UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No.110-K
 
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For fiscal year ended December 31, 20092012
or
Or
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to_____________
 
Commission File Number: 000-52807
 
China Changjiang Mining and& New Energy Company,Co., Ltd.
(Exact name of registrant as specified in its charter)
 
Nevada
75-2571032
(State or Other Jurisdiction of
Incorporation or Organization)
75-2571032
(I.R.S. Employer
Identification No.)
  
Seventeenth Floor, Xinhui Mansion, Gaoxin Road
+86(29) 8833-1685
Hi-Tech Zone, Xi’An P.R. China 71005
 +86(29) 8833-1685
(Address of Principal Executive Offices; Zip Code)(Registrant’s Telephone Number)Number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(b) of the Act:
Title of each className of each exchange on which registered
None 
NoneNone
 
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Common Stock, par value $0.001$0.01 per share (Title of Class)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ]o   No [üx]
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ]o   No [üx]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been bjectsubject to such filing requirements for the past 90 days. Yes [  ]o   No [üx]
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes [  ]o   No [üx]
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in artPart III of this Form 10-K or any amendment to this Form 10-K. [Yes üx]  No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
(Check one):  
Large accelerated filer [  ]oAccelerated filer   [  ]o
Non-accelerated filer [  ]oSmaller reporting companyx
(Do not check if a smaller reporting company)Smaller reporting company   [ü]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ]o   No [üx]
 
The aggregate market value of the voting common stock held by non-affiliates of the issuer, based on the average bid and asked price of such stock, was $484,321 at December 31, 2009 and the number of shares of voting Series C Preferred Stock issued and outstanding was 500,000.2012.
 
At December 31, 2009,2012, the registrant had outstanding 24,216,05864,629,559 shares of common stock, $0.01 par value.
 
DOCUMENTS INCORPORATED BY REFERENCE
None.
 
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CHINA CHANGJIANG MINING AND NEW ENERGY COMPANY LTD.
Amendment No. 1 to Annual Report on FORM 10-K/A
For the Fiscal Year Ended December 31, 2009
TABLE OF CONTENTS
PART I
Item 1. Business5
Item 1A. Risk Factors9
Item 1B. Unresolved Staff Comments16
Item 2. Properties.16
Item 3. Legal Proceedings18
Item 4. (Removed and Reserved)18
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
18
Item 6. Selected Financial Data19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations19
Item 7A. Quantitative and Qualitative Disclosures About Market Risk28
Item 8. Financial Statements and Supplementary Data29
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure29
Item 9A. Controls and Procedures30
Item 9B. Other Information31
PART III
Item 10. Directors, Executive Officers and Corporate Governance31
Item 11. Executive Compensation34
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters35
Item 13. Certain Relationships and Related Transactions, and Director Independence35
Item 14. Principal Accounting Fees and Services37
PART IV
Item 15. Exhibits, Financial Statement Schedules38
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Explanatory Note
The purpose of this Amendment No. 1 on Form 10-K/A is to amend and restate the Form 10-K of China Changjiang
Mining and New Energy Company, Ltd. (the “Company”) for the year ended December 31, 2009, filed with the
Securities and Exchange Commission (the “SEC”) on April 16, 2010, to respond to comments received by the
Company from the SEC.
 
Special Notes Regarding Forward Looking Statements
 
In addition to historical information, this report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,”
“aim, “aim,” “will” or similar expressions, which are intended to identify forward-looking statements. Such statements
include, among others, those concerning market and industry segment growth and demand and acceptance of new
and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements
of the plans, strategies and objectives of management for future operations; any statements regarding future
economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs
about future events. You are cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” included
herein, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of
the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other
filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our
business, financial condition and results of operations and prospects. The forward-looking statements made in this
report speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments
to any forward-looking statements to reflect changes in our expectations or future events.
 
Use of Terms
 
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:
“we, “we,” “us,” “our,” or the “Company” are to CHINA CHANGJIANG MINING AND& NEW ENERGY
COMPANY, CO., LTD., and its consolidated subsidiaries;
 
“MT” are to metric tons;
“MT” are to metric tons;
 
“PRC” and “China” are to the People’s Republic of China;
“PRC” and “China” are to the People’s Republic of China;
 
“SEC” are to the Securities and Exchange Commission;
“SEC” are to the Securities and Exchange Commission;
 
“Securities Act” are to the Securities Act of 1933, as amended;
“Securities Act” are to the Securities Act of 1933, as amended;
 
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
 
“Renminbi” and “RMB” are to the legal currency of China; and
“Renminbi” and “RMB” are to the legal currency of China; and
 
“U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
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“U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
 
 
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CHINA CHANGJIANG MINING AND NEW ENERGY COMPANY LTD.
For the Fiscal Year Ended December 31, 2012
TABLE OF CONTENTS
PART I
Item 1.Business4
Item 1A.Risk Factors11
Item 1B.Unresolved Staff Comments15
Item 2.Properties15
Item 3.Legal Proceedings16
Item 4.Mine Safety Disclosures16
PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities17
Item 6.Selected Financial Data18
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations18
Item 7A.Quantitative and Qualitative Disclosures About Market Risk21
Item 8.Financial Statements and Supplementary Data22
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure22
Item 9A.Controls and Procedures23
Item 9B.Other Information23
PART III
Item 10.Directors, Executive Officers and Corporate Governance24
Item 11.Executive Compensation26
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters26
Item 13.Certain Relationships and Related Transactions, and Director Independence27
Item 14.Principal Accounting Fees and Services29
PART IV
Item 15.Exhibits, Financial Statement Schedules30
3
 
 
PART I
 
ITEM 1. BUSINESS.
Overview

China Changjiang Mining & New Energy Co., Ltd. (the “Company”) is currently a turnkey developer and Engineering, Procurement and Construction (“EPC”) contractor of photovoltaic (“PV”) solar energy facilities (“SEF”).We design, engineer, construct, market and sell high-quality PV SEFs for commercial and utility applications to local markets..

On June 1, 2012, we entered into an agreement with Xunyang Yongjin Mining Co., Ltd to transfer our mining exploration rights for a cash payment of $2,380,612 (RMB15,000,000). Together with Mr. Zhang Hongjun, the Company established a subsidiary, named Shaanxi Weinan Changjiang Solar Photovoltaic Energy Applied Science and Technology Co., Ltd (“Changjiang PV”), to develop the new solar energy business in April 2012. Our subsidiary holds a 51% interest in Changjiang PV. We and Mr. Zhang Hongjun have invested new energy industry for several years. With close relations with government departments and extensive personal connections, we devoted our major efforts to the Solar photovoltaic downstream market after disposing our mining business in June 2012.

Our subsidiary, Changjiang PV, concentrates on the development and operation of EPC projects. Our first EPC project, the Weinan Hechuan 137KWp solar PV building applications has been completed and is expected to begin operating in the near future.

We also hold land use rights in a land parcel and we lease a portion of the land use rights on the 5.7 square kilometer parcel to Shaanxi Huanghe Bay Springs Lake Theme Park Ltd. (“Huanghe”), a company with a common control person. The term of the lease agreement is from January 1, 2011 to December 31, 2029 and the annual rent is approximately $1.2 million.
Subsequent Event

The Company has completed the transfer procedure for the mining exploration rights transfer transaction and the final payment was deposited in the escrow account at the end of the first quarter of 2013.
 
Our Corporate History and Background
China Changjiang Mining and New Energy Co., Ltd. (the “Company”) is an exploration-stage company engaged in
exploration in Shaanxi Province, China, for commercially recoverable metal-bearing mineral deposits. The
Company has not yet identified any proven or probable mineral reserves, and only limited exploration activity has so
far been undertaken, primarily by governmental bodies in Shaanxi Province. Provided the Company successfully
identifies commercializable mineral deposits, it intends to engage in mining, processing and distributing zinc, lead,
and gold.

The Company is the result of a 2008 share exchange transaction among: (i) North American Gaming and
Entertainment Corporation, a Delaware corporation (“North American”); (ii) Shaanxi Changjiang Petroleum &
Energy Development Stock Co., Ltd. (“CJP”), a limited liability company established and existing under the law of
People’s Republic of China; and (iii) the shareholders of CJP, among whom the predominant shareholder, holding
97.2% of CJP’s shares, was a Hong Kong company, Hong Kong Wah Bon Enterprise Limited (“Wah Bon”). After
completion of the share exchange transaction, the Company went public in the United States throughentered into a reverse
merger with North American.

At the time of the share exchange transaction, CJP owned 60%, and the Company continues to control, Shaanxi
Dongfang Mining Co., Ltd., (“Dongfang”East Mining”) which as discussed further under “Item 2. Properties,” holdsheld the Chinese
exploration license through which we pursuepursued our exploration activity.

The share exchange was completed on February 4, 2008, resulting in the shareholders of CJP controlling
approximately 96% of the equity ownership of North American At the time of the closing of the share exchange,
North American was a shell company domiciled in Delaware which filed reports under the Exchange Act and whose
shares traded in the U.S. over-the-counter market. Wah Bon caused its subsidiary, CJP, to pay $370,000 in cash,
and Wah Bon delivered shares constituting 97.2% of the outstanding equity of CJP, in exchange for 3,800,000
shares of North American common stock and 500,000 shares of Series C Preferred Stock of North American, which
originally were entitled to 1,218 votes per share. Two U.S. individuals, through their advisory company, Capital
Advisory Services, Inc., were paid in the aggregate 4,500,000 shares of North American. In June 2008, CJP
changed its name to “Shaanxi Changjiang Mining New&New Energy Co., Ltd.Ltd (“Shaanxi Changjiang”).”

Following the share exchange transaction, Wah Bon replaced North American’s Board of Directors.

China Changjiang Mining & New Energy Co., Ltd. was incorporated in the state of Nevada on September 19, 2008
for the purposes of re-domesticating the Company from Delaware to Nevada, adopting the Company’s current name,
and going public into serve as the United States by meanssurviving company of a reverse merger with North American.

Pursuant to Articles of Merger filed with the Secretary of the State of the State of Nevada on December 4, 2008 and
the Secretary of the State of the State of Delaware on April 2, 2009, North American was merged with and into the
Company, with the Company being the surviving entity.

After the close of the 2009 fiscal year, but prior to the filing of this Form 10-K/A, onOn February 9, 2010, we filed a
Certificate of Amendment to our Articles of Incorporation to effect a 1-for-10 reverse stock split of our common
stock, subject to FINRA approval. The 1-for-10 reverse split was approved by FINRA on July 30, 2010, effective
August 2, 2010.
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On September 15, 2010, the Company filed with the Nevada Secretary of State a Certificate of Designation and a
Certificate of Conversion and Elimination of the Series C Convertible Preferred Stock, pursuant to which: (i) all
shares of our Series C Preferred Stock were converted into shares of common stock at a rate of 1,218 shares of
common stock for each outstanding share of Series C Preferred Stock; and (ii) we canceled and eliminated the Series
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C Preferred Stock. In the aggregate, the outstanding shares of the Company’s Series C Preferred Stock were
converted into 609 million shares of common stock.
 
As a result of these transactions, we currently have 250,000,000 authorized shares of common stock, par value
$0.01 $0.01 per share, of which 37,716,58864,629,559 shares are issued and outstanding on the date of filing of this Form 10-K/A,
10-K, and 10,000,000 authorized shares of preferred stock, of which no shares are presently issued and outstanding. At the
time our share exchange transaction was completed, approximately 96% of the outstanding shares of North
American were owned by Wah Bon. See Item 12, “Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.”
 
We established a subsidiary, named Shaanxi Weinan Changjiang solar photovoltaic energy applied science and technology Co., Ltd. (“Changjiang PV”), in April 2012 to develop the new solar energy business. Our subsidiary, Shaanxi Changjiang accounted for 51% shares of Changjiang PV, and Mr. Zhang Hongjun, the actual controller, accounted for the other 49% shares.
Industry overview

Solar photovoltaic energy is an emerging, clean energy industry with a growing market share. The global solar PV market has grown from 6.1Gigawatt (“GW”) in 2008 to an estimated 25GW in 2012 but with imbalanced development. Application of solar energy in developed countries such as Germany and Japan, are relatively comprehensive and mature. At the present corporate structure of ourtime, the Chinese subsidiariesPV downstream market is as depictedstill in the chart below:initial stages of development, though most of the PV modules are manufactured in China,

In the past year, China's solar PV module manufacturers were hit by the European Union and the United States anti-dumping sanctions. Businesses and governments are trying to find better alternative applications market to absorb the huge domestic surplus solar PV capacity. The untapped domestic PV downstream market is one of the best ways to absorb the surplus production capacity.

The Chinese government is encouraging the construction of a large PV base and the development of distributed photovoltaic. Currently, we mainly focus on the development of distributed photovoltaic power generation projects.
 
It has been reported that as of the end of 2011, the installed capacity of photovoltaic power generation was 3.6 GW, thereinto, the installed capacity of distributed photovoltaic power generation only accounted for 0.2GW. According to a recent government planning, by 2015, the Chinese solar photovoltaic power generation capacity will reach 21GW, and distributed photovoltaic more than 10 GW. It was estimated that, by 2020, if the Building Integrated PV(“BIPV”) would be applied for 10% of the roof area and 15% of the facade area in the existing and new buildings, the potential market of BIPV applications would reach 1000GW, equivalent to 45 new installed capacity of the Three Gorges Hydropower Station.
Since the first half of 2012, the supply and demand of silicon in the international market has undergone great changes, resulting in obvious decline in the cost of solar modules. With the declining cost of solar modules from RMB15 to RMB6 per watt, the cost of PV power generation was significantly reduced.
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We believe the next few years will show protracted continued growth in the PV solar market. Government policies, in the form of both regulation and incentives, have accelerated the adoption of solar technologies by businesses and consumers and have provided opportunities for developers to construct PV systems as an alternative to more traditional forms of power generation.
 
Our Industry and Principal Market

Sales and Marketing

Although we are still in the exploration phase, weWe have established a sales and marketing department which is
focused on identifying and establishing relationships with companiesentities that are likely to have a need for our products.products and services.
We
Our products and services are seeking to explore further onlargely represented through our property for commercializable zinc, leadCompany’s sales force located in Xi’an City and gold deposits. Zinc and lead
can be freely sold and marketed throughout the PRC. China remains a net importer of these metals, and we believe a
customer base exists withinWeinan City, Shaanxi Province, China.
 
Current Business Operations
 
Our Businessa ) At the present time, we focus on serving the local distributed solar PV market,

According to the national policy and because of the favorable market conditions, Weinan City is to develop photovoltaic power generation demonstration area. Weinan city is a prosperous city, adjacent to the capital of Shaanxi province, Xian city. With rich solar radiation and developed business in the Northwest, Weinan city took advantage to accelerate the development of the distributed solar PV.

We established a subsidiary, named Shaanxi Weinan Changjiang solar photovoltaic energy applied science and technology Co., Ltd. (“Changjiang PV”), in April 2012 to develop the local distributed solar PV business..

The following chart showed our distributed solar PV business model.
 
Through
Our main EPC projects are as follows.

Huanghe Bay Project

In September 2012, Changjiang PV entered into an agreement with Shaanxi Changling Solar Energy & Electric Co., Ltd (“Changling”) to outsource the construction of a solar energy project located in Huanghe Bay Springs Lake Theme Park. The project, with a total contract amount of $310,548, was completed by the year end of 2012.

A series of licenses or permits must be obtained from the government organizations for power generation and distribution in PRC. Up to present, we have obtained following permits: a) The Heyang County Power Grid Access license; b) Application for the provincial solar photovoltaic building demonstration projects nominated by both the Housing and Urban-Rural Construction Bureau of Weinan City and Weinan Municipal Finance Bureau; and c) Filing in the Weinan City Municipal Development and Reform Commission.

The project was designed to generate electricity preferentially for Huanghe, and sell the surplus power to the grid company. We have received the subsidy funds of $159,096 (RMB1,000,000) from the local government for the project in December, 2012. As of May 2013, Huanghe Bay Project is ready to supply electricity to Huanghe.
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Baisui Project

We are applying for the Building-integrated photovoltaic (BIPV) demonstration project of Weinan City for Baisui Project. Which is the way to obtain the subsidy funds. This EPC project, with a total investment amount of $1,166,615 (RMB7,341,740), commenced construction in March 2013 and is expected to be completed at the end of 2013.

We are responsible to install PV modules for all of the roofs of Weinan baisui dukang liquid factory, with a total power capacity of 649.2KW. A PV module is an assembly of PV cells that are electrically interconnected, laminated and framed in a durable and weatherproof package. The DC (direct current) power generated from the PV module is converted into AC (alternating current) power by the inverter to supply the electricity needs inside the building. The surplus electricity is fed to a power grid.

On May 3, 2012, The Department of Finance, Department of Science & Technology, and Development & Reform Commission of Shaanxi Province jointly promulgated a Notice to set the subsidy standard for distributed solar PV investment to be RMB 7 per watt.

Thes kinds of incentive policies have greatly promoted Baisui Project and our majority-controlled subsidiary, Dongfang,other EPC projects. We have compared the cost of the project before and after the subsidy as follows.

Before subsidyAfter the subsidy RMB 7 per watt
Installed capacity649.2KWp649.2KWp
Investment cost per watt(including equipment & installment）
RMB 11.3RMB 4.3
Total amount of investmentRMB 7,341,740RMB 2,792,000
Annual generating capacity (25 years project working life)21,329,000 kilowatt-hour21,329,000 kilowatt-hour
Cost of power generationRMB 0.34/kilowatt-hourRMB 0.13/kilowatt-hour
Cost of power generation after the maintenance expense, salary and depreciationRMB 0.51/kilowatt-hourRMB 0.33/kilowatt-hour
b)  Our joint venture, Shaanxi Changjiang electricity & new energy Co., Ltd (“Changjiang Electricity”), is dedicated to the construction and operation of the biomass incineration power. Currently, we account for 20% shares of Changjiang Electricity, Mr. Zhang Hongjun and Shaanxi Changfa Industrial Co., LTD (“Changfa”) accounts for 52% and 28% respectively.

In order to further develop the clean energy projects, we are engagedentrusted full responsibility by Mr. Zhang Hongjun and Changfa to manage the following cooperation issues.

