What changed in this filing

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Item 1. Business

2010-08-30 compared with 2009-09-15 · 656 added, 382 removed, 206 unchanged (83% of the section changed)

Corporate History

Infrastructure Construction Corporation (the “Company”) was organized on

February 28, 2003 as Fidelity Aircraft Partners LLC, a Colorado limited

liability company (“Fidelity LLC”).

On December 16, 2004, Fidelity LLC converted

itself into Fidelity Aviation Corporation by filing a Statement of Conversion

and Articles of Incorporation with the Colorado Secretary of State.

Infrastructure Construction Corporation (the “Company”) was organized in

Colorado on February 28, 2003.

The Company, through its subsidiaries in Hong

Kong and the People’s Republic of China (“PRC” or “China”), engages in

production of ready-mixed concrete for developers and the construction industry

The Company primarily operates through its indirect majority-owned

subsidiary, Beijing Chengzhi Qianmao Concrete Co., Ltd.

(“Beijing Concrete”), a

company organized under the laws of the PRC.

Company was organized in Colorado on February 28, 2003 as a limited liability

company under the name “Fidelity Aircraft Partners LLC,” and on December 16,

2004 converted itself into Fidelity Aviation Corporation by filing a Statement

of Conversion and Articles of Incorporation with the Colorado Secretary of

At that time we were engaged in the business of salvaging rotable parts

and systems from airframes and selling them to the aviation industry.

we began to pursue an acquisition strategy, whereby we sought to acquire an

undervalued business with a history of operating revenues in markets that

provide room for growth.

October 8, 2008, the Company consummated a share exchange transaction pursuant

to that certain Share Exchange Agreement, as a result of which Northern

Construction Holdings, Ltd., a Hong Kong limited company (“NCH”) became our

wholly-owned subsidiary.

Beijing Fortune Capital Management, Ltd., a PRC limited

liability company (“BFCM”), a 95% owned subsidiary of NCH, became our indirect

majority-owned subsidiary.

The remaining 5% equity interest in BFCM is held by

Beijing Xingyuqing Tech Co., Ltd., controlled by Mr.

Bingchuan Xiao, a former

director of the Company.

BFCM owned 99.5% of the equity interest in Beijing

Chengzhi Qianmao Concrete Co., Ltd.

(“Beijing Concrete”), which enabled us to

acquire the business and substantially all of the assets of Beijing Concrete.

The remaining 0.5% in Beijing Concrete is owned by Mr.

Rong Yang, one of the

original founders of Beijing Concrete and our current chief executive officer

and director.

For accounting purposes, the share exchange transaction was

treated as a reverse acquisition with NCH as the acquirer and the Company as the

acquired party.

Following the share exchange, we evaluated the future market for

our aircraft parts business and resolved not to pursue this line of business any

January 15, 2010, Beijing Concrete increased its registered capital from RMB 15

million (approximately $2.2 million) to RMB 30 million (approximately $4.4

million) and BFCM increased its investment in Beijing Concrete accordingly.

share capital increased from RMB 10 million (approximately $1.47 million) to RMB

15 million (approximately $2.2 million).

As a result, BFCM owns 99.67% of

Beijing Concrete from January 15, 2010.

February 1, 2010, Beijing Concrete formed a subsidiary, Shaanxi Hongruida

Concrete Ltd.

(“Hongruida”) and contributed RMB 10 million (approximately $1.47

million) to its capital.

Beijing Concrete is the sole shareholder of Hongruida.

Hongruida was organized to implement the 10-year strategic cooperative agreement

with one of the Company’s major clients, China Railway Construction Group Co.,

Ltd (“CRCG”).

Under the Agreement, the Company and CRCG will jointly manage the

concrete mixing stations to be operated by Hongruida.

CRCG will provide the

cement for manufacturing the concrete mix in such concrete mixing stations, and

will be able to purchase the concrete mix at discounted prices.

accordance with the Agreement, each party will lease certain equipment to the

concrete mixing stations.

The Company and CRCG will share 75% and 25%

of the annual profits of such concrete mixing stations in Xi’an.

commenced its operations at the end of March 2010.

August 24, 2009, the Company changed its name from Fidelity Aviation Corporation

to China Infrastructure Construction Corporation.

The name change is currently

being reviewed by the Financial Industry Regulatory Authority (the

Company was formed to purchase large commercial (transport category) jet

airframes, salvage the usable aircraft parts and components from them and sell

the parts and components.

The Board of Directors evaluated the future market

for our aircraft parts business and resolved not to pursue this line of

business anymore.

Acquisition of

New Line of Business

October 8, 2008, the Company entered into a Share Exchange Agreement with (i)

Northern Construction Holdings, Ltd., a Hong Kong limited company (“NCH”);

(ii) the holder of all of the outstanding voting stock of NCH, Mr.

who held the shares on behalf of Mr.

Rui Shen, whereby the Company exchanged

12,000,000 voting common shares, or approximately 78% shares of the Company for

100% of the shares of NCH, as described below.

the Share Exchange Agreement, we effectively implemented a reverse acquisition

whereby we issued to the beneficiary Mr.

Rui Shen an aggregate of 12,000,000

shares of our common stock, in exchange for all of the issued and outstanding

capital stock of NCH.

NCH thereby became our wholly-owned subsidiary

Shen became our controlling stockholder.

We issued these

shares in a private transaction pursuant to the exemption under Regulation D of

the Securities Act.

All of our stock issued to Mr.

acquired in the future by Mr.

Rong Yang, our Chief Executive Officer and

Chairman, pursuant to a call option held by Mr.

result of the Share Exchange Agreement, Beijing Fortune Capital Management,

Ltd., a PRC limited liability company (“BFCM”), a 95% owned subsidiary of NCH,

became our indirect majority-owned subsidiary.

Also as a result of

the Share Exchange Agreement, Beijing Chengzhi Qianmao Concrete Co, Ltd., a PRC

corporation (“Beijing Concrete”), the operating company, and a 99.5% owned

subsidiary of BFCM, also became our indirect majority-owned

accounting purposes, the share exchange transaction was treated as a reverse

acquisition with NCH as the acquirer and Fidelity as the acquired party.

When we refer in this report to business and financial information for

periods prior to the consummation of the reverse acquisition, we are referring

to the business and financial information of NCH on a consolidated basis unless

the context suggests otherwise.

current corporate structure is set forth in the following diagram:

and Operations of Beijing Concrete

Concrete was established in January, 2002.

