What changed in this filing

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Item 2. Properties

2021-04-19 compared with 2011-09-26 · 58 added, 17 removed, 0 unchanged (100% of the section changed)

Our headquarters is located at Hebei Baoding Orient Paper Milling Company Limited, Science Park, Juli Rd, Xushui County, Baoding City, Hebei Province, People’s Republic of China.

The headquarters and our main production base, separated by approximately 4 kilometers apart in Xushui County of the city of Baoding, have a total area of 258.06 mu or approximately 42.50 acres.

All land in the PRC is owned by the government and cannot be sold to any individual or entity.

Instead, the government grants landholders a "land use right" after a purchase price for such "land use right" is paid to the government.

The "land use right" allows the holder the right to use the land for a specified long-term period of time and enjoys all the incidents of ownership of the land.

The following are the details regarding HBOP’s land use rights with regard to the land that it uses in its business.

The land of our main production base, comprising 200 mu of land, is leased from the local government pursuant to a 30 year lease that expires December 31, 2031.

The lease requires an annual payment of approximately $17,551 (RMB 120,000) due by June 30 every year.

The remaining 58.06 mu of land on which our administration office and other production facilities (including the new digital photo paper production equipments) are situated is obtained pursuant to a land use right granted by the local government on March 10, 2003.

HBOP obtained the right to use the 58.06 mu of land for 50 years through March 10, 2053.

The purchase price of the land use right was approximately $2,189,328 (RMB14,984,200), which was fully paid on March 8, 2005.

On November 25, 2009, Baoding Shengde entered into an asset purchase agreement with Hebei Shuangxing Paper Co., Ltd.

to acquire two coating production lines of digital photo paper, for a total purchase price of RMB 93 million Yuan (approximately $13.6 million).

Of the RMB 93 million Yuan, RMB 30 million Yuan was paid in cash by Baoding Shengde, the remaining cash payment in the amount of RMB 63 million Yuan was advanced by HBOP on behalf of Baoding Shengde and paid to the seller as of December 31, 2009.

Our facilities include a total of 8 production lines, 5 warehouses, 2 office buildings, 2 cafeterias, and 1 dormitory.

Major equipment includes 6 papermaking machines owned by HBOP and 2 coating production lines of digital photo paper that are owned by Baoding Shengde.

All costs of our facilities have been paid in full.

Our headquarters are

located at Hebei Baoding Dongfang Paper Milling Company Limited, Juli Road, Xushui District, Baoding City, Hebei Province, China.

We have two main production bases, one production base located approximately 4 kilometers away from our headquarters, and the second

production base located in Wei County, Xingtai City, Hebei Province.

All land in the PRC

is owned by the government and cannot be sold to any individual or entity.

Instead, the government grants landholders a “land

use right”

after a purchase price for such “land use right”

is paid to the government.

The “land use right”

allows the holder the right to use the land for a specified long-term period of time and enjoys all the incidents of ownership

The following are the details regarding Dongfang Paper’s land use rights with regard to the land that it uses

in its business.

The land of our first

production base (the “Xushui Paper Mill”), comprising 200 mu, or approximately 33 acres, of land, is leased from the

local government pursuant to a 30 year lease that expires December 31, 2031.

The lease requires an annual payment of approximately

$ 17,406 (RMB 120,000) due by June 30 every year.

of the second production base (the “Xingtai Paper Mill”), comprising 300 mu, or approximately 50 acres, of land,

is owned by Hebei Tengsheng Paper Co., Ltd., a limited liability company organized under the laws of the PRC.

(“Hebei

Tengsheng”).

On June 25, 2019, Dongfang Paper entered into an acquisition agreement with the shareholder of Hebei

Tengsheng Paper Co., Ltd., pursuant to which Dongfang Paper agreed to acquire Hebei Tengsheng for the consideration in the

amount of RMB 320 million (approximately $46 million), and upon full payment for the consideration Hebei Tengsheng will

become a wholly owned subsidiary of Dongfang Paper that manufactures and sells tissue paper products.

The closing of the

acquisition of Bebei Tengsheng has not occurred.

The office building

and essentially all industrial-use buildings at our headquarters (the “Industrial Buildings”) are leased to us by a

related party Hebei Fangsheng Real Estate Development Co.

(“Hebei Fangsheng”), for a term of up to three years

starting August 2013, with an annual rental payment of approximately $145,052 (RMB1,000,000).

The lease agreement expired in August

On August 9, 2016 and August 6, 2018, the Company entered into a supplementary agreement with Hebei Fangsheng, who agreed

to extend the lease term to August 9, 2022, with the same rental payment as original lease agreement.

See “Item 13.

Relationships and Related Transactions, and Director Independence - Sale of Headquarters Real Properties to a Related Party.”

In the spring of 2010,

we initiated the process of acquiring approximately 667,000 square meters of land adjacent to our first production base, Xushui

Paper Mill and subsequently received governmental approval for our capacity expansion plan.

On April 13, 2012, we closed our acquisition

of 58,566 square meters of land and secured all associated land use right permits (the “Xushui Mill Annex”).

acquisition of the Xushui Mill Annex, we paid a total of $7.5 million for various payments of compensation, taxes, and recording

fees to the sellers and the local government.

On October 26, 2012, we made a prepayment in the amount of $1,404,460 for the purchase

of land use right from the local residents’

council for approximately 65,023 square meters of land located inside of our

Xushui Paper Mill.

In December 2016, the Company completed the purchase of such land use right, with a land use term of 50 years

expiring in 2066.

As of December 31,

2020, our facilities include a total of nine production lines, among which PM7 is currently idle and under renovation, and PM4

and PM5 (both for digital photo paper) has been suspended, nine warehouses, two office buildings, two cafeterias, and five dormitories.

Legal Proceedings

Mine Safety Disclosures

Not Applicable.

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/A

Item 2. Properties