false
--12-31
Q2
2014
2014-06-30
10-Q
0000714284
19304921
Smaller Reporting Company
SORL Auto Parts Inc
sorl
32410
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE H - DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Deferred tax assets consisted of the following as of June 30, 2014 and December 31, 2013:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Deferred tax assets - current</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Allowance for doubtful accounts</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">771,102</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">578,928</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Revenue (net off cost)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,860</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">8,653</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Unpaid accrued expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">137,318</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">105,558</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Warranty</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 776,092</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 699,816</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Deferred tax assets</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,731,372</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,392,955</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Valuation allowance</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Net deferred tax assets - current</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,731,372</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,392,955</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> Deferred taxation is calculated under the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the foreseeable future. The Company and its subsidiaries do not have income tax liabilities in U.S. as the Company had no United States taxable income for the reporting period. The Company's subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable tax rate.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
0.35
0.35
0.165
0.165
0.25
0.25
2014-09-25
2014-09-25
2013-09-26
2013-09-26
0.15
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14409170
14531221
264612
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2
1293070
8137680
333688
2100000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> No customer individually accounted for more than 10% of our revenues or accounts receivable for the six months ended June 30, 2014. The changes in the allowance for doubtful accounts at June 30, 2014 and December 31, 2013 are summarized as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Beginning balance</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">3,813,415</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">998,492</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Add: Increase to allowance</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,280,165</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,814,923</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Accounts written off</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Ending balance</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,093,580</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,813,415</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Accounts receivable</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">74,283,304</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">61,725,799</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: allowance for doubtful accounts</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (5,093,580</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (3,813,415</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Account receivable balance, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 69,189,724</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 57,912,384</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">10% non-controlling interest in Ruian</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">784,422</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">577,425</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">40% non-controlling interest in SIH</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (43,604</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 75,013</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 740,818</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 652,438</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <!--EndFragment--></div> </div>
705980
-705980
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE C- RECENTLY ISSUED FINANCIAL STANDARDS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> In April 2014, the FASB issued ASU 2014-08, "<em>Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity</em>". The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption to have a significant impact on its consolidated financial statements.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 27pt"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> In May 2014, the FASB issued ASU 2014-09, "Revenue from contracts with Customers (Topic 606)". This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <strong>a. ACCOUNTING METHOD</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> The Company uses the accrual method of accounting for financial statement and tax return purposes.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong> </strong></p> <!--EndFragment--></div> </div>
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7272975
5572376
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong>NOTE J -CAPITAL LEASE OBLIGATIONS</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> </p> <table style="WIDTH: 93%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 25pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: left" colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Total Capital Lease Obligations</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">9,287,293</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">10,909,463</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Current portion</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (3,714,917</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (3,636,488</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Non-current portion</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,572,376</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,272,975</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> On September 13, 2011, the Company entered into a leasing agreement with International Far Eastern Leasing Co., Ltd., a subsidiary of China Sinochem Corporation, for a term of 60 months and an interest rate of 7.95% per annum, payable monthly in arrears. To reduce the financing expense, the Company entered into a new leasing agreement with International Far Eastern Leasing Co., Ltd. in December 2012 and terminated the original agreement. The duration of the new agreement is 48 months with an interest rate of 6.4% per annum and is secured with the Company's equipment in the original cost of $28,396,853. The capital lease obligation obtained by the Company is RMB 91,428,571 (approximately $14,545,950) and the Company is required to maintain a security deposit of RMB 11,428,571 (approximately $1,818,244). The Company prepaid all interests of RMB 10,705,357 (approximately $1,703,212) after the discount and is obligated for the payment of RMB 1,904,761.9 (approximately $303,041) monthly. The prepaid interest for capital lease obligation is amortized over the life of capital lease agreement using the effective interest method.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong> </strong></p> <!--EndFragment--></div> </div>
28241983
27020085
41253353
38009126
-1221898
-3244227
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE P - CONTINGENCIES</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td style="WIDTH: 0.25in">(1)</td> <td style="TEXT-ALIGN: left">According to the law of China, the government owns all the land in China. Companies and individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. The Company purchased the land use rights and the building on the land from Ruili Group for approximately $20 million on September 28, 2007. The Company has not yet obtained the land use right certificate nor the property ownership certificate of the building.</td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in"> </p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td style="WIDTH: 0.25in">(2)</td> <td style="TEXT-ALIGN: left">The Company provides guarantees to the loans obtained by Ruili Group from the Bank of Ningbo in the amount of RMB108,000,000 (approximately $17,182,404) for the period from September 26, 2013 to September 25, 2014.</td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.5in; TEXT-INDENT: -0.25in"> </p> <!--EndFragment--></div> </div>
0.002
0.002
50000000
50000000
19304921
19304921
19304921
19304921
19304921
19304921
38609
38609
10833398
8698754
4109903
5069104
11976451
9730680
4554960
5697639
81816214
69783242
47209861
40688905
1471873
941876
13931658
13737468