The company specializes in the

production of ready-mixed concrete and other types of special high-performance

concrete for developers and the construction industry.

The company is

certified to produce all types of concrete for residential and commercial

developers as well as industrial companies.

2008, the company completed its reorganization.

Through this reorganization,

Beijing Concrete’s original shareholders transferred 99.5% of their shares to

BFCM in exchange for $1.39 million US Dollars.

The remaining 0.5% in Beijing

Concrete is owned by Mr.

Rong Yang, one of the original founders and

majority shareholders of Beijing Concrete.

BFCM is a joint venture

company established in Beijing, China.

BFCM has two shareholders, NCH holding

95% and Beijing Xingyuqing Tech Co., Ltd.

As a result of the

reorganization, Beijing Concrete became an indirect subsidiary of

Concrete owns and operates three production lines of ready-mixed concrete, which

consist of 3 stationary concrete mixers.

In addition, it owns 2 concrete

transport vehicle pumps, 35 concrete mixing trucks and 3 bulk cement transport

All pump and transport vehicles are installed with GPS

tracking systems, enabling supervision of quality production and safe

Concrete currently has an annual output of approximately 1.2 million cubic

meters of concrete.

All of the company’s products have passed the ISO9001-2005

Certification Quality System and Integrated Certification System including

Quality Management System Certification, Environmental Management System

Certification and Occupational Health and Safety Management System Certification

issued by Beijing Zhong Jian Xie Certification Centre.

past six years, Beijing Concrete has enjoyed an average growth rate over 30%

We have successfully expanded our operations from a single production

facility in Beijing to additional production in the nearby city of Tangshan.

Currently, the Company has two prime production facilities each with two

ready-mix HZS120 series concrete production lines.

One facility is located in

Beijing’s Nanhaizi area, on the west side of the Yizhuang Economic Development

Zone south of Beijing.

The other is located in the Tangshan Development Zone,

about two hundred kilometers east of Beijing, with a combined annual operating

capacity from these two locations of 3.0 million cubic meters.

Our management

team has delivered sound historical financial results with the shareholder

equity of our company increasing to $20.9 million in US dollars as of May 31,

results from fiscal year ended May 31 st 2008,

and May 31 st 2009

(in US dollars):

2008, the Company commenced construction of a mixing concrete batch plant at

Jing-Tang Harbor of Tangshan to expand its operations in Hebei Province.

construction of the new plant is expected to be completed by 2010 and has a

production capacity of 500,000 cubic meters per annum.

has also mapped out a plan to establish or acquire two production facilities in

Tianjin is one of the largest cities in China and one of the fastest

growing real estate and infrastructure developments in the Bohai Gulf economic

zone, according to the PRC Council.

We estimate that Tianjin city

will require millions of cubic meters of concrete in the next few years.

Management has decided to capture this significant expanding opportunity by

establishing or acquiring two concrete production plants in the Bohai

has also mapped out a plan to establish or acquire one production facility in

Taiyuan, Shanxi Province, where we have already two of our major clients,

namely, Guangzhou Fuli Real Estate Group and China Railway, which have about 3.5

million square meters of residential construction area.

We estimate that Taiyuan

will require millions of cubic meters of concrete in the next few

is also considering establishing one or two movable facilities for China Railway

for its projects.

is also dedicated to be the leading “Green Concrete” producer in China.

“Green Concrete” refers to increasing the green content of the concrete, not

only by reducing the energy and raw material consumption, but also by mixing

various industrial wastes as possible to protect the environment.

the company has two production facilities.

One facility is located in the

Nanhaizi area, on the west side of the Yizhuang economic development zone in

The other is located at the Tangshan harbor, about two hundred

kilometers from Beijing.

producer of advanced ready-mix concrete materials in Beijing, China.

committed to conducting our operations with an emphasis on the extensive use of

recycled waste materials, the efficient production of our concrete materials

with minimal energy usage, dust and air pollution, and innovative products,

methods and practices.

able to meet the stringent environmental and technical needs of a rapidly

growing market.

The types of projects that we provide concrete for include large

express railways, bridges, tunnels, skyscrapers, dams, and nuclear reactor

infrastructure projects that many competitors are not able to produce due to

technical difficulties, resource and information limitations.

Recent projects

for which we have acted as a leading concrete and structural materials provider

Wanjing International Mansion

Tangshan Central Plaza

Projects with Beijing 5 th Gen

Semiconductor Company

Projects with Beijing Fuli Real Estate Company

Projects with Beijing Tian Yan Garden Real Estate

Projects with Beijing Zhongxin Semiconductor Company

Rainbow City Project

importance as a producer and user of concrete and concrete products has been

swiftly growing since the 1990s as its economy has opened and become more

developed and vibrant.

China is the world’s largest producer of cement and

the output of cement reached up to 1.38 billion tons in 2008.

production has grown about 10 percent per year over the past two decades and is

now growing even faster to keep up with massive urbanization.

produces roughly half of the total global output of cement, whereas the next

three largest producers, India, Japan, and the United States combined produce

less than 20 percent.

product producers will remain the largest market for cement in China, accounting

for approximately 40% of all cement consumption in 2010.

September 28, 2009, the Company effectuated a 1-for-10 reverse stock split of

the Company’s common stock, with no par value (the “Reverse Stock Split”).

the Reverse Stock Split, ten (10) shares of the outstanding common stock were

automatically converted into one (1) share of common stock.

The Reverse Stock

Split, however, did not alter the number of shares the Company is authorized to

issue, but only reduced the number of shares of its common stock issued and

Any fractional share issued as a result of the reverse split was

October 14, 2009, to provide incentives to the Company’s management and to

adjust the Company’s capital structure, the Company issued to Rui Shen, the

majority shareholder of the Company, an aggregate of 7,031,344 shares of common

stock (after taking into account the 1-for-10 reverse stock split which took

effect on September 28, 2009).

October 16, 2009, the Company entered into and consummated the sale of

securities pursuant to a Subscription Agreement with a number of investors,

providing for the sale to the investors of an aggregate of approximately

2,564,103 shares of common stock for an aggregate purchase price of

approximately $10,000,000 (or $3.90 per Share).

In connection with the private

placement, the Company issued to the placement agent warrants to purchase

153,846 shares of Common Stock exercisable for a period of five years at an

exercise price of $3.90 per share.

Additionally, the Company issued to a

financial advisor in the PRC 288,963 shares of common stock.

