2017 Q4 Form 10-Q Financial Statement

#000114420417058637 Filed on November 14, 2017

View on sec.gov

Income Statement

Concept 2017 Q4 2017 Q3 2016 Q4
Revenue $4.650M $1.142M $2.400M
YoY Change 93.75% -18.45% 50.0%
Cost Of Revenue $4.200M $1.100M $2.010M
YoY Change 108.96% -28.71% 40.56%
Gross Profit $450.0K $41.95K $380.0K
YoY Change 18.42% -129.4% 123.53%
Gross Profit Margin 9.68% 3.67% 15.83%
Selling, General & Admin $800.0K $382.3K $920.0K
YoY Change -13.04% 138.93% 3.37%
% of Gross Profit 177.78% 911.32% 242.11%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $330.0K $193.2K $420.0K
YoY Change -21.43% 54.02% 23.53%
% of Gross Profit 73.33% 460.49% 110.53%
Operating Expenses $800.0K $382.3K $920.0K
YoY Change -13.04% 145.68% 3.37%
Operating Profit -$350.0K -$340.3K -$540.0K
YoY Change -35.19% 14.11% -25.0%
Interest Expense -$90.00K $89.21K -$80.00K
YoY Change 12.5% 3.83% 0.0%
% of Operating Profit
Other Income/Expense, Net -$30.00K -$86.53K $0.00
YoY Change 4.02%
Pretax Income -$470.0K -$426.9K -$620.0K
YoY Change -24.19% 11.91% -22.5%
Income Tax $0.00 $51.00 $0.00
% Of Pretax Income
Net Earnings -$470.0K -$419.0K -$620.0K
YoY Change -24.19% 9.78% -18.42%
Net Earnings / Revenue -10.11% -36.69% -25.83%
Basic Earnings Per Share -$0.06
Diluted Earnings Per Share -$66.48K -$0.06 -$94.37K
COMMON SHARES
Basic Shares Outstanding 7.073M shares 7.073M shares 6.653M shares
Diluted Shares Outstanding 7.073M shares

Balance Sheet

Concept 2017 Q4 2017 Q3 2016 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $280.0K $20.00K $120.0K
YoY Change 133.33% -92.59% -72.09%
Cash & Equivalents $282.2K $20.83K $124.6K
Short-Term Investments
Other Short-Term Assets $3.650M $4.520M $3.110M
YoY Change 17.36% 123.76% -18.8%
Inventory $2.064M $5.150M $4.607M
Prepaid Expenses $186.5K $281.9K
Receivables $12.22M $7.940M $7.270M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $18.76M $17.63M $15.11M
YoY Change 24.09% 9.98% -22.79%
LONG-TERM ASSETS
Property, Plant & Equipment $19.99M $17.29M $17.13M
YoY Change 16.69% -17.07% 62.29%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets $22.68M $22.53M $22.20M
YoY Change 2.13% -4.21% -10.38%
TOTAL ASSETS
Total Short-Term Assets $18.76M $17.63M $15.11M
Total Long-Term Assets $22.68M $22.53M $22.20M
Total Assets $41.43M $40.16M $37.32M
YoY Change 11.02% 1.54% -15.86%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $3.980M $147.0K $3.400M
YoY Change 17.06% -96.17% -30.33%
Accrued Expenses
YoY Change
Deferred Revenue $513.4K
YoY Change
Short-Term Debt $7.224M $6.010M $5.761M
YoY Change 25.4% -0.66% -28.51%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $14.14M $13.04M $10.61M
YoY Change 33.21% 16.99% -24.07%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00 $0.00 $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $14.14M $13.04M $10.61M
Total Long-Term Liabilities $0.00 $0.00 $0.00
Total Liabilities $14.14M $13.04M $10.61M
YoY Change 33.21% 16.99% -24.07%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock $12.06M $12.06M $12.06M
YoY Change 0.0% 3.89%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $27.25M $27.07M $26.71M
YoY Change
Total Liabilities & Shareholders Equity $41.43M $40.16M $37.32M
YoY Change 11.02% 1.55% -15.86%