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE I - SHORT-TERM BANK LOANS</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Bank loans represented the following as of June 30, 2014 and December 31, 2013:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 93%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 25pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">June 30,</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2"> December 31,</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Secured</td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt"> </td> <td style="WIDTH: 1%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> $</td> <td style="WIDTH: 10%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,116,360</td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt"> </td> <td style="WIDTH: 1%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> $</td> <td style="WIDTH: 10%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,526,863</td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> <strong> </strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> The Company obtained those short term loans from Bank of China, Construction Bank of China and Agricultural Bank of China, respectively, to finance general working capital as well as new equipment acquisition. Interest rate for the loans ranged from3.53% to 6.44% per annum. The maturity dates of the loans ranged from July 1, 2014 to December 20, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong> </strong></p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left" colspan="3" nowrap="nowrap">Corporate or personal guarantee:</td> </tr> <tr> <td style="FONT-SIZE: 10pt; WIDTH: 20%; TEXT-ALIGN: left" nowrap="nowrap"><font style="FONT-SIZE: 10pt">$10.7 Million</font> </td> <td style="FONT-SIZE: 10pt; WIDTH: 2%; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-SIZE: 10pt; WIDTH: 78%; TEXT-ALIGN: left" nowrap="nowrap"><font style="FONT-SIZE: 10pt">Guaranteed by the Ruili Group, a related party;</font> </td> </tr> <tr> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left" nowrap="nowrap"><font style="FONT-SIZE: 10pt">$0.4 Million</font> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left" nowrap="nowrap"><font style="FONT-SIZE: 10pt">Guaranteed by the Ruili Group, a related party, Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both principal shareholders.</font> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong> </strong></p> <!--EndFragment--></div> </div>
28396853
monthly
0.064
0.0795
0.0644
0.0353
2014-12-20
2014-07-01
303041
1904761.9
P48M
P60M
-307429
-233687
8653
46860
1392955
1731372
1392955
1731372
105558
137318
578928
771102
699816
776092
1818244
1857459
1818244
11428571
3481100
3386360
3022678
2984076
709703
641039
3732381
3625115
94246
40570
94246
40570
0.36
0.27
0.21
0.21
0.36
0.27
0.21
0.21
0.1322
0.1068
0.25
0.35
0.35
0.165
0.165
0.0178
0.0432
0.1
0.1
624776
726068
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0.6
0.6
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0.3
0.1
0.63
0.5
0.1
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <strong>c. FAIR VALUE OF FINANCIAL INSTRUMENTS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> For certain of the Company's financial instruments, including cash and cash equivalents, trade receivables and payables, prepaid expenses, deposits and other current assets, short-term bank borrowings, and other payables and accruals, the carrying amounts approximate fair values due to their short maturities.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
126031
136511
176302
180104
50271
43593
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.7pt"> <strong>e. FOREIGN CURRENCY TRANSLATION</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> The Company maintains its books and accounting records in RMB, the currency of the PRC. The Company's functional currency is also RMB. The Company has adopted FASB ASC 830-30 in translating financial statement amounts from RMB to the Company's reporting currency, United States dollars ("US$"). All assets and liabilities are translated at the current rate. The shareholders' equity accounts are translated at appropriate historical rate. Revenue and expenses are translated at the weighted average rates in effect on the transaction dates.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders' equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
1164445
708188
-28075
9027028
9383277
4710874
5220131
27485904
23793067
6414917
5252855
33900821
29045922
18513885
16822099
17182404
108000000
17182404
108000000
10700000
400000
8808040
6628797
5231305
5086264
6902777
740818
6902777
7643595
5920609
4580095
4546930
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong>NOTE K - INCOME TAXES</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> </p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> The Joint Venture is registered in the PRC, and is therefore subject to state and local income taxes within the PRC at the applicable tax rate on the taxable income as reported in the PRC statutory financial statements in accordance with relevant income tax laws.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> The Company increased its investment in the Joint Venture as a result of its financing in December, 2006. In accordance with the Income Tax Law of the People's Republic of China on Foreign-invested Enterprises and Foreign Enterprises, the Joint Venture is eligible for additional preferential tax treatment. For the years 2007 and 2008, the Joint Venture was entitled to an income tax exemption on all pre-tax income generated by the company above its pre-tax income generated in the year 2006. Thereafter, the Joint Venture would enjoy a 50% exemption from the effective income tax rate on any pre-tax income above its 2006 pre-tax income, to be recognized in the years 2009, 2010 and 2011. The above taxation exemption was superseded, because the Joint Venture has been awarded the "High-Tech Enterprise" certificate by the Chinese government. The High-Tech Enterprise certificate is valid for three years and provided for a reduced tax rate of 15% for years 2009 through 2011. The Company used a tax rate of 25% for the first three quarters of 2012. In December 2012, the Joint Venture passed the re-assessment of the High-Tech Enterprise certificate by the government, according to relevant PRC income tax laws. Accordingly, it continues to be taxed at a 15% rate in 2012 through 2014.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> The reconciliation of the effective income tax rate of the Company to the statutory income tax rate in the PRC for the six months of 2014 and 2013 is as follows:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">US Statutory income tax rate</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right">35.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right">35.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Valuation allowance recognized with respect to the loss in the US company</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-35.00</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-35.00</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">HK Statutory income tax rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">16.50</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">16.50</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Valuation allowance recognized with respect to the loss in those HK company</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-16.50</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-16.50</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">China Statutory income tax rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25.00</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25.00</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">China Statutory income exemption</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-10.00</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-10.00</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Tax refund</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Other items</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -1.78</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -4.32</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Effective tax rate</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 13.22</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 10.68</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <table style="WIDTH: 92%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Computed income tax provision at the statutory rate</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">2,252,167</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,627,455</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Tax exemption</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(1,164,114</td> <td style="TEXT-ALIGN: left">)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(728,783</td> <td style="TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Tax refund</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Deferred tax provision</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(307,428</td> <td style="TEXT-ALIGN: left">)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(233,688</td> <td style="TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Current period permanent differences and other reconciling items</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 383,820</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 43,204</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total income taxes</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,164,445</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 708,188</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Income taxes are calculated on a separate entity basis. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's net deferred tax assets and liabilities are approximately as mentioned above at June 30, 2014. There currently is no tax benefit recorded for the United States. The tax authority may examine the tax returns of the Company three years after the year ended December 31, 2014. In the six months ended June 30, 2014, there were no penalties and interest, which generally are recorded in the general and administrative expenses or in the tax expenses. The provisions for income taxes for the six months ended June 30, 2014 and 2013, respectively, are summarized as follows:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 40pt"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: left" colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Current</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,471,873</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">941,876</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Deferred</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (307,428</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (233,688</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,164,445</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 708,188</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 40pt"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> As of June 30, 2014 and December 31, 2013, the Company had no unrecognized tax benefits.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> </p> <!--EndFragment--></div> </div>