Subscription Agreement, the Company agreed to deliver additional shares of

common stock to the investors on a pro rata basis for no additional

consideration in the event that the Company’s after tax net income for each of

the fiscal years ending May 31, 2010 and 2011 is less than $14,000,000 and

$18,000,000, respectively, subject to certain adjustments (such as exclusion of

non-cash charges and expenses required to be recognized by the Company under the

United States generally accepted accounting principles), which number of shares

would be calculated using the percentage of variation between the actual net

income and the target net income.

5, 2010, the Company and the investors in the October 2009 private placement

(the “2009 Investors”) entered into an Amendment to the Subscription Agreement

dated October 16, 2009.

The Amendment modified certain covenants to which the

Company had previously agreed pursuant to the Subscription Agreement, including

exemption of the private placement described below from certain restrictions on

subsequent offerings.

Amendment, the Company agreed to file a registration statement covering the

securities issued in the October 2009 private placement (the “Registrable

Shares”), if at anytime after December 31, 2010 not all of the Registrable

Shares may be sold without registration pursuant to Rule 144 under the 1933 Act.

Such registration statement shall be filed within 45 days after receipt of a

written demand from the 2009 Investors representing not less than 50% of the

then outstanding Registrable Shares.

The 2009 Investors also have piggy-back

registration rights exercisable after December 31, 2010 with respect to the

Registrable Shares that may not be sold without registration pursuant to Rule

consideration of the Amendment, the Company agreed to issue to the 2009

Investors warrants to purchase in the aggregate approximately 1,281,083 shares

of Common Stock at an exercise price of $6.00 per share.

The Company also agreed

for the after tax net income target for fiscal year 2011 to be increased to

$19.8 million from $18.0 million if the Company does not complete a public

offering on or before the date on which it releases its 2011 net income data in

a Form 10-K filed with the SEC.

Under the Amendment, the Company agreed to

deliver additional shares of common stock to the 2010 Investors who invest in

the private placement described below ("2010 Private Placement") on a pro rata

basis for no additional consideration in the event that the Company’s after tax

net income for each of the fiscal years ending May 31, 2010 and 2011 is less

than $14,000,000 and $18,000,000 (or $19,800,000 as applicable) respectively

subject to certain adjustments (such as exclusion of non-cash charges and

expenses required to be recognized by the Company under the United States

generally accepted accounting principles), which number of shares should be

equal to the percentage of variation between the actual net income and the

target net income (the “Adjustment Percentage”).

The number of such additional

shares shall equal the Adjustment Percentage, times the number of shares of

Common Stock acquired by the 2009 Investor in the 2010 Private Placement, minus

the Adjustment Percentage times the number of shares acquired by such

investor in the October 2009 private placement which have been sold by the

investor as of the date on which the Company releases its respective net income

data in a Form 10-K filed with the SEC.

11, 2010, the Company consummated a private placement pursuant to a Subscription

Agreement dated March 5, 2010 with a number of investors, providing for the sale

to the investors of an aggregate of approximately 1,282,091 shares of common

stock for an aggregate purchase price of approximately $5,000,000 (or $3.90 per

In connection with the private placement, the Company issued to the

placement agent a warrant to purchase 46,154 shares of common stock exercisable

for a period of five years at an exercise price of $3.90 per share and paid a

transaction fee of $240,000.

Additionally, the Company issued to a finder

a warrant to purchase 23,077 shares of common stock exercisable for a

period of five years at an exercise price of $3.90 per share and paid a

transaction fee of $120,000.

our indirect subsidiary Beijing Concrete, which has been engaged in the concrete

business since January 2002, we are operating as a producer of advanced

ready-mix concrete materials headquartered in Beijing, China.

specializes in the production of ready-mix concrete and other types of concrete

for developers in the construction industry.

The Company currently is

certified by the Chinese Ministry of Construction to produce certain types of

concrete (model C20 to model C60) for residential and commercial developers as

well as for industrial companies.

The Company currently is applying for

certification to produce all types of concrete.

Company currently owns two stationary factories and two mobile concrete mix

stations, which in total have eight ready-mix concrete batching plants.

addition, it owns 5 concrete transport pumps, 46 truck transit mixers and 3 bulk

cement transport vehicles.

All pump vehicles and trucks are installed

with GPS tracking systems, which ensure the quality control and safe delivery of

the concrete mix.

Company currently has an annual output capacity of approximately 3.6

million cubic meters of concrete.

In fiscal years 2010 and 2009, the Company’s

revenues amounted to $73.3 million and $66.8 million,

respectively.

All of the Company’s products have been certified by

the ISO9001-2000 Certification Quality System and by the Chinese Ministry of

Construction Beijing Branch Certification Center with respect to Integrated

Certification System which includes Quality Management System, Environmental

Management System and Occupational Health and Safety Management

past six years, we have successfully expanded our operations from a single

ready-mix concrete factory in Beijing to additional production in the cities of

Tangshan and Xi’an.

Currently, the Company has four main concrete factories.

these, one factory has two sets of ready-mix HZS120 series concrete mixing

towers and one set of Betomix 3.0A-R/DW series mixing towers, one factory has

one set of HZS120 series mixing towers, one factory has two sets of HZS120

series mixing towers, and one factory has two sets of HZS180 series mixing

One facility is located in Beijing’s Nanhaizi area, on the west side of

the Yizhuang Economic Development Zone in southern Beijing.

Another facility is

located in Shidu, on the outskirts of Beijing.

We also had two facilities, both

of which are mobile stations, in the Tangshan Development Zone, about two

hundred kilometers east of Beijing.

We combined these two facilities into one to

better utilize our resources.

Our newest facility is located in Xi’an, central

The Company also completed the construction of a stationary concrete

factory in Tangshan in May 2009.

However, this factory has not commenced

operation and it has not passed the first review by the Tangshan Commission of

Construction due to a particular feature of the subsoil that the foundation of

the facility is built upon.

The Company has recently entered into an agreement

for the sale of the Tangshan plant to a third party for RMB25,974,631

(approximately $3,819,799).

The purchase price shall be paid in installments

over four years starting from September 1, 2010.

If there is a delay in

payments for more than 10 days, we will be entitled to liquidated damages equal

to 4% of the purchase price.

If the delay lasts for more than 10 days, we will

have the right to terminate the agreement and will be entitled to liquidated

damages equal to 20% of the purchase price.

following summarizes the details of the two factories and two mobile stations as

of May 31, 2010:

Batching Plants

capacity (m 3 )

Production Capacity

Beijing (Yizhuang)

Betomix 3.0A-R /DW (Stationary)

since February 2010

Tangshan Caifeidian

since November 2009

180 (Stationary)

Company is planning to build two additional stationary concrete factories with

two batching plants of 3.5 million cubic meters production capacity and one

mobile station with one batching plant of 2 million cubic meters production

capacity during the fiscal year ended May 31, 2011.

