Officer of Dalian Fushi since he founded the company in 2001. Prior to founding Dalian Fushi and focusing his time on Dalian Fushi's management and operations, Mr. Fu had founded and managed Dalian Fushi Enterprise Group Co., Ltd., a holding company owning various subsidiaries in the hotel, process control instrumentation, international trade, automobile maintenance and education businesses. Mr. Fu graduated from PLA University of Science and Technology with a degree in Engineering.

Mr. Yue Yang was appointed a director of our company on December 13, 2005. He has served as the President of Dalian Fushi since November 2004. Mr. Yang is the founder of Forward Investment Co., Ltd and has served as its Chairman since 2000. Prior to that, Mr. Yang worked for Liaoning Province Economic & Trade Collaboration Enterprise Group as an Executive VP from 1994 to 1998 and the Export Department of Liaoning Province Chemicals Import & Export Corporation as a Business Manager from 1990 to 1994. Mr. Yang graduated from Shenyang Finance University with a Bachelor's Degree in International Trade.

Mr. John D. Kuhns was appointed a director of our company on December 13, 2005. Mr. Kuhns has been a 45% shareholder, a director and chairman of Kuhns Brothers, Inc., a holding company founded in 1987 for its 100% subsidiary, Kuhns Bros. & Co., Inc., an investment banking firm specializing in providing financing for power technology ventures, and, more recently, manufacturing operations within the PRC. Additionally, Kuhns Brothers, Inc. owns 100% of Kuhns Brothers Securities Corporation, a broker dealer, registered with the SEC, in which Mr. Kuhns is the Chairman. Since March 2005, Mr. Kuhns has been a director and chairman of Deli Solar (USA), Inc., a U.S. reporting company with solar hot water heaters manufacturing operation in the PRC. Since 2002 Mr. Kuhns has been a director and chairman of Distributed Power, Inc., a public company that owns electric generating projects. Mr. Kuhns is also a director of China Sciences Conservational Power Limited, a company listed on the Hong Kong Stock Exchange.

Neither of the foregoing Kuhns companies, nor Deli Solar (USA), Inc., Distributed Power, Inc. or China Sciences Conservational Power Limited are affiliated with the Company. Mr. Kuhns holds a bachelors degree in sociology and fine arts from Georgetown University, a master's degree in fine arts from the University of Chicago and an MBA degree from the Harvard Business School.

Mr. Wenbing Chris Wang has served as our Chief Financial Officer since December 13, 2005. Mr. Wang has served as Chief Financial Officer of Dalian Fushi since March 2005. Mr. Wang served as an Executive Vice President of Redwood Capital, Inc. from November 2004 to March 2005, with specific focus on providing strategic and financial advisory services to China based clients seeking access to the U.S. capital markets. Mr. Wang previously served as Assistant VP of Portfolio Management at China Century Investment Corporation from October 2002 to September 2004. Mr. Wang began his investment banking career at Credit Suisse First Boston (HK) Ltd in 2001. From 1999 to 2000, Mr. Wang worked for VCChina as Management Analyst. Fluent in both English and Chinese, Mr. Wang holds an MBA from Simon Business School of University of Rochester and is a Level III candidate of the Chartered Financial Analyst (CFA) Program.

Mr. Xishan Yang has served as the Executive Vice President of R & D and Chief Engineer of Dalian Fushi since its inception in 2001. Mr. Yang has more than 40 years of working experience in the communication electronics industry. He had held executive management positions with a number of electronic enterprises prior to joining our company. During his career, Mr. Yang has focused on the development, design, and processes of metallic and bimetallic cable production. He holds several patents for the design of the modified Cladding and Drawing processes for CCA and CCS production used by Dalian Fushi and has extensive experience in production management. Mr. Yang graduated from Harbin Industrial University with a graduate degree in engineering.

Ms. Chunyan Xu has served as the Supervisor Director of Dalian Fushi since 2001. She previously served as the Chief Accountant at the Dalian Personnel Bureau and served as a Finance Manager of a Chinese public company. Ms. Xu has many years of experience in industrial accounting, public company accounting and accounting management.

AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors currently acts as our audit committee. Because we only recently consummated the restructuring Agreements and appointed the current members of our board of directors, our board of directors has not yet determined whether we have a member who qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act. Our board of directors is in the process of searching for a suitable candidate for this position.

AUDIT COMMITTEE

We have not yet appointed an audit committee, and our board of directors currently acts as our audit committee. At the present time, we believe that the members of board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Our company, however, recognizes the importance of good corporate governance and intends to appoint an audit committee comprised entirely of independent directors, including at least one financial expert, during our 2006 fiscal year.

Executive Compensation

We entered into a consulting agreement with Mr. Glenn Little on November 8, 2005 in connection with his sale of his 50.96% ownership in the Company to Dalian Fushi. Under the terms of the consulting agreement, we retained Glenn Little as a consultant to provide certain consulting services, information and materials to us and our advisors relating to our past operations and filings. As consideration, we issued to Mr. Little a warrant to purchase 80,000 shares of our common stock. The warrant has a term of five years and an exercise price of $0.01 per share. Except for this warrant grant, during the last three fiscal years, the sole director and officer of our company did not receive any compensation.

The following is a summary of the compensation paid by Dalian Fushi to its CEO and executive officers for the three years ended December 31, 2004, 2003 and 2002, respectively. Mr. Fu and Mr. Yang are currently directors and executive officers of our company, DPI and Dalian DPI. See "Our Directors and Executive Officers." No executive officer of Dalian Fushi received compensation in excess of $100,000 for any of these three years.

	ANNUAL COMPENSATION					LONG TERM COMPENSATION


							Awards		Payouts
Name	Position		Year Ended	Salary($)	Bonus($)	Other Annual Compen- sation ($)	Restricted Stock Awards $	Securities Underlying Options/ SARS	LTIP Payouts	All Other Compensation

Li Fu (1)		CEO	12/31/2005	$ 240,000	0	0	0	0	0	0
		CEO	12/31/2004		0	0	0	0	0	0
		CEO	12/31/2003		0	0	0	0	0	0
Yue Yang (2)		President	12/31/2005	180,000	0	0	0	0	0	0
		President	12/31/2004	N/A	0	0	0	0	0	0
		President	12/31/2003	N/A	0	0	0	0	0	0
		CFO	12/31/2005	120,000	0	0	0	0	0	0

Wengbing Chris Wang (3)		CFO	12/31/2004	N/A	0	0	0	0	0	0
		CFO	12/31/2003	N/A		0	0	0	0	0
Xishan Yang		VP of R&D	12/31/2005	29,740	0	0	0	0	0	0
		VP of R&D	12/31/2004	22,472	0	0	0	0	0	0
		VP of R&D	12/31/2003	14,981	0	0	0	0	0	0
Chunyan Xu		Supervisor	12/31/2005	22,305	0	0	0	0	0	0
		Director Supervisor	12/31/2004	17,976	0	0	0	0	0	0
		Director Supervisor Director	12/31/2003	11,985	0	0	0	0	0	0

(1) Mr. Fu's annual salary in 2005 is $240,000, starting from December 2005.

(2) Mr. Yang joined Dalian Fushi in November 2004. Starting from December 2005, his annual salary in 2005 is $180,000.

(3) Mr. Wang joined Dalian Fushi in March 2005. Starting from December 2005, his annual salary in 2005 is $120,000.

Although we do not have any equity compensation plans, under the series B convertible preferred stock purchase agreement we must reserve for issuance 2,000,000 shares of common stock under an approved and qualified employee stock ownership plan, the terms of which will be determined by the compensation committee of our Board of Directors.

Certain Relationships and Related Transactions

Consulting Agreement with Mr. Glenn Little

On December 13, 2005, Dalian Fushi purchased the 20,000,000 shares of our pre-reverse stock-split common stock owned by our former chairman and president, Glenn A. Little, representing 50.96% issued and outstanding shares of our common stock, under a stock purchase agreement dated as November 8, 2005, as amended. The purchase price was $550,000, which was provided from investor funds in the series B convertible preferred stock private placement and the payment of the purchase price was deferred until the initial closing of the financing in the private placement. Immediately after the private placement offering, which was closed at the same time of the stock purchase from Mr. Little, these 20,000,000 shares represented only an approximately a 0.4% of our outstanding voting stock at that time. On January 30, 2006, these shares were converted into 81,542 shares of common stock upon the effectiveness of the reverse stock split.

In connection with the stock purchase from Mr. Little, we entered into a consulting agreement with Mr. Little, dated as of November 8, 2005. Under the terms of the consulting agreement, we retained Glenn Little as a consultant to provide certain consulting services, information and materials to us and our advisors relating to our past operations and filings. As consideration for the consulting services, we issued to Mr. Little a warrant to purchase 80,000 shares of our common stock. The warrant has a term of five years and an exercise price of $0.01 per share. We have registered for resale in the registration statement of which this prospectus is a part, the 80,000 shares Mr. Little may acquire upon the exercise of the warrant at the request of Mr. Little in accordance with the piggy-back registration rights we granted to Mr. Little.

Restructuring Agreements with Dalian Fushi

In December 2005, Dalian DPI entered into and consummated the Restructuring Agreements with Dalian Fushi to purchase substantially all of the assets of Dalian Fushi and lease the remaining assets. At this time, Dalian Fushi, was the beneficial owner of 20,000,000 shares of our common stock (50.96%, but which only represented 0.4% of the total voting power of our voting stock) through its purchase of the same from our former director, president and majority shareholder, Glenn A. Little under the stock purchase agreement which closed on December 13, 2005, described above. Although the acquisition of the assets and business of Dalian Fushi was effective on December 13, 2005, Dalian DPI did not commence operating the business until December 28, 2005, the date upon which all of the transactions contemplated by the Restructuring Agreements were completed. Under the Restructuring Agreements, Dalian Fushi's business is conducted now by Dalian DPI. To the extent that any aspect of Dalian Fushi's business needs to be conducted through Dalian Fushi in the future, the Restructuring Agreements provide Dalian DPI with the ability to control Dalian Fushi and any of its remaining assets and operations. The Restructuring Agreements were utilized, instead of a complete acquisition of Dalian Fushi's assets, because current PRC law does not specifically provide for the approval procedures and the detailed implementation regulations on non-PRC entity's equity to be used as consideration to acquire a PRC entity's equity or assets, which makes it impossible for a non-PRC entity to use its equity to acquire a PRC entity. If an acquisition of a PRC entity using foreign equity was possible, we could have acquired 100% of the stock of Dalian Fushi in exchange for our common stock. While PRC law does allow for the purchase of equity interests in (or assets of) a PRC entity by a non-PRC entity for cash, the purchase price must be based on the appraised value of such equity (or assets). Because we did not have sufficient cash to pay the estimated full value of all of the assets of Dalian Fushi, we, through Dalian DPI, purchased the maximum amount of assets possible with the net proceeds of the private placement offering described below, and leased the remainder of Dalian Fushi's assets used in Dalian Fushi's business for nominal consideration.

On December 28, 2005, we completed the transactions contemplated by the Restructuring Agreements, and Dalian DPI commenced operating the business conducted previously by Dalian Fushi.

Under the purchase agreement between Dalian DPI and Dalian Fushi, Dalian DPI purchased from Dalian Fushi (i) substantially all of Dalian Fushi's production equipment, consisting of 15 production lines, for RMB24 million (approximately $2.98 million), (ii) all of Dalian Fushi's patents for RMB 100,000 (approximately $12,397), (iii) Dalian Fushi's inventory based on its book value as of the purchase date (approximately $6.53 million), and (iv) Dalian Fushi's accounts receivable based on its book value as of the purchase date (approximately $6.52 million). Additionally, Dalian Fushi leased to DPI substantially all of Dalian Fushi's land, except for a small piece of land that is currently being leased to a third party, at an annual fee of RMB 100,000 (approximately $12,397) and the remaining manufacturing equipment, consisting of 5 production lines, at an annual fee of RMB 50,000 (approximately $6,198). These leased assets are all encumbered to the banks. Dalian Fushi also has granted a secondary lien on the leased assets to Dalian DPI. In total, we paid $8,532,500 to Dalian Fushi for their assets on the date of the closing and Dalian Fushi subsequently returned the payment to Dalian DPI as per the entrusted management agreement. The purchase price for the abovementioned assets was determined by management of both Dalian DPI and Dalian Fushi, based on or lower than their book value, and approved by the local commercial bureau. There was no appraisal of the assets.

Dalian Fushi also agreed to transfer any new patents issued under its pending patent applications to Dalian DPI for a nominal fee, upon their issuance. Dalian Fushi further agreed to cause Mr. Li Fu, the PRC registered holder of the "FUSHI" trademark and the holder of a patent, to authorize the free use of the trademark by Dalian DPI and to transfer his patent to Dalian DPI for a nominal fee. See "Trademark Authorization"above.

Dalian Fushi's Related Company Transactions

In 2004 and 2005, Dalian Fushi had loaned funds to certain related companies as unsecured loans free of interest payment and repayable on demand. It had also borrowed funds from two related parties for short-term unsecured advances free of interest and repayable on demand.

Amounts due from related companies.

As of December 31, 2004, the outstanding balance of loans to related companies, totaling US$456,527.10, are as follows: RMB 39,720.72 ($4,930) to Dalian Litai Auto Repair Co., Ltd. (of which Fushi Group owns 40%), RMB 629,721.25 ($78,159) to Dalian Fushi Yangguang Zhangyie Co., Ltd. (of which Fushi Group owns 90%), and RMB 3,105,124.12 ($385,399) to Dalian Fushi Commerce and Trade Co., Ltd. (of which Fushi Group owns 75%). Fushi Group is a holding company controlled by Mr. Li Fu, our Chairman and President.

In 2004, the Company loaned $26,442 to directors of AGL as a short-term unsecured loan free of interest payment. This loan was repaid in 2005.

As of December 31, 2005, the outstanding balance of loans to four related companies as unsecured loans free of interest and repayable on demand totaled US$3,323,528. The loans were advanced by Dalian Fushi to the related companies before the recapitalization and have been fully repaid by April 2006.

Amounts due to related companies.

As of the end of 2004, the amounts due to related parties, totaling US$153,519, are as follows: RMB 377,804.27 ($45,695) borrowed from Fushi Group and RMB 891,488.65 ($107,824) from Mr. Li Fu.

As of the end of 2005, the Company has no amounts due to related companies.

Share Exchange Agreement and Issuance of Series A Convertible Preferred Stock to Dalian Fushi Shareholders

On December 13, 2005, we entered into and consummated a share exchange agreement with the former stockholders of DPI, consisting of 4 Dalian Fushi Shareholders and designees of Kuhns Brothers, our financial advisor and private placement agent. The designees of Kuhns Brothers are John Kuhns, Mary Fellows, John Starr, Jay Gutterman, Kelly Chow, Redwood Capital, Inc., Chris Bickel, Sam Shoen and Paul Kuhns. Of the Dalian Fushi Shareholders, Dalian Fushi Enterprise Group Co., Ltd. is a PRC entity of which Mr. Li Fu, our Chairman and Chief Executive Officer, owns 85.71%, Yue Mathus Yang is our Director and President, Xishan Yang is Dalian Fushi's Chief Engineer and Executive Vice President of Research and Development, and Chunyan Xu is Dalian Fushi's Supervisor Director. Together they owned approximately 95.12% of the outstanding capital stock of DPI with Kuhns Brothers and its designees owning the remaining outstanding capital stock. Kuhns Brothers received its shares of DPI common stock for services rendered in connection with the reorganization of Dalian Fushi's business. Mr. John D. Kuhns, our Secretary and Director, is the chairman and 45% shareholder of Kuhns Brothers. For additional information concerning the reorganization, see "Acquisition of Business of Dalian Fushi."