1171310
972107
1164445
708188
651210
539334
-307428
-233688
2252167
1627455
383820
43204
1164114
728783
-254762
-5092453
11133975
-3762142
296017
-488943
2737611
4449536
8496818
3098660
7323135
2624773
2513792
-325030
-18266
743265
-1590962
-252772
-342776
1138941
1438338
479058
492094
722728
859771
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong>NOTE F - INVENTORIES</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> At June 30, 2014 and December 31, 2013, inventories consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,<br /> 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: justify">Raw Materials</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">10,215,642</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">12,380,061</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: justify">Work in process</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">30,536,330</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">31,546,330</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: justify">Finished Goods</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">41,727,633</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">32,466,337</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Write-down of inventories</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (28,709</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (28,709</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total Inventory</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 82,450,896</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 76,364,019</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <!--EndFragment--></div> </div>
32466337
41727633
76364019
82450896
12380061
10215642
28709
28709
31546330
30536330
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE M - OPERATING LEASES WITH RELATED PARTIES</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> In December 2006, Ruian entered into a lease agreement with Ruili Group for the lease of two apartment buildings. These two apartment buildings are for Ruian's management personnel and staff, respectively. The lease term is from January 2013 to December 2016. This lease was amended in 2013, with a new lease term from January 1, 2013 to December 31, 2022. The annual lease expense is RMB2,100,000 (approximately $333,688).</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> In May 2009, Ruian entered into a lease agreement with Ruili Group for the lease of a manufacturing plant. The lease term is from September 2009 to May 2017. In August 2010, a new lease agreement was signed between Ruian and Ruili Group, under which Ruian leased 32,410 square meters manufacturing plant for its new purchased Passenger Vehicle Brake Systems business. The lease term is from September 2009 to August 2020. This lease was amended in 2013. The amended lease term is from January 1, 2013 to December 31, 2017. The annual lease expense is RMB8, 137,680 (approximately $1,293,070).</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> The lease expenses were $814,389 and $814,389 for the six months ended June 30, 2014 and 2013, respectively.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <!--EndFragment--></div> </div>
53476323
61380132
252980284
272860544
46203348
55807756
7272975
5572376
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong>NOTE E - ACCOUNTS RECEIVABLE</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> No customer individually accounted for more than 10% of our revenues or accounts receivable for the six months ended June 30, 2014. The changes in the allowance for doubtful accounts at June 30, 2014 and December 31, 2013 are summarized as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Beginning balance</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">3,813,415</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">998,492</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Add: Increase to allowance</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,280,165</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,814,923</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Accounts written off</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Ending balance</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,093,580</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,813,415</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Accounts receivable</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">74,283,304</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">61,725,799</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: allowance for doubtful accounts</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (5,093,580</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (3,813,415</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Account receivable balance, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 69,189,724</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 57,912,384</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <!--EndFragment--></div> </div>
19647063
20790116
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE L - NONCONTROLLING INTEREST IN SUBSIDIAIRES</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Non-controlling interest in subsidiaries represents a 10% non-controlling interest, owned by the Ruili Group, in Ruian, and a 40% non-controlling interest, owned by the Company's Joint Venture partners, in SIH. Net income attributable to non-controlling interests in subsidiaries amounted to $740,818 and $652,438 for the six months ended June 30, 2014 and 2013, respectively.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">10% non-controlling interest in Ruian</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">784,422</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">577,425</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">40% non-controlling interest in SIH</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (43,604</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 75,013</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 740,818</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 652,438</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <!--EndFragment--></div> </div>
0.1
0.4
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE A - DESCRIPTION OF BUSINESS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> SORL Auto Parts, Inc. (together with its subsidiaries, "we," "us," "our" or the "Company" or "SORL") is principally engaged in the manufacture and distribution of vehicle brake systems and other key safety-related components, through its 90% ownership of Ruili Group Ruian Auto Parts Co., Ltd. (the "Joint Venture" or "Ruian") and 60% ownership of SORL International Holding, Ltd. ("SIH") in Hong Kong. The Company distributes products both in China and internationally under SORL trademarks. The Company's product range includes 65 categories and over 2000 different specifications.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> The Joint Venture was formed in the People's Republic of China ("PRC" or "China") as a Sino-Foreign joint venture on January 17, 2004, pursuant to the terms of a Joint Venture Agreement between the Ruili Group Co., Ltd. (the "Ruili Group") and Fairford Holdings Limited ("Fairford"), a wholly owned subsidiary of the Company. The Ruili Group was incorporated in China in 1987 and specialized in the development, production and sale of various kinds of automotive parts. Fairford and the Ruili Group contributed 90% and 10%, respectively, of the paid-in capital of the Joint Venture.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> On November 11, 2009, the Company entered into a joint venture agreement with MGR Hong Kong Limited ('MGR"), a Hong Kong-based global auto parts distribution specialist firm and a Taiwanese investor. The new joint venture was named SIH. SORL holds a 60% interest in the joint venture, MGR holds a 30% interest, and the Taiwanese investor holds a 10% interest. SIH is primarily devoted to expanding SORL's international sales network in Asia-Pacific and creating a larger footprint in Europe, the Middle East and Africa with a target to create a truly global distribution network. Based in Hong Kong, SIH is expanding and establishing channels of distribution in international markets with SORL's primary products, including spring brake chambers, clutch servos, air dryers, relay valves and hand brake valves.