In October 2011, we entered into an agreement with Shaanxi Lanniao New Energy Development Co., Ltd (“Shaanxi Lanniao”) to jointly develop Changjiang Electricity. In the near future, according to the agreement, Shaanxi Lanniao will invest around $11,529,000 in projects construction and accounts for 68% shares of the explorationnew Changjiang Electricity. We will invest a portion of our land in Huanghe Bay into Changjiang Electricity. As a result, Mr. Zhang Hongjun, Changfa and we account for commercially32% shares of the new Changjiang Electricity.
recoverable metal-bearing mineral deposits, such as zinc, lead and gold. Currently, our exploration activities are in a
61.27 square kilometer area in Jiao Shan Zhai, Guo Jia Ling, Xunyang County, in the Shaanxi Province of China. To
date, our activities have not resulted in the location of proven reserves.c ) We also hold land use rights in a 5.7 square
kilometer parcel located in Huanghe Nantan, Heyang County, in the Shaanxi Province of China. We lease a portion
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of the land use rights on the 5.7 square kilometer parcel to Shaanxi Huanghe WetlandBay Springs Lake Theme Park Company Ltd.
(“Huanghe”) for the development and operation of a theme park. The term of the lease agreement is from January 1,
2009 2011 to December 31, 2029. The annual rent is approximately $1.1$1.2 million. In November 2010, the Company
received the first rent payment under the lease, in the amount of approximately US$601,504. For additional
information, see “Item 2. Properties.”Properties”.

The following table summarizes the business activities of the Company’s subsidiaries:
MiningSolar PV Industry

General

IfThough we successfully identify commercializable mineral deposits and obtainmay be a new participant in solar PV industry, we also realized that the required government license, our
primarylocal downstream market of solar PV industry was as new as we are. Experience in some developed countries has shown that there should be a business activity is anticipated to be mining, processing and distributing zinc, lead and gold, and other
mineral products. China is currently a net importer of nonferrous metals. There are governmental restrictions on
exploration and mining activityopportunity in China, discussed further below.
We believe that China will continue to industrialize and this will cause increased demand for industrial raw
materials such as non-ferrous metals. We expect prices of non-ferrous metals to increase in ChinaChina’s PV downstream market in the future,near future.
although prices may experience significant fluctuations.
Each of our EPC projects is a strategic long-term investment, with relatively low risk, a stable cash inflow can be generated and little ongoing maintenance costs would be incurrd once the project begins operations.
 
Competition

We anticipate that our competitors in the nonferrous metalssolar PV markets will be local and regional mining enterprises.
EPC contractors and developers. Other companies in China that mine zinc, lead and gold andengage in solar PV power generation that we consider to be likely competitors, include:
Dongschengmiao Mining Industry Xiaan Huanghe Photovoltaic Technology Co., Ltd., Wancheng Trading & Mining Col, Ltd., Xinjian Woquia Tianzhen
MiningLtd, Shaanxi Tuori New Energy Technology Limited, and Shaanxi Changling Electric Co., Ltd., and Wulatehouqi Qingshan Nonferrous Metal Development Co., Ltd. TheseLtd etc.These competitors have
more experience in the operation of mines and mining activitiessolar PV energy and have superior financial resources than we do.
 
In the past, China protected its domestic metallurgy industry with high tariffs, import quotas and restrictions on
foreign ownership. Due to China’s WTO membership, China has reduced and is expected to further reduce
protection for Chinese companies against foreign competitors. To maintain its WTO membership, China must
gradually reduce its tariffs, quotas and restrictions, and permit foreign enterprises the opportunity to sell and
distribute in China. Tariffs will eventually be eliminated altogether. This is expected to increase the effect of
foreign competition and the importation of foreign products into China. We are unable to predict the effect these
changes may have on our Company.
Business Strategies
Our business strategies and near-term plans are as follows:
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The entire solar industry also faces competition from other power generation sources, both conventional sources as well as other emerging technologies. Solar power has certain advantages and disadvantages when compared to other power generating technologies. The advantages include the ability to deploy products in many sizes and configurations, provide reliable power for many applications, serve as both a power generator and the skin of a building and eliminate air, water and noise emissions.The disadvantages mainly came from the relatively high cost of power generation.
Further evaluate prospecting
The cost of electricity generated by PV products currently still exceeds the cost of electricity generated from conventional power such as coal and hydropower in Chinese markets. A significant reduction in the scope or discontinuation of government incentive programs,could cause demand for our products and our revenue to decline, and have a material adverse effect on our business, financial condition, results to date;of operations and prospects.

As an emerging industry, the rapid growth of the solar PV could reduce the intensity of competition from alternative products and services.
 
Perform a rough surveyIn the near term, mature government subsidy roadmaps from the government have led developers to be aggressive with their solar installations so that they can enjoy better economic returns. Cost reductions of zinc, leadsolar installations have proven to be viable and gold over a test area;have also led to aggressive solar installation. In the long run, we believe that solar energy continues to have significant future growth potential and
that demand for our products and services will continue to grow significantly for the following reasons:
 
increasing demand for renewable energies, including solar energy, due to the finiteness of fossil fuels and concerns over nuclear power;
Investigate other metallogenic areas, mainly through surface work, which may be combined with limited tunnel exploration and drilling.
increasing environmental awareness leading to regulations and taxes aimed at limiting emissions from fossil fuels;
continued adoption or maintenance of government incentives for solar energy at all level of Chinese government;
narrowing cost differentials between solar energy and conventional energy sources due to market-wide decreases in the average selling prices for PV products driven by lower raw materials costs and increased production efficiencies; and
continual improvements in the conversion efficiency of PV products leading to lower costs per watt of electricity generated, making solar energy more efficient and cost-effective.
 
Government Regulation

UnderThis section sets forth a system established by China’s State Council, industrial activity is categorized as “permitted,” restricted,”summary of the most significant regulations or requirements that affect our business activities in China.
“prohibited.” Our proposed exploration and mining activities fall into the “restricted” category, which means that
we may engage in these activities only with prior governmental approvals, as described below.
Exploration and mining activities are regulated in the PRC. Regulations issued or implemented by the State
Council, the Ministry of LandChina’s National Development and Resources, Reform Commission (“NDRC”),and other relevant government authorities cover many aspects of
exploration and mining of natural resources, new energy industry, including, but not limited to entry into the mining industry,following principal regulations:

Renewable Energy Law

On December 26, 2009, China revised its Renewable Energy Law, which originally became effective on January 1, 2006. The revised Renewable Energy Law became effective on April 1, 2010 and has laid the scope
of permissible business activities, tariff policies and foreign investment.legal foundation for developing renewable energy in China.
 
The principal regulations governingRenewable Energy Law clearly stipulates the mining business infollowing principles for the PRC include:development of new energy.

China Mineral Resources Law, which requires a mining business to have exploration and mining licenses from provincial or local land and resources agencies.
●encourage and support the use of solar and other renewable energy and the use of on-grid generation.

China Mine Safety Law, which requires a mining business to have a safe production license and provides for random safety inspections of mining facilities.
●encourage the installation and use of solar energy water-heating systems, solar energy heating and cooling systems, solar PV systems and other solar energy utilization systems.

China Environmental Law, which requires a mining project to obtain an environmental feasibility study of each project.
●authorizes the relevant pricing authorities to set favorable prices for the purchase of electricity generated by solar and other renewable power generation systems.

Permits
●provides financial incentives, such as national funding, preferential loans and tax preferences for the development of renewable energy projects.
In China, companies that seek to engage in mining must obtain two separate licenses from the land resource division
of the provincial government. The first license must be obtained before an enterprise may commence mineral
exploration activities. We have obtained this license. The law also requires a second license, for extraction
activities, including the excavation and sale of extracted minerals. As of December 31, 2009, we had not yet
received a mining license. If we do not obtain a mining license, the value of our interest in the mining properties
would be seriously impaired, and would result in a significant loss of value to us.
Mineral exploration also requires approval from the Environmental Department of the provincial government, which
must first determine that the exploration project will not cause environmental harm. In addition, the Security
Department controls strictly the explosives which are needed for exploration. The sale of mineral products is
managed by a joint department including industrial, commercial, taxation, and local public finance authorities.
There are also detailed rules and regulations related to management of the processing and transportation of mineral
products and the approval certificates needed in connection therewith. As of the date of this report, we have
obtained all necessary approvals from the Environmental Department and the Security Department with regard to
our activities to date.
Environmental Impact
Environmental protection laws in China are established on a national basis by the State Environmental Protection
Administration. Provincial and local authorities may set local regulations which may be more restrictive than the
national standards. Environmental standards govern a variety of matters, including disposal of solid waste,
discharge of contaminated water and handling of gases and emissions. The local authorities generally monitor and
enforce the regulations, including the assessment and collection of fees and the imposition of fines and
administrative orders.
8

 
8
 
 
Because weGovernment Directives

In January 2006, the NDRC promulgated two implementation directives of the Renewable Energy Law. These directives set forth specific measures in setting prices for electricity generated by solar and other renewal power generation systems and in sharing additional expenses occurred. The directives further allocate the administrative and supervisory authorities among different government agencies at the national and provincial levels and stipulate responsibilities of electricity grid companies and power generation companies with respect to the implementation of the Renewable Energy Law.

China’s Ministry of Construction issued a directive in June of 2005, which seeks to expand the use of solar energy in residential and commercial buildings and encourages the increased application of solar energy in townships. In addition, China’s State Council promulgated a directive in June of 2005, which sets forth specific measures to conserve energy resources and encourage exploration, development and use of solar energy in China’s western areas, which are stillnot fully connected to electricity transmission grids, and other rural areas.

In July 2007, the PRC State Electricity Regulatory Commission issued the Supervision Regulations on the Purchase of All Renewable Energy by Power Grid Enterprises which became effective on September 1, 2007. To promote the use of renewable energy for power generation, the regulations require that electricity grid enterprises must in a timely manner set up connections between the grids and renewable power generation systems and purchase all the electricity generated by renewable power generation systems. The regulations also provide that power dispatch institutions shall give priority to renewable power generation companies in respect of power dispatch services provision.

On September 4, 2006, China’s Ministry of Finance and Ministry of Construction jointly promulgated the Interim Measures for Administration of Special Funds for Application of Renewable Energy in Building Construction, which provides that the Ministry of Finance will arrange special funds to support the application of renewable energy in building construction in order to enhance building energy efficiency, protect the ecological environment and reduce the consumption of fossil energy. These special funds provide significant support for the application of solar energy in hot water supply, refrigeration and heating, PV technology and lighting integrated into building construction materials.

On October 28, 2007, the Standing Committee of the National People’s Congress adopted amendments to the PRC Energy-saving Law, which sets forth policies to encourage the conservation of energy in manufacturing, civic buildings, transportation, government agents and utilities sectors. The amendments also seek to expand the use of the solar energy in construction areas.
In March 2009, China’s Ministry of Finance promulgated the Interim Measures for Administration of Government Subsidy Funds for Application of Solar Photovoltaic Technology in Building Construction, or the Interim Measures, to support the demonstration and the promotion of solar PV applications in China. Local governments are encouraged to issue and implement supporting policies for the development of solar PV technology. These Interim Measures set forth subsidy funds set at RMB20 per watt for 2009 to cover solar PV systems integrated into building construction that have a minimum capacity of 50 kilowatt peak.

In April 2009, the Ministry of Finance and the Ministry of Housing and Urban-Rural Development jointly issued the “Guidelines for Declaration of Demonstration Project of Solar Photovoltaic Building Applications.” These guidelines created a subsidy of up to RMB20 per watt for building integrated PV or BIPV projects using solar-integrated building materials and components and up to RMB15 per watt for BIPV projects using solar-integrated materials for rooftops or walls.

In July 2010, the Ministry of Housing and Urban-Rural Development issued the “City Illumination Administration Provisions” or the Illumination Provision. The Illumination Provisions encourage the installation and use of renewable energy system such as PV systems in the exploration stage, our environmental impact has been limited. If weprocess of construction and re-construction of city illumination projects.

On March 8, 2011, the Ministry of Finance and the Ministry of Housing and Urban-Rural Development jointly promulgated the Notice on Further Application of Renewable Energy in Building Construction, which aims to raise the percentage of renewable energy used in buildings.

On March 27, 2011, the NDRC promulgated the revised Guideline Catalogue for Industrial Restructuring which categorizes the solar power industry as an encouraged item.

On March 14, 2012, the Ministry of Finance, the NDRC and the National Energy Bureau jointly issued the interim measures for the management of additional subsidies for renewable-energy power prices, according to which relevant renewable-energy power generation enterprises are successfulentitled to apply for subsidies for their renewable power generation projects that satisfy relevant requirements set forth in the measures.
commencing our extraction operations, we expect to generate waste water, gases
On March 1, 2013, China’s State Council issued the “Twelfth Five Year Plan.” The plan supports the promotion and solid waste. We will therefore
be subject to all national and local regulations governing these activities, and will likely require licenses fordevelopment of renewable energy, including the
disposal solar energy. The plan also encourages the development of water and solid wastes.solar PV power stations in the areas with abundant solar power resource.
 
Summary of Exploration Activity
Geological SurveyRestrictions on Foreign Businesses and Investments
 
The regionprincipal regulation governing foreign ownership of photovoltaic businesses in which we have exploration rightsthe PRC is one in which miningthe Foreign Investment Industrial Guidance Catalogue, updated and effective as of January 30, 2012. Under this regulation, industrial activity has long been conducted,is categorized as “permitted,” “restricted,” or “prohibited.” and the solar photovoltaic business is listed as an industry of “permitted” where
there foreign investments are several operating mines for non-ferrous metals.encouraged.
 
We have not conducted geological exploration sufficient to form a conclusion
9

Enterprise Income Tax

On March 16, 2007, the National People’s Congress passed the new Enterprise Income Tax Law (“the new EIT Law”), which was effective as to whether there are provenof January 1, 2008.

The key changes for the new EIT Law are:

a)The new EIT Law imposes a single income tax rate of 25% for most domestic enterprises and foreign investment enterprises.

b)The Companies established before March 16, 2007 continue to enjoy tax holiday treatment approved by local government for a grace period of either for the next 5 years or until the tax holiday term is completed, whichever is sooner.

c)Entities that qualify as “High and New Technology Enterprises” are entitled to the preferential lower tax rate of 15%.

d)The new EIT Law grants tax holiday to entities operating in certain beneficial industries, such as environmental protection, energy – saving, etc. Entities in beneficial industries enjoy a three-year tax exempt and a three-year period with 50% reduction in the income tax rates.

The new EIT Law also provides that an enterprise established under the laws of foreign countries or
probable mineral reserves regions but whose “de facto management body” is located in the areaPRC be treated as a resident enterprise for PRC tax purpose and consequently be subject to the PRC income tax at the rate of 25% for its worldwide income. The Implementing Rules of the new EIT Law merely defines the location of the “de facto management body” as “the place where the exercising, in which we have exploration rights. The principal surveys conducted to date
substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” On April 22, 2009, the PRC State Administration of Taxation further issued a notice entitled “Notice regarding Recognizing Offshore-Established Enterprises Controlled by PRC Shareholders as Resident Enterprises Based on Their place of Effective Management.” Under this land have been preliminary geological surveys conductednotice, a foreign company controlled by a unitPRC company or a group of PRC companies shall be deemed as a PRC resident enterprise, if (ⅰ)the senior management and the core management departments in charge of its daily operations mainly function in the PRC; (ⅱ) its financial decisions and human resource decisions are subject to decisions or approvals of persons or institutions in the PRC; (ⅲ) its major assets, accounting books, company sales, minutes and files of board meetings and shareholders’ meetings are located or kept in the PRC; and (ⅳ) more than half of the Shaanxi Provincial Government.
Itdirectors or senior management personnel with voting rights reside in the PRC. Based on a review of surrounding facts and circumstances, the Company does not believe that it is costlylikely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to conduct detailed mineralogy studies,limited guidance and we may not haveimplementation history of the resources to undertake them. If we fail
to identify proven or probable mineral resources,new EIT Law, should the value of our Company and our securitiesbe treated as a resident enterprise for PRC tax purposes, the Company will be materially andsubject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to September 19, 2008.
adversely affected.
The new EIT Law also imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the previous income tax regulations. The United States of America, where the Company is incorporated, has such tax treaty with China.
 
Our Employees

As of December 31, 2009,2012, we had an aggregate of 1921 employees, of whom 16 were full-time employees. This
includes two people in marketing, one in manufacturing, four in research and development and quality control, two
in financial and accounting, and seven in general management.

Available Information

We currently do not maintain a web site; however, our annual, periodic and current reports can be accessed on the
web site of the SEC at www.sec.gov and printed free of charge.
 
10
ITEM 1A. RISK FACTORS.
 
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described
below, together with all of the other information included in this report, before making an investment decision. If
any of the following risks actually occurs, our business, financial condition and results of operations could suffer.
In that case, the trading price of our common stock could decline, and you may lose part or all of your investment.
You should read the section entitled “Special Notes Regarding Forward-Looking Statements” above for a
discussion of what types of statements are forward-looking statements, as well as the significance of such statements
in the context of this report.

RISKS RELATED TO OUR BUSINESS

WE ARE AN EARLY STAGE EXPLORATION COMPANY FACINGHAVE TRANSITIONED OUR BUSINESS FROM MINING TO NEW CLEAN ENERGY BUSINESS, WHICH INVOLVED SIGNIFICANT FINANCIALTRANSITION AND
OPERATING RISKS. INTEGRATION RISK
 
We have completed the procedures of disposing our mining business sector at the end of first quarter of 2013, and currently we are an exploration stagedeveloping our new clean energy solar business. This change involves significant transition and integration risks, both because we are required to end our participation in mining operations and wind down our existing relationships prior to our being able to participate in a new energy business and because we may incur costs and/or a loss of revenue (or a delay in anticipated increased revenue from the new business) in connection with these changes. The significant transition and integration risks include:
an inability to transition our business to clean energy due to a lack of applicable approvals or difficulty in satisfying entrance requirements;
significant revenue dilution as we terminate our participation in mining operations and/or insufficient, or delay in receipt of, revenue from our participation in current operations, including an inability to maintain our key customer and business relationships as we transition to new energy; and
difficulties integrating our technology processes, and
lack of experience in EPC project management.
If any of these risks or costs materializes, they could have a material adverse effect on our business, results of operations and financial condition.
OUR LIMITED OPERATING HISTORY IN CLEAN NEW ENERGY INDUSTRY MAKE IT DIFFICULT TO EVALUATE OUR RESULTS OF OPERATIONS AND PROSPECTS.

We are a company engaged in the business of local clean solar energy development with land use rights to a 61.27 square kilometer tract of land in
Shaanxi Province, in Central China.two EPC projects under construction and several potential projects. We also hold land use rights in a 5.7 square kilometer parcel located in
Huanghe Nantan (Huanghe Bay), Heyang County, in the Shaanxi Province of China, which is not held for leasing purpose.

