x
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Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934.
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o
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Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934.
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Delaware
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22-3137907
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employee Identification No.)
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Jilin
Dongsheng Weiye Science and Technology Development Co., Ltd., Jifeng
East
Road, Gaoxin District
Jilin,
Jilin Province, PRC
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(Address
of principal executive offices)
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86-432-4566702
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(Issuer’s
telephone number)
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c/o
American Union Securities 100 Wall Street 15th Floor New York, NY
10005
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(Address
of principal agent offices)
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(212)
232-0120
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(Agent’s
telephone number)
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Yes
x
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No
o
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Yes o
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No
x
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PART
I - FINANCIAL INFORMATION
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Item
1. Financial Statements
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F-1
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Item
2. Management’s Discussion and Analysis or Plan of
Operation
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2
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Item
3. Controls and Procedures
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4
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PART
II - OTHER INFORMATION
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Item
1. Legal Proceedings
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5
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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5
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Item
3. Defaults Upon Senior Securities
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5
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Item
4. Submission of Matters to a Vote of Security Holders
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5
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Item
5. Other Information
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5
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Item
6. Exhibits
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5
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SIGNATURES
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6
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Condensed
Consolidated Balance Sheet as of September 30, 2007
(Unaudited)
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F-3
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Condensed
Consolidated Statements of Income for Three Months Ended September
30,
2007 and 2006 (Unaudited)
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F-4
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Condensed
Consolidated Statements of Cash Flows for the Three Months Ended
September
30, 2007 and 2006 (Unaudited)
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F-5
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Notes
to Condensed Consolidated Financial Statements (Unaudited)
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F-6
- F-11
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ASSETS
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September
30, 2007
Unaudited
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|||
Current
assets:
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||||
Cash
and cash equivalents
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$ |
462,024
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||
Accounts
receivable - net of allowance for doubtful accounts of
$40,000
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127,589
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|||
Inventory
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91,471
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|||
Prepaid
expenses
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57,901
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|||
Advances
to suppliers
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398,346
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|||
Other
receivable
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164,868
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|||
Total
Current Assets
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1,302,199
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|||
Property
and equipment, net of accumulated depreciation of $373,029
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41,375,532
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|||
Other
assets:
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||||
Deposit
on land
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2,802,691
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|||
Land
use right
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2,732,935
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|||
Total
Other Assets
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5,535,626
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Total
Assets
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$ |
48,213,357
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||
Current
liabilities:
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||||
Accounts
payable
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$ |
724,197
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||
Unearned
revenue
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440,683
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|||
Taxes
payable
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2,742,495
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|||
Accrued
expenses and other payables
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346,711
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|||
Total
Current Liabilities
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4,254,086
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|||
Notes
payable - related party
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25,000
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|||
Total
Liabilities
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4,279,086
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Stockholders'
Equity
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||||
Common
stock, $0.001 par value, 100,000,000 shares authorized; 31,546,134
shares
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||||
issued
and outstanding at September 30, 2007
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31,546
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|||
Additional
paid in capital
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1,209,847
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Accumulated
other comprehensive income
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1,366,648
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Retained
earnings - Appropriated
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1,218,086
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Retained
earnings -Unappropriated
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40,108,144
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Total
Stockholders' Equity
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43,934,271
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|||
Total
Liabilities and Stockholders' Equity
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$ |
48,213,357
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Three-Month
Ended
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||||||||
September
30,
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September
30,
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|||||||
2007
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2006
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|||||||
(Unaudited)
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(Unaudited)
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|||||||
Sales
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$ |
8,384,011
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$ |
7,889,229
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||||
Cost
of Sales
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2,951,505
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3,245,535
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||||||
Gross
Profit
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5,432,506
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4,643,694
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||||||
Operating
Expenses
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||||||||
Selling,
general and administrative
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536,246
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77,066