We are currently considering

acquiring potential target companies as well.

Company is committed to conducting its operations with an emphasis on the

efficient production, management and innovation of our concrete products.

particular, we produce “Green Concrete” by extensively using recycled industrial

waste and minimizing the energy consumption and the dust and air pollution.

believe that we are able to meet the stringent environmental and technical needs

of a rapidly growing market in China.

The types of projects for

which we provide concrete include large express railways, bridges, tunnels,

skyscrapers, and dams.

Many competitors are not able to participate in such

projects due to technical requirements and the limitations of funding and

believe that as its economy has opened and become more developed and vibrant

since the 1990s, China plays a more and more important role in the concrete

industry as both a producer and user of concrete and concrete

China is the world’s largest producer of cement and its

output of cement reached up to 1.38 billion tons in 2008 and 1.63 billion tons

Cement production has grown about 10 percent per year over the past two

decades and is now growing even faster to keep up with massive urbanization.

Today, China produces roughly half of the total cement in the world, whereas the

next three largest producers, India, Japan, and the United States altogether

produce less than 20 percent.

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consumption in China is forecast to rise by 6% annually through 2012, reaching

1.8 billion tons, according to a new study, "Cement in China", issued by the

Freedonia Group.

The study also mentioned that construction contractors will

remain the largest market for cement in China, accounting for approximately 36%

of all cement consumption in 2012.

According to the same study, the ready-mix

concrete market will see the strongest growth, rising 9.8% per annum through

2012 to 383 million tons.

Some of the forecasted growth is projected to result

from government regulations banning on-site concrete and mortar mixing as

described in more detail under the heading “Business”-“Products and Services” of

Demand for cement used in concrete products is expected to grow

5.4% annually through 2012 to 513 million tons, driven by the growing popularity

of precast concrete with many construction contractors.

The government’s

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accounts for half of all new building activity in the world and rapid expansion

is expected to continue to 2030 as up to 400 million citizens are expected to

move into urban areas.

is expected to continue.

According to the Report of China Cities Competence,

( http://www.ce.cn/cysc/cysczh/200803/31/t20080331_15010675.shtml )

up to 1 billion people in China are expected to move into Chinese urban areas by

and non-residential buildings in China are increasingly requiring much more

5 unchanged sentences

India and the U.S.

At the present rate, it is presumed that China will

continue to be an important player in the global construction materials

marketplace for at least the next two decades.

concrete market is considered highly competitive, with over 100,000 providers.

by 2010, according to the Freedonia Group.

At the present

rate, it is presumed that China will continue to be an important player in the

global construction materials marketplace for at least the next two

concrete market is considered highly competitive, with over 10,000 providers, of

which we estimate that approximately 3,000 are ready mix concrete producers,

Global Information Inc.

1 unchanged sentence

from an extremely favorable outlook in China, where large-scale construction

projects will require significant amounts of ready-mixed concrete.

Beijing concrete market, for example, no competitor has greater than a 10%

market share.

specialize in “ready-mixed concrete”, a concrete mixture made at our production

This is the most common form of concrete, and accounts for nearly

three-fourths of all concrete produced.

Ready-mixed concrete is mixed on demand

and is shipped to worksites by concrete mixer trucks.

sector in the concrete market is growing at a fast rate, largely due to the

projects will require significant amounts of ready-mix concrete.

In the Beijing

concrete market, for example, we estimate that no competitor has greater than a

10% market share according to the Beijing Concrete Association.

to a recent article in the Economic Observer Newspaper China, the Chinese

government has reviewed its investment priorities under the 4-trillion-yuan (USD

$586 billion) stimulus package introduced in 2008, with more emphasis given to

social welfare projects, rural development, and technology

top economic planner, the National Development and Reform Commission (NDRC),

unveiled a breakdown (see chart below) of the revised stimulus package spending

during a news conference on March 6, 2009.

infrastructure development constitutes the biggest portion – USD $222.7 billion,

or nearly 38% of the total Stimulus Package.

The projects to be undertaken by

the Chinese government include railway, road, irrigation, and airport

construction, for which we can provide concrete.

than the Chinese Central Government’s USD $586 billion stimulus funds,

provincial governments are anticipated to invest another USD $1.5 trillion over

the next five years.

More than half of the total investment is for

infrastructure development.

of the Eleventh Fifth Year Plan, the PRC Government had earmarked $730 billion

prior to the stimulus plan for the expansion of the rapid railway

Some of the details include:

national rail network is set to grow by 41,000 km (50%) by

5 trillion (USD $730 billion) government spending

to consume 120 million tons of

result of the Chinese Government Stimulus Package, the demand for cement and

concrete in China is expected to significantly increase in the next several

specialize in “ready-mix concrete”, a concrete mixture made at our production

Ready-mix concrete is mixed on demand and is shipped to worksites by

concrete mixer trucks.

Currently 20% of the total concrete produced in China is

ready-mixed concrete, and 80% is mixed on the construction sites.

developed countries, 80% of the total concrete produced is ready mix concrete.

This sector in the concrete market is growing at a fast rate, largely due to the

Chinese government’s implementation of Decree #341 in 2004, which bans on-site

concrete production in over 200 cities across China, with the goal of reducing

environmental damages from onsite cement mixing and improves the quality of

environmental damages from on-site cement mixing and improving the quality of

cement used in construction.

4 unchanged sentences

We use at least 34% recyclable components in

our mixtures.

our green concrete products.

Concrete is the concrete that utilizes industrial waste, or other recycled

materials as part of its raw materials, such as the ash reclaimed from the

power-plant, the grounded wasted steel slag powder, and the wasted ore from

Green Concrete has better performance and properties

than regular concrete in terms of endurance and strength, among other

Green Concrete uses large amounts of industrial waste and reduces the amount of

cement used in the concrete admixture by 27-38%, the Company’s products are

therefore very cost effective and environmentally friendly as

power-plant, the grounded waste steel slag powder, and the waste ore from steel

Green Concrete has better performance and properties than

regular concrete in terms of endurance and strength, among other

Green Concrete uses large amounts of industrial waste, the Company’s products

are cost effective and environmentally friendly.

of “Green Concrete” include:

4 unchanged sentences

attributes (i.e.

strength, endurance, bonding, etc.)

product portfolio that serves the diverse needs of our developing customer base

strength, endurance, and

product portfolio that serves the diverse needs of our expanding customer base

and its unique construction and infrastructure projects.