Though we commenced the purposebiomass incineration power business in 2009 by cooperation with our strategic partner, our business change in 2012 was our first time to enter the solar photovoltaic industry and determine the strategy of mining.mainly focusing on PV EPC developing in the future.

We seekexpected to determine if there are commercially adequate deposits of zinc, lead and gold within our properties. The
exploration and extraction of mineral deposits involve significant financial risks. The results of exploratory
investigations are not always reliable or accurate even if conductedgenerate revenue from PV business in strict compliance with professional guidelines.
Furthermore, exploration and extraction activities require substantial investment which must occur over a significant
period of time even though the quantity of minerals within any property is finite. Many properties are unable to
develop commercially viable mines even with positive exploration results. Successful extraction depends on very
9
expensive processes such as drilling, mine construction and establishment of processing facilities. Mines are also
hazardous and only a limited number of qualified, experienced miners exist. The Company must obtain additional
government approvals and must ramp up operations after obtaining permission to begin extraction. We are unable to
assure you that we will ultimately be successful in meeting these challenges or whether we will commence
commercial mining operations. Our failure to do so would have a substantial adverse effect in the value of our
company and our securities.
WE HAVE HAD A LIMITED OPERATING HISTORY AND A HISTORY OF FINANCIAL LOSSES.
We have no revenues from mining and do not anticipate generating mining revenues until exploitation has been
approved and undertaken, the mine infrastructure has been completed and the extraction of minerals has begun.
During the years ended December 31, 2009, 2008 and 2007, we had net losses of $ 921,675, $ 1,700,599, and
$ 568,756, respectively. During the years ended December 31, 2009, 2008 and 2007, we had comprehensive losses of
$ 911,535, $ 2,456,679, and $ 157,620, respectively.
These losses resulted from our exploration activities and corporate expenses, including the amortization of our land
use rights. We may never achieve profitable operations, and if we fail to do so, the value of our Company and our
securities will be substantially adversely affected.
WE HAVE NOT YET OBTAINED ALL OF THE LICENSES REQUIRED BY CHINESE LAW.
China employs a two-stage permitting process for permission to explore and to extract minerals. Although we
obtained the exploration license, as of December 31, 2009, we did not yet have the second required license needed
to permit the excavation and subsequent sale of extracted minerals. We cannot give assurance that we will obtain
this license. If we fail to do so, the value of our interests in the mining properties would be seriously impaired, and
would result in a material loss of value to us and our investors.
THERE IS NO ASSURANCE THAT OUR PROPERTY WILL CONTAIN SUFFICIENT QUANTITIES OF
COMMERCIALLY MARKETABLE MINERALS FOR US TO BECOME COMMERCIALLY VIABLE OR
THAT WE WILL BE ABLE TO ECONOMICALLY EXTRACT THE MINERALS.
We have engaged in limited investigation and geologic testing. There can be no assurance that our initial
exploratory efforts will prove satisfactory or correct, or that commercially mineable mineralization exists on our
property. It may not be economically feasible to profitably extract the minerals for many reasons, including some
reasons which are beyond our ability to control. We can offer no assurance that a profitable mining business will
result from our efforts.
WE HAVE NOT CONDUCTED GEOLOGICAL EXPLORATION SUFFICIENT TO FORM A CONCLUSION
THAT THERE ARE PROVEN OR PROBABLE MINERAL RESERVES ON OUR PROPERTY.
As of December 31, 2009, we had not yet conducted geological explorations sufficient to form a conclusion that
there are proven or probable mineral reserves in the area in which we have exploration rights. The only surveys
conducted on this land through the 2009 calendar year have been preliminary geological surveys conducted by a unit
of the Shaanxi Provincial Government. It is costly to conduct detailed mineralogy studies, and we may not have the
resources to undertake them. If we fail to identify commercially reasonable mineral resources, the value of our
Company and our securities will be materially and adversely affected.
DUE TO OUR LIMITED OPERATING HISTORY AND LIMITED EXPLORATION ACTIVITY, WE ARE
UNABLE TO FORECAST MINING REVENUES.
Due to2013. However, our limited operating history makes the prediction of future results of operations difficult, and limited exploration activity,in addition, we arecannot assure that the existing management model is suitable for the EPC project development.

We will devote more resources in our marketing promotion, and attempt to adapt our management to a more flexible operation environment as we have to deal with a variety of competitors due to the relatively lower entrance barrier for solar PV downstream industry.

WE DEPEND ON OUR SENIOR MANAGEMENT AND KEY EMPLOYEES, THE LOSS OF WHOM COULD ADVERSELY AFFECT OUR OPERATIONS.

Our success will depend to a large degree upon our ability to identify, hire, and retain personnel, particularly persons familiar with the marketing, manufacturing and administrative processes associated with the solar energy business. We depend on the skills of our management team and current key employees, such as Mr. Chen Wei Dong, our Chairman, President, and Chief Executive Officer. We may be unable to forecast future miningretain our existing key personnel or attract and retain additional key personnel.
revenues. We have not yet generated
The loss of any revenue from mining operations. Our current and future anticipated
expense levels are largely based onof our investment plans. Failure to generate revenues,key employees or the failure to attract, investment,
10
sufficient to support our planned expenditures, wouldand retain experienced or additional key employees could have a material adverse effect on our business prospects,and financial condition.
11
WE ACT AS THE GENERAL CONTRACTOR FOR OUR CUSTOMERS IN CONNECTION WITH THE INSTALLATIONS OF OUR SOLAR POWER SYSTEMS AND ARE SUBJECT TO RISKS ASSOCIATED WITH CONSTRUCTION, BONDING, COST OVERRUNS, DELAYS AND OTHER CONTINGENCIES, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.
We act as the general contractor for our customers in connection with the installation of our solar power systems. All essential costs are estimated at the time of entering into the sales contract for a particular project, and these are reflected in the overall price that we charge our customers for the project. These cost estimates are preliminary and may or may not be covered by contracts between us or the other project developers, subcontractors, suppliers and other parties to the project. In addition, we require qualified, licensed subcontractors to install most of our systems. Shortages of such skilled labor could significantly delay a project or otherwise increase our costs. Should miscalculations in planning a project or defective or late execution occur, we may not achieve our expected margins or cover our costs. Additionally, many systems customers require performance bonds issued by a bonding agency. Due to the general performance risk inherent in construction activities, it is sometimes difficult to secure suitable bonding agencies willing to provide performance bonding. In the event we are unable to obtain bonding, we will be unable to bid on, or enter into sales contracts requiring such bonding.
Delays in solar panel or other supply shipments, other construction delays, unexpected performance problems in electricity generation or other events could cause us to fail to meet these performance criteria, resulting in unanticipated and severe revenue and earnings losses and financial condition,penalties. Construction delays are often caused by inclement weather, failure to timely receive necessary approvals and permits, or delays in obtaining necessary solar panels, inverters or other materials. The occurrence of any of these events could have a material adverse effect on our business and results of operations.
 
WE WILL NEED ADDITIONAL CAPITALARE A PRIVATE COMPANY MAINLY OPERATING IN CHINA, WHICH MAY RESULT IN A MORE DIFFICULT BUSINESS ENVIRONMENT FOR US, COMPAIRED WITH THE STATE OWNED COMPANY IN PV INDUSTRY

We are a private company operating in China in PV industry, which may incur more cost in obtaining administrative permit, acquiring EPC project, etc, while many competitors are state-owned Companies and operate in a preferable business environment. The PV developer must apply for the PV demonstration project for financial subsidy. Usually the relevant government agencies give priority to the state-owned company under equal conditions.
RISKS RELATED TO PURSUE OUR PLANS,PV INDUSTRY
A SIGNIFICANT REDUCTION IN OUR DISCONTINUATION OF GOVERNMENT SUBSIDIES AND ECONOMIC INCENTIVES MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS.
Demand for our products and services substantially depends on government incentives aimed to promote greater use of solar power. The PV application markets would not be commercially viable without government incentives. This is because the cost of generating electricity from solar power currently exceeds the cost of generating electricity from conventional or non-solar renewable energy sources.
The scope of the government incentives for solar power depends, to a large extent, on political and policy developments in China related to environmental, economic or other concerns, which could lead to a significant reduction in or a discontinuation of the support for renewable energy sources .
Any new government regulations or utility policies pertaining to our solar power products may result in significant additional expenses to us, our resellers, and our customers and as a result, could cause a significant reduction in demand for our solar power products.

BECAUSE THE MARKETS IN WHICH WE COMPETE ARE HIGHLY COMPETITIVE AND MANY OF OUR COMPETITORS HAVE GREATER RESOURCES THAN US, WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AND WE MAY LOSE OR BE UNABLE TO GAIN MARKET SHARE.
OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR OPERATIONS.
We mainly focus on the local solar PV downstream market. Our competitors include Xiaan Huanghe Photovoltaic Technology Co.,Ltd, Shaanxi Tuori New Energy Technology Limited, and Shaanxi Changling Electric Co.,Ltd etc. Most of them have a stronger market position than ours, more sophisticated technologies greater resources and better name recognition than we do.

The barriers to entry are relatively low in the PV consumer market. Financial strength and social relations resource were the key barriers to entry for the EPC project acquisition. Because of the government's continuous efforts to encourage the PV consumer market, more and more companies with strong financial support commenced their solar PV energy business. It is a challenge for us to establish our competitive market position in the industry. In order to acquire more market share, we must respond more quickly to changing customer demands or market conditions or to devote greater resources to the marketing promotion.

New competitors or alliances among existing competitors could emerge and rapidly acquire a significant market share, which would harm our business. If we fail to compete successfully, our business would suffer and we may lose or be unable to gain market share.
 
As
12
RISKS RELATED TO THE REAL ESTATE INDUSTRY

THE CHINESE GOVERNMENT OWNS ALL LAND IN CHINA, AND CHINA ISSUES LAND USE RIGHTS INSTEAD OF LEGAL TITLE TO THE PROPERTIES. THERE IS NO ASSURANCE THAT OUR RIGHTS TO THE PROPERTIES WILL NOT BE SUBJECT TO IMPAIRMENT OR LOSS.

In China, all property is owned by the central government. Unlike deeds or other evidence of December 31, 2009a fee simple ownership interest, land use rights are always subject to fixed periods and December 31, 2008, we had current assetspermitted land use, usually for long periods of $ 488,698time. These periods are frequently 50 years. Disputes over mining claims are common. A loss of our property rights would cause material damage to the Company and $ 850,627,the price of its securities and could result in the loss of the entire value of our Company.
respectively. The remainder
RISKS RELATED TO DOING BUSINESS IN THE PEOPLE'S REPUBLIC OF CHINA

WE ARE SUBJECT TO THE POLITICAL AND ECONOMIC POLICIES OF THE PEOPLE’S REPUBLIC OF CHINA, AND GOVERNMENT REGULATION COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR INTENDED BUSINESS.

All of our assets and operations are illiquid. Explorationin the PRC. As a result, our operating results and financial performance as well as the value of our securities could be affected by adverse changes in economic, political and social conditions in China.

The Chinese government adopted a policy to transition from a planned economy to a market driven economy in 1978. Since then, the economy of the PRC has undergone rapid modernization, although the Chinese government still exerts a dominant force in the nation's economy. This continues to include reservation to the state of land use rights, and includes controls on foreign exchange rates and restrictions or prohibitions on foreign ownership in various industries. All lands in China are state owned and only limited “land use rights” are conveyed to business enterprises or individuals.

All of our intended exploration and mining activities will likely generate cash flow deficitsrequire approvals from the local government authorities in China. Obtaining governmental approval is typically a lengthy and difficult process with no guaranty of success. Since the lands where our activities are located were acquired through the grant of a land use right, changes in government policy could adversely affect our business.

The Chinese government operates the economy in many industries through various five-year plans and increased capital needs that will exceed our available capital. In that event, we will need to obtain additional
funding.
We currentlyeven annual plans. A large degree of uncertainty is associated with potential changes in these plans. Since China’s economic reforms have no lines of credit or other arrangements for capital and cannot provide anyprecedent, there can be no assurance that wefuture changes will not create materially adverse conditions for our business.
be able to obtain funding in the future to meet our needs. Even if we locate available capital, it may be on
unfavorable terms. Any future capital investments could dilute or otherwise materially and adversely affect the
rights of our existing shareholders.

FLUCTUATION OF THE CHINESE CURRENCY COULD MATERIALLY AFFECT OUR FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

We have not yet commenced mining operations and do not have mining revenues. We expect that our future
revenues, if any, revenue and expenses will be generated in China, but our reporting currency is US dollars and reported
results will be affected by exchange rate fluctuations between the RMB and the US dollar. We cannot give any
assurance that the value of the RMB will continue to appreciate, or even remain stable against the US dollar or any
other foreign currency. Accordingly, we may experience economic losses and negative impacts, as reported in U.S.
Dollars, as a result of foreign exchange rate fluctuations.

The RMB is currently not a fully convertible currency. The Chinese government may restrict future access to
foreign currencies for current account transactions. This may make it difficult for us to transfer money from China to
other countries on an economically advantageous basis or even at all. It may also make it difficult for us to pay cash
returns on the investment of foreign capital.
WE MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL REGULATIONS.
We are subject to China’s national and local environmental protection regulations which currently impose fees for
the discharge of waste substances, require the payment of fines for pollution, and provide for the closure by the
Chinese government of any facility that fails to comply with orders requiring a company to cease or improve upon
certain activities causing environmental damage. Due to the nature of the mining business, future mining operations
could produce significant amounts of waste water, gas, and solid waste materials. Chinese national, provincial, or
local authorities may impose legal requirements which would require additional expenditures on environmental
matters or changes in our processes or systems, the cost of which may exceed our financial resources.
WE DEPEND ON OUR SENIOR MANAGEMENT AND KEY EMPLOYEES, THE LOSS OF WHOM COULD
ADVERSELY AFFECT OUR OPERATIONS.
Our success will depend to a large degree upon our ability to identify, hire, and retain personnel, particularly
experienced miners and persons familiar with the marketing, manufacturing and administrative processes associated
with mining. We depend on the skills of our management team and current key employees, such as Mr. Chen Wei
Dong, our Chairman, President, and Chief Executive Officer. We may be unable to retain our existing key personnel
or attract and retain additional key personnel.
The loss of any of our key employees or the failure to attract, and retain experienced miners or additional key
employees could have a material adverse effect on our business and financial condition.
RISKS RELATED TO OUR INDUSTRY
11
HAZARDS AND RISKS ASSOCIATED WITH MINING MAY CAUSE SUBSTANTIAL DELAYS OF
OPERATIONS AND REQUIRE SIGNIFICANT EXPENDITURES.
The Company's operations are subject to all of the hazards and risks normally incident to the exploration for and
development and production of minerals, any of which could result in damages for which the Company may be held
responsible. Many hazards are beyond our control, such as unusual or unexpected rock formations, bad weather, and
high water tables. We could also experience landslides, cave-ins, flooding or other unfavorable conditions. If we
experience losses from these or other risks, it may cause substantial delays and require significant additional
expenditures. These conditions would adversely affect the Company's business, financial condition and the value of
our securities.
China has experienced a number of serious incidents in its mining industry that resulted in loss of life and serious
personal injury. Some mines have collapsed or were otherwise forced to close due to unsafe conditions. We would
suffer material losses if any of these events were to occur, and they would have a material adverse effect on our
business and the value of our securities.
RISKS RELATED TO THE REAL ESTATE INDUSTRY
THE CHINESE GOVERNMENT OWNS ALL LAND IN CHINA, AND CHINA ISSUES LAND USE RIGHTS
INSTEAD OF LEGAL TITLE TO THE PROPERTIES. THERE IS NO ASSURANCE THAT OUR RIGHTS TO
THE PROPERTIES WILL NOT BE SUBJECT TO IMPAIRMENT OR LOSS.
In China, all property is owned by the central government. Unlike deeds or other evidence of a fee simple ownership
interest, land use rights are always subject to fixed periods and permitted land use, usually for long periods of time.
These periods are frequently 50 years. Disputes over mining claims are common. A loss of our property rights or
mining rights would cause material damage to the Company and the price of its securities and could result in the loss
of the entire value of our Company.
MARKET PRICES FOR NON-FERROUS METALS FLUCTUATE AND COULD ADVERSELY AFFECT THE
VALUE OF OUR COMPANY AND OUR SECURITIES.
Market prices for zinc, lead and gold, the metals for which we explore, experience significant fluctuations in price.
The profitability of any mining operations will be directly related to these market prices. The market prices of non-
ferrous metals are subject to factors beyond our control. These factors include, but are not limited to, changes in
legal and regulatory requirements, changes in the exchange rates of the RMB and other currencies, worldwide
economic conditions, political and economic factors and variations in production costs. A reduction in the price or
demand for lead, zinc or gold would adversely affect our Company and the value of our securities.
WE ARE EXPOSED TO BUSINESS CYCLE RISK .
Our business is located in China and will be conducted in China. We expect to sell any minerals we extract within
China. The need for these minerals throughout the world is affected by the demand for such minerals in China. We
are dependant on the continued economic growth in China to maintain demand for our mineral products. The recent
global recession has adversely affected the non-ferrous metals industry. Our business and results of operation may
be adversely affected if Chinese economic growth were to decline.
SHORTAGES OF CRITICAL PARTS, EQUIPMENT AND SKILLED LABOR MAY ADVERSELY AFFECT
OUR DEVELOPMENT PROJECTS.
The mining industry has been impacted by increased worldwide demand for resources such as input commodities,
drilling equipment, tires and skilled labor. These shortages have caused, and may continue to cause, unanticipated
cost increases and delays in delivery times, potentially impacting operating costs, capital expenditures and
production schedules.
12
RISKS RELATED TO DOING BUSINESS IN THE PEOPLE'S REPUBLIC OF CHINA
WE ARE SUBJECT TO THE POLITICAL AND ECONOMIC POLICIES OF THE PEOPLE’S REPUBLIC OF
CHINA, AND GOVERNMENT REGULATION COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
INTENDED BUSINESS.
All of our assets and operations are in the PRC. As a result, our operating results and financial performance as well
as the value of our securities could be affected by adverse changes in economic, political and social conditions in
China.
The Chinese government adopted a policy to transition from a planned economy to a market driven economy in
1978. Since then, the economy of the PRC has undergone rapid modernization, although the Chinese government
still exerts a dominant force in the nation's economy. This continues to include reservation to the state of land use
rights or mining and exploration rights, and includes controls on foreign exchange rates and restrictions or
prohibitions on foreign ownership in various industries including mining. All lands in China are state owned and
only limited “land use rights” are conveyed to business enterprises or individuals.
All of our intended exploration and mining activities require approvals from the local government authorities in
China. Obtaining governmental approval is typically a lengthy and difficult process with no guaranty of success.
Since the lands where our exploration activities are located were acquired through the grant of a land use right,
changes in government policy could adversely affect our business.
The Chinese government operates the economy in many industries through various five-year plans and even annual
plans. A large degree of uncertainty is associated with potential changes in these plans. Since China’s economic
reforms have no precedent, there can be no assurance that future changes will not create materially adverse
conditions for our business.
 