Under the share exchange agreement, we issued an aggregate of 784,575.16 shares of our series A convertible preferred stock in exchange for the 15,560 shares of common stock of DPI held by the stockholders of DPI. Each share of series A convertible preferred stock is automatically convertible into 19.73 shares of common stock after giving effect to the reverse stock split. As a result of the reverse stock split occurred on January 30, 2006, the series A convertible preferred stock converted into an aggregate of 15,475,595 shares of common stock, which represent approximately 74% of our total outstanding common stock. See "Acquisition of Business of Dalian Fushi" for information concerning the acquisition of DPI.

Private Placement Offering of Series B Convertible Preferred Stock

On December 28, 2005, we completed a private placement offering of a total of 215,424.84 shares of our series B convertible preferred stock, along with warrants, for $12,000,000. We received gross proceeds of $11,225,000 at an initial closing on December 13, 2005, and gross proceeds of $775,000 at a closing on December 28, 2005. The series B convertible preferred stock and warrants were sold by us in a private placement through Kuhns Brothers, Inc., and its wholly-owned subsidiary, Kuhns Brothers Securities Corporation, an NASD and SEC registered broker-dealer, in reliance upon the exemption provided by Rule 506 of Regulation D under the Securities Act. Mr. John D. Kuhns, our Secretary and Director, is the chairman and 45% shareholder of Kuhns Brothers. See "Acquisition of Business of Dalian Fushi -- Series B Convertible Preferred Stock Financing" for further information on the series B convertible preferred stock private placement offering.

In connection with the placement of our Series B convertible preferred stock and related warrants, Kuhns Brothers, Inc. received the following compensation: (i) $200,000 cash as signing fee, documentation fee and purchase fee, (ii) 10% of the total cash paid for the series B convertible preferred stock and warrants, (iii) 38,321.15 shares of series A convertible preferred stock, which converted into approximately 756,017 shares of our common stock on January 30, 2006 upon the occurrence of the reverse stock split, and (iv) a warrant to purchase 424,929 shares of common stock at $3.1064 per share. In addition, Kuhns Brothers, Inc. is to receive 10% of the proceeds of any exercise of the warrants sold to investors of the series B convertible preferred stock. See "Acquisition of Business of Dalian Fushi-- Series B Convertible Preferred Stock Financing" for information concerning the private placement offering of our Series B convertible preferred stock.

The aggregate amount of cash paid to Kuhns Brothers is $1,400,000 and the aggregate value of the shares received by Kuhns Brothers is estimated to be $4,384,899 (based on the quoted bid price of $5.80 per share on March, 1, 2006). Assuming the warrants issued to investors on the private placement offering are all exercised by the investors to purchase 2,125,000 shares of common stock at $3.67 per share, Kuhns Brothers will be entitled to cash payment of $779,875. With respect to the warrants issued to Kuhns Brothers and its designated persons that entitle them to purchase 424,929 shares of common stock at $3.1064 per share, the gain from the exercise of the warrants is estimated to be $1,144,589 (based on the quoted bid price of $5.80 per share on March 1, 2006). Thus, the aggregate amount paid and to be paid to Kuhns Brothers is estimated to be $7.7 million.

Agreement with Chinamerica with Respect to selection of Directors and Executive Officers

Under the stock purchase agreement for the private placement offering, Chinamerica Fund, LLP, or Chinamerica, the representative of the investors, has the right to approve selection of our Directors and Executive Officers. Under the agreement, the Company is required to consult with Chinamerica and other investors on the nomination of directors. Also, the member to be elected chairman of the audit committee and the member to be elected vice-chairman of the board must be approved in advance by CA, which approval will not be unreasonably withheld. In addition, the Company must consult with Chinamerica on retaining a chief financial officer acceptable to Chinamerica. Finally, the Company is required to retain independent professional executive search firms acceptable to Chinamerica and enter into employment agreements with our executive officers in terms acceptable to Chinamerica.

Indemnification of Our Directors and Officers

Although Nevada law allows us to indemnify our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf, and under certain circumstances to advance the expenses of such litigation upon securing their promise to repay us if it is ultimately determined that indemnification will not be allowed to an individual in that litigation, neither our articles of incorporation nor our bylaws impose an indemnity obligation upon us. In addition, we have not entered into any agreements under which we have assumed such an indemnity obligation.

On December 25, 2005, our Board of Directors adopted, and the Fushi Group, the holder of approximately 65% of our voting stock, approved amended and restated bylaws which require that we indemnify our directors and officers, including those our subsidiaries, against liability for actions taken in the performance of their duties on our behalf, except in those circumstances where indemnification is not allowed under Nevada law, and that we advance expenses as incurred in defending against such liability. The amended and restated bylaws will not become effective until 20 days after we mail our information statement relating to the bylaws to our shareholders. On January 12, 2006, we filed a preliminary information statement with the SEC.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, pursuant to the foregoing provisions or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SELLING SHAREHOLDERS

This prospectus relates to the offer and sale of our common stock by the Selling Shareholders named in the table below, which sets forth the names of the Selling Shareholders and for each Selling Shareholder, the number of shares and percent of series B convertible preferred stock beneficially owned before the 245.27-for-one reverse stock-split, which we expect will become effective by the end of January 2006, the number of shares of common stock beneficially owned after the reverse stock-split, and the total number of shares being offered for sale under this prospectus.

Each Selling Shareholder acquired his or its shares of series B convertible preferred stock and warrants in our series B convertible preferred stock private placement offering in December 2005, except for Glenn A. Little, our former chairman and president, who received a warrant to purchase 80,000 shares for consulting services in December 2005. The Selling Shareholders, other then Mr. Little, received a warrant to purchase one share of common stock for each two shares of common stock to be acquired on automatic conversion of the series B convertible preferred stock. Each Selling Shareholder is offering all of the shares he or it will acquire upon automatic conversion of the series B convertible preferred stock and all of the shares he or it will acquire upon exercise of the warrants. Mr. Little is offering all of the shares he will acquire upon exercise of the warrant he received for consulting services. Except for Mr. Little, none of the Selling Shareholders has held a position as an officer or director of our company, nor has any Selling Shareholder had a material relationship of any kind with our company.

As of December 28, 2005, we had outstanding 39,243,659 shares of common stock, 784,575.16 shares of series A convertible preferred stock and 215,424.84 shares of series B convertible preferred stock. In addition, holders of series B convertible preferred stock owned warrants to purchase an aggregate of 2,125,000 post-reverse stock-split shares of common stock. Following the conversion of the preferred stock upon the effectiveness of the reverse stock-split, and assuming none of the warrants are exercised, we will have outstanding 20,000,000 shares of common stock and no preferred stock.

Each listed Selling Shareholder has the sole investment and voting power with respect to all shares of common stock shown as beneficially owned by such Selling Shareholder, except as otherwise indicated in the table. Under applicable SEC rules, a person is deemed to be the "beneficial owner" of a security with regard to which the person directly or indirectly, has or shares (a) the voting power, which includes the power to vote or direct the voting of the security, or (b) the investment power, which includes the power to dispose, or direct the disposition, of the security, in each case, irrespective of the person's economic interest in the security. Under these SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through the exercise of any option or warrant or through the conversion of another security.

In determining the percent of common stock owned by a Selling Shareholder after the reverse stock-split, (a) the numerator is the number of shares of common stock beneficially owned by such Selling Shareholder, which includes shares which the Selling Shareholder may acquire within 60 days upon exercise of warrants, and (b) the denominator is the sum of (i) the total 20,000,000 shares which will be outstanding following the reverse stock-split, and (ii) the number of shares which each of the Selling Shareholders has the right to acquire within 60 days upon exercise of warrants.

Each Selling Shareholder may offer all or part of the shares of common stock beneficially owned after the reverse stock-split for resale from time to time. The table assumes that the Selling Shareholders will sell all of the shares offered for sale and accordingly, own no shares of common stock upon completion of the offering. A Selling Shareholder is under no obligation, however, to sell any shares immediately pursuant to this prospectus, nor is a Selling Shareholder obligated to sell all or any portion of the shares at any time. Therefore, we are not able to estimate the number of shares of common stock that will be sold pursuant to this prospectus or the number of shares that will be owned by the Selling Shareholders upon termination of this offering.

	Amount and Nature of Beneficial Ownership
		Shares of
Name	Common Stock	Common Stock Offered

Chinamerica Fund, LP
2909 St. Andrews
Richardson , TX 75082	903,125	903,125

Barron Partners LP 730 Fifth Avenue New York, NY	664,063	664,063

Chinamerica Dalian Fushi Acquisition Fund LP 2909 St. Andrews Richardson, TX 75082	531,250	531,250

Renaissance US Growth Investment Trust PLC 8080 N. Central Expressway, Suite 210 LB 59 Dallas, TX 75206-1857	531,250	531,250

BFS US Special Opportunities Trust PLC 8080 N. Central Expressway, Suite 210 LB 59 Dallas, TX 75206-1857	531,250	531,250

Lake Street Fund LP 660 S.Lake Street Pasadena, CA	371,875	371,875

Heller Capital Investments, LLC 700 East Palisades Avenue Englewood Cliffs, NJ 07632	332,032	332,032

Midsouth Investor Fund, LP 1776 Peachtree Street, NW, Suite 412 North Atlanta, GA 30309	65,625	65,625

Fred L. Astman Wedbush Securities Inc. Custodian IRA Rollover 10/13/92 600 S. Lake Street Pasadena, CA	185,938	185,938

Lyman O. Heidtke 37 Concord Park East Nashville, TN 37205	66,407	66,407

John Peter Selda 2301 S. Mopac #236 Austin, TX	53,125	53,125

Hayden Communications

1401 Havens Dr., N

Myrtle Beach, SC 29582

53,125


Brett Maas c/o Heller Capital Investments, LLC 500 5th Avenue, Suite 2240, New York, NY 10110	26,563	26,563

Glenn A. Little 211 West Wall Street Midland, TX 79701	80,0,00	80,000

Halter Pope USX China Fund 5100 Poplar Avenue,Suite 512 Memphis, TN 38137	79,687	79,687

Clients of Pope Asset Management, LLC:


The Community Foundation, Inc. 3661 Woodward Place Jackson, MS 39216	202,964	202,964

Ayers LP 1727 Renshaw Road Yazoo City, MS 39194-86	80,134	80,134

Confermation, LLP 8610 Park Heights Avenue Stevenson, MD 21153	70,662	70,662

Kerby E. Confer 8610 Park Heights Avenue Stevenson, MD 21153	7,668	7,668

W. Brigham Klyce, Jr 3685 South Galloway Drive Memphis, TN 38111-6835	103,738	103,738

Karen Clyce Smith Conservator 3685 South Galloway Drive Memphis, TN 38111-6835	7,067	7,067

Marilyn G. Abrams Living Trust 21 Marion Avenue Albany, NY 12203-1815	30,069	30,069

Donald J. Alt 4273 Old Mill Lane Atlanta, GA 30342-3400	18,945	18,944

Donald J. Alt Grantor Retained Annuity 4273 Old Mill Lane Atlanta, GA 30342-3400	10,224	10,224

Grier C. Bovard, III 2918 Lake Forest Blvd Augusta, GA 30909-3026	11,126	11,126


Grier C. Bovard, III IRA 2918 Lake Forest Blvd Augusta, GA 30909-3026	4,361	4,361

Kelsey G. Bryant 130 Winged Foot Circle Jackson, MS 39211	18,944	18,944

Danilou Holdings, Ltd. 1409 Roundrock Way Flower Mound, TX 75028	21,650	21,650

Carolyn P. Davis 2506 Waterford Road Auburn, AL 36832	13,982	13,982

Hartwell Davis, Jr 4109 Kennesaw Drive Birmingham, AL 35213	40,292	40,292

Frank S. Dennis Jr. LLP 2918 Professional Parkway Augusta, GA 30907	28,115	28,115

Jane S. Dennis IRA 2643 Hillcrest Avenue Augusta, GA 30904	28,866	28,866

Mary M. Yerger Dunbar IDGT Trust 129 Woodland Circle Jackson, MS 39216	10,073	10,073

Robert Eichelberger MD PC PSP 2750 Pump House Road Birmingham, AL 35243	9,471	9,471

A. Farris Evans IRA 255 Windover Grove Memphis, TN 38111	5,562	5,562

Farris Evans Insurance Agency 1420 Union Avenue Memphis, TN 38104	12,480	12,480

William T. Green Trust 633 Commerce Street Laurel, MS 39440	13,230	13,230

Barbara T. Green 633 Commerce Street Laurel, MS 39440	7,668	7,668

Hackney One Investments, LLC Two Metroplex Drive, Suite 303 Birmingham, AL 35209	20,898	20,898

Brenda Hackney Two Metroplex Drive, Suite 303 Birmingham, AL 35209	9,471	9,471

Beth M. Harris 1727 Renshaw Road Yazoo City, MS 39094	13,532	13,532

Douglas A. Holder 136 Osprey Point Drive Osprey, FL 34299	11,877	11,877

Suneel & Jayashree Mahajan JT 4240 Point la Vista Road W Jacksonville, FL 32207	28,716	28,716

R. Brad Martin

1025 Cherry Road

Memphis, TN 38117-5423

16,538


Scott McCandless 169 Shore Road Chatham, MA			4,361			4,361

W.B. McCarty III 4032 Pinewood Drive Jackson, MS 39211	110,533	110,553

W.B. McCarty IRA 4032 Pinewood Drive Jackson, MS 39211	1,203	1,203

Catherine McCarty PO Box 321001 Flowood, MS 39232	3,008	3,008

Frances C. McCarty PO Box 321001 Flowood, MS 39232	2,555	2,555


Isabel R. McCarty PO Box 321001 Flowood, MS 39232			14,583			14,583

Isabel R. McCarty IRA PO Box 321001 Flowood, MS 39232	3,909	3,909

McCarty Properties LP PO Box 321001 Flowood, MS 39232	10,976	10,976

H. Russell McCarty PO Box 321001 Flowood, MS 39232	16,839	16,839

H.Russell McCarty, Jr PO Box 321001 Flowood, MS 39232	1,503	1,503

Frank M. Mitchener, Jr. IRA 404 Walnut Street Sumner, MS 38957	19,695	19,695

Neurosurgical Associates PC 401(k) Redmont Park Lane Birmingham, AL 35205	25,409	25,409

W.K. Paine 3661 Woodward Place Jackson, MS 39216	5,420	5,420

Prude Interests Ltd. 6154 Park Lane Dallas, TX 75225-0727	3,909	3,909

James R. Prude 6154 Park Lane Dallas, TX 75225-0727	5,714	5,714

Sarah S. Prude Revocable Trust PO Box 840 Amory, MS 38821-0840	5,714	5,714

Juanita W. Ridgeway 233 1/2 Capitol Street Jackson, MS 39201	14,885	14,885

W.B. Ridgeway 233 1/2 Capitol Street Jackson, MS 39201	9,773	9,773

Sheila Robbins 633 Owen road Albany, MS 38652	22,251	22,251

Paul J. Schierl Trust 2413 Hazelwood Lane, Suite Green Bay, WI 54304-1905	18,342	18,342

Gary & Kay Stavrum, JT 4722 Gwynne Road Memphis, TN 38117	50,666	50,666

John A. Travis, III 111 Mockingbird Lane Ridgeland, MS 39157	37,286	37,286

Anne D. Trotter 13 Bristlecone Way Augusta, GA 30909	6,765	6,765

T. Barrett Trotter 13 Bristlecone Way Augusta, GA 30909	8,118	8,118

E.L. Vowell 403 S. Church Street Loisville, MS 39339	17,139	17,139

Jeffrey & Gina Webb, JT 6589 Green Shadows Lane Memphis, TN 38119	36,233	36,233

William P. Wells 4723 Gwynne Road Memphis, TN 38117	29,238	29,238

Colleen Weyers 500 AMS Court Green Bay, WI 54313			15,636			15,636

Jeffrey Weyers

500 AMS Court

Green Bay, WI 54313

8,420

Robert Weyers 500 AMS Court Green Bay, WI 54313	12,027	12,027

Ronald Weyers 500 AMS Court Green Bay, WI 54313	16,388	16,388


Ronald Weyers IRA 500 AMS Court Green Bay, WI 54313	7,067	7,067

Wirt A. Yerger III PO Box 16910 Jackson, MS 39236	7,067	7,067

Yerger Properties LP PO Box 16910 Jackson, MS 39236	7,217	7,217

Frank M. Yerger 165 Glenway Jackson, MS 39216	4,059	4,059

Frank M. Yerger Revocable Trust 165 Glenway Jackson, MS 39216	10,073	10,073

Wirt A.Yerger, III IDGT Trust 129 Woodland Circle Jackson, MS 39216	18,041	18,041

Others (40) **	197,559	197,559

**These Selling Shareholders own and are offering in the aggregate less than 1% of the outstanding shares of common stock.