1 unchanged sentence

specialize in ready-mix concrete formulations from controlled low-strength

material to high-strength concrete, each specifically formulated to meet the

individual needs of each project, we provide both industry standard and highly

innovative products, including:

Green Concrete, Self-dense Concrete, Lightweight

Aggregate Pump-able Concrete, Heavy Concrete, Macro-void Pervious Concrete, C60

Mass Concrete, Color Concrete.

material to high-strength concrete, specifically formulated to cater into the

respective requirement of each project, we provide both industry standard and

highly innovative products, including:

Green Concrete, Self-densifying Concrete,

Lightweight Aggregate Pumpable Concrete, Heavy Concrete, Macro-void Pervious

Concrete, C60 Mass Concrete, Color Concrete, etc.

Manufacturing

is a mixture of paste and aggregates (sand & rock).

usually composed of cement and water, coating the surface of the fine sand

and coarse aggregates such as rocks and binding them together into a

rock-like mass known as concrete.

comprise 60 to 75 percent of the total volume of concrete.

size of the aggregate mixture depends on the thickness and purpose of the

final concrete product.

A continuous gradation of particle sizes is

desirable for efficient use of the paste.

In addition, aggregates should

be clean and free from any matter that might affect the quality of the

The paste is usually

composed of cement and water, coating the surface of the fine sand and coarse

aggregates such as rocks and binding them together into a rock-like mass known

comprise approximately 61 percent of the total volume of concrete.

size of the aggregate mixture depends on the thickness and purpose of the final

concrete product.

A continuous gradation of particle sizes is desirable for

efficient use of the paste.

In addition, aggregates should be clean and free

from any matter that might affect the quality of the concrete.

to achieving a strong, durable concrete rests on the careful proportioning and

mixing of the ingredients.

A concrete mixture that does not have enough paste to

Concrete mixture that does not have enough paste to

fill all the voids between the aggregates will be difficult to place and will

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the fresh concrete and the required durability and strength for the hardened

Typically, a mixture is by volume about 10 to 15 percent cement, 60 to

75 percent aggregates and 15 to 20 percent water.

Entrained air bubbles in many

concrete mixtures may also take up another 5 to 8 percent.

Typically, a mixture is by volume approximately 16 percent cement, 61

percent aggregates and 18 percent water.

Entrained air bubbles in many concrete

mixtures may also take up another 3 percent.

character of concrete is determined by the quality of the paste.

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incorporated in concrete to control cracking or improve abrasion and impact

Manufacturing

following is a flow chart of the manufacturing process of our main product—

ready-mix concrete:

mixing concrete batch plants including 4 production lines, which are stationary,

and plant-mounted mixer that mixes the concrete before it is discharged into a

And we use the truck mixers primarily as an agitating

haul unit at a central mix operation.

Control Laboratories

Most common admixtures we use include pumping agent,

superplasticizer, and expansive admixtures.

aggregates, water, and the cement are combined, the mixture remains in a fluid

condition for about four to six hours during which we use the agitator trucks to

transport, place and finish the concrete in its final location.

We have around

94 truck drivers to operate and deliver the concrete to customers mainly in the

Beijing area, Tangshan, Hebei Province, and Xi’an area.

We intend to hire more

drivers to accommodate our growing business.

Quality Control

proportioning of a concrete mix design should result in an economical and

2 unchanged sentences

We have laboratories on the site of each plant, performing quality

control tests (“Q/C Test”) throughout our manufacturing process to ensure that

our products are accustomed to the needs of the customers.

During various stages

of the ready-mix concrete manufacturing, the labs inspect the raw materials,

such as the sand, rocks and water, and determine the proportion of the

ingredients of the concrete in accordance with the specifications received from

the customers, before the mixing of aggregates and paste.

Right after the mixing

process, the labs will also perform tests on the fluid concrete with respect to

its minimum cement content, air content, slump, maximum size of aggregate,

strength, etc.

The Company, over the years, has developed some expertise in

selecting the proportions based on previously developed guidelines and

We have established methods for selecting the proportions for

concrete for each batch and producing environmental friendly concrete with best

control tests throughout our manufacturing process to ensure that our products

are accustomed to the needs of the customers.

During various stages of the

ready-mix concrete manufacturing, the labs inspect the raw materials, such as

the sand, rocks and water, and determine the proportion of the ingredients of

the concrete in accordance with the specifications received from the customers,

before the mixing of aggregates and paste.

Right after the mixing process, the

labs will also perform tests on the fluid concrete with respect to its minimum

cement content, air content, slump, maximum size of aggregate, strength, etc.

The Company, over the years, has developed some expertise in selecting the

proportions based on previously developed guidelines and experience.

established methods for selecting the proportions for concrete for each batch

and producing environmental friendly concrete with best

utilize fly ash, waste ore, slag or other cementitious materials, which

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appropriate specifications and in general should be clean, strong and

apply some air-entraining and water reducing admixtures into the

ready-mixed concrete to adjust the rate of setting and strength

development of our concrete.

apply some air-entraining and water reducing admixtures into the ready-mix

concrete to adjust the rate of setting and strength development of our

Company tests the absolute volume of the concrete to determine the safety

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processes allow the Company to produce a more cost efficient “Green Concrete”

while maintaining the product’s integrity.

aggregates, water, and the cement are combined, the mixture remains in a fluid

condition for about four to six hours during which we use the agitator trucks to

transport, place and finish the concrete in its final location.

We have around

80 truck drivers operating and delivering the concrete to customers mainly in

the Beijing area and Tangshan, Hebei Province.

while maintaining the product’s quality.

and Marketing

marketing efforts are geared towards advancing Beijing Concrete as the supplier

of choice for building China’s most modern and challenging projects.

constantly seeking ways to raise its profile and leverage additional publicity.

To this end, we plan to expand Beijing Concrete’s presence at leading

construction industry events and in periodicals to build on its successful

The primary goal when expanding into new markets is to reinforce the

sales effort by promoting positive testimonials and success stories from the

company’s strong base of high profile clients.

marketing efforts are geared towards advancing the Company as the supplier of

choice for helping to build China’s most modern and challenging projects.

constantly seeking ways to raise our profile and leverage additional publicity.