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> On February 8, 2010, the Company sold 1,000,000 shares of its common stock to selected institutional investors at a price of $10.00 per share pursuant to a registered direct offering. This transaction provided net proceeds of approximately $9.4 million.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> On August 31, 2010, the Company, through the Joint Venture, executed an agreement to acquire the assets of the hydraulic brake, power steering, and automotive electrical operations of the Ruili Group (a related party under common control). As a result of this acquisition, the Company's product offerings expanded to both commercial and passenger vehicles' brake systems and other key safety-related auto parts. The purchase price was RMB 170 million, or approximately USD$25 million. The transaction was accounted for using the book value of assets acquired, consisting primarily of machinery and equipment, inventory, accounts receivable and patent rights, used or usable in connection with the acquired segment of the auto parts business of the Seller. The Company purchased the machinery and equipment, inventory, accounts receivable at book values of $8.0 million, $8.0 million and $5.2 million, respectively. The Company did not acquire any of the assets of the Seller other than those in the segment of Seller's business described above. The excess of consideration over the carrying value of net assets received has been recorded as a decrease in the additional paid-in capital of the Company.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> The acquisition was accounted for as a transaction between the entities under common control because the CEO of the Company owns 63% of the registered capital of the Ruili Group, and owns more than 50% of the outstanding common stock of SORL, together with his wife and brother. This results in the acquisition being accounted for using the historical costs of the financial statements of the Seller. The consolidated financial statements have been prepared as if the acquisition took place at the earliest time presented, that is, as of January 1, 2009. The assets purchase was deemed to be the acquisition of a business.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!-- Field: Page; Sequence: 8; Value: 2 --><!--EndFragment--></div> </div>
4540724
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181401
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20000000
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2061662
2219689
1000000
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3773750
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371777
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.7pt"> <strong>f. RECLASSIFICATIONS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.75pt"> </p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
22292424
48751425
9400000
12783841
53437
4665439
5173945
634836
1143342
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE N - WARRANTY CLAIMS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Warranty claims were $1,143,342 and $1,023,349 for the six months ended June 30, 2014 and June 30, 2013, respectively. Warranty claims are classified as accrued expenses on the balance sheet. The movement of accrued warranty expenses for the six months ended June 30, 2014 was as follows:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="right"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 87%; TEXT-ALIGN: left">Beginning balance at January 1, 2014</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">4,665,439</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Aggregate reduction for payments made</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">634,836</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Aggregate increase for new warranties issued during current period</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,143,342</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Aggregate changes in the liability related to pre-existing warranties (changes in estimate)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Ending balance at June 30, 2014:</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,173,945</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <br style="CLEAR: both" /> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <!--EndFragment--></div> </div>
1143342
1023349
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong>NOTE G - PROPERTY, PLANT AND EQUIPMENT</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Property, plant and equipment consisted of the following, at June 30, 2014 and December 31, 2013:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Machinery</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">49,341,407</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">46,475,961</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Molds</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,418,158</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,388,218</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Office equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,096,657</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,960,476</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Vehicles</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,066,179</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,248,280</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Buildings</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,102,678</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">8,910,501</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Machinery held under capital lease</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 29,012,601</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 28,396,853</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Sub-Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 93,037,680</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 89,380,289</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (48,383,297</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (44,175,888</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Property, plant and equipment, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 44,654,383</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 45,204,401</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> Depreciation expense charged to operations was $3,481,100 and $3,386,360 for the six months ended June 30, 2014 and June 30, 2013, respectively.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <!--EndFragment--></div> </div>
46475961
49341407
1388218
1418158
1960476
2096657
2248280
2066179
8910501
9102678
28396853
29012601
89380289
93037680
45204401
44654383
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Property, plant and equipment consisted of the following, at June 30, 2014 and December 31, 2013:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Machinery</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">49,341,407</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">46,475,961</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Molds</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,418,158</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,388,218</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Office equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,096,657</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,960,476</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Vehicles</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,066,179</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,248,280</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Buildings</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,102,678</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">8,910,501</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Machinery held under capital lease</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 29,012,601</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 28,396,853</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Sub-Total</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 93,037,680</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 89,380,289</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Accumulated depreciation</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (48,383,297</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (44,175,888</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Property, plant and equipment, net</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 44,654,383</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 45,204,401</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> </p> <!--EndFragment--></div> </div>
1194754
1634203
2043053
2046604
1109426
1161423
1472020
816189
934065
816189
769957
551457
420691
551457
4285030
3414250
2464182
2529069