PLAN OF DISTRIBUTION

The Selling Shareholders may sell the common stock offered by this prospectus directly or through brokers, dealers or underwriters who may act solely as agents or may acquire common stock as principals. Such sales may be made at prevailing market prices, at prices related to such prevailing market prices, or at variable prices negotiated between the sellers and purchasers. The Selling Shareholders may distribute the common stock in one or more of the following methods:

ordinary brokers transactions, which may include long or short sales through the facilities of the Over-the-Counter Bulletin Board (if a market maker successfully applies for inclusion of our common stock in such market) or other market;

privately negotiated transactions;

o	transactions involving cross or block trades or otherwise on the open market;

o	purchases by brokers, dealers or underwriters as principal and resale by these purchasers for their own accounts under this prospectus;

o	sales "at the market" to or through market makers or into an existing market for the common stock;

o	sales in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales made through agents;

o	through transactions in puts, calls, options, swaps or other derivatives (whether exchange listed or otherwise); or

o	any combination of the above, or by any other legally available means.

In addition, the Selling Shareholders may enter into hedging transactions with broker-dealers who may engage in short sales of common stock, or options or other transactions that require delivery by broker-dealers of the common stock.

The Selling Shareholders and/or the purchasers of common stock may compensate brokers, dealers, underwriters or agents with discounts, concessions or commissions (compensation may be in excess of customary commissions). The Selling Shareholders and any broker dealers acting in connection with the sale of the shares being registered may be deemed to be underwriters within the meaning of Section 2(11) of the Securities Act, as amended, and any profit realized by them on the resale of shares as principals may be deemed underwriting compensation under the Securities Act. We do not know of any arrangements between the Selling Shareholders and any broker, dealer, underwriter or agent relating to the sale or distribution of the shares being registered.

We and the Selling Shareholders and any other persons participating in a distribution of our common stock will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M, which may restrict certain activities of, and limit the timing of purchases and sales of securities by, these parties and other persons participating in a distribution of securities. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other activities with respect to such securities for a specified period of time prior to the commencement of such distributions subject to specified exceptions or exemptions.

The Selling Shareholders may sell any securities that this prospectus covers under Rule 144 of the Securities Act rather than under this prospectus if they qualify.

We cannot assure you that the Selling Shareholders will sell any of their shares of common stock.

In order to comply with the securities laws of certain states, if applicable, the Selling Shareholders will sell the common stock in jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states, the Selling Shareholders may not sell or offer the common stock unless the holder registers the sale of the shares of common stock in the applicable state or the applicable state qualifies the common stock for sale in that state, or the applicable state exempts the common stock from the registration or qualification requirement.

We have agreed to indemnify the Selling Shareholders whose shares we are registering from all liability and losses resulting from any misrepresentations we make in connection with the registration statement.

DESCRIPTION OF OUR SECURITIES

The following is a summary of the material terms of our capital stock. This summary is subject to and qualified in its entirety by our Articles of Incorporation, as amended, the Certificate of Designations for our series A and series B convertible preferred stock, our By-laws and by the applicable provisions of Nevada law.

Prior to the reverse stock split of January 30, 2006, our authorized capital stock consisted of 100,000,000 shares of common stock par value $0.006 per share, of which there were 39,243,659 shares of common stock issued and outstanding, and 5,000,000 shares of preferred stock, par value $0.01 per share. We had two series of preferred stock: series A convertible preferred stock, of which 785,000 shares were authorized and 784,575.16 shares were issued and outstanding; and series B convertible preferred stock, of which 216,000 shares were authorized and 215,424.84 shares were issued and outstanding.

Following the reverse stock split, the 39,243,469 shares of our common stock were reversed down to approximately 160,000 shares, the series A convertible preferred stock has converted into 15,475,595 shares of our common stock, and the series B convertible preferred stock has converted into 4,250,000 shares of our common stock. Shares of series A and series B stock were cancelled and automatically returned to the status of authorized and unissued shares of preferred stock, available for future designation and issuance pursuant to the terms of the Articles of Incorporation. Therefore, after the reverse stock split, our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.006 per share, of which there are approximately 20,000,000 shares of common stock issued and outstanding, and 5,000,000 shares of preferred stock, par value $0.01 per share, of which no shares of preferred stock are issued and outstanding.

Common Stock

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. According to our charter documents, holders of our common stock do not have preemptive rights, and are not entitled to cumulative voting rights. There are no conversion or redemption rights or sinking fund provided for our stockholders. Shares of common stock share ratably, together with shares of series A and Series B convertible preferred stock on an as converted basis, in dividends, if any, as may be declared from time to time by our Board of Directors in its discretion from funds legally available for distribution as dividends. In the event of a liquidation, dissolution or winding up of our company, subject to the prior rights of the holders of our series B convertible preferred stock, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable.

Preferred Stock

Our Board of Directors is authorized under the Restated Articles of Incorporation to provide for the issuance of shares of preferred stock, by resolution or resolutions for the issuance of such stock, and, by filing a certificate of designations under Nevada law, to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the shareholders. Any shares of preferred stock so issued are likely to have priority over our common stock with respect to dividend or liquidation rights.

The issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holder to block such a transaction, or facilitate a business combination by including voting rights that would provide a required percentage vote of the stockholders. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of the holders of the common stock. Although the Board of Directors is required to make any determination to issue such stock based on its judgment as to the best interests of our stockholders, the Board of Directors could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of such stock. The Board of Directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized preferred stock, unless otherwise required by law.

On December 5, 2005, our Board of Directors designated 216,000 shares of our authorized $0.001 par value per share preferred stock as series A convertible preferred stock and 785,000 shares of our preferred stock as series B convertible preferred stock. On December 8, 2005, we filed Certificates of Designation for the series A and series B convertible preferred stock with the Office of the Secretary of State of Nevada. Our Board of Directors created the series A convertible preferred stock to allow us to consummate the share exchange agreement with DPI and the series B convertible preferred stock in connection with the private placement, although in each case we do not have sufficient unissued authorized common stock to allow for a complete conversion. Each share of the series A convertible preferred stock and series B convertible preferred stock is automatically convertible into approximately 19.73 shares of our common stock after giving effect to the reverse stock-split.

On January 30, 2006, we effectuated the reverse stock-split. As a result, the series A convertible preferred stock has converted into 15,475,595 shares of our common stock, and the series B convertible preferred stock has converted into 4,250,000 shares of our common stock. Shares of series A and series B stock were cancelled and automatically returned to the status of authorized and unissued shares of preferred stock, available for future designation and issuance pursuant to the terms of the Articles of Incorporation.

Reverse Stock Split

On December 5, 2005, our sole director adopted a resolution to amend the our Articles of Incorporation to effect a 245.27 for-1-reverse stock split of our common stock and to change our corporate name to "Fushi International, Inc." On that same date, the holder of a majority of our then outstanding shares of common stock signed a written consent approving the reverse stock-split and corporate name change. On January 5, 2006, we mailed an Information Statement to our shareholders notifying them of the reverse stock-split and the change in our corporate name. Under SEC Regulation 14C, corporate action taken pursuant to consents or authorizations of security holders may not take effect prior to the 20th day following the date upon which an Information Statement is sent or given to shareholders. On January 30, 2006, which is, not less than 20 days after, but within 25 days of, the mailing of the Information Statement to our shareholders, we effectuated the reverse stock split and name change by filing a certificate of amendment to our Articles of Incorporation with the Office of the Secretary of State of Nevada. Upon the filing of the certificate of amendment:

o	the 784,575.16 outstanding shares of series A convertible preferred stock were automatically converted into approximately 15,475,595 shares of common stock, without any action on the part of shareholders

o	the 215,424.84 outstanding shares of series B convertible preferred stock were automatically converted into approximately 4,250,000 shares of common stock, without any action on the part of shareholders

the 39,243,659 outstanding shares of common stock were automatically converted into approximately 160,000 shares of common stock, without any action on the part of shareholders. Of these shares, 81,543 shares are owned by Dalian Fushi, with the other existing shareholders owning in the aggregate only approximately 78,458 shares.

Warrants

We currently have outstanding warrants to purchase a total of 2,125,000 shares of our common stock issued to the investors in the series B convertible preferred stock private placement. The warrants have a five year term and an exercise price of $3.67 per share. We may force the exercise of the warrants if we sign a binding agreement to make a certain acquisition (provided certain conditions are met), or if the price of our common stock exceeds $10 per share for 10 consecutive trading days.

We have granted warrants to Kuhns Brothers and its designees to purchase 424,929 shares of common stock at an exercise price of $3.1064 per share. We issued these warrants for advisory services connection with the reorganization of our company and the acquisition of DPI.

We also have issued to Glenn A. Little a warrant to purchase 80,000 shares of the post-reverse stock-split shares of common stock in consideration for certain consulting services to be rendered by Mr. Little under a consulting agreement. These warrants may be exercised for a period of five years commencing December 13, 2005 at an exercise price of $0.01 per share.

MARKET FOR OUR COMMON STOCK

The Company's common stock is currently quoted on the Over-the-Counter (OTC) Bulletin Board under the trading symbol "FSIN.OB" following the reverse stock split. Prior to the reverse stock split, the Company's trading symbol was "PLLK.OB."

On April 12, 2006, the last reported close price of our common stock was $4.00 per share, the bid price was $3.3 per share and the last reported ask price was $5.00 per share. However, there has been no regular, established trading market for the Company's common stock since the completion of the 1993 public offering via a Registration Statement on Form S-18. Further, to the knowledge of management, there has been no significant trading activity in the past three years.

As of March 21, 2006, there were 19,916,331 shares of our common stock issued and outstanding on an as-converted basis, and there were approximately 628 holders of record of our outstanding shares.

Penny Stock Regulations

The SEC has adopted regulations which generally define "penny stock" to be an equity security that has a market price of less than $5.00 per share. Our common stock, when and if a trading market develops, may fall within the definition of penny stock and subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 or $300,000, together with their spouse).

For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell our common stock and may affect the ability of investors to sell their common stock in the secondary market.

Dividends

Our board of directors has not declared a dividend on our common stock during the last two fiscal years or the subsequent interim period and we do not anticipate the payments of dividends in the near future as we intend to reinvest our profits to grow operations. See "Risk Factors - Risks Related to an Investment in our common stock - We are unlikely to pay cash dividends in the foreseeable future." We rely entirely on dividends from Dalian DPI for our funds and PRC regulations may limit the amount of funds distributed to us from Dalian DPI, which will affect our ability to declare any dividends. See "Risk Factors - Risks Related to Doing Business in the PRC - Dalian DPI and Dalian Fushi are subject to restrictions on paying dividends and making other payments to us" and "- Governmental control of currency conversion may affect the value of your investment."

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

On December 13, 2005, our Board of Directors approved the dismissal of S. W. Hatfield, CPA as our registered independent certified public accounting firm. S.W. Hatfield had been previously engaged as our independent auditing firm to audit our financial statements.

No accountant's report on the financial statements, issued by S.W. Hatfield, for either of the past two years contained an adverse opinion or disclaimer of opinion or was qualified or modified as to uncertainty, audit scope or accounting principles, except for a going concern opinion expressing substantial doubt about our ability to continue as a going concern.

During our two most recent fiscal years (ended December 31, 2004 and 2003) and from January 1, 2005 to December 13, 2005, we did not have any disagreements with Hatfield on any matter of accounting principles or practices, financial disclosure, or auditing scope or procedure. There were no reportable events, as described in Item 304(a)(1)(iv)(B) of Regulation S-B, during our two most recent fiscal years (ended December 31, 2004 and 2003) and from January 1, 2005.

Our Board of Directors has retained Jimmy C.H. Cheung & Co. ("Cheung") as our new registered independent certified public accounting firm. Jimmy C.H. Cheung & Co. is located at 1607 Dominion Center, 43 Queen's Road East, Wanchai, Hong Kong. Since Jimmy C.H. Cheung & Co has audited the business of Dalian Fushi in prior years, management has elected to continue this existing relationship.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC, 100 F Street, N.E., Washington, D.C. 20549, a registration statement on Form SB-2, under the Securities Act for the common stock offered by this prospectus. We have not included in this prospectus all the information contained in the registration statement and you should refer to the registration statement and its exhibits for further information.

The registration statement and reports, statements and other information we file with the SEC under the Exchange Act may be read and copied at the SEC's Public Reference Room at 100 F Street NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room at 1-800-SEC-0330. The SEC maintains a web site (http://www.sec.gov.) that contains the registration statements, reports, proxy and information statements and other information regarding registrants that file electronically with the SEC such as us. You may access our SEC filings electronically at this SEC website. These SEC filings are also available to the public from commercial document retrieval services.

LEGAL MATTERS

Our counsel, Guzov Ofsink, LLC, located at 600 Madison Avenue, 14th Floor, New York, New York 10022, is passing upon the validity of the issuance of the common stock offered under this prospectus.

EXPERTS

Jimmy C.H. Cheung & Co., independent certified public accountants, located in Wanchai, Hong Kong, have audited the financial statements of Dalian Fushi (PRC) included in this registration statement to the extent, and for the periods set forth in their reports. We have relied upon such reports, given upon the authority of such firm as experts in accounting and auditing.

100

JIMMY C.H. CHEUNG & CO

Certified Public Accountants

(A member of Kreston International)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:

Parallel Technologies, Inc. and subsidiaries

We have audited the accompanying balance sheets of Parallel Technologies, Inc. and subsidiaries, as of December 31, 2005 (consolidated) and 2004 and the related statements of operations and comprehensive income, stockholders' equity and cash flows for the years ended December 31, 2005 (consolidated) and 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits of the financial statements provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Parallel Technologies, Inc. and subsidiaries, as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years ended December 31, 2005 and 2004, in conformity with accounting principles generally accepted in the United States of America.