To this end, we plan to expand the Company’s presence at leading construction

industry events and in periodicals to build on its successful reputation.

primary goal when expanding into new markets is to reinforce the sales effort by

promoting positive testimonials and success stories from the Company’s strong

base of high profile clients.

marketing strategy of the Company relies primarily on direct sales and we

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(i) by our sales

department, which consists of 5-6 employees, conducts the market promotion and

development and also collects the feedback from the customers on the Company’s

(ii) by the salesmen, currently around 10 people, that we contract

with to expand our client base;

and (iii) by references from our current

customers and our raw material suppliers.

department, which consists of 5-6 employees in each station, conducts the market

promotion and development and also collects the feedback from the customers on

the Company’s products;

(ii) by the salesmen, currently around 10 people, with

whom we contract to expand our client base;

and (iii) by references from our

current customers and our raw material suppliers.

Due to positive prior

experience with the government projects and extensive work with the PRC

government on such projects in the past, we believe that we will continue to

receive access to such projects in the future.

Materials and Suppliers

2 unchanged sentences

Our primary suppliers of each are:

Zhenxing Cement Factory, Hebei Wushan Cement Factory,

Luan Xinmaopai Cement Factory

Xingda Fly Ash Co., Baolu Tongda Co., Zhongxin Shenyuan Fly

Zhenxing Cement Factory, Hebei Wushan Cement Factory, Hebei Luan Xian

Maopai Cement Factory

Xingda Fly Ash Co., Baolu Tongda Co., Zhongxin Shenyuan Fly Ash

Shenshou Slag Co., Tangshan Slag Co., Beijing Liuhuan Construction

Trade Center Co.

Zhou Hongyuan Sand & Gravel Factory, Zhuozhou Shuishang Leyuan Sand

Hongyuan Sand & Gravel Factory, Zhuozhou Shuishang Leyuan Sand &

Gravel Factory

2 unchanged sentences

replace them, if necessary, without material difficulties.

In particular, we do

not expect to experience a shortage of cement, the main material for

manufacturing our product, since it is usually readily available and we have

long-term contracts with three large cement manufacturers to ensure the constant

supplier of truck transit mixers and concrete transport pumps is Sanyi Zhonggong

(“Sanyi Zhonggong”), which is the largest concrete production equipment

manufacturer in the world.

We have purchased over US$5.2 million of equipment

from Sanyi Zhonggong.

Pursuant to a Strategic Agreement with Sanyi Zhonggong

dated December 3, 2009, we agreed to use Sanyi Zhonggong Ltd.

preferred equipment supplier, and Sanyi Zhonggong in turn will provide discounts

on the purchase prices of the equipment, 24/7 customer service, as well as

training services to our employees.

For potential construction projects

undertaken by Sanyi Zhonggong in China, we will be recommended as their

preferred ready-mix concrete provider.

In addition, Xiamen XGMA

Machinery Co., Ltd., the major supplier of our forklifts, intends to form a

similar strategic cooperation relationship with us.

clients are mostly property developers and industrial companies, as well as PRC

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The PRC state-owned companies, which are our customers,

include China Railway, China Construction Group, Beijing Construction

Corporation and Beijing Chemical and Coking.

The Company had two major

customers, which represented 25% and 12% of the Company’s total sales for the

fiscal year ended May 31, 2009.

And the Company had sales to one major customer,

which represented 17% of the Company’s total sales for the fiscal year ended May

include China Railway Construction Group (“CRCG”), China Construction Group

(“China Construction”), Beijing Construction Corporation and Beijing Chemical

one major customer, China Railway Construction Group, which represented 14% of

the Company’s total sales for the fiscal year ended May 31, 2010.

to two major customers, China Railway Construction Group and Guangzhou Tianli

Construction Group, which represented 25% and 12% of the Company’s total sales

for the fiscal year ended May 31, 2009.

customers, China Railway Construction Group, and Guangzhou Tianli Construction

Group, accounted for 26% and 10% of the Company’s accounts receivable balance at

May 31, 2010.

China Railway Construction Corp.

comprised 33% of the

Company’s accounts receivable balance at May 31, 2009.

following table summarizes some of the high-end residential and commercial real

estate development projects, which we have completed.

Zhongxin Semiconductor Company

estate development projects, which are currently under construction or we

completed as noted including those completed in fiscal years 2010 and

Project Names

Start/Duration

Concrete Supplied

Zhongxin Semiconductor Company (Completed)

total 140,000 cubic meters

square meters construction space

Rainbow City Project

Rainbow City Project (Completed)

100,000 cubic meters

square meters construction space

Generation semiconductor Company

Generation semiconductor Company (Completed)

70,000 cubic meters

square meter construction

World Trade CBD project

square meter construction space

World Trade CBD project (Completed)

90,000 cubic meters

square meter construction space

Wanjing International Mansion

Wanjing International Mansion (Completed)

180,000 cubic meters

square meters construction space

Central Plaza

cubic meters in total from September

square meters construction

still in progress)

to April 2009

Jiahua Project (project still in progress)

cubic meters in total from September 2007 to November

Zhuang (project still in progress)

cubic meters in total from June 2007 to November 2009

Xiangbo Yuan (project still in progress)

cubic meters in total from June 2007 to November 2009

Fuli Real Estate Company

construction space

still in progress)

square meters of construction space (project still in

cubic meters in total from June 2006 to February

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There are approximately 130 concrete mixture stations in the Beijing

The industry is highly segmented, with no single supplier having greater

than a 10% market share.

We currently have an

estimated market share of 3% in the ready mix concrete market in

market, we compete with national, regional and local construction

According to our estimates, no single supplier has greater than a 10%

market share, which results in this industry being highly segmented.

currently have an estimated market share of 3% in the ready-mix concrete market

Beijing market, we compete with national, regional and local construction

Some of our competitors have greater financial and other

2 unchanged sentences

Center, Beijing Jian Gong Group Concrete Center, and Beijing Gaoqing Concrete

compete primarily on the basis of quality, technological innovation and price.

We bid on projects which are awarded through a competitive bid process.

are usually awarded to the lowest bidder, although other factors such as shorter

delivery schedules are also taken into consideration.

In 2009, the Beijing government issued a series of policies to

encourage concrete manufacturers to upgrade their transportation vehicles to

those models that are environmentally friendly.

Vehicles that cannot meet the

environmentally friendly criteria will be restricted in going into the 5 th ring of

Therefore, concrete manufacturers that cannot afford

replacing their truck transit mixers with the environmentally friendly models

will be banned from delivering the concrete mix and eventually be eliminated

from the concrete industry.

compete primarily on the basis of quality, technological innovation, customer

service, and pricing of our products.