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE D - RELATED PARTY TRANSACTIONS</strong></p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> The Company continues to purchase packaging materials from the Ruili Group. The Ruili Group is the minority shareholder of Joint Venture and is collectively controlled by Mr. Xiao Ping Zhang, his wife Ms. Shuping Chi, and his brother Mr. Xiao Feng Zhang. In addition, the Company purchases from two other related parties, Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd. ("Guangzhou Kormee") and Ruian Kormee Vehicle brake Co., Ltd. ("Ruian Kormee"). Guangzhou Kormee is controlled by the Ruili Group and Ruian Kormee is the wholly-owned subsidiary of Guangzhou Kormee. The Company also sells certain automotive products to Guangzhou Kormee, Ruian Kormee and the Ruili Group. MGR holds a 30% interest in SIH. The stockholders of MGR are the management of SIH.</p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> The following related party transactions are reported for the three months and six months ended June 30, 2014 and June 30, 2013:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 27pt"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Three Months Ended June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Six Months Ended June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">PURCHASES FROM:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 48%; TEXT-ALIGN: left">Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd.</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">934,065</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">816,189</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,472,020</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">816,189</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Ruian Kormee Vehicle Brake Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">420,691</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">551,457</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">769,957</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">551,457</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,109,426</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,161,423</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,043,053</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,046,604</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total Purchases</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,464,182</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,529,069</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,285,030</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,414,250</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">SALES TO:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">934,064</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">289,571</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">974,711</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">289,571</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Ruian Kormee Vehicle Brake Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">30,266</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">55,739</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 381,176</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 714,820</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 605,133</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 953,001</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total Sales</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,345,506</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,004,391</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,635,583</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,242,572</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 27pt"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">ACCOUNTS PAYABLE</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Ruian Kormee Vehicle brake Co., Ltd.</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">180,124</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">445,896</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,621,993</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,229,192</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 364,414</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,031,309</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 810,310</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">OTHER PAYABLES</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">MGR Hong Kong Limited</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">94,246</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 40,570</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 40,570</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 94,246</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong> </strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px; TEXT-INDENT: 0.25in"> The Company entered into several lease agreements with related parties, see Note M for more details.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px; TEXT-INDENT: 0.25in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px; TEXT-INDENT: 20pt"> In addition, the Company provides guarantees to the loans obtained by Ruili Group from the Bank of Ningbo in the amount of RMB108,000,000 (approximately $17,182,404) for the period from September 26, 2013 to September 25, 2014.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong> </strong></p> <!--EndFragment--></div> </div>
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1847655
10473023
3691757
3007611
2200558
1617147
10609435
11315415
104544120
110740917
1635583
1242572
1345506
1004391
974711
289571
934064
289571
605133
953001
381176
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30226
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.6pt"> <strong>d. REVENUE RECOGNITION</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> Revenue from the sale of goods is recognized when the risks and rewards of ownership of the goods have transferred to the buyer. The transfer is decided by several factors, including factors such as when persuasive evidence of an arrangement exits, delivery has occurred, the sales price is fixed and determinable, and collection is probable. Revenue consists of the invoice value for the sale of goods and services net of value-added tax, rebates and discounts and returns. The Company nets sales return in gross revenue, i.e., the revenue shown in the income statement is the net sales.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
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21842065
17874701
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> The provisions for income taxes for the six months ended June 30, 2014 and 2013, respectively, are summarized as follows:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 40pt"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: left" colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Current</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,471,873</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">941,876</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Deferred</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (307,428</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (233,688</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,164,445</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 708,188</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 40pt"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Bank loans represented the following as of June 30, 2014 and December 31, 2013:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 93%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 25pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">June 30,</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2"> December 31,</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> Secured</td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt"> </td> <td style="WIDTH: 1%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> $</td> <td style="WIDTH: 10%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,116,360</td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt"> </td> <td style="WIDTH: 1%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> $</td> <td style="WIDTH: 10%; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 4,526,863</td> <td style="WIDTH: 1%; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> <strong> </strong></p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Deferred tax assets consisted of the following as of June 30, 2014 and December 31, 2013:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Deferred tax assets - current</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Allowance for doubtful accounts</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">771,102</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">578,928</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Revenue (net off cost)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">46,860</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">8,653</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Unpaid accrued expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">137,318</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">105,558</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Warranty</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 776,092</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 699,816</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Deferred tax assets</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,731,372</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,392,955</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Valuation allowance</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Net deferred tax assets - current</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,731,372</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,392,955</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> The reconciliation of the effective income tax rate of the Company to the statutory income tax rate in the PRC for the six months of 2014 and 2013 is as follows:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">US Statutory income tax rate</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right">35.