Cashflow Statement

Concept 2017 Q4 2017 Q3 2016 Q4
OPERATING ACTIVITIES
Net Income -$470.0K -$419.0K -$620.0K
YoY Change -24.19% 9.78% -18.42%
Depreciation, Depletion And Amortization $330.0K $193.2K $420.0K
YoY Change -21.43% 54.02% 23.53%
Cash From Operating Activities -$780.0K $0.00 $320.0K
YoY Change -343.75% -100.0% -114.48%
INVESTING ACTIVITIES
Capital Expenditures $0.00 -$410.0K
YoY Change -100.0% -278.26%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00
YoY Change -100.0%
Cash From Investing Activities $0.00 $0.00 -$410.0K
YoY Change -100.0% -116.53%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 1.030M 20.00K -60.00K
YoY Change -1816.67% -45.45%
NET CHANGE
Cash From Operating Activities -780.0K 0.000 320.0K
Cash From Investing Activities 0.000 0.000 -410.0K
Cash From Financing Activities 1.030M 20.00K -60.00K
Net Change In Cash 250.0K 20.00K -150.0K
YoY Change -266.67% -71.43% -193.75%
FREE CASH FLOW
Cash From Operating Activities -$780.0K $0.00 $320.0K
Capital Expenditures $0.00 -$410.0K
Free Cash Flow -$780.0K $730.0K
YoY Change -206.85% -129.92%