JIMMY C.H. CHEUNG & CO

Certified Public Accountants

Hong Kong

Date: March 4, 2006

1607 Dominion Centre, 43 Queen's Road East, Wanchai, Hong Kong

Tel: (852) 25295500 Fax: (852) 28651067 Email: jchc@krestoninternational.com.hk

Website: http://www.jimmycheungco.com

F-1

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

BALANCE SHEETS

AS OF DECEMBER 31, 2005 AND 2004

ASSETS		2005 Consolidated		2004
CURRENT ASSETS
Cash and cash equivalents	$	6,163,670	$	2,612,282
Accounts receivable, net		6,198,705		1,760,586
Due from related companies		3,323,528		456,527
Inventories, net		7,627,866		2,050,256
Other receivables and prepaid expenses		3,759,072		2,857,416
Total Current Assets		27,072,841		9,737,067

PROPERTY AND EQUIPMENT, NET		38,641,783		33,467,298

OTHER ASSETS Intangible assets, net		819,498		938,161
Land use rights, net		4,602,812		4,691,638
TOTAL ASSETS	$	71,136,934	$	48,834,164
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,744,652	$	1,560,437
Other payables and accrued liabilities		779,898		610,245
Notes payable - current maturities		7,496,902		6,894,049
Value added tax and other taxes payable		3,869,814		2,581,181
Income tax payable		2,104,709		666,995
Due to a related company		--		45,695
Due to a stockholder		--		107,824
Total Current Liabilities		16,995,975		12,466,426

LONG-TERM LIABILITIES
Notes payable - long term		9,675,859		9,675,859

TOTAL LIABILITIES		26,671,834		22,142,285

COMMITMENTS AND CONTINGENCIES		--		--
STOCKHOLDERS' EQUITY
Series A convertible preferred stock ($0.001 par value, 50,000,000 shares		785		785
authorized, 784,575.15 shares issued and outstanding as of December 31, 2005 and 2004)
Series B convertible preferred stock ($0.001 par value, 5,000,000 shares authorized, 216,000 share issued and outstanding as of		216		--
December 31, 2005; 0 shares issued and outstanding
as of December 31, 2004) Common stock ($0.006 par value, 100,000,000 shares authorized, 78,459 shares issued and outstanding as of December 31, 2005; 0 shares issued
and outstanding as of December 31, 2004)		471		--
Additional paid-in capital		29,307,285		19,350,932
Retained earnings Unappropriated		12,710,833		6,119,998
Appropriated		2,428,310		1,220,164
Accumulated other comprehensive income		17,200		--
Total Stockholders' Equity		44,465,100		26,691,879
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
	$	71,136,934	$	48,834,164

The accompanying notes are an integral part of these consolidated financial statements

F-2

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

	2005			2004
	Consolidated
NET SALES	$	33,709,428		$	15,662,493
COST OF SALES		(21,400,248	)		(8,947,365	)

GROSS PROFIT		12,309,180			6,715,128

OPERATING EXPENSES Selling expenses		317,324			578,031
General and administrative expenses		969,576			688,232
Professional fees		317,448			36,661
Depreciation		534,726			472,912
Amortization of land use rights		88,826			96,901
Amortization of intangible assets		118,663			124,709


Total Operating Expenses		2,346,563			1,997,446

INCOME FROM OPERATIONS		9,962,617			4,717,682

OTHER INCOME (EXPENSES) Government grant		117,844			-
Interest income		95,766			23,122
Interest expense		(1,033,861	)		(378,588	)
Other income		74,027			109,586
Other expenses		(15,177	)

Total Other Expenses, net		(761,401	)		(245,880	)

INCOME BEFORE TAXES		9,201,216			4,471,802
INCOME TAX EXPENSE		(1,402,235	)		(666,995	)

NET INCOME	$	7,798,981		$	3,804,807
OTHER COMPREHENSIVE INCOME Foreign currency translation gain		17,200			-

COMPREHENSIVE INCOME	$	7,816,181		$	3,804,807

NET INCOME PER SHARE-BASIC	$	2,015.76		$	-

NET INCOME PER SHARE-DILUTED	$	0.50		$	0.25

Weighted average number of shares outstanding during the year-basic		3,869			-

Weighted average number of shares outstanding during the year-diluted		15,689,053			15,475,595

The accompanying notes are an integral part of these consolidated financial statements

F-3

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

	Series A				Series B
	Convertible				Convertible
	Preferred		Stock		Preferred		Stock		Common Stock
	Shares		Amount		Shares		Amount		Shares		Amount

Balance at January 1, 2004		784,575	$	785		-	$	-		-	$	-

Net income for the year		-		-		-		-		-		-

Transfer to statutory and staff welfare reserves		-		-		-		-		-		-

Balance at December 31, 2004		784,575	$	785		-		-		-		-

Recapitalization		-		-		-		-		78,459		471

Shares issue for placement		-		-		216,000		216		-		-

Net income for the year		-		-		-		-		-		-

Other comprehensive income		-		-		-		-		-		-

Transfer to statutory and staff welfare reserves		-		-		-		-		-		-

Balance at December 31, 2005		784,575	$	785		216,000	$	216		78,459	$	471

F-4

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

(CONTINUED)

	Additional paid-in capital		Unappropriated retained earnings			Appropriated retained earnings		Other comprehensive income		Total


Balance at January 1, 2004	$	19, 350, 932	$	2,885,912		$	$ 649,443	$	-	$	22,887,072

Net income for the year		-		3,804,807			-		-		3,804,807

Transfer to statutory and staff welfare reserves		-		(570,721	)		570,721		-		-

Balance at December 31, 2004		19,350,932		6,119,998			1,220,164		-		26,691,879

Recapitalization		26,157		-			-		-		26,628

Shares issue for placement		9,930,196		-			-		-		9,930,412

Net income for the year		-		7,798,987			-		-		7,798,981

Other comprehensive income		-		-			-		17,200		17,200

Transfer to statutory and staff welfare reserves		-		(1,208,146	)		1,208,146		-		-

Balance at December 31, 2005	$	29,307,285	$	12,710,833		$	2,428,310	$	17,200	$	44,465,100

The accompanying notes are an integral part of these consolidated financial statements

F-5

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

CASH FLOWS FROM OPERATING ACTIVITIES	2005 Consolidated			2004

Net income	$	7,798,981		$	3,804,807
Adjusted to reconcile net income to cash provided by operating activities: Depreciation - cost of sales		1,245,172			298,142
Depreciation - operating expenses		534,726			472,912
Amortization of land use rights		88,826			96,901
Amortization of intangible assets		118,663			124,709
Changes in operating assets and liabilities (Increase) decrease in: Accounts receivable		(4,438,119	)		191,035
Other receivable and prepaid expenses		(901,656	)		1,183,916
Inventories		(5,577,610	)		(1,582,120	)
Increase (decrease) in: Accounts payable		1,184,215			625,078
Other payables and accrued liabilities		169,653			(835,141	)
Value added tax payable		1,288,633			1,287,440
Income tax payables		1,437,714			666,995

Net cash provided by operating activities		2,949,198			6,334,674

F-6

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

(CONTINUED)


CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(6,954,383	)		(11,870,910	)

Net cash used in investing activities		(6,954,383	)		(11,870,910	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from stock issuance in private placement		9,930,412			--
Proceeds from recapitalization		471			--
Additional paid-in capital		26,157			--
Due from related companies		(2,867,001	)		940,048
Due to a stockholder		(107,824	)		--
Due to related companies		(45,695	)		54,140
Notes borrowed		7,496,902			8,164,006
Notes repaid		(6,894,049	)		(1,269,957	)

Net cash provided by financing activities		7,539,373			7,888,237

EFFECT OF EXCHANGE RATE ON CASH		17,200			--

NET INCREASE IN CASH AND CASH EQUIVALENTS		3,551,388			2,352,001
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		2,612,282			260,281

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	6,163,670		$	2,612,282

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	$	1,371,642		$	721,427
Cash paid for interest

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES

The Company capitalized interest of $337,781 and $342,839 during 2005 and 2004, respectively.

The accompanying notes are an integral part of these consolidated financial statements

F-7

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Organization

Parallel Technologies, Inc. ("Parallel") was incorporated under the name of M, Inc. in the State of Nevada on October 6, 1982. The name was changed to Parallel Technologies, Inc. on June 3, 1991 on consummation of a business combination transaction. During 1995, Parallel ceased all business operation and disposed of all assets, liabilities and operating activities. Parallel has had no operations or significant assets since the year ended December 31, 1995.

Diversified Product Inspections, Inc. ("DPI") was incorporated on January 5, 2005 in the State of Nevada as an investment holding company. Through its wholly owned subsidiary, Dalian Diversified Product Inspections Bimetallic Cable Co., Ltd. (" Dalian DPI") incorporated in the People's Republic of China ("PRC") as a wholly owned foreign limited liability company on September 24, 2005, Dalian DPI is engaged in the manufacturing and selling of copper clad aluminum and steel wire, both of which are bimetallic composite wire products that are principally used for network signal transmission cable, cable television wire and other applications. Dalian DPI commenced business on December 28, 2005.

Dalian Fushi Bimetallic Manufacturing Company Limited ("Dalian Fushi") was incorporated on January 16, 2002 in the PRC as a limited liability company. The business activities of Dalian Fushi are the same with those of Dalian DPI.

On December 13, 2005, Parallel consummated a Plan of Exchange ("the Agreement") with the shareholders of DPI pursuant to which Parallel issued 784,575.16 shares of newly designated Series A Convertible Preferred Stock ("Series A Stock") to the stockholders of DPI for all the issued and outstanding stocks of DPI.

The merger of Parallel and DPI was treated for accounting purposes as a capital transaction and recapitalization by DPI ("the accounting acquirer") and re-organization by Parallel ("the accounting acquiree"). The financial statements have been prepared as if the reorganization had occurred retroactively.

Accordingly, the financial statements include the following:

(1)	The balance sheet consists of the net assets of the acquirer at historical cost and the net assets of the acquiree at historical cost.

(2)	The statement of operations includes the operations of the acquirer for the periods presented and the operations of the acquiree from the date of the merger.

On the same date, Dalian DPI entered into a series of agreements (collectively known as the Restructuring Agreements) with Dalian Fushi and the shareholders of Dalian Fushi in which Dalian DPI will take over the management of the business activities of Dalian Fushi and will hold a 100% variable interest in Dalian Fushi. As both companies are under common control, this has been accounted for as a reorganization of entities and the financial statements have been prepared as if the reorganization had occurred retroactively.

Parallel, DPI, Dalian DPI and Dalian Fushi are hereinafter referred to as ("the Company").

The Company changed its name to Fushi International, Inc. on January 27, 2006.

F-8

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

(B)	Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(C)	Principles of consolidation

The accompanying 2005 consolidated financial statements include the financial statements of Parallel and its 100% owned subsidiaries DPI, Dalian DPI and its 100% variable interest entity Dalian Fushi.

The accompanying 2004 consolidated financial statements include the financial statements of Dalian Fushi.

All significant inter-company transactions and balances have been eliminated in consolidation.

(D)	Consolidation of variable interest entity

In accordance with Interpretation No. 46R, Consolidation of Variable Interest Entities ("FIN 46R"), variable interest entities (VIEs) are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

In connection with the adoption of FIN 46R, the Company concludes that Dalian Fushi is a VIE and that the Company is the primary beneficiary. Under FIN 46R transition rules, the financial statements of Dalian Fushi are then consolidated into the Company's consolidated financial statements.

(E)	Cash and cash equivalents

For purpose of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits with a bank with a maturity of less than three months.

(F)	Accounts receivable

The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on managements' assessment of the credit history with the customer and current relationships with them.

As of December 31, 2005 and 2004, the Company considers all its accounts receivable to be collectible and no provision for doubtful accounts has been made in the financial statements.

F-9

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

(G)	Inventories

Inventories are stated at lower of cost or market value, cost being determined on a weighted average method. The Company provided inventory allowances based on excess and obsolete inventories determined principally by customer demand.

(H)	Property and equipment

Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expense as incurred.

Depreciation is provided on a straight-line basis, less estimated residual value over the assets' estimated useful lives. The estimated useful lives are as follows:

Buildings	20 Years
Plant and machinery	10 Years
Motor vehicles	5 Years
Furniture, fixtures and equipment	5 Years

Land use rights are stated at cost, less accumulated amortization and are amortized over the term of the relevant rights of 50 years from the date of acquisition. Amortization of land use rights for the years ended December 31, 2005 and 2004 was $88,826 and $96,901 respectively.

(I) Long-lived assets

The Company accounts for long-lived assets under the Statements of Financial Accounting Standards Nos. 142 and 144 "Accounting for Goodwill and Other Intangible Assets" and "Accounting for Impairment or Disposal of Long-Lived Assets" ("SFAS No. 142 and 144"). In accordance with SFAS No. 142 and 144, long-lived assets held and used by the Company are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset's carrying amount, the asset is written down to its fair value. In the opinion of the management, no impairment of property and equipment, intangible assets and land use rights exist at December 31, 2005.

(J) Fair value of financial instruments

Statement of Financial Accounting Standards No. 107, "Disclosure About Fair Value of Financial Instruments," requires certain disclosures regarding the fair value of financial instruments. Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

F-10

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

The carrying value of cash and cash equivalents, accounts receivable (trade, related parties and others), accounts payable (trade and related party) and accrued liabilities approximate their fair value because of the short-term nature of these instruments. The Company places its cash and cash equivalents with what it believes to be high credit quality financial institutions. The Company has a diversified customer base, most of which are in the PRC. The Company controls credit risk related to accounts receivable through credit approvals, credit limit and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

The Company's major operation is in the PRC, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility of foreign exchange rates between the United States dollars ("US$") and the Chinese Renminbi ("RMB"). On July 21, 2005, PRC let the RMB to fluctuate ending its decade-old valuation peg to the US$. The new RMB rate reflects an approximately 2% increase in value against the US$. Historically, the PRC government has benchmarked the RMB exchange ratio against the US$, thereby mitigating the associated foreign currency exchange rate fluctuation risk. The Company does not believe that its foreign currency exchange rate fluctuation risk is significant, especially if the PRC government continues to benchmark the RMB against the US$.

(K)	Revenue recognition

The Company recognizes revenue upon delivery or shipment of the products, at which time title passes to the customer provided that: there are no uncertainties regarding customer acceptance; persuasive evidence of an arrangement exists; the sales price is fixed and determinable; and collectability is deemed probable.

The local government of Dalian City also approved a grant to the Company to encourage the high technology industry. The grant is recognized as revenue on receipt from the local government.

(L)	Advertising costs

Advertising costs for the years ended December 31, 2005 and 2004 were $10,967 and $22,171 respectively, are expensed as incurred and included in cost of sales in the statements of operations.

(M)	Income taxes

The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date.

F-11

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

(N)	Foreign currency transactions

Parallel, DPI, Dalian DPI and Dalian Fushi maintain their accounting records in their functional currencies of US$, US$, RMB and RMB respectively.

Foreign currency transactions during the year are translated to the functional currency at the approximate rates of exchange on the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the approximate rates of exchange at that date. No-monetary assets and liabilities are translated at the rates of exchange prevailing at the time the asset or liability was acquired. Exchange gains or losses are recorded in the statement of operations.

The financial statements of the PRC subsidiaries (whose functional currency is RMB) are translated into US$ using the closing rate method. The balance sheet items are translated into US$ using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the year. All exchange differences are recorded within equity. Translation gain for the years ended December 31, 2005 and 2004 was $17,200 and $0 respectively.