We win projects which are awarded through

a competitive bidding process based on our competitive pricing.

usually awarded to the lowest bidder, if other conditions are the same, although

other factors such as shorter delivery schedules are also taken into

consideration.

Our Competitive

us with other companies in the concrete industry in Beijing and in the Jingjin

area, we believe that Beijing Concrete has the following competitive

us with other companies in the concrete industry in Beijing and in the Tianjin

area, we believe that the Company has the following competitive

(1) Environmentally friendly

Concrete produces all types of concrete products as well as specialty concrete

for varied industry uses.

After many years of research and experiment, we are

applying approximately 34% of fly ash (from coal fired power plants) and some

mining waste into our concrete products.

produce all types of concrete products including specialty concrete for varied

industry uses.

Capitalizing on our research and development, we extensively use

recycled materials such as fly ash (from coal fired power plants) and mining

waste in our production with the share of these materials of approximately 34%

of other raw materials used by us.

In doing so, we not only help reduce

6 unchanged sentences

tax and franchise tax in China.

(2) Strict and effective quality management

Beijing Concrete

has developed an effective quality management system that covers all aspects of

the company’s operation, including planning, budgeting, purchasing and

In every step, we have fully trained, experienced and skilled

They are working in concert to ensure our product’s quality and

timely delivery.

From signing contracts to finishing a project, the company has

a quality follow up supervising team to make sure that our concrete matches our

clients’ engineering designs exactly.

(2) Strict and effective quality

management system.

developed an effective quality management system that covers all aspects of our

operations, including planning, budgeting, purchasing and production.

step, not only do we have fully trained, experienced and skilled employees that

are working in concert to ensure our product’s quality and timely delivery, we

also implemented the computer-controlled Concrete Enter Price Management System

(CEM 2008 System) to coordinate and oversee the manufacturing, bookkeeping and

shipping process.

From signing contracts to finishing a project, we

have a quality follow up supervising team to make sure that our concrete matches

our clients’ engineering designs exactly.

All pump vehicles and truck transit

mixers are installed with GPS tracking systems, which ensure the quality control

and safe delivery of the concrete mix.

quality supervisory staff on each construction site is responsible for

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for every cubic meter of concrete we produce and deliver.

(3) We also have lower production costs by

smart outsourcing and quality engineering.

(3) We also have lower production costs

by smart outsourcing and quality engineering.

80% of concrete costs come from raw materials, such as cement, sands, fly ash,

The costs of materials have a direct impact on our production

The costs of materials have a direct impact on our production costs.

We compare several suppliers’ quotes before we make final purchases.

5 unchanged sentences

we have excellent mixing formulas while achieving the required quality.

scientific formula of each type of concrete, in Management's view, gives us 3-5%

lower costs than our competitors.

our company has significant advantages when compared with companies in the same

We believe our tremendous track record in the industry, effective

management, solid clientele base, lower production costs and higher than the

industry average profit margin puts us at the top in the industry.

believe the scientific formula of each type of concrete reduces our costs to

levels 3% to 5% lower than our competitors.

believe our tremendous track record in the industry, effective management, solid

clientele base, lower production costs and higher than the industry average

profit margin puts us at the top in the industry.

(4) Maintenance of key

relationships

successfully built long-term cooperative relationships with China’s top

construction companies through our services.

Our reputation and good record will

help us gain new business from existing customers and new

instance, on December 3, 2009, the Company entered into a Strategic Agreement

with Sanyi Zhonggong Ltd.

(“Sanyi Zhonggong”), our major equipment supplier,

whereby the Company agreed to choose Sanyi Zhonggong Ltd.

as its preferred

equipment supplier, and Sanyi Zhonggong in return will provide discounts on the

purchase prices of the equipment as well as training services to the Company’s

For potential construction projects undertaken by Sanyi Zhonggong in

China, we will be recommended by Sanyi Zhonggong as their preferred ready-mix

concrete provider.

(1) Focus on The Infrastructure

Industries and Develop New Relationships .

sales people will focus on developing relationships with the government, general

contractors, architects, engineers, and other potential sources of new business

in our target markets.

We will actively monitor and analyze China’s

infrastructure construction plan to ensure that we direct our resources at the

center of the developing area and have the opportunities to bid on the potential

business at the earliest time.

(2) Capacity Expansion via Building New

We will add three to five batching plants during the fiscal year

2011 in order to meet the requirements of existing contracts and anticipated

We plan to add more stationary and mobile stations in 2011 as part of

our long-term expansion plans due to very attractive margins and high return on

(3) Cooperation with other concrete

will consider cooperating with other concrete companies in certain area or for

certain projects.

The cooperation will include but not be limited to lease,

co-construct a new plant and profit sharing, or an M&A transaction.

believe that by cooperating with local concrete companies, we will save capital

and time compared with building a new plant by ourselves.

And it will also help

us to develop our relationship with local customers and suppliers.

and Development

materials companies are under extreme pressure to respond quickly to industry

demands with new designs and product innovations that support rapidly changing

technical demand and regulatory requirements.

We devote a substantial amount of

attention to the research and development of advanced construction materials

that meet the demands of project specific needs while striving to lead the

industry in value, materials and processes.

We have sophisticated in house

R&D and testing facilities, a highly technical onsite team, access to highly

specialized market research, cooperation with a leading research institution,

experienced management and advisory board, and close relationships with leading

concrete materials experts.

Our research and development expense amounted to

approximately $43,200 and $25,800 for the years ended May 31, 2009 and 2008,

respectively.

research laboratory led by top professional engineers conducts extensive

experiments to ensure that we have excellent mixing formulas while achieving the

required quality.

This includes production of innovative concrete admixtures to

supply the company.

Admixtures are chemical raw materials used for production of

Admixture is also one of the key materials that affect the quality of

Through technology innovation, our admixture products help the company

produce environmentally friendly and energy-saving concrete.

engaged in production of construction materials are under extreme pressure to

respond quickly to industry demands with new designs and product innovations

that support rapidly changing technical demand and regulatory requirements.

devote a substantial amount of attention to the research and development of

advanced construction materials that meet the demands of project specific needs

while striving to lead the industry in value, materials and processes.

sophisticated in-house R&D and testing facilities, a highly technical onsite

team, the access to highly specialized market research, the cooperation with a

leading research institution, an experienced management and advisory board, and

close relationships with leading concrete materials experts.

A total of 20

employees are currently working for our R&D department.