THERE ARE RISKS INHERENT IN DOING BUSINESS IN CHINA OVER WHICH WE HAVE NO
CONTROL.

The political and economic systems of the PRC are very different from those of the United States and other western
countries. China remains volatile with respect to certain social, economic and political issues which could lead to
revocation or adjustment of reforms. There are also issues between China and the United States that could result in
disputes or instabilities. The role of China and its government remain in flux both domestically and internationally,
and could cause shocks or setbacks that may adversely affect our business.

THE CHINESE LEGAL SYSTEM DIFFERS FROM THAT OF THE UNITED STATES, PROVIDING LESS
PROTECTION FOR INVESTORS, AND IT MAY BE DIFFICULT FOR INVESTORS TO SEEK LEGAL
REDRESS AGAINST US OR OUR OFFICERS AND DIRECTORS, INCLUDING CLAIMS THAT ARE
BASED UPON U.S. SECURITIES LAWS.

All of our current operations are conducted in China. All of our current directors and officers are nationals or
residents of China. All of the assets of these persons are located in China. The PRC legal system is a civil law
system. Unlike the common law system, the civil law system is based on written statutes in which decided legal
cases have little value as precedents. Differences in interpretations and rulings can occur with limited opportunity
for redress or appeal.
 
It may not be possible to effect service of process within the U.S. or elsewhere outside China upon our officers and
directors. Even if service of process were successful, considerable uncertainty exists as to whether Chinese courts
would recognize and enforce U. S. laws or judgments obtained in the U.S. federal and state securities laws as the U.
S. laws confer substantial rights to investors and shareholders that have no equivalent in China. Therefore a claim
against us or our officers and/or directors or even a final judgment in the U. S. may not be recognized or enforced by
Chinese courts.
13
 
 
13
 
 
In 1979, the PRC began to reform its legal system and has enacted numerous laws regulating economic and business
development, including those related to foreign investment. Currently many of the approvals required for our
business may be obtained at local or provincial level. We believe that it is relatively easier and faster to obtain
provincial approval than central government approval. Changes to existing laws that repeal or alter local regulatory
authority and preempt it with national laws could negatively affect our business and the value of our securities.

China's regulations and policies regarding investments, including investment in the miningPV business, are subject to
continued reformation and revisions. They may change in a manner adverse to us and our stockholders.

CHINESE LAWS COULD RESTRICT THE PAYMENT OF DIVIDENDS FROM ANY PROCEEDS
OBTAINED FROM LIQUIDATION OF OUR ASSETS.

All of our assets are located in China. Chinese law governs the distributions that can be made in the event of
liquidation of assets of foreign invested enterprises. While dividend distribution is allowed, some distributions are
subject to the approval from the foreign exchange authority in China. Liquidation proceeds would also be subject to
foreign exchange control. We are unable to predict the outcome in the event of liquidation insofar as it affects
payment to non-Chinese nationals.

RISKS RELATED TO OUR COMMON STOCK

SUSPENSION OF TRADING

The SEC announced a suspension, pursuant to Section 12(k) of the Exchange Act, of trading in the securities of the
Company on April 1, 2011. Questions have arisen regarding the accuracy and completeness of information
contained in the Company’s public filings with the SEC and concerning the company’s financial statements.
The absence of a trading market adversely affects the value of our securities.

However, as of September 5, 2012, the Securities and Exchange Commission officially notified us of termination of the investigation against us that began in April 2011. We expect that our common stock would resume trading after filling all of the outstanding periodic reports.
 
THERE IS CURRENTLY A LARGE MARKET OVERHANG IN OUR COMMON STOCK AND FUTURE
SALES OF OUR COMMON STOCK COULD DEPRESS THE MARKET PRICE AND DIMINISH THE
VALUE OF YOUR INVESTMENT.

SubsequentOn February 9, 2010, we filed a Certificate of Amendment to year-end 2009, we hadour Articles of Incorporation to effect a 1-for-10 reverse split of our common stock, after which all shares of our
Series C Preferred Stock were converted into an aggregate of 609 million shares of our common stock. This
effectively eliminated the ability of our other common stock holders to have a significant role in the election of
directors and other corporate changes. Future sales of shares of our common stock or securities that are convertible
into our common stock could adversely affect the market price of our common stock. If any of our principal
stockholders sells a large number of shares or if we issue a large number of shares, the market price of our common
stock could significantly decline. Moreover, the perception in the public market that our principal stockholders
might sell shares of common stock could further depress the market for our common stock.
 
BECAUSE OUR OFFICERS AND DIRECTORS CONTROL THE MAJORITY OF THE VOTING POWER OF OUR COMMON STOCK, INVESTORS IN OUR COMMON STOCK WILL NOT BE ABLE TO DETERMINE THE OUTCOME OF STOCKHOLDER VOTES.
Our officers and directors currently control approximately 94% of our common stock. So long as they continue to hold, directly or indirectly, shares of common stock representing more than 50% of the combined voting power of our common stock, they will be able to direct the election of all of the members of our board of directors who will determine our strategic plans and financing decisions and appoint top management. They will also be able to determine the outcome of substantially all matters submitted to a vote of our stockholders, including matters involving mergers, acquisitions and other transactions resulting in a change of control of us, and our pursuit of corporate opportunities. They may seek to cause us to take courses of action that, in their judgment, could enhance their investment in us, but which might involve risks to holders of our common stock or adversely affect us or other investors.

THE MARKET FOR SHARES OF OUR COMMON STOCK HAS BEEN LIMITED AND SPORADIC, AND
THERE IS NO GUARANTEE THAT A MARKET WILL BE AVAILABLE FOR YOU TO SELL YOUR
SHARES.

Shares of our common stock are not listed on any exchange but have been sporadically traded in over the counter
transactions or in inter-dealer quotations. The trading of our stock was suspended by the SEC in April 2011. There is
no assurance that any market makers will in the future post bid and ask prices for our shares of common stock. Our
stock has been very thinly traded and there were many days or weeks that the shares did not trade at all. There is no
assurance that any market will exist at the time that a shareholder wishes to sell his or her shares and there is no
assurance that any market will continue.
14
 
OUR COMMON STOCK PRICE IS VOLATILE AND MAY NOT APPRECIATE IN VALUE.

The trading of our stock was suspended on April 1, 2011 by the SEC. The market price of shares of our common
stock fluctuated and, if trading resumes, is likely to continue to fluctuate significantly. Fluctuations could be rapid
and severe and may provide investors little opportunity to react. Factors such as changes in commodity prices,
conversion of our preferred shares, results of operations, and a variety of other factors, many of which are beyond
the control of the Company, could cause the market price of our common stock to fluctuate substantially. Also,
stock markets in penny stock shares tend to have extreme price and volume volatility. The market prices of the
securities of many smaller public companies are subject to volatility for reasons that frequently are unrelated to
operating performance, earnings or other recognized measurements of value. This volatility may cause declines,
including very sudden and sharp declines, in the market price of our common stock. We cannot assure investors that
the stock price will appreciate in value, that a market will be available to resell your securities or that the shares will
retain any value at all.
 
WE MAY INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH U.S. CORPORATE
GOVERNANCE AND ACCOUNTING REQUIREMENTS.
 
The SEC issued comment letters on September 28, 2010, February 18, 2011 and April 19, 2011, regarding our Form
10-K for fiscal year ended December 31, 2009, and regarding our Forms 10-Q for fiscal quarters ended March 31,14
2010, June 30, 2010 and September 30, 2010. The SEC also issued another letter to us on February 25, 2011
regarding the need to file Form 8-K to disclose non-reliance on our filings, pursuant to a letter addressed to the
Board of Directors of the Company by our former independent accountant, Brock, Schechter & Polakoff, LLP. We
filed Form 8-K and a Form 8-K Amendment on May 31, 2011 and June 6, 2011, respectively, to address the
February 2011 SEC comment letter. On April 4, 2011, the SEC issued a subpoena to the Company as part of its
investigation and required the Company to produce certain documents. We complied with the subpoena and
responded on May 2, 2011 to the Los Angeles Regional Office of the SEC.
 
On June 7, 2011, the SEC issued another subpoena in furtherance of its investigation and required the Company to
produce additional documents relating to its land use right. We complied with the subpoena and responded on June
24, 2011 to the Los Angeles Regional Office of the SEC.
We expect to incur significant costs associated with these matters, as well as our ongoing public company reporting
requirements and costs associated with corporate governance requirements and other rules implemented by the SEC.
We expect our current SEC matters and these rules and regulations to increase our legal and financial compliance
costs and to make some activities more time-consuming and costly. We also expect it may become more difficult
and more expensive for us to obtain director and officer liability insurance and we may be required to accept
reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a
result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or
as executive officers.
 
WE DO NOT FORESEE PAYING CASH DIVIDENDS IN THE FORESEEABLE FUTURE.

We have not paid cash dividends on our stock and we do not plan to pay cash dividends on our stock in the
foreseeable future. We intend to retain any earnings to help fund operations. Therefore an investment in our
common stock is not appropriate for investors who require regular and periodic returns on their investments.
 
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC’S
PENNY STOCK REGULATIONS AND THE FINRA’S SALES PRACTICES, WHICH MAY LIMIT A
STOCKHOLDER’S ABILITY TO BUY AND SELL OUR STOCK.

The trading of our stock was suspended on April 1, 2011, by the SEC. OurIf trading resumes, our stock iswill be a penny stock. The SEC has
adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our
securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-
dealers who sell to persons other than established customers and “accredited investors”, as defined. Rule 15g-2
15
requires a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form required by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market, and cautions investors against making a hurried
investment decision. The broker-dealer must also provide the customer with the current bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in the transaction. The broker-dealer
must also send a confirmation of these prices after the trade. After a purchase of penny stock, the broker-dealer
must send a monthly account statement that gives an estimate of the value of each penny stock purchased.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to
these penny stock rules.

Consequently, these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our
common stock.

In addition to the “penny stock” rules promulgated by the SEC, the Financial Industry Regulatory Authority
(“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must
have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending
speculative, low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts
to obtain information about the customer’s financial status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced
securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-
dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our
stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
 
Not applicable to a smaller reporting company.
 
ITEM 2. PROPERTIES.
 
Corporate Headquarters

Our corporate headquarters, consisting of 554 square meters, are located at Seventeenth Floor, Xinhui Mansion, Gaoxin Road, Hi-tech Zone, Xi'An, Shaanxi Provence PRC, 710075. Our telephone number is (86)29- 88331685 and our fax number is (86)29-88332335. We have renewed the leasing contract for our headquarters in January, 2013, at a rental rate of $11,932(RMB75,000) per year.
Land use right leasing Parcel

All land in China is owned by the state. Individuals and companies are permitted to acquire rights to use land, or
“land “land use rights,” for specific purposes. In the case of land used for commercial purposes, the land use rights are
granted for a period of 50 years. The original period, and any subsequent periods, may be renewed prior to their
expiration. Granted land use rights are transferable and may be used as security for borrowings and other
obligations.
Corporate Headquarters
Our corporate headquarters, consisting of 554 square meters, are located at Seventeenth Floor, Xinhui Mansion,
Gaoxin Road, Hi-tech Zone, Xi'An, Shaanxi Provence PRC, Postcode: 710075. Our telephone number is (86)29-
88331685 and our fax number is (86)29-88332335. We have leased our headquarters through January 31, 2013, at a
rental rate of $11,029 per year.
The Dongfang Parcel
We have mining rights to a 61.27 square kilometer (15,140acres) parcel in the Jiao Shan Zhai Mining Area, located
in Xunyang County-Guo Jia Ling, Xunyang County, Shaanxi Province (the “Donfang Parcel”). Approval of the
exploration rights was granted by the appropriate authorities (Certificate No. 6100000720386). As shown on the
map below, the Dongfang Parcel is located in the Guo Jia Ling- Jiao Shan Zhai Mining Area in eastern Xunyang
County, under the jurisdiction of Shuhe Town, Guankou Town and Gouyuan Village, Xunyang County, Shaanxi
Province.
16
17
Dongfang Mining obtained an exploration license in September, 2003 relating to the exploration for mineral
deposits on this parcel. Also in 2003, the First Geological Team of the Shaanxi Provincial Bureau of Geology and
Mineral Resources undertook a preliminary survey, a geographical profile survey, and performed limited trenching
in 1.15 square kilometers. Also, the Yunnan Nonferrous Geological Institute Physical Branch performed a survey,
using the geophysical transient electromagnetic method. We have not yet established the presence or location of
proven or provable mineral reserves.
Theme Park Parcel

We have land use rights (certificate No. (2006)3240001), toin a 5.7 square kilometer parcel in Huanghe Nantan
(Huanghe Bay), Heyang County, Shaanxi province. We currently lease a portion of this parcel to Shaanxi Huanghe Wet Land Park
Co., Ltd. for the development and operation of a theme park. The lease expires on December 31, 2029. The photograph below shows an overview of our land in Hunaghe Bay.
 
15

The solar PV parcel

We have invested $280,178 to Huanghe Bay Project for the construction of solar PV system as of December 31, 2012, located in the Huanghe Nantan (Huanghe Bay), Heyang County, Shaanxi province.
ITEM 3. LEGAL PROCEEDINGS.

We received a document subpoena dated April 4, 2011, pursuant to which the Enforcement Division of the SEC
informed us that it iswas conducting an investigation of the Company to determine whether the Company has committed
a violation of the federal securities laws. The subpoena required us to produce certain documents to the SEC, and
we complied and responded on May 2, 2011.

On June 7, 2011, the SEC issued another subpoena in furtherance of its investigation and required the Company to
produce additional documents relating to its land use right. We complied with the subpoena and responded on June
24, 2011 to the Los Angeles Regional Office of the SEC.

On September 5, 2012, the Securities and Exchange Commission officially notified us of its termination of the investigation against us that began in April 2011. The SEC also confirmed that it had no intention of recommending any enforcement action by the Commission.
 
ITEM 4. (REMOVED AND RESERVED).MINE SAFETY DISCLOSURES.
Not applicable.
16
 
PART II
 
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market information

The trading of our stock was suspended on April 1, 2011 by the SEC. Prior to the suspension, the Company's
common stock was traded over-the-counter and quoted from time to time in the Over-the-Counter (“OTC”) Bulletin
Board under the trading symbol “CHJI.OB”. There is currently no public trading market for the Company's common
stock. The following table sets forth the range of high and low bid prices as reported by the OTC Bulletin Board for
the periods indicated. Such quotations represent inter-dealer prices without retail markup, markdown, or
commission, and may not necessarily represent actual transactions.

18
CALENDAR YEAR QUARTER BID PRICE 
    high  low 
2011 First Quarter $0.0025   0.0005 
  First Quarter $0.035   0.01 
2010 Second Quarter  0.01   0.0001 
  Third Quarter  0.0001   0.0001 
  Fourth Quarter  0.0001   0.0001 
  First Quarter $0.035   0.01 
2009 Second Quarter  0.07   0.035 
  Third Quarter  0.14   0.02 
  Fourth Quarter  0.03   0.018 
 
Holders
 
As of April 29, 2011,December 31, 2012, we had 4,0693,353 record holders of our common stock.
 
Dividends

To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying
any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if
any, to finance the exploration and growth of our business, our board of directors reserves the right to declare and
pay dividends in the future, to the extent permitted by law.

Stock Option Grants

None.
 
17

Unregistered Sales of Equity Securities

After the end of fiscalOn December 25, 2009, on January 10, 2010 and January 21, 2010, the Company issued an aggregate of
4,500,000 shares of common stock to Messrs. Donald R. Monroe and Stanley F. Wilson, the principals of Capital
Advisory Services, Inc., in connection with our share exchange transaction. To the best of our knowledge, each of
them now holds 2,250,000 shares of common stock the shares were issued without registration in reliance on section
4(2) of the Securities Act .AllAct. All issued and outstanding shares of series C Preferred Stock have been converted into an
aggregate amount of 609 million shares of our common stock which were issued without registration in reliance on
SEC Regulation S.S and section 3(a)(9) of the Securities Act.

Repurchases of Shares by the Company

None.
ITEM 6. SELECTED FINANCIAL DATA.
 
Not required for a smaller reporting company.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and
the related notes thereto as filed with the SEC, and other financial information contained elsewhere in this Form 10- K.
K/A.

Overview
 
We are an exploration stagehave transitioned our business from mining company. We have not yet conducted sufficient exploration activity to
determine whether we have any proven or probable mineral reserves. We have sustained losses from operations to
date.
We have exploration rights for a 61.27 sq.km parcel clean new energy in the Jiao Shan Zhai Mining Area, locatedmiddle of 2012, and mainly focused on the solar PV downstream market at the present stage. Though the solar PV business did not generate revenue in Xunyang County2012, our Huanghe Bay Project was expected to begin the operation in 2013. And at the end of 2013, our Baisui Project is expected to complete its construction works. In the near future, we plan to gradually increase the resource devoted to marketing.

We also hold land use rights in a land parcel and we lease a portion of the land use rights on the 5.7 square kilometer parcel to Shaanxi ProvinceHuanghe Bay Springs Lake Theme Park Ltd. (“Huanghe”), a company with a common control person. The term of China.the lease agreement is from January 1, 2011 to December 31, 2029. Our land use rights are amortized over their 50-year50 year term. We have performed
limited tests onThe Land use right was not only our largest asset, but also the site but we have not yet determined if the site contains adequate mineralizationstable operating income to support miningour other business, with an annual rent of approximately $ 1.2 million (RMB7,500,000).
activity.

The following is a summary of the book value of our land use rights as of December 31, 2009:2012:
 
Cost$18,744,677
Less: Accumulated amortization2,146,978
Land use rights, net$16,597,699
Cost $20,363,122 
Less: Accumulated amortization  3,587,160 
Land use rights, net $16,775,962 
 
10-KA Exhibit v10-KA
19
The land use rights are amortized over the fifty year term. The amortization expense for the year ended
December 31, 20092012 and December 31, 20082011 was $405,100$407,262 and $391,451,$401,476, respectively.
Since 2003, Dongfang has held licenses for the exploration of minerals and precious metals in the Shaanxi Province
of China. Dongfang was granted an exploration right for zinc, lead and gold at Gan Gou and Guan Zi Gou, Xunyang
County, Shaanxi Province, PRC, on December 31, 2006.

As reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit of
$ 6,258,430 $4,946,453 as at December 31, 2009,2012, which includes a net lossincome of $ 921,675$615,507 for the year ended December 31,
2009. 2012. The Company's current liabilities exceed its current assets by $ 16,620 and the Company usedCompany’s operations provided cash of $1,981,311 in 2012.
$ 237,950 in its operations in 2009.
As ofWe began to generate revenue for the year ended December 31, 2009,2011, of which the revenue from land use right leasing was expected to provide stable cash flow. In the future, we had appliedexpect that there will no longer be a need for but had not yet obtained, a license that will permit the excavation and
extraction of minerals. Issuance of that license will depend, in part, on the results of exploration for zinc, lead and
gold at the site.
To date, we have financed our activities from loans received from certain of our directors and other related parties
We mainly received loan from Hongjun Zhang, the stockholder and director of the Company.
We expectus to continue to rely on loans from our directors and other related parties. We believe that we have no other sources ofadequate capital
and there can be no assurance to assure that the Companywe will be able to meet itsour obligations or obtain sufficient capital to complete
its our plan of operations for the next twelve (12) months.
 
18
RESULTS OF OPERATIONS

Comparison of the Years Ended December 31, 20092012 and December 31, 20082011

The Company is an exploration stage companySales revenue

We generated total revenue of $1,188,119 for the year ended December 31, 2012, compared with the revenue of $2,744,624 for the year ended December 31, 2011. This decrease was due to the termination of our mines exploitation compensation business at the end of 2011, and has not yet generated mining revenue.subsequently, disposing the mines in the middle of 2012.
The amortization of land use rights was $ 405,100 in 2009 and $ 391,451 in 2008, both of which have been
included in operating expense. The amortization is a non-cash accounting charge. Business tax was zero both in
2009 and 2008.

Operating Expenses

Total operating expenses for the year ended December 31, 20092012 decreased to $ 895,389$676,094 from $1,666,930$810,910 for the
year ended December 31, 2008. Total expenses,2011. The decrease was partially due to a decrease in the administrative expense, which decreased to $241,376 from $374,388, due to our more stringent cost control in 2012. The amortization expense for the year ended December 31, 2012 remained stable, as no addition or disposal occurred for Land use rights and the depreciation expense for the year ended December 31, 2012 decreased by $7,590, as one of the cars was disposed in February, 2012.
Income before taxes and non-controlling interests for the year ended
December 31, 20092012 was $ 898,179$601,242 as compared to $ 1,665,241an income of $1,779,128 for year ended December 31, 2008.2011. The reduction
significant decrease for our operating results was primarilyattributable to the resulttermination of lower legal and professional fees in 2009 than in 2008.our mine exploitation compensation business at the end of 2011.
 
Net LossIncome

OurWe achieved a net lossincome of $615,507 for the year ended December 31, 2009 decreased2012, compared to $ 921,675 from $1,700,599 for the year ended
December 31, 2008. The overall decrease ina net lossincome of $ 778,924, over the prior year period, is primarily due to the
lower legal and professional fees in 2009 than in 2008
Comprehensive Gain (Loss)
Our comprehensive loss$1,495,882 for the year ended December 31, 20092011. The significant decrease was $10,140primarily due to the termination of our mine exploitation compensation business at the end of 2011.

Comprehensive Income

Our comprehensive income for the year ended December 31, 2012 was $646,757 compared with comprehensive
income of $1,194,891 for the year ended December 31, 2011. The comprehensive income (loss) for each period only referred to the foreign currencies translation gain of $756,080 in 2008. The change primarily resulted from exchange rates(loss), between the U.S. Dollar and the
Chinese Yuan RMB.
20
RMB (or Hong Kong Dollar for Wah Bon).
 
Stockholders’ Equity

Stockholders' equity decreased by $832,418increased to $9,705,366$12,728,536 as of December 31, 2009,2012, or approximately 0.8 %,
13%, from $10,537,784$11,307,186 as of December 31, 2008.The decrease2011. The significant increase was primarily due to our net income of $615,507 generated for the expense occurred in 2009.year ended December 31, 2012.
 
LIQUIDITY AND CAPITAL RESOURCES
General
For the year ended December 31, 2009, net cash used in operating activities was $ 237,950, net cash used in
investing activities was $131,397 and net cash provided by financing activities was $374,624. At December 31,
2009, our cash balance was $27,194 as compared to $23,878 for the prior year.

Cash Flows From Operating Activities

Net cash used inprovided by operating activities of $ 237,950$1,981,311 for the year ended December 31, 20092012 was primarily attributable
to receiving a payment of $554,455 (RMB3,500,000) for land use rights leasing and receiving a payment of $318,193 (RMB2,000,000) for the net daily operating expense withiout income.deposit of mines exploration rights transfer transaction. The adjustments to reconcile our net lossincome to
net cash flow are mainly these:include depreciation expense of $ 34,933,27,456, amortization of $ 407,262 for land use rights, of $ 406,922,
,adjustment for non-controlling interests of $ 23,496 , a decreasean increase in operating assets of $213,844
$648,110 and a decrease in operating liability of $4,530.$21,636.
 
Cash Flows From Investing Activities
 
Net cash used in investing activities of $131,397$797,156 for the year ended December 31, 20092012 was primarily
attributable to$131,397 dueincurred from purchase of property, plant and equipment and cash provided to the related parties.
19
 
Cash Flows From Financing Activities

Net cash of $374,624$532,376 provided by financing activities infor the year ended December 31, 20092012 resulted primarily
from advances from shareholders and$242,217 repayment to related parties and $774,593 from minority interest investment.
General

Collectability of our account receivable for the land use right leasing is important to our continuation of operation. In addition, we have access to short and long term loans of cash from our directors or other related parties.
We provided loans of $639,559 to our related parties for the year ended December 31, 2012.
We returned cash of $ 242,217 to our related parties for the year ended December 31, 2012.
Our current assets increased by $2,223,923 and total assets increased by $2,729,293 respectively, which resulted in our surplus cash on hand for the year ended December 31, 2012.

We have cash of $1,763,381 and $20,932 as described above.of December 31, 2012 and 2011 respectively. The significant increase of cash balance was due to the following collection in 2012.

The investment amount of $774,593 (RMB4,900,000) for Shaanxi Weinan Changjiang solar photovoltaic energy applied science and technology Co., Ltd, from Mr. Zhang Hongjun, was received in May 2012.

The deposit of $318,193(RMB2,000,000) for the Transfer Contract of Mines Exploration Rights was received in June 2012.

The rent income of $554,455(RMB3,500,000) from the Land use right leasing was received in October 2012.

We believe that we have sufficient cash to fund operations for the next 12 months.
 
FINANCING

We are still an exploration stage company. We ended fiscal 2009 with $27,194 of cash and equivalents. Given our
current cash usage rate, we can provide no assurance that our available cash andanticipated the cash we anticipate generating
generated from operating activities will be sufficient to sustain our daily operations for the next twelve months.
INTERNAL SOURCES OF LIQUIDITY
There is no assurance that funds from operations will meet the requirements of our daily operations in the future. In
the event that we have insufficient cash to meet our operating requirements, we will need to seek external financing
to maintain liquidity.
EXTERNAL SOURCES OF LIQUIDITY
Our management will review any financing options available to us, but we cannot assure you that we will be able to
secure additional funds from debt or equity financing, as and when we need to ormonths, if we can, thatdo not invest to expand the termsscale of such
financing will be favorable to us and our shareholders.
21
operations.
 
INFLATION
 
Our management believes that inflation did not have a material effect on our results of operations in 2009.2012.
 
OFF-BALANCE SHEET ARRANGEMENTS.
 
We do not have any off-balance sheet arrangements.
 
CONTRACTUAL OBLIGATIONS
 
None
 
SUBSEQUENT DEVELOPMENTSBASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").

This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC ("PRC GAAP"), the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company to present them in conformity with US GAAP.
 
Non-Reliance issues.
 
On March 18, 2010, we filed a Form 8-K and an amended Form 10-K for the period ended December 31, 2008. In
consultation with Brock, Schechter & Polakoff (“BSP”), our independent registered public accounting firm at that
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time, we concluded on February 22, 2010 that the financial statements for the fiscal year ended December 31, 2008,
as presented in our Report on Form 10-K for that year, should no longer be relied upon due to the accounting issues
more fully described in our Form 8-K filing.
 
The Company restated its financial statements for the fiscal year ended December 31, 2008 by disclosing the effect
of these accounting issues in our amended Form 10-K.
On May 31 and June 6, 2011, we filed a Form 8-K and a Form 8-K/A to report the resignation of BSP as the
Company’s auditor and that our Annual Report on Form 10-K for the year ended December 31, 2009, and our
Quarterly Reports for the fiscal quarters ended March 31, June 30 and September 30, 2010 could not be relied upon
for the reasons stated in the May 31 Form 8-K. We also reported that we had retained Parker Randall CF (H.K.)
CPA limited (“Parker Randall”) as our audit firm. This Form 10-K/A is being filed to amend our Form 10-K for the
2009 fiscal year and includes our restated financial statements and an audit report thereon from Parker Randall.
SUMMARY OF SIGNIFICANTCRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based on our consolidated
financial statements, which are prepared in accordance with accounting principles generally accepted in the United
States of America. The preparation of these consolidated financial statements requires us to make estimates,
judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the
related disclosure of contingent assets and liabilities to comply with generally accepted accounting principles. We
base our estimates on historical experience and on various other assumptions that we believe are reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results could differ from our estimates, which
would affect the related amounts reported in our financial statements.
 
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on
assumptions about matters that are highly uncertain at the time the estimates are made, and if different estimates that
reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur, could
materially impact the consolidated financial statements. We believe that the following critical accounting policies
reflect the significant estimates and assumptions which are used in the preparation of the consolidated financial
statements and affect our financial condition and results of operations.
 
Method of Accounting
The Company maintains its accountsrecognizes revenue when the earnings process is complete, both significant risks and prepares its financial statements using the accrual method accounting .
The consolidated financial statements and notesrewards of ownership are representations of management. Accounting policies
adopted by the Company conform to generally accepted accounting principles in the United States of America
andtransferred or services have been consistently applied.rendered and accepted, the selling price is fixed or determinable, and collectability is reasonably assured.

22
Principles of consolidation
The accompanying consolidated financial statements as of December 31, 2009 and 2010consolidate the financial
statements of North American and its 100% owned subsidiary Wah Bon, 100% owned subsidiary
Tai  Ping  Yang, 97.2% owned subsidiary Chang Jiang and 60% owned subsidiary Dongfang Mining.
The minority interests represent the minority shareholders' 2.8% and 40% shares of the results of Chang Jiang
and Dongfang Mining respectively.
The accompanying consolidated financial statements as of December 31, 2006 consolidate the financial statements
of Chang Jiang and its 92.93% owned subsidiary Huanghe. The minority interests represent  the minority
shareholders' 7.07% share of the results of Huanghe.
Business combinations and consolidated financial statements
Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of
the combining enterprises are ultimately controlled by the same party or parties both before and after the business
combination, and that control is not transitory. The assets and liabilities obtained are measured at the carrying
amounts as recorded by the enterprise being combined at the combination date. The difference between the
carrying amount of the net assets obtained and amount of consideration paid for the combination (or the value
of shares issued) is accounted for by an adjustment to the capital premium (or share premium) in the capital reserve.
If the balance of the capital premium (or share premium) is insufficient, any excess is charged against retained
earnings. The combination date is the date on which one combining enterprise effectively obtains control of the
other combining enterprises.
Business combinations involving enterprises not under common control
A business combination involving enterprises not under common control is a business combination in which
all of the combining enterprises are not ultimately controlled by the same party or parties both before and after
the business combination. Where 1) the aggregate of the fair value at the acquisition date of assets transferred
(including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and
equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds 2) the acquirer’s
interest in the fair value of the acquiree’s identifiable net assets, the difference is recognized as goodwill.
Where 1) is less than 2), the difference is recognized in profit or loss for the current period. The costs of the
issuance of equity or debt securities as a part of the consideration paid for the acquisition are included as a
part of initial recognition amount of the equity or debt securities. Other acquisition-related costs arising from
the business combination are recognized as expenses in the periods in which the costs are incurred. The difference
between the fair value and the carrying amount of the assets transferred is recognized in profit or loss.
The acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
The acquirer, at the acquisition date, allocates the cost of the business combination by recognizing the acquiree’s
identifiable asset, liabilities and contingent liabilities at their fair value at that date.
In a business combination, the acquiree’s deductible temporary differences obtained by the Group are not
recognized if the deductible temporary differences do not satisfy the criteria for recognition of deferred tax
assets at the acquisition date. The Group recognizes the relevant deferred tax assets and reduces goodwill
accordingly if within 12 months of the acquisition date, new or updated information indicates that at the
acquisition date, the obtained deferred tax benefit is expected to be realized in future periods. If the goodwill
is insufficient to be deducted, any remaining deferred tax benefits shall be recognized in profit or loss for the
current period. All other acquired deferred tax benefit shall be included in profit or loss for the current period.
Consolidated financial statements
The consolidated financial statements comprise the Company and its subsidiaries. Control is the power to
govern the financial and operating policies of an entity so as to obtain benefits from its operating activities.
In assessing control, potential voting rights, such as warrants and convertible bonds, thatWe are currently
exercisable or convertible, are taken into account. The consolidated financial statements of subsidiaries
are included in leasing the consolidated financial statements from the date that control commences until the date
that control ceases.
23
Where a subsidiary is acquired during a reporting period through a business combination involving enterprises
under common control, the consolidated financial statements of the subsidiary are included in the consolidated
financial statements as if the combination had occurred at the date that the ultimate controlling party first
obtained control. Therefore the opening balances and the comparative figures of the consolidated financial
statements are restated. In the preparation of the consolidated financial statements, the subsidiary’s assets,
liabilities and results of operations are included in the consolidated balance sheet and the consolidated income
statement, respectively, based on their carrying amounts, from the date that common control was established.
Where a subsidiary is acquired during a reporting period through a business combination involving enterprises
not under common control, the identifiable assets, liabilities and results of operations of the subsidiaries are
consolidated into consolidated financial statements from the date that control commences, based on the fair
value of those identifiable assets and liabilities at the acquisition date.For a business combination not involving
enterprises under common control and achieved in stages, the Group remeasures its previously-held equity
interest in the acquiree to its fair value at the acquisition date. The difference between the fair value and the
carrying amount is recognized as investment income for the current period; the amount recognized in other
comprehensive income relating to the previously-held equity interest in the acquiree is reclassified as investment
income for the current period.
Where the Company acquires a minority interest from a subsidiary’s minority shareholders or disposes of a
portion of an interest in a subsidiary without a change in control, the difference between the amount by which
the minority interests are adjusted and the amount of the consideration paid or received is adjusted to the capital
reserve in the consolidated balance sheet. If the credit balance of capital reserve is insufficient, any excess is
adjusted to retained earnings.
When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment, the
remaining equity investment is remeasured at its fair value at the date when control is lost. The difference
between 1) the total amount of consideration received from the transaction that resulted in the loss of control
and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the former
subsidiary’s net assets immediately before the loss of the control is recognized as investment income for the
current period when control is lost. The amount recognized in other comprehensive income in relation to the
former subsidiary’s equity investment is reclassified as investment income for the current period when
control is lost.
Minority interest is presented separately in the consolidated balance sheet within shareholders’ equity.
Net profit or loss attributable to minority shareholders is presented separately in the consolidated income
statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds
the minority shareholders’ portion of the opening balance of shareholders’ equity of the subsidiary, the excess
is allocated against the minority interests.
When the accounting period or accounting policies of a subsidiary are different from those of the Company,
the Company makes necessary adjustments to the consolidated financial statements of the subsidiary based
on the Company’s own accounting period or accounting policies. Intra-group balances and transactions,
and any unrealised profit or loss arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated
in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
The acquisition on March 22, 2007, which Chang Jiang entered into an agreement with the majority stockholder
of Chang Jiang to exchange its 92.93% interest in Huanghe for 20% equity interest in Dongfang Mining owned
by this related party; the acquisition on August 15, 2007, which 97.2% of the stockholders of Chang Jiang
entered into a definitive agreement with Tai Ping Yang and the stockholders of Tai Ping Yang pursuant to
which they disposed their ownership in Chang Jiang to Tai Ping Yang for 98% of ownership in Tai Ping Yang;
The acquisition on September 2, 2007, in which Wah Bon acquired 100% ownership of Tai Ping Yang at a
consideration of $128,205 in cash were all accounted for as a reorganization of entities under common control.
24
Basis of Presentation
The Company's consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in the United States of America ("US GAAP").
This basis of accounting differs in certain material respects from that used for the preparation of the books of
account of the Company, which are prepared in accordance with the accounting principles and the relevant
financial regulations applicable to enterprises with limited liabilities established in the PRC ("PRC GAAP"),
the accounting standards used in the places of their domicile. The accompanying consolidated financial
statements reflect necessary adjustments not recorded in the books of account of the Company to present them
in conformity with US GAAP.
Economic and Political Risks
The Company's operations are conducted in the PRC and involve risks associated with, among others,
the political, economic and legal environment and foreign currency exchange. The Company's results
may be adversely affected by changes in the political and social conditions in the PRC, and by changes
in governmental policies with respect to laws and regulations, anti-inflationary measures, currency
conversion, remittances abroad, and rates and methods of taxation, among other things.
Use of Estimates
In preparing of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery. Actual results could differ from those estimates.
25
Concentrations of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash
and cash equivalents, notes receivable and amounts due from a related party. The Company places its cash with
financial institutions with high-credit ratings and quality. In addition, the Company conducts periodic reviews of
the related party financial conditions and payment practices.
Cash and Cash Equivalents
The Company considers all highly liquid investments with initial maturities of three months or less to be cash equivalents.
Property, machinery and mining assets
Property, plant and equipment, are stated at cost less depreciation and amortization and accumulated impairment loss. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.
Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives.  Estimated useful lives are as follows:
Machinery5 years
Motor vehicles10 years
Furniture and office equipment5 years
Intangible assets
We have exploration rights for a 61.27 sq.km parcel in the Jiao Shan Zhai Mining Area, located in Xunyang County
in the Shaanxi Province of China. Our land use rights are amortized over their fifty year term.We have performed tests
on the site but we have not begun mining activity. We originally planned to participate in constructing a theme park
business on the parcel, but have delayed those plans while we direct our resources on the mining opportunities. We
have leased our land use right to Huanghe wetfor the development and operation of a theme park. We generally collect the annual rent every year, and then recognize land park Co.,Ltd. Therefore we can focus our management inuse right leasing revenue over the mining
segment.beneficial period described by the agreement, as the revenue is realized or realizable and earned.
 