(O)	Comprehensive income (loss)

The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported as other comprehensive income (loss) in the statements of operations and stockholders' equity. Comprehensive income for the years ended December 31, 2005 and 2004 was $17,200 and $0 respectively.

(P)	Income per share

Basic income per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

F-12

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

(Q)

Segments

The Company adopted Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131 establishes standards for operating information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decision how to allocate resources and assess performance. The information disclosed herein, materially represents all of the financial information related to the Company's principal operating segments. The Company operates in a single segment.

(R)	Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123R "Share-Based Payment" ("SFAS 123R"), a revision to SFAS No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123"), and superseding APB Opinion No. 25 "Accounting for Stock Issued to Employees" and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, including obtaining employee services in share-based payment transactions. SFAS 123R applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date. Adoption of the provisions of SFAS 123R is effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. The guidelines of this statement are not applicable to the Company.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs --an amendment of ARB No. 43, Chapter 4"("SFAS 151") This statement clarifies the criteria of "abnormal amounts" of freight, handling costs, and spoilage that are required to be expensed as current period charges rather than deferred in inventory. In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS 151 is effective for the Company July 1, 2005. The Company does not expect the adoption of this statement will have any material impact on its results or financial position.

In December 2004, the FASB issued SFAS no. 153, Exchanges of Nonmonetary Assets an amendment of APB Opinion No. 29. This Statement addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29, Accounting for Nonmonetary Transactions, and replaces it with an exception for exchanges that do not have commercial substance. This Statement specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The Company does not expect the adoption of this statement will have any material impact on its results or financial position

In December 2004, the FASB issued SFAS No. 152, Accounting for Real Estate Time-Sharing Transactions an amendment of FASB Statements No. 66 and 67. This Statement amends FASB Statement No. 66, Accounting for Sales of Real Estate, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions. This Statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to state that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions. This Statement is effective for financial statements for fiscal years beginning after June 15, 2005. The guidelines of this statement are not applicable to the Company.

F-13

PARALLEL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

(S)	Recent Accounting Pronouncements (Continued)

SFAS No. 154 ("SFAS 154"), Accounting Changes and Error Corrections, was issued in May 2005 and replaces APB Opinion No. 20 and SFAS No. 3 ("SFAS 3"). SFAS No. 154 requires retrospective application for voluntary changes in accounting principle in most instances and is required to be applied to all accounting changes made in fiscal years beginning after December 15, 2005. At such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2006. The Company is currently evaluating the impact of SFAS 154 on its consolidated financial statement.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments" (SFAS 155"), which amends SFAS No. 133, "Accounting for Derivatives Instruments and Hedging Activities" ("SFAS 133") and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" (SFAS 140"). SFAS 155 amends SFAS 133 to narrow the scope exception for interest-only and principal-only strips on debt instruments to include only such strips representing rights to receive a specified portion of the contractual interest or principle cash flows. SFAS 155 also amends SFAS 140 to allow qualifying special-purpose entities to hold a passive derivative financial instrument pertaining to beneficial interests that itself is a derivative instrument. The Company is currently evaluating the impact this new Standard, but believes that it will not have a material impact on the Company's financial position.

2.	CONSOLIDATION OF VARIABLE INTEREST ENTITY

On December 13, 2005 Dalian DPI entered into the Restructuring Agreements with Dalian Fushi and its shareholders in which Dalian DPI took over the management of the business activities of Dalian Fushi. The Restructuring Agreements consist of the following agreements:

Purchase agreement in which Dalian DPI acquired from Dalian Fushi 15 production lines for $2,973,978; patents and trademarks for $18,587; inventories representing the book value of inventories as at the date of acquisition for $7,627,866 and trade receivables representing the book value as at date of acquisition for $5,771,196. Dalian Fushi also leased to Dalian DPI land and 5 production lines at an annual rent of $12,392 and $ 6,196 respectively.

b)	First and second patent contracts in which 4 patents in use and 1 pending registration patents are transferred from Dalian Fushi to Dalian DPI for $14,870.

c)	Trademark authorization in which the trademark "Fushi" registered in the name of a stockholder was transferred to Dalian DPI free of charge.

Entrusted management contract in which the shareholders of Dalian Fushi entrusted the business operation of Dalian Fushi and its management to Dalian DPI at a monthly management fee. The monthly management fee shall be the monthly net income earned by Dalian Fushi. Dalian DPI shall assume all the operation risks out of the entrusted management of Dalian Fushi and bear all the losses incurred by Dalian Fushi.

e)	Shareholders' voting proxy agreement in which Dalian Fushi appointed Board of Directors of Dalian DPI as their proxy to vote on all matters that require Dalian Fushi shareholders' approval.

f)	Exclusive Option Agreement in which Dalian Fushi shareholders granted Dalian DPI an irrecoverable option to acquire Dalian Fushi's equity and remaining assets.

g)	Share Pledge Agreement in which Dalian Fushi shareholders pledged all their equity interests in Dalian Fushi to guarantee Dalian DPI's rights and benefits under the Restructuring Agreements.

Under the requirements of FASB Interpretation No. 46 (R), Consolidation of Variable Interest Entities, an interpretation of ARB No. 51 ("FIN 46"), the Company consolidated the financial statements of Dalian Fushi, a VIE of Dalian DPI. As both companies are under common control, the financial statements have been prepared as if the transaction had occurred retroactively.

F-14

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

3.	ACCOUNTS RECEIVABLE

Accounts receivable at December 31, 2005 and 2004 consisted of the following:


	2005		2004

Accounts receivable	$	$6,198,705	$	1,760,586
Less: allowance for doubtful accounts		-		-

Accounts receivable, net	$	$6,198,705	$	1,760,586

As of December 31, 2005 and 2004, the Company considered all accounts receivable collectable and has not recorded a provision for doubtful accounts.

4.	INVENTORIES

Inventories at December 31, 2005 and 2004 consisted of the following:

	2005		2004
Raw materials	$	4,638,789	$	862,806
Work-in-progress		1,938,498		93,392
Finished goods		1,050,579		1,094,058

		7,627,866		2,050,256
Less: provision of obsolescence		-		-
Inventories, net	$	7,627,866	$	2,050,256

For both of the years ended December 31, 2005 and 2004, the Company has not recorded a provision for obsolete inventories.

F-15

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

5. OTHER RECEIVABLES AND PREPAID EXPENSES

Other receivables and prepaid expenses at December 31, 2005 and 2004 consisted of the following:

	2005		2004

Prepaid expenses	$	29, 402	$	111,030
Advances to suppliers		1,993,554		402, 137
Advances to staff		97, 375		239, 732
Deposits for purchases of property and equipment		644, 362		1,231,652
Other receivables		994,379		872, 865

	$	3,759,072	$	2,857,416

6. PROPERTY AND EQUIPMENT, NET

The following is a summary of property and equipment at December 31:

		2005			2004
Buildings	$	13,619,949		$	13,209,090
Plant and machinery		10,567,148			9,026,944
Office equipment		486,629			130,007
Motor vehicles		1,913,383			823,715
Construction in progress		15,071,773			11,514,743
		41,658,882			34,704,499
Less: accumulated depreciation		(3,017,099	)		(1,237,201	)
Property and equipment, net	$	38,641,783		$	33,467,298

Depreciation expense for the years ended December 31, 2005 and 2004 was $1,779,898 and $771,054 respectively.

F-16

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

7. INTANGIBLE ASSETS
Intangible assets related to two registered patent rights acquired by the Company from third parties:
	2005		2004

Patents	$	1,303,822	$	1,303,822
Less: accumulated amortization		484,324		365, 661

Intangible assets, net	$	819,498	$	938,161

Intangible assets are stated at cost, less accumulated amortization and are amortized on a straight line basis over 7 years and 15 years from date of acquisition to the date of expiration of the patent registration. Amortization of patents for the years ended and December 31, 2005 and 2004 was $118,663 and $124,709 respectively.

8.	LAND USE RIGHTS

Land use rights at December 31, 2005 and 2004 consisted of the following:-

	2005		2004

Rights to use land	$	4,845,065	$	4,845,065
Less: accumulated amortization		242,253		153, 427

Land use rights, net	$	4,602,812	$	4,691,638

F-17

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

9.	OTHER PAYABLES AND ACCRUED LIABILITIES

Other payables and accrued liabilities at December 31, 2005 and 2004 consisted of the following:

	2005		2004

Other payables	$	230,409	$	271,977
Accrued liabilities		549,489		338, 268

	$	779,898	$	610,245

F-18

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

10. NOTES PAYABLE

Balance at December 31, 2005 and 2004:



Note payable to a bank, interest rate of 5.58% per annum, collateralized by buildings and plant and machinery of the Company and related parties, due October 2008	$	4,837,929	$	4,837,929

Note payable to a bank, interest rate of 5.58% per annum, guaranteed by a related company, due October 2008		4,837,930		4,837,930

Note payable to a bank, interest rate of 5.544% per annum, collateralized by buildings of the Company, due April 2005		-		3,628,447

Note payable to a bank, interest rate of 5.544% per annum, collateralized by buildings of the Company, due April 2005		-		241,896

Note payable to a bank, interest rate of 5.544% per annum, - collateralized by buildings of the Company, due April 2005		-		604,741

Note payable to a bank, interest rate of 6.138% per annum, - collateralized by buildings of the Company, due September 2005		-		1,814,224

Note payable to a bank, interest rate of 5.742% per annum, - collateralized by buildings of the Company, due May 2005		-		604,741

Note payable to a bank, interest rate of 6.138% per annum, 1,858,736 collateralized by buildings of the Company, due February 2006		1,858,736		-

Note payable to a bank, interest rate of 5.742% per annum, 619,579 collateralized by buildings of the Company, due January 2006		619,579		-

F-19

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

10. NOTES PAYABLE (CONTINUED)


Note payable to a bank, interest rate of 6.138% per annum, 991,326 collateralized by buildings of the Company, due March 2006			991,326			-

Note payable to a bank, interest rate of 6.138% per annum, collateralized by buildings of the Company, due April 2006		1,177,199		-

Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due January 2006		371,747		-

Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due January 2006		2,478,315		-

		17,172,761		16,569,908
Less: current maturities		7,496,902		6,894,049

	$	9,675,859	$	9,675,859

Maturities are as follows: For the year ending December 31,

2006		7,496,902
2007		-
2008		9,675,859

	$	17,172,761

Interest paid in 2005 and 2004 was $1,371,642 and $721,427 respectively of which $337,781 and $342,839 was capitalized in 2005 and 2004 in construction in progress respectively.

F-20

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

11. INCOME TAX

a)	It is management's intention to reinvest all the income attributable to the Company earned by its operations outside the US. Accordingly, no US corporate income taxes are provided for in these financial statements.

The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

b)	Parallel and DPI were incorporated in the United States and have incurred net operating loss for income tax purposes for 2005 and 2004.

Parallel and DPI have net operating loss carry forwards for income taxes amounting to approximately $145,000 as at December 31, 2005 which may be available to reduce future years' taxable income. These carry forwards, will expire, if not utilized, through 2025. Management believes that the realization of the benefits from these losses appears uncertain due to the Companies' limited operating history and continuing losses. Accordingly, a full, deferred tax asset valuation allowance has been provided and no deferred tax asset valuation allowance has been provided and no deferred tax asset benefit has been recorded. The valuation allowance at December 31, 2005 was $49,512. The net change in the valuation allowance for 2005 was an increase of $49,512.

The federal statutory tax rate reconciled to the effective tax rate during 2005 is as follows:

Tax U.S statutory rate			34%
State tax rate, net of federal benefits			-
Change in valuation allowance			34%
Effective tax rate			-

Dalian DPI was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable tax rate has been 30% and no tax benefit is expected from the tax credits in the future. Dalian DPI located its factory in a special economic region in Dalian, the PRC. This economic region allows foreign enterprises a two-year income tax exemption beginning in the first year after they become profitable and a 50% income tax reduction for the following three years. Dalian DPI was approved as a wholly owned foreign enterprise in September 2005. No income tax expense has been recorded for 2005 and 2004 as Dalian DPI commenced business on December 28, 2005.

Dalian Fushi was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable tax rate has been 30% and no tax benefit is expected from the tax credits in the future. Dalian Fushi located its factory in a special economic region in Dalian, the PRC. This economic region allows high technology enterprises a two-year income tax exemption beginning in the first year after they become profitable, being 2002 and 2003 and a 50% income tax reduction for the following three years, being 2004 to 2006. Income tax expense recorded for the years ended December 31, 2005 and 2004 was $1,238,399 and $ 666,995 respectively.

F-21

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

12. NET INCOME PER SHARE

The following is information of net income per share at December 31:

	2005		2004

Net income	$	7,798,981	$	3,804,807

Basic weighted-average common stock outstanding		3,869		-
Effect of dilutive securities Series A and B convertible preferred stock		15, 687,184		15,475,595
Diluted weighted-average common stock outstanding		15,691,053		15,475,595
Net income per share - basic		2,015.76		-

Net income per share - diluted		0.50		0.25

13. SEGMENTS

The following is geographic information of the Company's revenue from non-related parties for the year ended December 31:

	2005		2004

Finland	$	310,869	$	-
China		33,274, 995		15, 662, 493
Other foreign countries		123,564		-

	$	33,709,428	$	15,662,493

F-22

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

14.	STOCKHOLDERS' EQUITY

(A)	STOCK ISSUANCES

(1) Stock issued for reverse merger

On December 13, 2005, the Company issued 784,575.16 shares of newly designated Series A Stock to the stockholders of DPI in exchange for all of the issued and outstanding stock of DPI pursuant to the Plan of Exchange.

(2) Stock issued for private placement

On December 13, 2005, the Company received net amount after deducting expenses of $9,930,412 from corporation and individual investors for issues of 216,000 shares of newly designated Series B Convertible Preferred Stock ("Series B Stock") by a private placement.

(3) Stock split

On January 30, 2006, the Company effected a 245.27:1 reverse stock split. All share and per share amounts have been retroactively restated to reflect the stock split.

15.	STOCKHOLDERS' EQUITY (CONTINUED)

(B)	APPROPRIATED RETAINED EARNINGS

The Company's PRC subsidiaries are required to make appropriations to reserves funds, comprising the statutory surplus reserve, statutory public welfare fund and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the People's Republic of China (the "PRC GAAP"). Appropriation to the statutory surplus reserve should be at least 10% of the after tax net income determined in accordance with the PRC GAAP until the reserve is equal to 50% of the entities' registered capital. Appropriations to the statutory public welfare fund are at 5% to 10% of the after tax net income determined in accordance with the PRC GAAP. The statutory public welfare fund is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable other than in liquidation. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors.

During 2005 and 2004, the Company appropriated $1,208,146 and $570,721, respectively to the reserves funds based on its net income under PRC GAAP.

F-23

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

16.	RELATED PARTY TRANSACTIONS

In 2004, the Company loaned $456,527 to three related companies as unsecured loans free of interest payment and repayable on demand.

In 2005, the Company loaned $3,323,528 to four related companies as unsecured loans free of interest payment and repayable on demand. The loans were advanced by Dalian Fushi to the related companies before the recapitalization.

In 2004, the Company owed a related company $45,695 for short-term unsecured advances free of interest and repayable on demand.

In 2004, the Company owed a stockholder $107,824 for short-term unsecured advances free of interest and repayable on demand.

17.	COMMITMENTS

(A)	Employee benefits

The full time employees of the Company's PRC subsidiaries are entitled to employee benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a Chinese government mandated multi-employer defined contribution plan. The Company is required to accrue for those benefits based on certain percentages of the employees' salaries and make contributions to the plans out of the amounts accrued for medical and pension benefits. The total provision and contributions made for such employee benefits was $19,233 and $703 for the years ended December 31, 2005 and 2004, respectively. The Chinese government is responsible for the medical benefits and the pension liability to be paid to these employees.

