Concentrations of Business and Credit Risk
majority of the Company’s bank accounts in banks located in
the PRC are not covered by any type of protection similar to that
provided by the FDIC on funds held in U.S banks.
Company is operating in the People’s Republic of China,
which may give rise to significant foreign currency risks from
fluctuations and the degree of volatility of foreign exchange rates
between the U.S. dollar and the RMB.
instruments that potentially subject the Company to concentration
of credit risk consist principally of cash and trade receivables,
the balances of which are stated on the balance sheet. The Company
places its cash in high credit quality financial institutions;
however, such funds are not insured in the PRC. As of September 30,
2011 and December 31, 2010, the Company maintains cash in the US,
in a financial institution insured by the FDIC that has
approximately $24,000 and $960,000, respectively, in funds in
excess of FDIC insured amounts.