Facts In Submission

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CY2016Q4 us-gaap Inventory Raw Materials Net Of Reserves
InventoryRawMaterialsNetOfReserves
519500 USD
CY2017Q3 us-gaap Inventory Finished Goods Net Of Reserves
InventoryFinishedGoodsNetOfReserves
3943704 USD
CY2016Q4 us-gaap Inventory Finished Goods Net Of Reserves
InventoryFinishedGoodsNetOfReserves
3684639 USD
CY2017Q3 us-gaap Inventory Work In Process Net Of Reserves
InventoryWorkInProcessNetOfReserves
612238 USD
CY2016Q4 us-gaap Inventory Work In Process Net Of Reserves
InventoryWorkInProcessNetOfReserves
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CY2017Q3 us-gaap Customer Deposits Current
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CY2017Q3 nfec Value Added Taxes Payable Current
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CY2017Q3 nfec Accrued Operating Expenses Current
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CY2016Q4 nfec Accrued Operating Expenses Current
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387981 USD
CY2017Q3 us-gaap Other Liabilities Current
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45764 USD
CY2016Q4 us-gaap Other Liabilities Current
OtherLiabilitiesCurrent
50372 USD
us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
0.25 pure
us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate
-177416 USD
us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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us-gaap Income Tax Reconciliation Nondeductible Expense
IncomeTaxReconciliationNondeductibleExpense
180139 USD
us-gaap Income Tax Reconciliation Nondeductible Expense
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nfec Income Loss Before Income Taxes
IncomeLossBeforeIncomeTaxes
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nfec Income Loss Before Income Taxes
IncomeLossBeforeIncomeTaxes
1119393 USD
CY2017Q3 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
7073289 shares
CY2017Q3 us-gaap Common Stock Par Or Stated Value Per Share
CommonStockParOrStatedValuePerShare
0.001
CY2016Q4 us-gaap Common Stock Par Or Stated Value Per Share
CommonStockParOrStatedValuePerShare
0.001
CY2017Q3 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
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CY2016Q4 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
50000000 shares
CY2017Q3 us-gaap Common Stock Shares Issued
CommonStockSharesIssued
7073289 shares
CY2016Q4 us-gaap Common Stock Shares Issued
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7073289 shares
CY2016Q4 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
7073289 shares
CY2017Q3 us-gaap Commitments And Contingencies
CommitmentsAndContingencies
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CY2016Q4 us-gaap Commitments And Contingencies
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us-gaap Variable Interest Entity Ownership Percentage
VariableInterestEntityOwnershipPercentage
1 pure
us-gaap Use Of Estimates
UseOfEstimates
<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"></div> <table style="BORDER-BOTTOM: 0px solid; BORDER-LEFT: 0px solid; LINE-HEIGHT: 107%; WIDTH: 100%; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; BORDER-TOP: 0px solid; BORDER-RIGHT: 0px solid" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 27pt; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="36"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: Wingdings; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> </font><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>l</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>Use of estimates</font></div> </td> </tr> </table> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.</font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>
us-gaap Net Income Loss
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-1104531 USD
us-gaap Net Income Loss
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us-gaap Proceeds From Minority Shareholders
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nfec Transfer From Construction In Progress To Plant And Equipment
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0 USD
us-gaap Net Income Loss Attributable To Noncontrolling Interest
NetIncomeLossAttributableToNoncontrollingInterest
-7956 USD
us-gaap Net Income Loss Attributable To Noncontrolling Interest
NetIncomeLossAttributableToNoncontrollingInterest
0 USD
CY2017Q3 us-gaap Concentration Risk Percentage1
ConcentrationRiskPercentage1
0.1 pure
CY2016Q3 us-gaap Concentration Risk Percentage1
ConcentrationRiskPercentage1
0.1 pure
us-gaap Concentration Risk Percentage1
ConcentrationRiskPercentage1
0.1 pure
us-gaap Concentration Risk Percentage1
ConcentrationRiskPercentage1
0.1 pure
CY2017Q3 us-gaap Net Income Loss
NetIncomeLoss
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CY2016Q3 us-gaap Net Income Loss
NetIncomeLoss
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CY2017Q3 us-gaap Other Nonoperating Income
OtherNonoperatingIncome
0 USD
CY2016Q4 nfec Accounts And Retention Receivable Gross
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CY2016Q3 us-gaap Other Nonoperating Income
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us-gaap Other Nonoperating Income
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0 USD
us-gaap Other Nonoperating Income
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2788 USD
us-gaap Proceeds From Minority Shareholders
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CY2017Q3 us-gaap Minority Interest
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CY2016Q4 us-gaap Minority Interest
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0 USD
CY2017Q3 us-gaap Stockholders Equity Including Portion Attributable To Noncontrolling Interest
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CY2017Q3 us-gaap Profit Loss
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CY2016Q3 us-gaap Profit Loss
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us-gaap Profit Loss
ProfitLoss
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us-gaap Profit Loss
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CY2017Q3 us-gaap Net Income Loss Attributable To Noncontrolling Interest
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CY2016Q3 us-gaap Net Income Loss Attributable To Noncontrolling Interest
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nfec Transfer From Construction In Progress To Plant And Equipment
TransferFromConstructionInProgressToPlantAndEquipment
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us-gaap Noncontrolling Interest Increase From Subsidiary Equity Issuance
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56204 USD
us-gaap Adjustments To Additional Paid In Capital Sharebased Compensation Requisite Service Period Recognition Value
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290700 USD
us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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1176097 USD
CY2017Q3 us-gaap Due To Employees Current
DueToEmployeesCurrent
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CY2016Q4 us-gaap Due To Employees Current
DueToEmployeesCurrent
0 USD
us-gaap Basis Of Accounting
BasisOfAccounting
<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: -1in; MARGIN: 0in 0in 0pt 1in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"></div> <table style="LINE-HEIGHT: 107%; WIDTH: 100%; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.3pt; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"></td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 1in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="96"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>NOTE&#150;1</font></b></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">BASIS OF PRESENTATION</font></b></div> </td> </tr> </table> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (&#8220;GAAP&#8221;), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">In the opinion of management, the consolidated balance sheet as of December 31, 2016 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2017 or for any future period.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management&#8217;s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016.</font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>
us-gaap Nature Of Operations
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<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <table style="LINE-HEIGHT: 107%; WIDTH: 100%; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.3pt; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"></td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 1in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="96"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>NOTE&#150;2</font></b></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> ORGANIZATION AND BUSINESS BACKGROUND</font></b></div> </td> </tr> </table> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: -63.15pt; MARGIN: 0in 0in 0pt 63.15pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></b></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">NF Energy Saving Corporation (the &#8220;Company&#8221; or &#8220;NFEC&#8221;) was incorporated in the State of Delaware in the name of Galli Process, Inc. on October 31, 2000. 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MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> </tr> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">Liaoning Nengfa Weiye Energy Technology Co. Ltd (&#8220;Nengfa Energy&#8221;)</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The PRC, a limited liability company</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; 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FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">US$<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">5,000,000</font></font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">100</font>%</font></div> </td> </tr> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> </tr> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">Liaoning Nengfa Tiefa Import &amp; Export Co. Ltd</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> (&#8220;Nengfa Tiefa Import &amp; Export&#8221;)</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The PRC, a limited liability company</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">Development and production of hi-tech and automatic-intelligence valve products</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">RMB<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">877,192</font></font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 1.4pt; PADDING-RIGHT: 1.4pt; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">57</font>%<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></font></div> </td> </tr> </table> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">NFEC and its subsidiaries are hereinafter referred to as (the &#8220;Company&#8221;).<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></font></div> </div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;CLEAR: both"> </div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>

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