(B)	Capital commitments

According to the amended Articles of Association of Dalian DPI, the Company has to fulfill registered capital contributions of $29,800,000 within one year from September 21, 2005. As of December 31, 2005, the Company has fulfilled $8,532,500 of the registered capital requirement and has registered capital commitments of $21,267,500.

(C)	Commitments

As at December 31, 2005 and 2004, the Company had firm purchase commitments for capital projects in progress of $49,566 and $216,876 respectively.

F-24

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

18.	CONCENTRATIONS AND RISKS

During 2005 and 2004, 100% of the Company's assets were located in China.

The Company relied on five customers and sales to those customers for the years ended December 31, 2005 and 2004 were as follows:

For the year ended	Customer A	Customer B	Customer C	Customer D	Customer E

December 31, 2005	12%	10%	8%	7%	4%
December 31, 2004	19%	16%	21%	8%	10%

At December 31, 2005 and 2004, accounts receivable from those customers totaled $2,851,191 and $937,862 respectively.

The Company relied on two suppliers and purchases from those suppliers for the year ended December 31, 2005 and 2004 were as follows:

For the year ended	Supplier A	Supplier B

December 31, 2005	24%	17%
December 31, 2004	59%	37%

At December 31, 2005 and 2004, accounts payable to those two suppliers totaled $0 and $126,939 respectively.

F-25

PARALLEL TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 (CONSOLIDATED) AND 2004

19. SUBSEQUENT EVENTS

(A)	Reverse stock split

On January 30, 2006, the Company effected a 245.27 for 1 reverse stock split of its issued and outstanding common stock as previously approved on December 5, 2005 by its board of directors and stockholders. All shares and per share amounts have been retroactively restated for all periods presented to reflect the effect of the reverse split.

(B)	Change of the Company's name

On January 30, 2006, the Company changed its name From "Parallel Technologies, Inc." to "Fushi International, Inc.".

(C)	Series A and B Stocks

The Series A and B Stocks were automatically converted into common upon the effectiveness of the reverse split on January 30, 2006 under the certificates of designation for Series A and B Stocks.

(D)	Repayment by the related companies

During January 2006, two related companies repaid $638,681 due to the Company.

(E)	Repayment of other receivables

During March 2006, $844,363 owed to the Company included as other receivables

F-26

PARALLEL TECHNOLOGIES, INC.

BALANCE SHEETS

September 30, 2005 and 2004

(UNAUDITED)

		September 30, 2005			September 30, 2004
ASSETS
CURRENT ASSETS Cash on hand and in bank	$	47,424		$	54,105
TOTAL CURRENT ASSETS		47,424			54, 105
TOTAL ASSETS	$	47,424		$	54,105

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

LIABILITIES CURRENT LIABILITIES
Accounts payable - trade	$	-		$	-
TOTAL CURRENT LIABILITIES		-			-

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (DEFICIT)
Common stock - $0.006 par value 100,000,000 shares authorized 39,243,659 shares issued and outstanding, respectively		235,462			235,462
Additional paid-in capital		11,897,662			11,897,662
Accumulated deficit		(12, 085, 700	)		(12, 079, 019	)
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)		47,424			54,105
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	47,424		$	54,105

The financial information presented herein has been prepared by management

without audit by independent certified public accountants.

The accompanying notes are an integral part of these financial statements.

F-27

PARALLEL TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Nine and Three months ended September 30, 2005 and 2004



	Nine months ended September 30,			Nine months ended September 30,			Three months ended September 30,			Three months ended September 30,
	2005			2004			2005			2004
REVENUES	$	--		$	--		$	--		$	--
EXPENSES General and administrative expenses		5,743			44,431			2,853			5,583
Total operating expenses		5,743			44,431			2,853			5,583
LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES		(5,743	)		(44,431	)		(2,853	)		(5,583	)
OTHER INCOME Interest income		759			35			308			--
LOSS BEFORE PROVISION FOR INCOME TAXES		(4,984	)		(44,396	)		(2,545	)		(5,583	)
PROVISION FOR INCOME TAXES		--			--			--			--
NET LOSS		(4,984	)		(44,396	)		(2,545	)		(5,583	)
OTHER COMPREHENSIVE INCOME		--			--			--			--
COMPREHENSIVE LOSS	$	(4,984	)	$	(44,396	)	$	(2,545	)	$	(5,583	)
Earnings per share of common stock outstanding computed on net loss - basic and fully diluted		nil			nil			nil			nil
Weighted-average number of shares outstanding - basic and fully diluted		39,243,659			32,674,316			39,243,659			39,243,659

The financial information presented herein has been prepared by management

without audit by independent certified public accountants.

The accompanying notes are an integral part of these financial statements.

F-28

PARALLEL TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

Nine and Three months ended September 30, 2005 and 2004

		Nine months ended September 30, 2005			Nine months ended September 30, 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period	$	(4,984	)	$	(44,395	)
Adjustments to reconcile net loss to net cash provided by operating activities Increase (Decrease) in Accounts payable - trade		--			(21,500	)
NET CASH USED IN OPERATING ACTIVITIES		(4,984	)		(65,895	)
CASH FLOWS FROM INVESTING ACTIVITIES		--			--
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of common stock		--			120, 000
INCREASE (DECREASE) IN CASH		(4,984	)		54,105
Cash at beginning of period		52,408			--
CASH AT END OF PERIOD	$	47,424		$	54,105
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID Interest paid for the year	$	--		$	--
Income taxes paid for the year	$	--		$	--

The financial information presented herein has been prepared by management

without audit by independent certified public accountants.

The accompanying notes are an integral part of these financial statements.

F-29

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Parallel Technologies, Inc. (Company) was originally incorporated on October 6, 1982 under the laws of the State of Nevada as M, Inc. The Company was initially formed as a "blank check" entity for the purpose of seeking a merger, acquisition or other business combination transaction with a privately owned entity seeking to become a publicly-owned entity.

On June 3, 1991, the Company consummated a business combination transaction, pursuant to an Agreement and Plan of Reorganization (Agreement) with Graphex Imaging Systems, Inc. whereby Graphex Imaging Systems, Inc. became a wholly-owned subsidiary of the Company. Concurrent with this transaction, the Company changed its corporate name to Parallel Technologies, Inc.

During 1995, this activity ceased to operate and the Company disposed of all assets, liabilities and operating activities related to Graphex Imaging Systems, Inc. The Company has had no operations, assets or liabilities since the year ended December 31, 1995.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has a year-end of December 31.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its General Form for Registration of Securities of Small Business Issuers Under Section 12(b) or (g) of the Securities Exchange Act of 1934 on Form 10-SB, initially filed on March 15, 2005. The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.

In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission's instructions for Form 10-QSB, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2005.

F-30

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE C - GOING CONCERN UNCERTAINTY

The Company was originally formed in 1982 for the purpose of entering into a business combination transaction with a privately owned company seeking to become a publicly-owned entity. In 1991, the Company consummated a business combination transaction and this endeavor was unsuccessful. The Company has had no operations, assets or liabilities since 1995.

The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.

The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and upon additional funds loaned by management and/or significant stockholders to preserve the integrity of the corporate entity at this time. In the event, the Company is unable to acquire advances from management and/or significant stockholders, the Company's ongoing operations would be negatively impacted.

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding.

While the Company is of the opinion that good faith estimates of the Company's ability to secure additional capital in the future to reach our goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.	Cash and cash equivalents

For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

2.	Income Taxes

The Company uses the asset and liability method of accounting for income taxes. At September 30, 2005 and 2004, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

As of September 30, 2005 and 2004, the deferred tax asset related to the Company's net operating loss carryforward is fully reserved. Due to the provisions of Internal Revenue Code Section 338, the Company may have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of a change in control involving 50 percentage points or more of the issued and outstanding securities of the Company.

F-31

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

3.	Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements. Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company's net income (loss) position at the calculation date.

At September 30, 2005 and 2004, and subsequent thereto, the Company had no outstanding common stock equivalents.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that the Company's earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates. The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.

Financial risk is the risk that the Company's earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates. The company does not use derivative instruments to moderate its exposure to financial risk, if any.

F-32

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE F - INCOME TAXES

The components of income tax (benefit) expense for each of the nine month periods ended September 30, 2005 and 2004, are as follows:

	Nine months ended September 30, 2005		Nine months ended September 30, 2004

Federal: Current	$	--	$	--
Deferred		--		--
		--		--
State: Current		--		--
Deferred		--		--
		--		--
Total	$	--	$	--

As a result of an April 2004 change in control, the Company has a nominal net operating loss carryforwards of approximately $49,300 for Federal income tax purposes. The amount and availability of any net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.

F-33

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE F - INCOME TAXES - CONTINUED

The Company's income tax expense (benefit) for each of the nine month periods ended September 30, 2005 and 2004, respectively, differed from the statutory federal rate of 34 percent as follows:


	Nine months ended September 30, 2005			Nine months ended September 30, 2004
Statutory rate applied to income before income taxes	$	(1,700	)	$	(15,100	)
Increase (decrease) in income taxes resulting from: State income taxes		--			--
Other, including reserve for deferred tax asset and application of net operating loss carryforward		1,700			15, 100
Income tax expense	$	--		$	--

Temporary differences, consisting primarily of statutory deferrals of expenses for organizational costs and statutory differences in the depreciable lives for property and equipment, between the financial statement carrying amounts and tax bases of assets and liabilities give rise to deferred tax assets and liabilities as of September 30, 2005 and 2004, respectively:

	September 30,			September 30,
	2005			2004
Deferred tax assets, reflecting the April
2004 change in control Net operating loss carryforwards	$	16,700		$	15,100
Less valuation allowance		(16,700	)		(15,100	)
Net Deferred Tax Asset	$	--		$	--

During the nine month periods ended September 30, 2005 and 2004, respectively, the reserve for the deferred current tax asset increased by approximately $1,700 and $15,100, respectively.

NOTE G - COMMON STOCK TRANSACTIONS

On February 23, 2004, the Company sold 20,000,000 shares of restricted common stock at $0.006 per share for gross proceeds of $120,000, pursuant to a subscription agreement, to Glenn A. Little, who became the Company's current Chief Executive Officer. The Company relied upon Section 4(2) of The Securities Act of 1933, as amended, for an exemption from registration of these shares and no underwriter was used in this transaction. As a result of this transaction, Glenn A. Little became the Company's controlling shareholder, owning 20,000,000 shares of the 39,243,659 issued and outstanding shares of the Registrant's common stock, or approximately 50.96%, at the close of business on February 23, 2004. This transaction closed, and the Company received, the proceeds on March 31, 2004.

F-34

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE H - SUBSEQUENT EVENT

On or about November 8, 2005, Glenn A. Little (Little) and Dalian Fushi Bimetallic Manufacturing Company, Ltd. (Dalian Fushi), a company organized under the laws of the People's Republic of China (PRC) and owned and controlled by Li Fu, Chunyan Xu, Yue Yang, and Xishan Yang, entered into a Stock Purchase Agreement (Stock Purchase Agreement) pursuant to which Little has agreed to sell to Dalian Fushi his 20,000,000 shares of common stock of the Company constituting approximately 50.96% of the Company's outstanding common stock for $550,000. The consummation of the Stock Purchase Agreement will cause a change of control of the Company.

Simultaneously with the consummation of the Stock Purchase Agreement, the Company will enter into a consulting agreement with Little to retain Little's services as a consultant to provide advice, information and copies of documents regarding the Company's historical records and operations to its auditors, attorneys, officers and directors. In return for his services, the Company will issue him a warrant which shall be exercisable, upon the occurrence of a contemplated reverse merger, and after a reverse split of the Company's common stock, into 0.4% of the then-outstanding common stock of the Company.

Further, as a condition of the Stock Purchase Agreement, Little has agreed at the closing of the Stock Purchase Agreement to (a) appoint Li Fu as a Director of the Company, Chairman of the Board and Chief Executive Officer of the Company, (b) appoint Yue Yang and John D. Kuhns as directors of the Company, subject to the filing and dissemination of a Schedule 14f-1, and (c) submit his resignation as a Director and officer, subject to the filing and dissemination of a Schedule 14f-1. As a result thereof, immediately after the closing of the Stock Purchase Agreement, Messrs. Fu and Little will constitute the entire Board of Directors of the Company.

Dalian Fushi is a corporation organized under the laws of the Peoples Republic of China ("PRC") which manufactures and sells in China copper clad aluminum wire and copper clad steel wire. Simultaneously with the closing of the Stock Purchase Agreement, the Company expects to complete a series of transactions, contemplated pursuant to a nonbinding letter of intent between Dalian Fushi and certain potential investors, to effect, or have substantially the effect of, a reverse merger of the Company with Dalian Fushi. Dalian Fushi and the Company are in the process of negotiating with these certain potential investors regarding the structure and consummation of these transactions. The Company expects that in connection with these contemplated transactions there will be up to four additional persons elected to the Board of Directors of the Company.

(Remainder of this page left blank intentionally)

F-35

LETTERHEAD OF S. W. HATFIELD, CPA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders Parallel Technologies, Inc.

We have audited the accompanying balance sheets of Parallel Technologies, Inc. (a Nevada corporation) as of December 31, 2004 and 2003 and the related statements of operations and comprehensive loss, changes in shareholders' equity (deficit) and cash flows for the each of the two years ended December 31, 2004 and 2003, respectively. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Parallel Technologies, Inc. as of December 31, 2004 and 2003 and the results of its operations and its cash flows for the each of the two years ended December 31, 2004 and 2003 respectively, in conformity with generally accepted accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note C to the financial statements, the Company has no viable operations or significant assets and is dependent upon significant shareholders to provide sufficient working capital to maintain the integrity of the corporate entity. These circumstances create substantial doubt about the Company's ability to continue as a going concern and are discussed in Note C. The financial statements do not contain any adjustments that might result from the outcome of these uncertainties.

/s/ S. W. HATFIELD, CPA

Dallas, Texas

February 7, 2005

F-36

PARALLEL TECHNOLOGIES, INC.

BALANCE SHEETS

December 31, 2004 and 2003

	December 31, 2004			December 31, 2005
ASSETS
CURRENT ASSETS
Cash on hand and in bank	$	52,408		$	--

TOTAL CURRENT ASSETS		52,408			--

TOTAL ASSETS	$	52,408		$	--

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
LIABILITIES

CURRENT LIABILITIES
Accounts payable - trade	$	--		$	21,500


TOTAL CURRENT LIABILITIES		--			21,500

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (DEFICIT)
Common stock - $0.006 par value. 100,000,000 shares
authorized. 39,243,659 and 19,243,659 shares issued
and outstanding, respectively		235,462			115,461
Additional paid-in capital		11,897,662			11,897,663
Accumulated deficit		(12,080,716	)		(12,034,624	)

TOTAL SHAREHOLDERS' EQUITY (DEFICIT)		52,408			(21,500	)

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	52,408		$	--

The accompanying notes are an integral part of these financial statements.