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right">35.00</td> <td style="WIDTH: 1%; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Valuation allowance recognized with respect to the loss in the US company</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-35.00</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-35.00</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">HK Statutory income tax rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">16.50</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">16.50</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Valuation allowance recognized with respect to the loss in those HK company</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-16.50</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-16.50</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">China Statutory income tax rate</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25.00</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25.00</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">China Statutory income exemption</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-10.00</td> <td style="TEXT-ALIGN: left">%</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-10.00</td> <td style="TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Tax refund</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Other items</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -1.78</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -4.32</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Effective tax rate</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 13.22</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 10.68</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">%</td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <table style="WIDTH: 92%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Six months ended<br /> June 30, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Computed income tax provision at the statutory rate</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">2,252,167</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,627,455</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Tax exemption</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(1,164,114</td> <td style="TEXT-ALIGN: left">)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(728,783</td> <td style="TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Tax refund</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Deferred tax provision</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(307,428</td> <td style="TEXT-ALIGN: left">)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(233,688</td> <td style="TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Current period permanent differences and other reconciling items</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 383,820</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 43,204</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total income taxes</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,164,445</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 708,188</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 93%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 25pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: left" colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Total Capital Lease Obligations</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">9,287,293</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">10,909,463</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Current portion</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (3,714,917</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (3,636,488</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Non-current portion</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,572,376</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,272,975</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> At June 30, 2014 and December 31, 2013, inventories consisted of the following:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31, 2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 74%; TEXT-ALIGN: justify">Raw Materials</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">10,215,642</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">12,380,061</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: justify">Work in process</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">30,536,330</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">31,546,330</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: justify">Finished Goods</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">41,727,633</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">32,466,337</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Less: Write-down of inventories</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (28,709</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (28,709</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total Inventory</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 82,450,896</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 76,364,019</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <!-- Field: Page; Sequence: 12; Value: 2 --> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> Warranty claims were $1,143,342 and $1,023,349 for the six months ended June 30, 2014 and June 30, 2013, respectively. Warranty claims are classified as accrued expenses on the balance sheet. The movement of accrued warranty expenses for the six months ended June 30, 2014 was as follows:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> </p> <table style="WIDTH: 90%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="right"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="WIDTH: 87%; TEXT-ALIGN: left">Beginning balance at January 1, 2014</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">4,665,439</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Aggregate reduction for payments made</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">634,836</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Aggregate increase for new warranties issued during current period</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,143,342</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Aggregate changes in the liability related to pre-existing warranties (changes in estimate)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Ending balance at June 30, 2014:</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,173,945</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <br style="CLEAR: both" /> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong> </strong></p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 30pt"> The following related party transactions are reported for the three months and six months ended June 30, 2014 and June 30, 2013:</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 27pt"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Three Months Ended June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Six Months Ended June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">PURCHASES FROM:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 48%; TEXT-ALIGN: left">Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd.</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">934,065</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">816,189</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">1,472,020</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">816,189</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Ruian Kormee Vehicle Brake Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">420,691</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">551,457</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">769,957</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">551,457</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,109,426</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,161,423</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,043,053</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,046,604</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total Purchases</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,464,182</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,529,069</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,285,030</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,414,250</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">SALES TO:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">934,064</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">289,571</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">974,711</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">289,571</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Ruian Kormee Vehicle Brake Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">30,266</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">55,739</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 381,176</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 714,820</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 605,133</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 953,001</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total Sales</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,345,506</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,004,391</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,635,583</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,242,572</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 27pt"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">December 31,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">ACCOUNTS PAYABLE</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Ruian Kormee Vehicle brake Co., Ltd.