From 2003 until the present, Dongfang Mining has held licenses for the exploration of minerals and precious metalsRelated Party
in the Shaanxi Province of the People's Republic of China. Dongfang Mining was granted an exploration right for lead,
zinc and gold at Gan Gou and Guan Zi Gou, Xunyang County, Shaanxi Province, PRC, on December 31, 2006. The
Company engaged the Geology and Mineral Bureau of ShaanxiA party is considered to conduct a preliminary survey which reported
preliminary positive findings for mineral deposits at this site.
Long-lived assets
The Company accounts for long-lived assets under the Statements of Financial Accounting Standards Nos.
142 and 144 "Accounting for Goodwill and Other Intangible Assets" and "Accounting for Impairment
or Disposal of Long-Lived Assets" ("SFAS No. 142 and 144"). In accordance with SFAS No. 142 and 144,
long-lived assets, goodwill and certain identifiable intangible assets held and used bybe related to the Company are reviewed
for impairment annuallyif the party directly or whenever eventsindirectly or changes in circumstances indicate thatthrough one or more intermediaries, controls, is controlled by, or is under common control with the carrying amount of an
asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, when undiscounted
future cash flows will not be sufficient to recover an asset's carrying amount, the asset is  written down to its fair
value. The Company believes that no impairment of furniture and equipment.
26
Fair value of financial instruments
Statement of Financial Accounting Standards No. 107, "Disclosure About Fair Value of Financial Instruments,"
requires certain disclosures regarding the fair value of financial instruments. Fair value of financial instruments
is made at a specific point in time, based on relevant information about financial markets and specific financial
instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment,
they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
The carrying value of current assets and liabilities approximate their fair value because of their short-term nature.
Goodwill
Goodwill arising on an acquisition of a subsidiary represents the excess of the cost of acquisition over the company’s
interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the relevant business at the
date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses.
Capitalized goodwill arising on an acquisition of a subsidiary is presented separately in the consolidated balance sheet.
For the purposes of impairment testing, goodwill arising from an acquisition is allocated to each of the relevant
cash-generating units, or groups of cash-generating units, that are expected to benefit from the acquisition. A
cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is
an indication that the unit may be impaired. For goodwill arising on an acquisition during  a fiscal year, the
cash-generating unit to which goodwill has been allocated is tested for impairment before the end of that fiscal year.
When the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, an impairment
loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first, and then to the other assets
of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is
recognised directly in the consolidated income statement. An impairment loss for goodwill is not reversed in subsequent periods.
On disposal of a subsidiary, the attributable amount of goodwill capitalised is included in the determination of the
amount of profit or loss on disposal.Goodwill in the amount of arose on acquisition of 40% interest in Dongfang
for $3,117,267 on February 6, 2007.
Impairment loss of goodwill
Determining whether goodwill has been impaired requires estimation of its value to the cash-generating units to
which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows
expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value.
Where the actual future cash flow are less than expected, a material impairment loss may arise.
The goodwill which arose on acquisition of Dongfang was identified to be fully impaired and we reduced goodwill
by $22,786,715 to zero, effective in 2007. Relevant information refers to Note 8.
Foreign Currency Translation
The Group maintains its consolidated financial statements in the functional currency. The functional currency of
the Company is US dollar (“USD”), the functional currency of "Wah Bon" is Hong Kong dollar (“ HKD”), and
the functional currency of "Tai Ping Yang", "Chang Jiang" and "Dongfang Mining" are the Renminbi (“RMB”).
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the
functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies
other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the
dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the
determination of net income for the respective periods.
For financial reporting purposes, the consolidated financial statementsCompany. Related parties also include principal owners of the Company, "Wah Bon",
"Tai Ping Yang", "Chang Jiang"its management, member of the immediate families of principal owners of the Company and "Dongfang Mining"its management and other parties with which are prepared using the functional currency have
been translated into United States dollars (“USD”). AssetsCompany may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting party might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and liabilities are translated atcan significantly influence the exchange rates atother to an extent that one or more of the
balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity
transacting parties might be prevented from fully pursuing its own separate interests is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net
income but are included in foreign exchange adjustment to other comprehensive income,also a component of
stockholders’ equity.related party.
 
27Our related parties are the following individuals and entities: (i) Mr. Wang Shengli (a director of the Company), Mr. Chen Weidong (our President, Chief Executive Officer and Chairman of the Board), Ms Li Ping (a director of the Company), and Ms. Chen Min (a director of the Company), all of whom are shareholders of the Company; (ii) Mr. Zhang Hong Jun, who is currently a director of the Company; (iii) Ms Li Ping (our Chief Financial Officer and who has the same name with our Director Ms Li Ping); and (iv) the following companies: Du Kang Liquor Development Co., Ltd., Huiton World Property Superintendent Company, Xi Deng Hui Development Stock Co., Ltd. Zhongke Lvxiang Development Stock Co., Ltd., Shaanxi Du Kang Liquor Group Co., Ltd., Shaanxi Bai Shui Du Kang Brand Management Co., Ltd, Shaanxi Changjiang electricity & new energy Co.,Ltd, Shaanxi Huanghe Bay Springs Lake Theme Park Ltd, Shaanxi Changfa Industrial Co.,LTD, Shaanxi Tangrenjie Advertising Media Co.,Ltd and Zhongke Aerospace & Agriculture Development Stock Co.,Ltd.
 
HK$ is peggedCash flows from due from related parties are classified as cash flows from investing activities. Cash flows from due to US$ and hence there is no significant translation adjustment impact on these consolidated financial statements.
RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through
authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted
into US$ at the rates used in translation.
Revenue Recognition
The Company operated in two reportable segments, theme park and exploration in the years ended December 31, 2010
and 2009.
Income Taxes
The Company utilizes SFAS No. 109, “Accounting for Income Taxes,” codified in FASB ASC Topic 740, which
requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that
have been included in the consolidated financial statements or tax returns. Income taxesrelated parties are accounted for under the
asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets are reduced by a valuation
allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Comprehensive Loss
Comprehensive loss is defined to include all changes in equity except those resultingclassified as cash flows from investments by owners
and distributions to owners. Among other disclosures, all items that are required to be recognized under current \
accounting standards as components of comprehensive income are required to be reported in a consolidated financial
statement that is presented with the same prominence as other financial statements. At present, the only component
of other comprehensive income is the company’s foreign currency translation adjustment.financing activities.
 
FINANCIAL INSTRUMENTS

We do not employ derivative financial instruments and have no foreign exchange contracts. Our financial
instruments are primarily cash and cash equivalents, but also include receivables, payables, long term debt, and short
term notes. We do not try to manage risk of foreign exchange rates or engage in hedging activities.
 
FOREIGN EXCHANGE RATES

All of our sales are in the Chinese currency, RMB, but our financial reporting is in U. S. dollars. We are therefore
subject to fluctuations in foreign exchange rates in our reports. There can be no assurance that changes in foreign
exchange rates will not have a material adverse impact on our financial reporting and a negative effect on the prices
of our securities.

Foreign currency translation gain or loss is reported as other comprehensive income in the consolidated statements
of operations and comprehensive loss and stockholders’ equity. The translation gain (loss) recorded for the years
ended December 31, 2009 and 20082012 was $10,140 and $-756,080 respectively.$31,250, while the translation loss for the year ended December 31, 2011 was $300,991. The equity accounts were
stated at their historical rate.
ITEM 7A.QUANTITATIVE7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
Not required for a smaller reporting company.
 
28
 
21
 
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
The financial statements and supplementary data filed as part of this report are set forth beginning on page[page 3930 of ]
of this report.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
 
In July 2008, we dismissed Jimmy C.H. Cheung & Co. as our principal independent accountants, and engaged
Brock, Schechter & Polakoff, LLP (“BSP”) as our principal independent accountants to audit our financial
statements for the fiscal year ended December 31, 2009 and 2008, to be included on our Form 10-K under Section
13(a) or 15(d) under the Exchange Act of 1934, as amended, and for the fiscal quarterly reports. The change in our
principal independent accountants was not the result of any disagreement with Jimmy C.H. Cheung & Co.
Management and the board of directors at that time participated in and approved the decision to change the principal
independent accounts. Our financial statements for the year ended December 31, 2007 were audited by Jimmy C.H.
Cheung & Co. Our financial statements for the years ended December 31, 2006, 2005, 2004 and 2003 were audited
by Sartain Fischbein & Company, CPA. Jimmy C.H. Cheung & Co.’s reports on our financial statements did not
contain an adverse opinion or disclaimer of opinion and were not modified as to uncertainty, audit scope, or
accounting principles, except that the reports contained an explanatory paragraph indicating that substantial doubt
exists about our ability to continue as a going concern. We have had no disagreements with Jimmy C.H. Cheung &
Co. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Jimmy C.H. Cheung & Co., would have
caused it to make reference to the subject matter of any such disagreements in their reports on the financial
statement for the year ended December 31, 2007.
 
Resignation of Former AuditorBrock, Schechter & Polakoff, LLP

On January 5, 2011, Brock, Schechter & Polakoff, LLP (“BSP”) resigned as the principal independent accountant to
audit the consolidated financial statements of the Company as of and for the fiscal year ended December 31, 2010.
The Company’s Board of Directors accepted BSP’s resignation. During the years ended December 31, 2009 and
2008, and the subsequent interim periods, there was a disagreement between BSP and the Company, arising with
regard to the filing by the Company of the September 30, 2010 Quarterly Report on Form 10-Q without prior
approval by BSP. Further, BSP advised the Company that (i) BSP’s report for the year ended December 31, 2008
contained a going concern paragraph and a scope limitation on the value of goodwill; (ii) BSP’s report for the year
ended December 31, 2009 contained a going concern paragraph and scope limitations for the value of goodwill and
shares of stock; and (iii) certain material weaknesses were noted by BSP: (A) the Company does not have the
internal controls necessary to develop reliable financial statements; (B) the Company does not have sufficient
knowledge of all the necessary financial statement disclosures that are required to be made in accordance with U.S.
generally accepted accounting principles; (C) the Company’s Board of Directors contained various members of
management and was not independent; and (D) the Company lacked an independent audit committee to oversee the
external financial reporting process and the internal control over financial reporting as required by the Sarbanes-
Oxley Act of 2002.

On January 7, 2011, the Company was formally notified by BSP of the following:

(i)
(i)The September 30, 2010 condensed consolidated financial statements and the Form 10-Q for the related quarter should not be relied upon.
(ii)The September 30, 2010 Quarterly Report on Form 10-Q was filed without prior approval by BSP and failed to address issues identified by the SEC, and for these reasons should be considered deficient and not timely filed.
(iii)The Company’s December 31, 2009 consolidated financial statements and Form 10-K for the year ended December 31, 2009 include errors identified by the SEC that require correction, and that report, including its financial statements, should not be relied upon.
(iv)The March 31, 2010 and June 30, 2010 condensed consolidated financial statements and Forms 10-Q include errors identified by the SEC that need to be corrected and those reports should not be relied upon.
Resignation of Parker Randall CF (H.K.) CPA Limited

Effective May 23, 2012, Parker Randall CF (H.K.) CPA Limited (“Parker Randall”) resigned as our independent registered public accounting firm.

The reports of Parker Randall on the our financial statements as of and the Form 10-Q for the related quarter
should not be relied upon.
(ii) The September 30,years ended December 31, 2010 Quarterly Report on Form 10-Q was filed without prior approval by BSP and failed to
address issues identified by the SEC, and for these reasons should be considered deficient and not timely filed.
(iii) The Company’s December 31, 2009 consolidated financial statementscontained no adverse opinion or disclaimer of opinion nor were any such reports qualified or modified as to uncertainty, audit scope, or accounting principle.

During the recent fiscal years ending December 31, 2010 and Form 10-K for the year ended
December 31, 2009 include errors identified byand through the SECdate of this Annual Report, there have been no (i) disagreements with Parker Randall on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Parker Randall’s satisfaction, would have caused Parker Randall to make reference to the subject matter of the disagreement(s) in connection with its reports; or (ii) “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K.

We have provided Parker Randall with a copy of the above disclosures and requested that require correction,Parker Randall furnish us with a letter addressed to the Securities and that report, including its
financial statements, shouldExchange Commission stating whether or not be relied upon.it agrees with the above statement.
 
29Engagement of New Auditor
On August 20, 2012, we engaged MaloneBailey LLP (“MaloneBailey”), as our new independent registered public accounting firm.
During the recent fiscal years ending December 31, 2011 and December 31, 2012, and through the date of this Annual Report, we have not consulted MaloneBailey regarding (i) the application of accounting principles to any specified transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Company’s financial statements, or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv)) or a reportable event (as defined in Item 304(a)(1)(v)).
 
 
22
 
 
(iv) The March 31,2010 and June 30,2010 condensed consolidated financial statements and Forms 10-Q include
errors identified by the SEC that need to be corrected and those reports should not be relied upon.
Engagement of New Auditor
On March 18,2011 the company engaged Parker Randall (H.K) CPA Limited (“Parker Randall”) as its independent
accounting firm. The desion to engage Parker Randall was approved by the Company’s Board of Directors. BSP had
and used ,the opportunity to communicate with Parker Randall regarding the Company’s financial statements, any
disagreement between BSP and the Company’s,and the Company’s internal controls
ITEM9A.ITEM 9A. CONTROLS AND PROCEDURESPROCEDURES.

Disclosure Controls and Procedures

In connection with the preparation of this Amendment No. 1,Annual Report on Form10-K, an evaluation was carried out by the Company’s
management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) as of December 31, 2009.2012. Disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized,
and reported within the time periods specified in the SEC rules and forms and that such information is accumulated
and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosures.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were not effective as of December 31, 2009.2012.

Internal Control over Financial Reporting

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the
Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal
financial officers and effected by a company’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009.
2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework and Internal
Control over Financial Reporting-Guidance for Smaller Public Companies. As a result of this assessment,
management identified a material weakness in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements
will not be prevented or detected on a timely basis.

We note the following deficiencies that management believes to be material weaknesses:

a)
a)Various members of the Company’s executive management are also members of its board of directors, including the board’s chairman. This situation prevents a truly independent review of the actions of the Company’s executive management are also members of its board of directors,
including the board’s chairman. This situation prevents a truly independent review of the actions of the Company’s
management.
 
30
b)The Company does not have an independent audit committee to oversee the external financial reporting process and the internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002. This, in combination with the lack of an independent board of directors, creates a material weakness in the oversight of the Company’s management, its internal control and its financial reporting process.

b) The Company does not have an independent audit committee to oversee the external financial reporting
process and the internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002. This, in
combination with the lack of an independent board of directors, creates a material weakness in the oversight of the
Company’s management, its internal control and its financial reporting process.
c) The Company does not have the internal controls necessary to develop reliable financial statements.
In addition, management notes the following deficiency
c)The Company does not have sufficient knowledge of all the necessary financial statement disclosures that management considers to be a significant deficiency:
The Company does not have sufficient knowledge of all the necessary financial statement disclosures that
are required to be made in accordance with U.S. generally accepted accounting principles.
 
Based on the material weakness described above, management has concluded that, as of December 31, 2009,2012, the
Company's internal control over financial reporting was not effective based on the criteria in Internal control -
Integrated framework issued by the COSO.
 
The Company intends to take the following steps as soon as practicable to remediate the material weakness and
significant deficiency we identified as follows:

1.
1.We intend to recruit independent directors such that at least a majority of our Board is independent.
 
2. We intend to constitute audit, nominating and compensation committees comprised entirely of
independent directors and to adopt committee charters for those committees, in accordance with the corporate
governance standards of the New York Stock Exchange. We intend that at least one member of our Audit
Committee will qualify as an “Audit Committee financial expert.”
3. We intend to recruit an individual with experience and familiarity with generally accepted
accounting principles, as applied in the United States, to help implement and document a system of internal control
sufficient to develop reliable financial statements, and to be responsible for our external reporting.
2.We intend to constitute audit, nominating and compensation committees comprised entirely of independent directors and to adopt committee charters for those committees, in accordance with the corporate governance standards of the New York Stock Exchange. We intend that at least one member of our Audit Committee will qualify as an “Audit Committee financial expert.”
 
Changes in Internal Controls over Financial Reporting

There has been no significant change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-
15(f) of the Exchange Act) that occurred during the three monthsyear ended December 31, 20092012 that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.
23
 
PART III
 
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors, Executive Officers and Key Employees

The following table sets forth the directors, executive officers and key employees of the Company as of December 31, 2012.
31, 2009.
POSITION AND OFFICE
 
NAMEAGE POSITION AND OFFICE
NAME
AGE
HELD WITH THE COMPANY
Chen Wei Dong4042President, Chief Executive Officer and Chairman of the Board
Zhang Hong Jun4345Director
Wang Sheng Li4345Director
Li Ping48Director and 50Chief Financial Officer
Li Ping3638Director
Tian Hai Long39Director
Chen Min37Director
31
 
Board of Director Independence

We intend to comply with the rules of the New York Stock Exchange governing director independence, although
our stock is not listed on the New York Stock Exchange. As of December 31, 2009,2012 none of our directors qualified
as independent director under the rules of the New York Stock Exchange, because each director is involved in an
employee or executive management function with the Company. Further, as of December 31, 2009,2012 we did not have
a lead independent director.

Biographical Information of Directors, Officers and Key Employees of the Company

Listed below is biographical information for each of the directors and executive officers of the Company, including
their principal occupations during the five (5) years ended December 31, 2009,2012, and other affiliations. None of our
officers, directors, promoters or control persons has filed or been involve for the past ten years in any of the events
listed in item 401(f) of Regulation S-K. No family relationships exist between any of our executive officers and directors.
 
Chen Wei Dong – President, Chief Executive Officer and Chairman of the Board

Mr. Chen is the President, Chief Executive Officer and Chairman of our board of directors. He has served in these
functions since March 2006. From 2001 to January 2006, he served as the General Manager of Du Kang Trading
Company, a distributor of alcoholic beverages. Mr. Chen graduated from China’s Northwestern University
majoring in Enterprise Management. We believe Mr. Chen’s qualifications to serve on our board of directors
include his expertise in business and corporate strategy, and his knowledge regarding our Company and industry.