F-37

PARALLEL TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Years ended December 31,2004 and 2003

	Year ended December 31, 2004			Year ended December 31, 2005

REVENUES	$	--		$	--
EXPENSES
General and administrative expenses		46,204			2,000

Total operating expenses		46,204			2,000

LOSS FROM OPERATIONS		(46,204	)		(2,000	)

OTHER INCOME
Interest income		112			--

LOSS FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES		(46,092	)		(2,000	)

PROVISION FOR INCOME TAXES		--			--

NET LOSS		(46,092	)		(2,000	)

OTHER COMPREHENSIVE INCOME		--			--

COMPREHENSIVE LOSS	$	(46,092	)	$	(2,000	)

Earnings per share of common stock
outstanding computed on net loss -
basic and fully diluted		nil			nil

Weighted-average number of shares
outstanding - basic and fully diluted		34,325,626			19,243,659

The accompanying notes are an integral part of these financial statements.

F-38

PARALLEL TECHNOLOGIES, INC.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Years ended December 31, 2004 and 2003

	Common Stock				Additional paid-in		Accumulated
	Shares		Amount		capital		deficit			Total

BALANCES AT JANUARY 1, 2003	19,243, 659	$	115, 461	$	11, 897, 663	$	(12, 032, 624	)	$	(19, 500	)
Net loss for the year	--		--		--		(2,000	)		(2,000	)

BALANCES AT DECEMBER 31, 2003	19,243,659		115,461		11,897,663		(12,034,624	)		(21,500	)
Private placement of common stock	20,000,000		120,000		--		--			120,000

Net loss for the year	--		--		--		(46, 092	)		(46, 092	)
BALANCES AT DECEMBER 31, 2004	39,243,659	$	235,461	$	11,897,663	$	(12,080, 716	)	$	52,408

The accompanying notes are an integral part of these financial statements.

F-39

PARALLEL TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

Years ended December 31, 2004 and 2003

		Year ended December 31, 2004			Year ended December 31, 2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period	$	(46,092	)	$	(2,000	)
Adjustments to reconcile net loss to net
cash provided by operating activities
Increase (Decrease) in
Accounts payable - trade		(21,500	)		2,000
NET CASH USED IN OPERATING ACTIVITIES		(67,592	)		--

CASH FLOWS FROM INVESTING ACTIVITIES		--		--

CASH FLOWS FROM FINANCING ACTIVITIES
Cash received on private placement of common stock		120,000		--

NET CASH PROVIDED BY FINANCING ACTIVITIES		120,000		--

INCREASE (DECREASE) IN CASH		52,408		--

Cash at beginning of period		--		--

CASH AT END OF PERIOD	$	--	$	--

SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID
Interest paid for the year	$	--	$	--
Income taxes paid for the year	$	--	$	--

The accompanying notes are an integral part of these financial statements.

F-40

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

During 1995, this activity ceased to operate and the Company disposed of all assets, liabilities and operating activities related to Graphex Imaging Systems, Inc. The Company has had no operations or significant assets since the year ended December 31, 1995.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has a year-end of December 31.

NOTE C - GOING CONCERN UNCERTAINTY

F-41

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE C - GOING CONCERN UNCERTAINTY - CONTINUED

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Cash and cash equivalents

For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

2. Income Taxes

The Company uses the asset and liability method of accounting for income taxes. At December 31, 2004 and 2003, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

As of December 31, 2004 and 2003, the deferred tax asset related to the Company's net operating loss carryforward is fully reserved. Due to the provisions of Internal Revenue Code Section 338, the Company may have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of a change in control involving 50 percentage points or more of the issued and outstanding securities of the Company.

3. Earnings (loss) per share

F-42

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

3. Earnings (loss) per share - continued

At December 31, 2004 and 2003 and subsequent thereto, the Company had no outstanding common stock equivalents.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE F - INCOME TAXES

The components of income tax (benefit) expense for each of the years ended December 31, 2004 and 2003, are as follows:

		Year ended December 31, 2004		Year ended December 31, 2003
Federal: Current	$	--	$	--
Deferred		--		--
		--		--
State: Current		--		--
Deferred		--		--
		--		--
Total	$	--	$	--

As a result of an April 2004 change in control, the Company has a net operating loss carryforwards for income tax purposes of approximately $46,000. The amount and availability of any net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.

F-43

PARALLEL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE F - INCOME TAXES - CONTINUED

The Company's income tax expense (benefit) for each of the years ended December 31, 2004 and 2003 respectively, differed from the statutory federal rate of 34 percent as follows:

		Year ended December 31, 2004			Year ended December 31, 2003
Statutory rate applied to income before income taxes	$	(15,700	)	$	(680	)
Increase (decrease) in income taxes resulting from:
State income taxes		--			--
Other, including reserve for deferred tax asset
and application of net operating loss carryforward		15,700			680

Income tax expense	$	--		$	--

	December 31, 2004			December 31, 2003
Deferred tax assets, reflecting the April 2004 change in control Net operating loss carryforwards	$	15,700		$	--
Less valuation allowance		(15,700	)		--
Net Deferred Tax Asset	$	--		$	--

During the year ended December 31, 2004, the reserve for the deferred current tax asset increased by approximately $15,700.

NOTE G - COMMON STOCK TRANSACTIONS

On February 23, 2004, the Company sold 20,000,000 shares of restricted common stock at $0.006 per share for gross proceeds of $120,000, pursuant to a private placement subscription agreement, to Glenn A. Little, who became the Company's current Chief Executive Officer. The Company relied upon Section 4(2) of The Securities Act of 1933, as amended, for an exemption from registration of these shares and no underwriter was used in this transaction. As a result of this transaction, Glenn A. Little became the Company's controlling shareholder, owning 20,000,000 shares of the 39,243,659 issued and outstanding shares of the Registrant's common stock, or approximately 50.96%, at the close of business on February 23, 2004.

(Remainder of this page left blank intentionally)

F-44

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

BALANCE SHEET

AS OF MARCH 31, 2006 (UNAUDITED)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,452,806
Accounts receivable, net		9,477,298
Due from a related company		2,615,549
Inventories, net		10,913,459
Other receivables and prepaid expenses		3,359,898
Total Current Assets		34,819,010

PROPERTY AND EQUIPMENT, NET		40,349,664

OTHER ASSETS
Intangible assets, net		816,292
Land use rights, net		4,731,969
TOTAL ASSETS	$	80,716,935


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	4,927,185
Other payables and accrued liabilities		2,085,044
Notes payable - current maturities		9,875,000
Value added tax and other taxes payable		4,375,394
Income tax payable		183,706
Total Current Liabilities		21,446,329

LONG-TERM LIABILITIES
Notes payable - long term		10,000,000

TOTAL LIABILITIES		31,446,329

STOCKHOLDERS' EQUITY
Common Stock- $0.006 par value
100,000,000 shares authorized
19,891,194 shares issued and outstanding		119,347
Additional paid-in capital		29,110,685
Retained earnings
Unappropriated		16,476,749
Appropriated		2,428,310
Comprehensive income		1,135,515
Total Stockholders' Equity		49,270,606
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	80,716,935

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements

F-45

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005 (UNAUDITED)

	2006			2005
	(Consolidated)

NET SALES	$	14,590,143		$	3,994,226
COST OF SALES		(9,321,561	)		(2,479,791	)
GROSS PROFIT		5,268,582			1,514,435

OPERATING EXPENSES Selling expenses		116, 620			43,470
General and administrative expenses		347,240			134,492
Professional fee		188,788			768
Depreciation		164,797			135,044
Amortization of land use rights		25,037			24,225
Amortization of intangible assets		30,659			29,666

Total Operating Expenses		873,141			367,665
INCOME FROM OPERATIONS		4,395,441			1,146,770
OTHER INCOME (EXPENSES) Interest income		11,012			7,485
Interest expense		(250,106	)		(102,862	)
Other income		91,547			--
Other expenses		(25,298	)		(7,814	)

Total Other Expenses, net		(172,845	)		(103,191	)
INCOME FROM OPERATIONS BEFORE TAXES		4,222,596			1,043,579
INCOME TAX EXPENSE		(456,680	)		(142,764	)

NET INCOME	$	3,765,916		$	900,815
OTHER COMPREHENSIVE INCOME Foreign currency translation gains		1,135,515			--

COMPREHENSIVE INCOME	$	4,901,431		$	900,815
Net income per share-basic	$	0.20		$	0.06

Net income per share-diluted	$	0.19		$	0.06

Weighted average number of shares outstanding during the period- basic		18,474,527			15,475,595
Weighted average number of shares outstanding during the period- diluted		19,532,120			15,475,595

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

F-46

FUSHI INTERNATIONAL, INC.
(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)
AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005 (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES	2006 (Consolidated)			2005

Net income	$	3,765,916		$	900,815
Adjusted to reconcile net income to cash provided by operating activities: Depreciation - cost of sales		273,577			144,387
Depreciation - operating expenses		164,797			135,044
Amortization of land use rights		25, 037			24,225
Amortization of intangible assets		30, 659			29, 666
Changes in operating assets and liabilities (Increase) decrease in: Accounts receivable		(3,278,593	)		(541,197	)
Inventories		(3,285,593	)		156,763
Other receivable and prepaid expenses		399,174			(332,816	)
Increase (decrease) in: Accounts payable		2,182,533			1,161,304
Other payables and accrued liabilities		1,305,146			(181,013	)
Value added tax payable		505, 580			357,456
Income tax payables		(1,921,003	)		(524,231	)

Net cash provided by operating activities		167, 230			1,330,403
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment		(769,597	)		(69,540	)
Net cash used in investing activities		(769,597	)		(69,540	)

CASH FLOWS FROM FINANCING ACTIVITIES Additional paid-in capital		(78,725	)		--
Due from related companies		707,979			(882,864	)
Due to related companies		--			395,287
Loans borrowed		9,875,000			8,103,532
Loans repaid		(7,496,902	)		(6,894,049	)
Net cash provided by financing activities		3,007,352			721,906

EFFECT OF EXCHANGE RATE ON CASH		(115, 849	)		--

NET INCREASE IN CASH AND CASH EQUIVALENTS		2,289,136			1,982,769
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		6,163,670			2,612,282

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	8,452,806		$	4,595,051

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest	$	319,784		$	385,747
Cash paid for income tax	$	2,396,100		$	--

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

F-47

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2006 (UNAUDITED)

NOTE 1 BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments consisting only of normal recurring accruals considered necessary to present fairly the Company's financial position at March 31, 2006, the results of operations for the three months ended March 31, 2006 and 2005, and cash flows for the three months ended March 31, 2006 and 2005. The results for the three months ended March 31, 2006 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2006.

These financial statements should be read in conjunction with the Company's annual report on Form 10-KSB as filed with the Securities and Exchange Commission.

NOTE 2 ORGANIZATION

Fushi International, Inc. (formerly Parallel Technologies, Inc.) was incorporated under the name of M, Inc. in the State of Nevada on October 6, 1982. The name was changed to Parallel Technologies, Inc. ("Parallel") on June 3, 1991 and changed to Fushi International, Inc. ("Fushi International") on January 30, 2006 on consummation of a business combination transaction. During 1995, Parallel ceased all business operations and disposed of all assets, liabilities and operating activities. Since the fiscal year ended December 31, 1995, Parallel had no business operations, assets or liabilities, until December 13, 2005, when it acquired Diversified Product Inspections, Inc. ("DPI") and its wholly owned subsidiary, Dalian Diversified Product Inspections Bimetallic Cable Co., Ltd. ("Dalian DPI").

DPI was incorporated on September 22, 2005 in the State of Delaware. Through its wholly owned subsidiary, Dalian DPI incorporated in the People's Republic of China ("PRC") as a wholly owned foreign limited liability company on September 24, 2005, DPI is engaged in the manufacturing and selling of copper clad aluminum and steel wire, both of which are bimetallic composite wire products that are principally used for network signal transmission cable, cable television wire and other applications. Dalian DPI commenced business on December 28, 2005.

On December 13, 2005, Parallel consummated a Plan of Exchange ("the Agreement") with the shareholders of DPI pursuant to which Parallel issued 784,575.16 shares of newly designated Series A Convertible Preferred Stock to the stockholders of DPI for all the issued and outstanding stocks of DPI.

F-48

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2006 (UNAUDITED)

NOTE 2 ORGANIZATION-continued

Accordingly, the financial statements include the following:

(1)	The balance sheet consists of the net assets of the acquirer at historical cost and the net assets of the acquiree at historical cost.

(2)	The statement of operations includes the operations of the acquirer for the periods presented and the operations of the acquiree from the date of the merger.

Fushi International (formerly Parallel), DPI, Dalian DPI and Dalian Fushi are hereinafter referred to as ("the Company").

NOTE 3 PRINCIPLES OF CONSOLIDATION

The accompanying unaudited condensed consolidated financial statements for 2006 include the financial statements of Fushi International and its wholly owned subsidiaries, DPI, Dalian DPI and its 100% variable interest entity Dalian Fushi.

The accompanying unaudited condensed financial statements for 2005 include the financial statements of Dalian Fushi.

All significant inter-company transactions and balances have been eliminated in consolidation.

NOTE 4 SEGMENTS

The Company adopted Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information ("SFAS 131 "). SFAS 131 establishes standards for operating information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decision how to allocate resources and assess performance.

1. The Company operates in a single segment.

2.	The following is geographic information of the Company's revenue for the three months ended March 31:

	2006		2005
Domestic China	$	13,967,802	$	395,661
Other foreign countries		622,341		37,615
	$	14,590,143	$	433,276

F-49

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2006 (UNAUDITED)

NOTE 5 INVENTORIES

Inventories at March 31, 2006 consisted of the following:

Raw materials	$	8,727, 502
Work-in-progress		849, 405
Finished goods		1,336, 552

		10,913,459
Less: provision of obsolescence		-

Inventories, net	$	10,913,459

For the three months ended March 31, 2006, the Company has not recorded a provision for obsolete inventories.

NOTE 6 NOTES PAYABLE

Notes payable at March 31, 2006 consisted of the following:

Note payable to a bank, interest rate of 5.58% per annum, collateralized by buildings and plant and machinery of the Company and related parties, due April 2008	$	5,000,000

Note payable to a bank, interest rate of 5.58% per annum, guaranteed by a related company, due April 2008		5,000,000

Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due July 2006		1,250,000

Note payable to a bank, interest rate of 6.138% per annum, collateralized by buildings of the Company, due April 2006		1,187,500

Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due July 2006		2,000,000

F-50

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2006 (UNAUDITED)

NOTE 6 NOTES PAYABLE (CONTINUED)


Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due July 2006		1,250,000

Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due May 2006		2,500,000

Note payable to a bank, interest rate of 5.742% per annum, collateralized by buildings of the Company, due June 2006		1,687,500

	$		19,875,000
Less: current maturities			9,875,000

	$		10,000,000

Maturities are as follows:

For the period ending March 31,
2007	$	9,875,000
2008		10,000,000

	$	19,875,000

Interest expense for the three months ended March 31, 2006 was $319,784, of which $69,678 was capitalized in construction in progress.

F-51

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2006 (UNAUDITED)

	2006		2005

Net income	$	3,765,916	$	900,815

Basic weighted-average common stock outstanding		18,474,527		15,475,595
Effect of dilutive securities Warrants		1,057,593		-

Diluted weighted-average common stock outstanding		19,532,120		15,475,595
Net income per share - basic		0.20		0.06

Net income per share - diluted		0.19		0.06

NOTE 8 STOCKHOLDERS' EQUITY

(A)	Reverse stock split

On January 30, 2006, the Company effected a 245.27:1 reverse stock split. All share and per share amounts have been retroactively restated to reflect the stock split.