</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">180,124</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">445,896</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Guangzhou Kormee Vehicle Brake Technology Development Co., Ltd.</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,621,993</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,229,192</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 364,414</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,031,309</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 810,310</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">OTHER PAYABLES</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">MGR Hong Kong Limited</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">94,246</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">The Ruili Group</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 40,570</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> -</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 40,570</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 94,246</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <strong> </strong></p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> All of the Company's long-lived assets are located in the PRC and Hong Kong. The Company and its subsidiaries do not have long-lived assets in the United States for the reporting periods.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <table style="WIDTH: 96%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Six Months Ended June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">NET SALES TO EXTERNAL CUSTOMERS</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">93,874,970</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">80,954,463</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 21,842,065</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 17,874,701</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Net sales</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 115,717,035</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 98,829,164</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">INTERSEGMENT SALES</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Intersegment sales</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">GROSS PROFIT</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">27,485,904</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">23,793,067</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6,414,917</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5,252,855</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Gross profit</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">33,900,821</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">29,045,922</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Other operating income</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">925,262</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">835,892</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Selling and distribution expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">12,178,605</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,319,843</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">General and administrative expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,027,028</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,383,277</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Research and development expenses</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,691,757</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,007,611</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Income from operations</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,928,693</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">8,171,083</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Financial Expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(1,138,941</td> <td style="TEXT-ALIGN: left">)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(1,438,338</td> <td style="TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Other income</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">251,596</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">91,353</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Non-operating expenses</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> (233,308</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> (195,301</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> Income before income tax expense</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8,808,040</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,628,797</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">CAPITAL EXPENDITURE</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,670,876</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,827,244</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 390,786</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 392,445</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,061,662</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,219,689</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">DEPRECIATION AND AMORTIZATION</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">3,022,678</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,984,076</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 709,703</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 641,039</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,732,381</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,625,115</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0px"> </p> <table style="WIDTH: 96%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>June 30, 2014</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>December 31, 2013</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">TOTAL ASSETS</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">221,356,996</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">205,310,702</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 51,503,548</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 47,669,582</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 272,860,544</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 252,980,284</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0px"> </p> <table style="WIDTH: 96%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>June 30, 2014</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>December 31, 2013</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">LONG LIVED ASSETS</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">49,916,631</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">50,413,024</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,614,196</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,705,029</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 61,530,827</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 62,118,053</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>NOTE O - SEGMENT INFORMATION</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> The Company produces brake systems and other related components for different types of commercial vehicles ("Commercial Vehicle Brake Systems"). On August 31, 2010, the Company through Ruian, executed an Asset Purchase Agreement to acquire, and purchased, a segment of the passenger vehicle auto parts business ("Passenger Vehicle Brake Systems") of Ruili Group. As a result of this acquisition, the Company's product offerings were expanded to both commercial and passenger vehicles' brake systems and other key safety-related auto parts.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> The Company has two operating segments: Commercial Vehicle Brake Systems and Passenger Vehicle Brake Systems.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 21pt"> All of the Company's long-lived assets are located in the PRC and Hong Kong. The Company and its subsidiaries do not have long-lived assets in the United States for the reporting periods.