Zhang Hong Jun – Director

Mr. Zhang has been a director of our Company since August 2006. In 2000, he was named to serve as the Executive
Commissioner of the Shaanxi Federation of Industry & Commerce, an academician of the China Academy of
Management of Science, the Shaanxi Deputy of the National People’s Congress, a member of the Shaanxi Executive
Commission of the Political Consultation Committee, and the Vice Chairman of the Beijing Federation of Shaanxi
Commerce. From February 2002 to May 2006, Mr. Zhang served as Chairman and CEO of Shaanxi Bai shui Du
Kang Liquor Co., where his responsibilities included raising capital, as well as corporate culture and brand
construction. Mr. Zhang received his MBA Certificate from the China Academy of Management of Science. He
joined our board in August 2006. Our board believes that his entrepreneurial qualities, his governmental, political
and association experience, and his business acumen offer a valuable perspective to our Company.

Wang Sheng Li – Director

Mr. Wang has been a director of our Company since March 2006. From 1998 to March 2006, he served as the
general manager of Xi Deng Hui Alcohol Co. Ltd. Mr. Wang is in charge of the development and maintenance of
our public relations, as well as the leasing of our real estate. Mr. Wang studied in Xi’an Petroleum University
Electron Construction School, where he majored in computers. We believe that Mr. Wang’s qualifications to serve
on our board of directors include his significant local community network as well as his knowledge regarding our
Company and our industry.
 
24
Li Ping - Director and– Chief Financial Officer

Ms. Li has been our Chief Financial Officer since March 2008. From 2000 to 2005, she worked as CFO of China
Life Insurance Company, Weinan branch. From September 2005 to January 2008, Ms. Li was a professor at China’s
Northwest Business College. Ms. Li has substantial experience in financial management and in the regulations, tax
system and banking business of China. Ms. Li studied in the Shaanxi Finance and Economics College from 1985 to
1991, where she majored in Finance and Economics Management. Our board of directors believes that Ms. Li’s
32
judgment, decision making, and experience in the financial and accounting industry, provide a valuable perspective
to our Company.

Tian Hai Long-Long – Director

Mr. Tian has been a director of the Company since March 2006. From May 1998 to December 2006, he served as
the marketing director in Shaan Xi Hong Yuan E-commerce Limited Co., and as marketing general manager for
Shaan Xi Bai Shui Trade Limited Co. Mr. Tian participates in formulating the Company’s mineral resources market
research work and establishing our network database for minerals logistics. He studied in Xi’an Technological
University Electronic Information School, where he majored in e-commerce and marketing management. We
believe Mr. Tian’s qualifications to serve on our board of Directors include his extensive experience in marketing as
well as his knowledge of our Company and industry.

Chen Min – Director

Ms Chen was appointed as a director of the Company in September 2006. She was in charge of item funds management and budget in a bridge design Company from March 2000 to September 2006. She worked in a national machinery manufacturing enterprise from 1997 to 2000. She obtained a bachelor degree from the Northern West University in Financial and foreign exchange management in 1996.
 
Li Ping – Director

Ms. Li has been a director of the Company since September 2006. From 2002 to 2006, she was a teacher in Shaanxi
Northwest Metallurgy College. She graduated from Shaanxi Metallurgy College in 1992 and majored in
Metallurgy.

Audit Committee

We did not have an audit committee at December 31, 2009,2012, and we are in the process of developing one.
 
Code of Ethics

We have adopted a code of ethics (the "Code of Ethics") that applies to our principal chief executive officer,
principal financial officer, principal accounting officer or controller, or persons performing similar functions. The
Code of Ethics is being designed with the intent to deter wrongdoing, and to promote the following:
 
•
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships
 
•
Full, fair, accurate, timely and understandable disclosure in reports and documents that registrant files with,
or submits to, the Commission and in other public communications made by the registrant
 
•
Compliance with applicable governmental laws, rules and regulations The prompt internal reporting of
violations of the code to an appropriate person or persons identified in the code
 
•
Accountability for adherence to the code.

Stockholders may request a copy of the Code of Ethics, which will be provided without charge, by writing to: China
Changjiang Mining and& New Energy Company.Co.., Ltd., 17th Floor, Xinhui Mansion, Gaoxin Road, Hi-Tech Zone,
Xi’An, P.R. China, 710075.

We are in the process of reviewing and updating our Code of Ethics.
 
33
Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires each director, officer and individual beneficially owning more than 10%
of a registered security of the Company, to file with the SEC, within specified time frames, initial statements of
beneficial ownership (Form 3) and statements of changes in beneficial ownership (Forms 4 and 5) of common stock
of the Company. To the best of our knowledge, no reports required to be filed by Section 16(a) of the Exchange Act
were untimely during fiscal 2009.2012.
 
25
ITEM 11. EXECUTIVE COMPENSATION.
 
The following table and the accompanying notes provide detailed information for each of the last two fiscal years
ended 20092012 and 20082011 concerning cash and non-cash compensation paid or accrued to our named executive officers.
 
Summary Compensation Table — Fiscal Years Ended December 31, 20092012 and 20082011
 
Name and Principal
Position		Year
($)		Salary
($)		Bonus
($)		Stock
Awards
($)		Option
Awards
($)		Non-Equity
Incentive Plan
Compensation
($)		Non-Qualified
Deferred
Compensation
Earnings
($)		All Other
Compensation
($)		Total
($)(1)		 
Year
($)
 
Salary
($)
 
Bonus
($)
 
Stock
Awards
($)
 
Option
Awards
($)
 Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) 
Total
($)(1)
 
(a)(b)(c)(d)(e)(f)(g)(h)(i)(j) (b) (c) (d) (e) (f) (g) (h) (i) (j) 
Chen Wei Dong2008$85,6740$85,674 2011 $106,648 0 0 0 0 0 0 $106,648 
(Chairman of Board and CEO)2009$99,5870$99,587 2012 $107,723 0 0 0 0 0 0 $107,723 
                    
Li Ping2008$7,323 $7,323 2011 $10,979 0 0 0 0 0 0 $10,979 
Director and Chief Financial Officer2009$8,7870$8,787
Chief Financial Officer 2012 $11,089 0 0 0 0 0 0 $11,089 
______________
(1)       Compensation paid in RMB has been converted at the rate of $1USD = 6.8282RMB.
We have not entered into any employment agreements with our employees, officers or directors.
(1)Compensation paid in RMB has been converted at the rate of $1USD = 6.3125RMB.
 
Director Compensation

In 2009,2012, all directors were company employees and received no compensation for service as directors. We
reimbursed the directors for any expenses incurred in connection with their duties as directors.

Compensation Committee Interlocks and Insider Participation

During the year ended December 31, 2009,2012, none of our executive officers served as a member of a compensation
committee (or other committee of the board of directors performing equivalent functions or, in the absence of any
such committee, the entire board of directors) of any entity that has one or more executive officers serving as a
member of our board of directors.
34

Stock Option Plan
We have not implemented a stock option plan at this time and have issued no stock options, SARs or other equity
compensation. We may decide, at a later date, and reserve the right to, initiate such a plan as deemed necessary by
the Board.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.

The following table sets forth information with respect to the beneficial ownership of our common stock as of December 31, 2012 for:
September 1, 2011 for:
Each stockholder, or group of affiliated stockholders, who we know beneficially to own more than 5% of the outstanding shares of our common stock;
 
Each stockholder, or group of affiliated stockholders, who we know beneficially to own more than 5% of the outstanding shares of our common stock;
Each of our current directors;
 
Each of our current directors;
Each of our executive officers; and Each of our current directors and current executive officers as a group.
26
 
Beneficial ownership is determined in accordance with rules of the SEC and generally includes any shares over
which a person exercises sole or shared voting and/or investment power. We believe the beneficial owners of the
common stock listed below, based on information furnished by them, have sole voting and investment power with
respect to the number of shares listed opposite their names.

The number of shares and percentages of beneficial ownership set forth below are based on 63,854,93464,629,559 shares of
common stock outstanding as of September 1, 2011,December 31, 2012, which gives effect to our 1-for-10 reverse split of our common
stock and the conversion of all outstanding shares of Series C Preferred Stock into 609 million shares of common
stock.
 
Name and Address of Beneficial Owner(1)Number of shares Beneficially ownedPercentage Number of shares Beneficially owned  Percentage 
       
Executive Officers and Directors       
Chen Wei Dong608,5491%  608,549   0.95%
Zhang Hong Jun35,174,15255.1  35,174,152   54.43%
Wang Sheng Li7,442,55811.7  7,442,558   11.52%
Li Ping6,079,4089.5  6,079,408   9.41%
Tian Hai Long6,079,4089.5  6,079,408   9.41%
Chen Min5,470,8598.6  5,470,859   8.47%
 
Officers and Directors as a Group60,854,93495.3%
(6 people) 
Li Ping  0   0%
Officers and Directors as a Group (7 people)  60,854,934   94.19%
___________
(1)The address for each beneficial owner is Seventeenth Floor, Xinhui Mansion, Gaoxin Road Hi-Tech Zone, Xi’An P.R. China 71005.
 
(1) The address for each beneficial owner is Seventeenth Floor, Xinhui Mansion, Gaoxin Road
Hi-Tech Zone, Xi’An P.R. China 71005.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTV TRANSACTIONSPARTIES TRANSACTIONS.
 
Loans fromfrom/to Related Parties[NEED DISCUSSION WITH COMPANY]
Our related parties are the following individuals and entities: (i) Mr. Wang Shengli (a director of the Company), Mr. Chen Weidong (our President, Chief Executive Officer and Nie Pingjun,Chairman of the Board), Ms Li Ping (a director of the Company), and Ms. Chen
Min (a director of the Company), all three of whom are shareholders of the Company; (ii) Mr. Zhang Hong Jun, who is currently a director of
the Company; (iii) Ms Li Ping (our Chief Financial Officer and (iii)who has the same name with our Director Ms Li Ping); and (iv) the following companies: Du Kang Liquor SalesDevelopment Co., Ltd., Huiton World Property
35
Superintendent Company, Xi Deng Hui Development Stock Co., Ltd. Zhongke Lvxiang Development Stock Co.,
Ltd., Shaanxi Du Kang Liquor Group Co., Ltd., Shaanxi Bai Shui Du Kang Brand Management Co., Ltd, Shaanxi Changjiang electricity & new energy Co.,Ltd, Shaanxi Huanghe Bay Springs Lake Theme Park Ltd, Shaanxi Changfa Industrial Co.,LTD, Shaanxi Tangrenjie Advertising Media Co.,Ltd and Zhongke Aerospace & Agriculture Development Stock Co.,Ltd.
 
§ As of December 31, 2009,2012, the related parties owed the Company $856,627, for advances made on an unsecured
basis, repayable on demand and interest free.
As of December 31, 2009, the Company owed $2,653,396 to two former stockholders, Shen Li Wang and Min
Chen of Changjiang$2,863,074, for advances made on an unsecured basis, repayable on demand, and interest free. Imputed
interest is charged at 5.94% per year on the amounts due. Shen Li Wang and Min Chen own 1.4% shares of Shanxi
Changjiang Mining and New Energy Co.Ltd respectively.as follows:
 
  
December 31,
2012
  
December 31,
2011
  Interest 
Du Kang Liquor Development Co., Ltd $795,482   793,537  interest free for the first year and bear interest in the 
Shaanxi Du Kang Liquor Group Co., Ltd $-   573,001  benchmark lending rate over the same period afterwards 
Zhongke Aerospace & Agriculture Development Stock Co.,Ltd $449,447   448,349  interest free 
Shaanxi Huanghe Bay Springs Lake Theme Park Ltd  1,193,222   -  interest free 
Shaanxi Changfa Industrial Co., LTD $365,922   365,027  interest free 
Mr Chen Weidong $45,876   32,229  interest free 
Shaanxi Changjiang Zhongxiayou Investment Co.,Ltd $13,125   12,935  interest free 
Total  2,863,074   2,225,078    
27
The balance of $795,482 represents the loan to the related parties Du Kang Liquor Development Co., Ltd, which are unsecured, repayable on demand. These loans are interest free for the first year and bear interest in the benchmark lending rate over the same period afterwards.

The balance of $1,193,222 from Shaanxi Huanghe Bay Springs Lake Theme Park Ltd was the receivable of rent for land use right for the year ended December 31, 2012.

The remaining balances of $902,040 are the loans to the related parties, which are interest free, unsecured and repayable on demand..

As of December 31, 2009,2012, the Company owed to three individuals an aggregate of $1,450,283,$4,186,907 to three stockholders, for a loan made on an unsecured basis, repayable on demand and interest free, as follows:follows.

USD
Hongjun Zhang1,360,948
Pingjun Nie82,013
Shenli Wang7,323
Total1,450,283
  
December 31,
2012
  
December 31,
2011
 
       
Due to Wang Shengli $2,192,966   2,187,606 
Due to Zhang Hongjun  1,394,798   1,391,389 
Due to Chen Min $599,143   597,705 
   4,186,907   4,176,700 
 
The Company owed the sevenfollowing companies listed above an aggregate of $2,293,036,$1,858,861, as follows:of December 31, 2012, which are interest free, unsecured and repayable on demand.

Du Kang Liquor Sales Co., Ltd.120,090
Xi Deng Hui Development Stock  Co., Ltd245,467
Huitong World Property Superintendent Company366,129
Zhongke Lvxiang Development Stock Co., Ltd1,066,240
Shaanxi Bai Shui Du Kang Brand Management Co.,Ltd.14,645
Shaanxi Du Kang Liquor Group Co., Ltd198,392
Shaanxi Changjiang electricity new energy Co.Ltd282,073
Total2,293,036
Imputed interest is charged at 5.94% per year on the amount due.
  
December 31,
2012
  
December 31,
2011
 
       
Due to Huiton World Property Superintendent Company $397,741  $396,769 
Due to Zhongke Lvxiang Development Stock Co., Ltd $1,113,674   1,110,952 
Due to Shaanxi Changjiang electricity & new energy Co.,Ltd $292,876   294,883 
Due to Du Kang Liquor Development Co., Ltd $-   65,200 
Due to Du Kang Liquor Marketing co.,Ltd $-   130,140 
Due to Baishui Du Kang Brand Management Co.,Ltd $9,546   101,573 
Due to Shaanxi Xidenghui Technology Co. Ltd. $970   969 
Due to Shaanxi Dukang Liquor Group Co.,Ltd $44,054   - 
Total $1,858,861   2,100,486 
 
Consulting Fees
E.H. Hawes, II served aas the chairman of the board, President and Chief Executive Officer of North American until
February 2008. Mr. Hawes has provided certain consulting services to the Company and was paid $ 0$0 in consulting
fees during 2008 and 2007. He did not receive a salary from the Company and, , the sum of $170,000 was paid to
him in settlement of all claims and obligations.

At the completion of the reverse merger transaction between North American and the Company in February 2008,
we paid Capital Advisory Services, Inc. $370,000 and issued 3,700 shares of Series C Preferred Stock in satisfaction
of our obligation for the legal and consulting fees incurred in connection with the reverse merger transaction.
Stanley F. Wilson was the CEO of Capital Advisory Services. From 2006 until completion of the reverse merger
transaction, Capital Advisory Services provided consultation to the Company in connection with its business plan,
evaluation of companies for potential mergers, and assistance to management in completing required tasks necessary
for securities law compliance. On January 10 and January 21, 2010, we issued 4,500,000 shares of common stock in
exchange for 3,700 Series C Preferred shares, according to the exchange agreement. All such shares were restricted
securities and could not be resold without registration or an exemption from registration
under the Securities Act.
36

Review, Approval or Ratification of Transactions with Related Persons

The Company’s policy with regard to any transactions between the Company and a related person is that such
transactions must be on terms at least as favorable to the Company as arms’-length transactions of similar types
with unaffiliated third parties. Additionally, all related party transactions must be disclosed to, and considered and
approved by, our board of directors prior to entering into any such transaction.
 
28
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Independent Auditors’ Fees

Fees Billed for Audit and Non-Audit Services
The following table represents the aggregate fees billed for professional audit services rendered to Brock, Schechter
& Polakoff, LLP for the audit of our financial statements for the years ended December 31, 2009 and 2008.
 Year Ended December 31
   
 
2009 (2)
2008 (2)
Audit Fees (1)$33,000$30,000
Audit-Related Fees (3)——
Tax Fees (4)——
All Other Fees (5)——
Total Accounting Fees and Services$33,000$37,000
 
On March 18, 2011, we engaged Parker Randall CF (H.K.) CPA Limited (“Parker Randall”) as our independent
accounting firm for purposing of performing another audit of our financial statements for the years ended December
31, 2007, 2008, 2009 and 2010. The following table represents the aggregate fees billed for professional audit
services rendered to Parker Randall for the audit of our financial statements for the years ended December 31, 20092010 and 2008.2009.
 
Year EndedDecember 31 Year Ended December 31, 
(2)
2009 (2)
2008 (2)
 2010 2009 
Audit Fees (1)$13,875 $13,875  $13,875 
Audit-Related Fees (3)[____][___]  -   - 
Tax Fees (4)[____][___]  -   - 
All Other Fees (5)[____][___]  -   - 
Total Accounting Fees and Services$13,875 $13,875  $13,875 

On August 20, 2012, we engaged MaloneBailey LLP (“MaloneBailey”), as the Company’s new independent registered public accounting firm.
 
(1) Audit Fees. These areThe following table represents the aggregate fees billed for professional audit services rendered to MaloneBailey for the audit of our annual financial statements, and for services that are normally
provided in connection with statutory and regulatory filings or engagements.
(2) The amounts shown in 2009 and 2008 relate to (i) the audit of our annual financial statements for the fiscal yearsyear ended December 31, 20092011 and 2012.
and 2008.
(3) Audit-Related Fees. These are fees for the assurance and related services reasonably related to the performance of the audit or the review of
  For the year ended December 31,2012  For the year ended December 31,2011 
Audit Fees (1) $45,000  $45,000 
Audit-Related Fees (3)      - 
Tax Fees (4)      - 
All Other Fees (5)      - 
Total Accounting Fees and Services $45,000  $45,000 
_________________
our financial statements.
(4) Tax Fees. These are fees for professional services with respect to tax compliance, tax advice, and tax planning.
(5) All Other Fees. These are fees for permissible work that does not fall within any of the other fee categories, i.e.,
(1)Audit Fees, Audit-Related
Fees, or Tax Fees. These are fees for professional services for the audit of our annual financial statements, and for services that are normally provided in connection with statutory and regulatory filings or engagements.
 
(2)The amounts shown in 2010 and 2009 relate to (i) the audit of our annual financial statements for the fiscal years ended December 31, 2010 and 2009.
(3)Audit-Related Fees. These are fees for the assurance and related services reasonably related to the performance of the audit or the review of our financial statements.
(4)Tax Fees. These are fees for professional services with respect to tax compliance, tax advice, and tax planning.
(5)All Other Fees. These are fees for permissible work that does not fall within any of the other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax Fees.