(B)	Series A and Series B Convertible Preferred Stocks

The Series A and Series B Convertible Preferred Stocks ("Series A and B Stocks") were automatically converted into common stock upon the effectiveness of the reverse split on January 30, 2006 under the certificates of designation for Series A and B Stocks

(C)	Following the reverse stock split and as of March 31, 2006, the Company had outstanding:

(1)	19,891,194 shares of common stock, par value $.006.

(2)	warrants to purchase 2,125,000 shares of common stock at an initial exercise price of $3.67 per share, expire December 2010.

(3)	warrants to purchase 424,929 shares of common stock with exercise prices of $3.11 per share, expire December 2011.

(4)	warrants to purchase 80,000 shares of common stock with exercise price of $.01 per share, expire at the earlier of (i) December 2010, or (ii) immediately preceding a Change of Control.

F-52

FUSHI INTERNATIONAL, INC.

(PREVIOUSLY PARALLEL TECHNOLOGIES, INC.)

AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2006 (UNAUDITED)

NOTE 9 RELATED PARTY TRANSACTIONS

As of March 31, 2006, the Company loaned $2,615,549 to a related company as unsecured loan free of interest payment and repayable on demand. The loan was advanced by Dalian Fushi to the related company before the recapitalization.

NOTE 10 COMMITMENTS AND CONTINGENCY

(A) Capital commitments

According to the amended Articles of Association of Dalian DPI, the Company has to fulfill registered capital contributions of $29,800,000 within one year from September 21, 2005. As of March 31, 2006, the Company has fulfilled $9,132,500 of the registered capital requirement and has registered capital commitments of $20,667,500.

(B) Commitments

As at March 31, 2006, the Company had purchase commitments for capital projects in progress of $171,663.

On March 27, 2006, the Company received advances of $1,250,000 in the form of Acceptance Bills ("the bills") from two customers and entered into agreements with a bank to discount the bills in exchange for cash. Pursuant to the terms of the agreement, the Company is contingently liable to the bank should the customers fail to honor the bills when they mature.

Common stock outstanding prior to this offering	160,000 shares

Common stock offered by us	0 shares

Total shares of common stock offered by Selling Shareholders .	6,455,000 shares*

Common stock to be outstanding after the offering (assuming all warrants have been exercised)	22,549,929 shares

Use of Proceeds	We will not receive any of the proceeds from the sale of the shares owned by the Selling Shareholders. However, we will receive the net proceeds from the exercise of the warrants by the Selling Shareholders to acquire shares offered under this prospectus. We intend to use any proceeds we receive from the exercise of warrants for working capital and other general corporate Purposes. We cannot assure you that any of the warrants will ever be exercised.

Our OTC Bulletin Board Trading Symbol	FSIN.OB (formerly PLLK.OB)

Risk Factors	See "Risk Factors" beginning on page 20 and other information included in this prospectus for a discussion of factors you should consider before deciding to invest in shares of our common stock.

Five largest customers % of Sales '03	% of Sales '03	% of Sales '04	% of Sales '05
Andrew Corporation	14%	21.15%	8.22%
Zhuhai Hansheng Industrial Co., Ltd.	14%	19.21%	11.59%
Jiangxi Lianchuang Photoelectricity Science Co.	18%	16.19%	9.95%
Shantou Jinqiao Cable Co., Ltd.	17%	8.74%	7.10%
ACOME Xintai Cable Co., Ltd.	N/A	10.08%	3.91%
Datang Telecom	10%	N/A	N/A

Five largest customers as % of total sales	73%	75.37%	40.77%

Patent	Type of Patent	Patent No.	Inventor's Name	Date of Application	Date of Publication and Term

1. Metallurgical Rolling and Welding Device for CCA and CCS	Utility	ZL 2004 2 0031104.0	Mr. Xishan Yang	April 9, 2004	March 30, 2005; term: 10 years from 4/9/2004 to 4/8/2014

2. Polyurethane (PU) Roller	Utility	ZL 2003 2 0105378.5	Mr. Xishan Yang	November 11, 2003	December 8, 2004; term: 10 years from 11/11/2003 to 11/10/2013

3. Aluminum Bar Brushing Machine	Utility	200320105379.X	Mr. Xishan Yang	November 11, 2003	April 20, 2005; term: 10 years from 11/11/2003 to 11/10/2013

4. Press Cladding Devise for CCA	Utility	ZL 2003 2 0105377.2	Mr. XiShan Yang	November 11, 2003	February 2, 2005; term: 2003 10 years from 11/11/2003 to 11/10/2013

5. Vertical Integrated Drawing Machine for CCA	Utility	2003 2 0105380.2	Mr. Xishan Yang	November 11, 2003	November 25, 2005

Registered Owner of land use right	Location & Certificate of Land Use Right Number	Usage	Square Meters	Construction on the Land	Term of Use Right

Dalian Fushi	1 Shuang Qiang Road, Yang Jia Village, Jinzhou District, Dalian, PRC; #0625014	Industrial Use	103,605 Sq. M;	Dalian Fushi's new facilities	50 years from July, 2003

Dongyi	8 Hai La'er Road, Dalian Development Zone; PRC; #0626006	Industrial Use	3,569 Sq. M;	Dalian Fushi's old facilities	40 years from March 4, 1989

	Increase/ (Decrease)			For the three ended months March 31, 2006			For the three months ended March 31, 2005
Net sales		265.3%	%	$	14,590,143		$	3,994,226
Gross Profit		247.9	%	$	5,268,582		$	1,514,435
Operating Income		283.3	%	$	4,395,441		$	1,146,770
Net Income		318.1	%	$	3,765,916		$	900,815
Gross Margins		(1.80	%)		36.10	%		37.90	%
Operating Margins		1.42	%		30.13	%		28.71	%
Net Margins		3.26	%		25.81	%		22.50	%

Cautionary Note Regarding Forward Looking Statements and Other Information Contained in this Prospectus	4
Prospectus Summary	4
Acquisition of Business of Dalian Fushi	12
Risk Factors	20
Use of Proceeds	32
Business	33
Management's Discussion and Analysis of Financial Condition and Results of Operations	51
Security Ownership of Certain Beneficial Owners and Management	75
Management	78
Selling Shareholders	86
Plan of Distribution	93
Description of Our Securities	96
Market for Our Common Stock	98
Changes in and Disagreements with Accountants	98
Where You Can Find More Information	99
Legal Matters	99
Experts	99
Financial Statements	F-1

Revenue		Q1 2006		Q1 2005	YTY Change

CCA	$	14,517,429	$	3,994,226	263.46	%
CCS	$	19,775		-	N/A

Aluminum Ingot	$	52,939		-	N/A
Total	$	14,590,143	$	3,994,226	265.28	%

Sales By Volume—Tons
CCA		2,884		1,065	170.80	%
CCS		8		-	N/A

Aluminum Ingot		42		-	N/A
Total		2,934		1,065	175.49	%


Average Selling Price/ Ton
CCA	$	5,033.78	$	3,750.45	34.22	%
CCS	$	2,471.88		-	N/A
Aluminum Ingot	$	1,260.45		-	N/A


Top 5 customers	% of Sales '03	% of Sales '04	% of Sales '05	% of Sales Q1 '06
Andrew Corporation	14%	21.15%	8.22%	N/A
Zhuhai Hansheng Industrial Co., Ltd.	14%	19.21%	11.59%	6.71%
Jiangxi Lianchuang Photoelectricity Science
Co.	18%	16.19%	9.95%	14.34%
Shantou Jinqiao Cable Co., Ltd.	17%	8.74%	7.10%	7.88%
ACOME Xintai Cable Co., Ltd.	N/A	10.08%	3.91%	6.56%
Datang Telecom	10%	N/A	N/A	N/A
Taizhou Yihua Specialty Electric Co., Ltd.	N/A	N/A	N/A	5.61%

Top 5 as % of total sales:	73%	75.37%	40.77%	41.10%


Top 5 customers as of 3/31/06	% of A/R
Jiangxi Lianchuang Photoelectricity Science Co.	12.00%
Taizhou Yihua Specialty Electric Co., Ltd.	7.63%
ACOME Xintai Cable Co., Ltd.	6.59%
Zhuhai Hansheng Industrial Co., Ltd.	4.59%
Shantou Jinqiao Cable Co., Ltd.	2.96%
Top 5 customers as % of A/R:	33.77%

		Copper Price/ Ton				Aluminum Price/ Ton
		SHFE		Yangtze Cash		SHFE		Yangtze Cash	RMB/USD
3/31/2006	$	6,264	$	6,262	$	2,497	$	2,490	8.0167
2/28/2006	$	5,708	$	5,764	$	2,339	$	2,325	8.0415
1/26/2006	$	5,738	$	5,613	$	2,552	$	2,515	8.0702
12/30/2005	$	5,189	$	5,278	$	2,365	$	2,366	8.0808
11/30/2005	$	4,687	$	4,779	$	2,155	$	2,154	8.0877
10/31/2005	$	4,603	$	4,692	$	2,107	$	2,116	8.0924
9/30/2005	$	4,517	$	4,552	$	2,049	$	2,060	8.0956

Top 4 Suppliers	% of Purchase Q1 '06	% of Purchase Q1 '05

Baotou Aluminum Co., Ltd.	26.87%	N/A
Harbin Electric Wire Co.	19.36%	55.60%
Shanghai Jutai Copper Co.	18.66%	40.70%
Beijing Golden Eagle Huichuang Copper Co.	17.76%	N/A
Top 4 suppliers as % of total purchase:	82.65%
Top 2 suppliers as % of total purchase:	46.23%	96.30%

Top 4 Suppliers	as % of total advances to suppliers	as % of accounts payables

Baotou Aluminum Co., Ltd.	11.62%	0.00%

Harbin Electric Wire Co.	0.00%	6.60%

Shanghai Jutai Copper Co.	6.91%	41.90%

Beijing Golden Eagle Huichuang Copper Co.	6.74%	16.01%

Total:	25.27%	64.51%

		or the three months ended
		March 31, 2006		March 31, 2005
Net income	$	3,765,916	$	900,815
Income applicable to common shareholders	$	3,765,916	$	900,815

Basic:
Income applicable to common shareholders	$	3,765,916	$	900,815
Weighted-average common stock outstanding		18,474,527		15,475,595
Basic earnings per share	$	0.20	$	0.06

Diluted:
Income applicable to common shareholders	$	3,765,916	$	900,815

Weighted-average common stock outstanding		18,474,527		15,475,595
Effect of dilutive securities (assuming 3/31/06 bid
price of FSIN.OB $5.8):
Warrants		1,057,593		--
Diluted weighted-average common stock outstanding		19,532,120		15,475,595
Diluted earnings per share	$	0.19	$	0.06

Name of lenders	Date of borrowing	Date of maturity	Interest rate per annum	Borrowed amount (RMB)	Borrowed amount (USD)
LONG TERM LOANS
Industrial and Commercial Bank of China	2003.05.06	2008.04.10	5.580%	40,000,000	$ 5,000,000
Industrial and Commercial Bank of China	2003.05.17	2008.04.10	5.580%	40,000,000	$ 5,000,000
	Total long terms loans			$80,000,000	$10,000,000

SHORT TERM LOANS
Revolving credit line of RMB 100MM for working capital
Bank of China	2006.01.23	2006.07.10	5.742%	10,000,000	$ 1,250,000
Bank of China	2005.08.15	2006.04.14	6.138%	9,500,000	$ 1,187,500
Bank of China	2006.02.17	2006.07.05	5.742%	16,000,000	$ 2,000,000
Bank of China	2006.03.15	2006.07.14	5.742%	10,000,000	$ 1,250,000
Bank of China	2005.12.26	2006.05.25	5.742%	20,000,000	$ 2,500,000
Bank of China	2006.02.28	2006.06.27	5.742%	13,500,000	$ 1,687,500
	Total short term loans:			RMB79,000,000	$ 9,875,000

	Q1 2006
Raw materials	$	8,727,502
Work-in-progress		849,405
Finished goods		1,336,552
		10,913,459
Less: provision of obsolescence		--
Inventories, net		10,913,459

By Revenue		2004			2005			YoY Change

CCA	$	15,613,605	99.69%	$	32,973,493	97.82	%	111.18	%
CCA-M	$	-	0.00%	$	697,455	2.07	%
CCS	$	48,888	0.31%	$	38,480	0.11	%	-21.29	%
Total	$	15,662,493	100.00%	$	33,709,428	100.00	%	115.22	%

By Volume- Tons
CCA		4446	99.51%		7949	98.00	%	78.79	%
CCA-M		0	0.00%		146	1.80	%
CCS		22	0.49%		16	0.20	%	-27.27	%
Total		4468	100.00%		8111	100.00	%	81.54	%

Average Selling Price/ Ton
CCA	$	3,511.83		$	4,148.13			18.12	%
CCA-M	$	-		$	4,777.09
CCS	$	2,222.18		$	2,405.02			8.23	%

FIVE LARGEST CUSTOMERS	% OF SALES '03	% OF SALES '04	% OF SALES '05
Andrew Corporation	14%	21.15%	8.22%
Zhuhai Hansheng Industrial Co., Ltd.	14%	19.21%	11.59%
Jiangxi Lianchuang Photoelectricity ScienceCo	18%	16.19%	9.95%
Shantou Jinqiao Cable Co., Ltd.	17%	8.74%	7.10%
ACOME Xintai Cable Co., Ltd.	N/A	10.08%	3.91%
Datang Telecom	10%	N/A	N/A

FIVE LARGEST CUSTOMER AS % OF TOTAL SALES:	73%	75.37%	40.77%


Bank of China	2005.10.09	2006.2.21	6.138%	15,000,000	$1,858,736
Bank of China	2005.8.15	2006.4.14	6.138%	9,500,000	$1,177,200
Bank of China	2005.8.11	2006.03.10	6.138%	8,000,000	$991,326
Bank of China	2005.08.30	2006.1.29	5.742%	3,000,000	$371,747
Bank of China	2005.12.26	2006.05.25	5.742%	20,000,000	$2,478,315
Bank of China	2005.08.10	2006.1.09	5.742%	5,000,000	$619,579
				60,500,000	$7,496,902

	0-30 days	30-60 days	60-90 days	> 90 days	Total
2005	$471,119	$6,073	$5,721,513	0	$6,198,705
2004	$6,886	$1,300,522	$433,507	0	$1,740,915

	2005		2004
Accounts receivables	$	6,198,705	$	1,760,586
Less: allowance for doubtful accounts		--		--
Accounts receivable, net	$	6,198,705	$	1,760,586


Name of Beneficial Owner of Common Stock	Beneficial Ownership
	Shares	Percent
Owner of More than 5%
Li Fu (transferred from Dalian Fushi Enterprise Group Company, Ltd. ("Fushi Group")(1) 1 Shuang Qiang Road, Jinzhou Dalian, People's Republic of China 116100	12,796,421	63.98%(2)

Yue Mathus Yang	1,480,399	7.76%

Pope Asset Management LLC 5100 Poplar Avenue, Suite 512 Memphis, TN 38137	1,859,375(3)	9.02%

Directors and Executive Officers

Li Fu (transferred from Fushi Group) Chairman of Board, Director, Chief Executive Officer	14,796,421	64.98%

Yue Mathus Yang Director and President	1,480,399	7.76%


John D. Kuhns Director The Farm House 558 Lime Rock Road Lakeville, CT 06039	558,280(4)	2.72%

Xishan Yang Director Head of Research and Development	242,778	1.61%

Chunyan Xu Director Executive Vice President of Research and Development of Dalian Fushi	93,274	*

All Directors and Executive Officers as a group (6)	15,362,265	77%