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <table style="WIDTH: 96%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="6" nowrap="nowrap">Six Months Ended June 30,</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2014</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">2013</td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">NET SALES TO EXTERNAL CUSTOMERS</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">93,874,970</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left">$</td> <td style="WIDTH: 10%; TEXT-ALIGN: right">80,954,463</td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 21,842,065</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 17,874,701</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Net sales</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 115,717,035</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 98,829,164</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">INTERSEGMENT SALES</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">―</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Intersegment sales</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; FONT-SIZE: 10pt; TEXT-ALIGN: right"> ―</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">GROSS PROFIT</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">27,485,904</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">23,793,067</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6,414,917</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5,252,855</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Gross profit</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">33,900,821</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">29,045,922</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Other operating income</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">925,262</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">835,892</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Selling and distribution expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">12,178,605</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,319,843</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">General and administrative expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,027,028</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,383,277</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Research and development expenses</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,691,757</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,007,611</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Income from operations</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">9,928,693</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">8,171,083</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Financial Expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(1,138,941</td> <td style="TEXT-ALIGN: left">)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">(1,438,338</td> <td style="TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Other income</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">251,596</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">91,353</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Non-operating expenses</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> (233,308</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> (195,301</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">)</td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> Income before income tax expense</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8,808,040</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,628,797</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">CAPITAL EXPENDITURE</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,670,876</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">1,827,244</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 390,786</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 392,445</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,061,662</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2,219,689</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">DEPRECIATION AND AMORTIZATION</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">3,022,678</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,984,076</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 709,703</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 641,039</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,732,381</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,625,115</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0px"> </p> <table style="WIDTH: 96%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>June 30, 2014</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>December 31, 2013</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">TOTAL ASSETS</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">221,356,996</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">205,310,702</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 51,503,548</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 47,669,582</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 272,860,544</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 252,980,284</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0px"> </p> <table style="WIDTH: 96%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>June 30, 2014</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap"><strong>December 31, 2013</strong></td> <td style="FONT-WEIGHT: bold; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 1%"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> <td style="WIDTH: 10%; TEXT-ALIGN: right"> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="TEXT-ALIGN: left">LONG LIVED ASSETS</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left">Commercial Vehicle Brake Systems</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">49,916,631</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">50,413,024</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Passenger Vehicle Brake Systems</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,614,196</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 11,705,029</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,238,255)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 61,530,827</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 62,118,053</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; 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All intercompany balances and transactions have been eliminated in the consolidation. Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted as permitted by the rules and regulations of the United States Securities and Exchange Commission, although the Company believes that the disclosures contained in this report are adequate to make the information presented not misleading. The consolidated balance sheet information as of December 31, 2013 was derived from the consolidated audited financial statements included in Form 10-K. These consolidated financial statements should be read in conjunction with the annual consolidated audited financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2013, and other reports filed with the Securities and Exchange Commission ("SEC").</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 27pt"> The accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <table style="MARGIN-BOTTOM: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0px"> </td> <td style="WIDTH: 0.25in"><strong>(2)</strong></td> <td style="TEXT-ALIGN: left"><strong>SIGNIFICANT ACCOUNTING POLICIES</strong></td> </tr> </table> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong> </strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <strong>a. ACCOUNTING METHOD</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> The Company uses the accrual method of accounting for financial statement and tax return purposes.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> <strong> </strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <strong>b. USE OF ESTIMATES</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> The preparation of financial statements in conformity with U.S generally accepted accounting principles 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. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in"> <strong>c. FAIR VALUE OF FINANCIAL INSTRUMENTS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.25in; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> For certain of the Company's financial instruments, including cash and cash equivalents, trade receivables and payables, prepaid expenses, deposits and other current assets, short-term bank borrowings, and other payables and accruals, the carrying amounts approximate fair values due to their short maturities.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.6pt"> <strong>d. REVENUE RECOGNITION</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> Revenue from the sale of goods is recognized when the risks and rewards of ownership of the goods have transferred to the buyer. The transfer is decided by several factors, including factors such as when persuasive evidence of an arrangement exits, delivery has occurred, the sales price is fixed and determinable, and collection is probable. Revenue consists of the invoice value for the sale of goods and services net of value-added tax, rebates and discounts and returns. The Company nets sales return in gross revenue, i.e., the revenue shown in the income statement is the net sales.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.7pt"> <strong>e. FOREIGN CURRENCY TRANSLATION</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> The Company maintains its books and accounting records in RMB, the currency of the PRC. The Company's functional currency is also RMB. The Company has adopted FASB ASC 830-30 in translating financial statement amounts from RMB to the Company's reporting currency, United States dollars ("US$"). All assets and liabilities are translated at the current rate. The shareholders' equity accounts are translated at appropriate historical rate. Revenue and expenses are translated at the weighted average rates in effect on the transaction dates.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 25pt"> Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders' equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.7pt"> <strong>f. RECLASSIFICATIONS</strong></p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 14.75pt"> </p> <p style="TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 35pt"> Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.</p> <p style="TEXT-ALIGN: left; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.5in"> </p> <!--EndFragment--></div> </div>
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