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||||||
Operating
income
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4,896,260
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4,566,628
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||||||
Other
Income and Expenses
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||||||||
Interest
income
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2,854
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6
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||||||
Other
income
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-
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76,801
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||||||
Other
expense
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(1,310 | ) | (6,575 | ) | ||||
Total
Other Income
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1,544
|
70,232
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||||||
Income
Before Income Taxes
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4,897,804
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4,636,860
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||||||
(Benefit)
provision for Income Taxes
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||||||||
Income
tax benefit
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(19,392,018 | ) |
1,526,167
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|||||
Provision
for income taxes
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1,646,006
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-
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||||||
Total
(benefit) provision for income taxes
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(17,746,012 | ) |
1,526,167
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|||||
Net
Income
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$ |
22,643,816
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$ |
3,110,693
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||||
Basic
and Diluted Income Per Common Share
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||||||||
Basic
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$ |
0.72
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$ |
0.38
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||||
Diluted
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$ |
0.72
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$ |
0.26
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||||
Weighted
Average Number Common Shares
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||||||||
Oustanding
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||||||||
Basic
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31,546,134
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8,196,521
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||||||
Diluted
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31,546,134
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11,846,064
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2007
(Unaudited)
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2006
(Unaudited)
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|||||||||
Cash
Flows From Operating Activities:
|
||||||||||
Net
income
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$ |
22,643,816
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$ |
3,110,693
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||||||
Adjustments
to reconcile net income to net cash
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||||||||||
provided
by operating activities:
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||||||||||
Depreciation
and amortization
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78,214
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38,441
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||||||||
Income
tax benefit
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(19,392,018 | ) |
-
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|||||||
Changes
in operating assets and liabilities:
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||||||||||
Accounts
receivable
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(213,001 | ) | (36,752 | ) | ||||||
Inventory
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(17,083 | ) | (29,961 | ) | ||||||
Advances
to suppliers
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222,162
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(2,945,341 | ) | |||||||
Prepaid
expenses
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(401 | ) |
-
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|||||||
Accounts
payable
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41,974
|
-
|
||||||||
Unearned
revenue
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(52,983 | ) |
1,027
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|||||||
Taxes
payable
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3,208,971
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3,018,827
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||||||||
Accrued
expenses and other payables
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51,351
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(118,439 | ) | |||||||
Cash
provided by operating activities
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6,571,003
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3,038,495
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||||||||
Cash
Flows From Investing Activities:
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||||||||||
Purchase
of land use right
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-
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(2,628,294 | ) | |||||||
Purchase
of property and equipment
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(587,412 | ) |
-
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|||||||
Additions
to construction in process
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(6,387,615 | ) | (434,122 | ) | ||||||
Cash used in investing activities | (6,975,027 | ) | (3,062,416 | ) | ||||||
Cash
Flows From Financing Activities:
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||||||||||
Payment
of notes payable
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(63,145 | ) |
-
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|||||||
Cash
used in financing activities
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(63,145 | ) |
-
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|||||||
Effect
of exchange rate changes on cash and cash equivalents
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344,068
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51,061
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||||||||
Increase
(Decrease) in cash and cash equivalents
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(123,102 | ) |
27,140
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|||||||
Cash
and Cash Equivalents - Beginning of period
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585,126
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30,801
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||||||||
Cash
and Cash Equivalents - Ending of period
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$ |
462,024
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$ |
57,941
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||||||
Supplemental
disclosures of cash flow information:
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||||||||||
Interest
paid
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$ |
-
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$ |
-
|
||||||
Income
Taxes paid
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$ |
-
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$ |
-
|
||||||
Machinery
and Equipment
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$ |
998,270
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Vehicle
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3,897
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|||
Building
and Plant
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4,346,569
|
|||
Subtotal
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5,348,736
|
|||
Less:
Accumulated Depreciation
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(373,029 | ) | ||
Construction
in progress
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36,399,825
|
|||
Total
property and equipment, net
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$ |
41,375,532
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Exhibit No.
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Title
of Document
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31.1
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Certification
pursuant to Section 302 of Sarbanes Oxley Act of 2002
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32.1
|
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Certification
pursuant to Section 906 of Sarbanes Oxley Act of
2002
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CHINA
DONGSHENG INTERNATIONAL, INC.
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||
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Date: November
19,
2007
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By:
|
/s/
Aidong Yu
AIDONG
YU
|
|
|
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Chief
Executive Officer
|
|
|
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Chief
Financial Officer
|
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