Our research and

development expenses amounted to approximately $55,723 and $43,200 for the years

ended May 31, 2010 and 2009, respectively.

research laboratory led by a team of 20 engineers and technicians conducts

extensive experiments to ensure that we have excellent mixing formulas while

achieving the required quality.

This includes production of innovative concrete

admixtures to supply the company.

Admixtures are chemical raw materials used for

production of concrete.

Admixture is also one of the key materials that affect

the quality of concrete.

Through technology innovation, our admixture products

help the company produce environmentally friendly and energy-saving

to conduct research in developing new raw materials.

2 unchanged sentences

our product quality.

Company has dedicated itself to testing and research of ready-mix

The Company has been developing and researching the raw

material mixture ratios, which are crucial to the quality of our products, by

our advanced testing facilities and the 17 years of testing experience of our

technical and engineering staff.

dedicated ourselves to testing and research of ready-mix concrete.

have been developing and researching the raw material mixture ratios, which are

crucial to the quality of our products, by our advanced testing facilities and

the 17 years of testing experience of our technical and engineering

December 31, 2009, the Company entered into a three-year agreement with the

Institute of Building Materials, a subsidiary of the China Academy of Building

Research ("CABR") (the “Agreement”).

Under the Agreement, the Institute of

Building Materials will provide its technical research, development and support

exclusively to us for an annual payment of RMB 350,000 (or US$51,000).

Institute of Building Materials will also provide training courses to our

We are allowed to list the Institute of Building Materials as our

technological partner in its marketing materials, and the Institute of Building

Materials has agreed to use its relationships and brand influence in the

construction industry to assist us in its business development.

have any patents or other registered intellectual property.

Currently, we are in

the process of applying to register two of our trademarks.

To protect our

unregistered intellectual property, we enter into confidentiality agreements

with our officers and employees in our R&D Department.

A confidentiality

agreement will cover three years after such officer or employee leaves the

Company, and any breach of the agreement will subject such person to liquidated

damages of RMB 10,000 and any other losses incurred by the breach.

Environmental

1 unchanged sentence

promulgated by the Ministry of Construction and the State Environmental

Protection Administration.

Some specific environmental regulations apply to

sealed transportation of dust materials and final products, non-open storage of

sand and gravel, as well as reduction of noise and dust pollution on production

site and encouraged use of waste materials.

The governmental regulatory

authorities conduct periodic inspections.

We have met all the requirements in

the past inspections.

We are one of the companies in the industry that have been

awarded the honor of “Green Concrete Producer” by the PRC

Protection Administration in China.

Some specific environmental regulations

apply to sealed transportation of dust materials and final products, non-open

storage of sand and gravel, as well as reduction of noise and dust pollution on

production site and encouraged use of waste materials.

In 2009, the Beijing

government issued a series of policies to encourage concrete manufacturers to

upgrade their transportation vehicles to those models that are environmentally

Vehicles that cannot meet the environment friendly criteria will be

restricted in going into the 5 th ring of

addition, the governmental regulatory authorities conduct periodic inspections

We have met all the requirements in the past inspections.

The Company has

set up and documented its environment management system according to

GB/T24001-2004 Guidance.

The Company has also invested:

1) $29,411 for powder

silo dust equipment, which reduces the release of dust when delivering the

concrete mix;

2) $14,705 for sand and gravel separators, which recycle and reuse

the discharged concrete;

3) $14,705 for 3 sedimentation tanks to recycle the

water in the manufacturing process;

and 4) $294,117 for a warehouse to store

sand and gravel to reduce the air pollution.

Because of our

dedication to be environmentally friendly, we are one of the companies in the

industry that have been awarded the honor of “Green Concrete Producer” by the

PRC government.

manufacturing operations are primarily located in northeastern China, which is

cold during the winter months.

During such time, we are able to manufacture our

advanced ready-mix concrete material;

however, many construction projects

operate on an abbreviated work schedule, if at all.

products and services are subject to regulation by governmental agencies in the

PRC, and Beijing City and

Hebei Province.

Business and company registrations, along with the products, are

certified on a regular basis and must be in compliance with the laws and

regulations of the PRC and provincial and local governments and industry

agencies, which are controlled and monitored through the issuance of licenses.

All of the Company’s products have passed the ISO9001-2005 Certification Quality

System and Integrated Certification System including Quality Management System

Certification, Environmental Management System Certification and Occupational

Health and Safety Management System Certification issued by the Beijing Zhong

Jian Xie Certification Centre.

company has been in compliance with all registrations and requirements for the

issuance and maintenance of all licenses and certificates required by the

applicable governing authorities, including the Ministry of Construction and the

Beijing Administration of Industry & Commerce.

The Ministry of Construction

awards Level II and Level III qualifications to concrete producers in the PRC

PRC, Beijing City and Hebei Province.

Business and company registrations,

along with the products, are certified on a regular basis and must be in

compliance with the laws and regulations of the PRC and provincial and local

governments and industry agencies, which are controlled and monitored through

the issuance of licenses.

All of the Company’s products have passed the

ISO9001-2000 Certification Quality System and Integrated Certification System

including Quality Management System Certification, Environmental Management

System Certification and Occupational Health and Safety Management System

Certification issued by the Beijing Zhong Jian Xie Certification

been in compliance with all registrations and requirements for the issuance and

maintenance of all licenses and certificates required by the applicable

governing authorities, including the Ministry of Construction and the Beijing

Administration of Industry & Commerce.

The Ministry of Construction awards

Level II and Level III qualifications to concrete producers in the PRC

construction industry, based on criteria such as production capacity, technical

5 unchanged sentences

We are a Level

II concrete producer.

September 15, 2009, we had 150 employees.

The following table sets forth the

number of our full-time employees by department as of September 15,

Management & Sales

III concrete producer.

August 27, 2010, we had 308 employees.

The following table sets forth the number

of our full-time employees by department as of August 27, 2010:

Purchase & Inventory

& Engineering Staff

Administrative

& Heavy Equipment Operators

required by applicable PRC law, we have entered into employment contracts with

14 unchanged sentences

maintain worker's employee insurance for our employees.

maintain any other business, liability or key employee insurance.

We provide social

welfare insurance for our employees.

We also provide life insurance for our

Other than the above mentioned, we do not maintain any other business,

liability or key employee insurance.

principal executive offices are located at Room 1906, Shidai Caifu Tiandi

Building, 1 Hangfeng Road, Fengtai District, Beijing, China 100070, and our

telephone number is 011-86-10-5809-0110.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business