Pre-Approval Policy for Audit and Non-Audit Services

We do not have a standing audit committee, and the full Board performs all functions of an audit committee,
including the pre-approval of all audit and non-audit services before we engage an accountant. All of the services
rendered to us by Brock, Schechter & Polakoff, LLP were pre-approved by our Board of Directors.
All of the services rendered to us by Parker RandallMaloneBailey have been pre-approved by our Board of Directors.
 
37
 
29
 
 
PART IV
 
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as part of or incorporated by reference into this Amendment No.1:10K:

(a)(1)
Consolidated Financial Statements: The index of the consolidated financial statements contained herein is set forth on page F-1 hereof.
 
(a)(1) Consolidated Financial Statements:
The index of the consolidated financial statements contained herein is set forth on page F-1 hereof.
(a)(2) Financial Statement Schedule:
All schedules have been omitted as the required information is inapplicable or the information is presented in
the consolidated financial statements or related notes.
(b) Exhibits Required by Item 601 of Regulation S-K:
The exhibits listed on the Exhibit Index (following the signatures section of this Amendment No.1) are included, or incorporated by        
reference, in this Amendment No.1.
(c) Financial Statement Schedule:
See Item 15(a)(2) above.
(a)(2)
Financial Statement Schedule: All schedules have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.
(b)Exhibits Required by Item 601 of Regulation S-K:
 
38
Number Exhibit Description Footnote Reference
     
3.1 Articles of Incorporation (filed as Exhibit 3.1 to the Form 10-K for 2011) (2)
     
3.2 Bylaws (filed as Exhibit 3.2 to the Form 10-K for 2011) (2)
     
10.1 
Plan of Exchange dated May 30, 2007 by and among North American Gaming and Entertainment Company, and SHAANXI CHAN JIANG SI YOU NENG YUAN FA ZHANG GUFENG YOU XIAN GONG SI (filed as Exhibit 10.1 the Company’s Form 8-K filed on February 6, 2008)
 (1)
     
10.2 Lock Up Agreement among North American Gaming and Entertainment Company, E H. Hawes Trust, E. H. Hawes, II, Richard P. Crane and Daryl Case (filed as Exhibit 10.2 the Company’s Form 8-K filed on February 6, 2008) (1)
     
10.3 
Lock-up Agreement (filed as Exhibit 10.3 the Company’s Form 8-K filed on February 6, 2008)
 (1)
     
10.4 Mining Exploration Certificate (filed as Exhibit 10.4 the Company’s Form 8-K filed on February 6, 2008) (1)
     
10.5 Land Use Right (filed as Exhibit 10.5 the Company’s Form 8-K filed on February 6, 2008) (1)
     
10.6 Lease Agreement (1)
     
10.7 Transfer Contract for the Guojialing- Jiaoshanzhai Lead & Zinc Exploration rights in Xunyng County, Shaanxi Province dated June 1, 2012 with Xunyang Yongjin Mining Co., Ltd to transfer the exploration rights (filed as Exhibit 10.7 to the Form 10-K for 2011) (2)
     
14 Code of Ethics (filed as Exhibit 14 to the Form 10-K for 2011) (2)
     
21 Subsidiaries (filed as Exhibit 21 to this Form 10-K) *
 
 
30
101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema
101.CAL*XBRL Taxonomy Extension Calculation Linkbase
101.DEF*XBRL Taxonomy Extension Definition Linkbase
101.LAB*XBRL Taxonomy Extension Label Linkbase
101.PRE*XBRL Taxonomy Extension Presentation Linkbase
31.1Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2Certification of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1Certification of Chief Executive Officer and Chief Financial Officer under 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
__________
*  Filed herewith.
(1)Incorporated by reference from the Information Statement on Form 8-K of North American Gaming and Entertainment Company filed with the Securities and Exchange Commission on February 6, 2008.
(2)Incorporated by reference from the Annual Report on Form 10-K for the year ended December 31, 2011 of the Company filed with the Securities and Exchange Commission on February 26, 2013.
31
 
 
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY,CO., LTD.
39
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Stated in US Dollars)
40
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY, LTD.
(An Exploration Stage Company)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
Page(s)
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM41-42
CONSOLIDATED BALANCE SHEETS42-43
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME44
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY45-46
CONSOLIDATED STATEMENT OF CASH FLOWS47-48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS49-64
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Shareholders of
China Changjiang Mining & New&New Energy Company,Co., Ltd.

We have audited the accompanying consolidated balance sheets of China Changjiang Mining & New Energy Company,Co., Ltd. (theand its subsidiaries (collectively, the "Company") as of December 31, 2009, 20082012 and 2007,2011, and the consolidated statements of income and comprehensive income, shareholders' equity and cash flows for the years ended December 31, 2009, 2008 and 2007.then ended. The consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements based on our audit.audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform thean audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
41

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the CompanyChina Changjiang Mining & New Energy Co., Ltd. and its subsidiaries as of December 31, 2009, 20082012 and 2007,2011, and the consolidated statementsresults of incometheir operations and comprehensive income, shareholders’ equity andtheir cash flows for the years then ended, December 31, 2009, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America.
 
With respect to those qualifications expressed by the predecessor auditor on its audit opinion for years ended December 31, 2009, 2008 and 2007, we have performed our audit procedures in respect of those qualifications and those adjustments that have been made by the Company in respect of those qualifications under the current report for those prior periods without having the predecessor auditor to reissue the prior period audit report./s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
 
Parker Randall CF (H.K.) CPA Limited
Certified Public Accountants,
Hong Kong
November 21, 2011
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY, LTD.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009, 2008 AND 2007
(Stated in US Dollars)
Notes December 31, 2009 December 31, 2008 December 31, 2007
ASSETS  $ $ $
Current assets       
Cash and cash equivalents  27,194 23,878 479,859
Notes receivable4 - - 133,000
Due from related parties5 - 152,033 -
Other current assets and prepayments3 461,504 674,716 520,487
Total current assets  488,698 850,627 1,133,346
        
Property, Plant and Equipment, net6 201,084 235,584 253,016
Land use rights, net7 16,597,699 16,987,068 16,272,927
Goodwill8 - - -
Long-term investment  292,903 292,629 -
Due from related parties10 856,627 572,518 454,040
Total non-current assets  17,948,313 18,087,799 16,979,983
        
TOTAL ASSETS  18,437,011 18,938,426 18,113,329
See accompanying notes to the consolidated financial statement
42May 10, 2013
 
 
32
 
 
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY,CO., LTD.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS (continued)
AS OF ENDED DECEMBER 31, 2009, 20082012 AND 20072011
(Stated in US Dollars)
 
Notes December 31, 2009 December 31, 2008 December 31, 2007
  $ $ $
LIABILITIES AND SHAREHOLDERS’ EQUITY       
Current liabilities       
Accounts payable  - - 59,874
Other payables and accrued liabilities9 71,179 66,587 165,245
Notes payable - related parties  434,139 434,137 573,146
Total current liabilities  505,318 500,724 798,265
Non-current liabilities       
Due to related parties11 3,743,320 3,444,625 2,389,188
Due to shareholders  2,653,396 2,627,395 2,134,434
Payable on acquisition of a subsidiary  1,829,611 1,827,898 1,874,565
Total non-current liabilities  8,226,327 7,899,918 6,398,187
        
TOTAL LIABILITIES  8,731,645 8,400,642 7,196,452
SHAREHOLDERS’ EQUITY       
Series C convertible preferred stock ($0.01 par value, 10,000,000 shares authorized, 500,000 shares issued and outstanding as of December 31, 2009, 2008 and 2007, respectively)14 5,000 5,000 5,000
Common stock  ($0.01 par value, 250,000,000 shares authorized, 37,716,588 shares, 33,216,588 shares, 24,216,588 shares issued and outstanding as of December 31,   2009, 2008, and 2007 respectively)13 377,166 332,166 242,166
Treasury stock  (489,258) (489,258) (489,258)
Additional paid-in capital  14,180,973 14,170,352 13,730,284
Retained earnings  (6,258,430) (5,336,755) (3,636,156)
Non-controlling interests  459,350 435,854 400,496
Effect of foreign currency translation  1,430,565 1,420,425 664,345
TOTAL SHAREHOLDERS’ EQUITY  9,705,366 10,537,784 10,916,877
TOTAL LIABILITIES AND       
SHAREHOLDERS’ EQUITY  18,437,011 18,938,426 18,113,329
  December 31,  December 31, 
  2012  2011 
ASSETS (Audited)  (Audited) 
Current assets      
Cash and cash equivalents $1,763,381  $20,932 
Restricted Cash (Note 3)
  1,113,674   - 
Deferred tax assets  14,326   - 
Other current assets and prepayments (Note 4)
  107,217   753,742 
Total Current Assets  2,998,598   774,674 
         
Property, plant and equipment, net (Note 5)  102,280   145,336 
Constructing in progress  280,178   - 
Land use rights, net (Note 6)  16,775,962   17,141,227 
Long-term investment  312,931   317,415 
Due from related parties (Note 7)  2,863,074   2,225,078 
TOTAL ASSETS $23,333,023  $20,603,730 
 
See accompanying notes to the consolidated financial statement
43
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY, LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Stated in US Dollars)
Notes Year ended December 31, 2009 Year ended December 31, 2008 Year ended December 31, 2007
   $ $ $
Net sales  - — —
Cost of sales  - — —
Gross profit  - — —
Administrative expenses  (453,534) (1,239,700) (89,680)
Depreciation  (36,755) (35,779) (23,675)
Amortization  (405,100) (391,451) (359,903)
Profit from operations  (895,389) (1,666,930) (473,258)
        
Other Income (Expenses)       
Interest income  152 2,909 1,922
Interest expenses  - - -
Other expenses  (2,942) (1,220) (1,323)
Total Other Income (Expense)  (2,790) 1,689 599
        
Income(Loss) before non-controlling interests and tax  (898,179) (1,665,241) (472,659)
Non-controlling interests(loss)  (23,496) (35,358) (96,097)
        
Net loss  (921,675) (1,700,599) (568,756)
Other comprehensive income       
Effects of foreign currency conversion  10,140 (756,080) 411,136
Comprehensive income/(loss)  (911,535) (2,456,679) (157,620)
        
Net loss per share       
Basic  (0.02444) (0.051197) (0.023487)
Diluted  (0.00143) (0.002648) (0.000898)
        
Weighted average number of shares outstanding       
Basic  37,716,588 33,216,588 24,216,058
Diluted  646,716,588 642,216,588 633,216,058
See accompanying notes to the consolidated financial Statement
44
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY, LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007(Stated in US Dollars)
 Preferred Stock Common Stock Treasury Stock Additional paid-in capital Non-controlling Interest Retained earnings   Accumulated other comprehensive income Total
 ShareAmount ShareAmount ShareAmount     
  $  $  $ $ $ $ $ $
Balance at December 31, 2006-- -- -- 33,667,990 1,314,094 (3,067,400) 1,075,481 32,990,165
                   
Issuance of preferred stock500,0005,000 -- -- 245,000 - - - 250,000
Recapitalization-- 24,216,588242,166 17,572,494(489,258) (20,182,706) 304,399 - - (20,125,399)
Disposal of subsidiary-- -- -- - (1,314,094) - - (1,314,094)
Net income (loss) for the year-- -- -- - 96,097 (568,756) - (472,659)
Foreign currency translation gain (loss)-- -- -- - - - (411,136) (411,136)
                   
Balance at December 31, 2007500,0005,000 24,216,588242,166 17,572,494(489,258) 13,730,284 400,496 (3,636,156) 664,345 10,916,877
                   
Issuance of common stock-- 9,000,00090,000 -- 440,068 - - - 530,068
Net income (loss) for the period-- -- -- - 35,358 (1,700,599) - (1,665,241)
Foreign currency translation gain(loss)-- -- -- - - - 756,080 756,080
Balance at December 31, 2008500,0005,000 33,216,588332,166 17,572,494(489,258) 14,170,352 435,854 (5,336,755) 1,420,425 10,537,784
45
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY, LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(Stated in US Dollars)
 Preferred StockCommon StockTreasury Stock     
 ShareAmountShareAmountShareAmountAdditional paid-in capitalNon-controlling InterestRetained earningsAccumulated other comprehensive incomeTotal
  $ $ $$$$$$
Balance at December 31, 2008500,0005,00033,216,588332,16617,572,494(489,258)14,170,352435,854(5,336,755)1,420,42510,537,784
            
Issuance of common stock--4,500,00045,000--(45,000)----  
Recapitalization------55,621---55,621
Net income (loss) for the year-------23,496(921,675)-(898,179)
Foreign currency translation gain(loss)---------10,14010,140
Balance at December 31, 2009500,0005,00037,716,588377,16617,572,494(489,258)14,180,973459,350(6,258,430)1,430,5659,705,366
46
See accompanying notes to the consolidated financial statements
 
 
33
 
 
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY, LTD.
(An Exploration Stage Company)CO., LTD
CONSOLIDATED STATEMENTSBALANCE SHEETS (continued)
AS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009, 20082012 AND 20072011
(Stated in US Dollars)
 
  Year ended December 31, 2009 Year ended December 31, 2008 Year ended December 31, 2007
  $ $ $
Cash Flows from Operating Activities      
Net loss (921,675) (1,700,599) (568,756)
Provided by operating activities:      
Depreciation and amortization 441,855 427,230 383,578
Goodwill impairment - - 3,119,502
Interest receivable - (45,560) -
Interest paid - 103,137 -
Non-controlling interests 23,496 35,358 96,097
Other current assets and prepayments 213,844 (118,436) (115,969)
Other payables and accrued liabilities 4,530 (349,590) (98,485)
       
Net cash provided by (used in) operating activities (237,950) (1,648,460) 2,815,967
       
Cash Flows from Investing Activities      
Purchase of property and equipment - (2,149) (36,462)
Due from related parties (131,397) 200,780 (454,040)
Acquisition of long-term investment - (292,629) (2,422,142)
Interest received - 45,560 -
Net cash used in investing activities (131,397) (48,438) (2,912,644)
  December 31,  December 31, 
  2012  2011 
  (Audited)  (Audited) 
LIABILITIES & SHAREHOLDERS’ EQUITY      
Current Liabilities      
Other payables and accrued liabilities (Note 8)  705,132   602,496 
Notes payable - related parties  434,137   434,137 
Advance from customer  1,431,867   - 
Total Current Liabilities  2,571,136   1,036,633 
         
Non-current liabilities        
Due to related parties (Note 9)
  1,858,861   2,100,486 
Due to shareholders (Note 10)  4,186,907   4,176,700 
Payable on acquisition of a subsidiary  1,987,583   1,982,725 
Total Long-term Liabilities  8,033,351   8,259,911 
         
         
SHAREHOLDERS’ EQUITY        
Series C convertible preferred stock ($0.01 par value,10,000,000 shares authorized, no shares outstanding as of December 31, 2011 and 2012
  -   - 
Common stock ($0.01 par value, 250,000,000 shares authorized, 64,629,559 shares issued and outstanding as of December 31, 2011 and 2012)
  646,295   646,295 
Treasury stock  (489,258)  (489,258)
Additional paid-in capital  13,916,844   13,916,844 
Retained earnings  (4,946,453)  (5,564,337)
Non-controlling interests  1,389,550   617,334 
Accumulated other comprehensive income  2,211,558   2,180,308 
TOTAL SHAREHOLDERS’ EQUITY  12,728,536   11,307,186 
         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $23,333,023  $20,603,730 
 
47See accompanying notes to the consolidated financial statements
 
 
34
 
 
CHINA CHANGJIANG MINING & NEW ENERGY COMPANY,CO., LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(An Exploration Stage Company)Stated in US Dollars)
  December 31  December 31 
  2012  2011 
       
Sales revenue (Note 11) $1,188,119  $2,744,624 
Cost of revenue  66,535   153,699 
Gross Profit  1,121,584   2,590,925 
         
Operating expenses        
Administrative expenses  241,376   374,388 
Depreciation  27,456   35,046 
Amortization  407,262   401,476 
Total operating expenses　
  676,094   810,910 
         
Income from operations  445,490   1,780,015 
         
Other Income (Expenses)        
Interest income  169,441   457 
Interest expenses  (290)  (1,344)
Other expenses  (13,399)  - 
Total Other Income (Expense)  155,752   (887)
         
Income(Loss) before tax  601,242   1,779,128 
Income tax expense (Note 12)  14,265   (283,246)
Net Income $615,507  $1,495,882 
         
Net income attributable to:        
Non-controlling interests  (2,377)  (485,788)
Common Stockholders $617,884  $1,010,094 
         
Other comprehensive income/(loss)        
Foreign currency translation adjustments  31,250   (300,991)
Total Comprehensive Income $646,757  $1,194,891 
         
Weighted average shares-Basic  64,629,559   25,448,985 
Weighted average shares-Diluted  64,629,559   25,448,985 
Earnings per share,        
Basic $0.01  $0.06 
Diluted $0.01  $0.06 
See accompanying notes to the consolidated financial statements
35
CHINA CHANGJIANG MINING & NEW ENERGY CO., LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(Stated in US Dollars)
  Preferred stock  Common stock  Treasure stock  Additional paid-in  Non-controlling  Retained  Accumulated other comprehensive    
  Share  Amount  Share  Amount  Share  Amount  
capital
  
Interest
  earnings  income  Total 
      $       $       $   $   $   $   $   $  
                                             
Balance at December 31, 2010  500,000   5,000   3,774,625   37,746   17,572,494   (489,258)  14,520,393   131,546   (6,574,431)  2,481,299   10,112,295 
                                             
Apportionment of loss to non-controlling interest  -   -   -   -   -   -   -   485,788   (485,788)  -   - 
                                             
Net income (loss) for the year  -   -   -   -   -   -   -   -   1,495,882   -   1,495,882)
                                             
Conversion from Preferred stock to Common Stock  (500,000)  5,000   60,854,934   608,549           (603,549)                
                                             
Foreign currency translation gain(loss)  -   -   -   -   -   -   -   -   -   (300,991)  (300,991) 
                                             
Balance at December 31, 2011  -   -   64,629,559   646,295   17,572,494   (489,258)  13,916,844   617,334   (5,564,337)  2,180,308   11,307,186 
                                             
Apportionment of loss to non-controlling interest  -   -   -   -   -   -   -   (2,377,)  2,377   -   - 
                                             
Net income (loss) for the period  -   -   -   -   -   -   -   -   615,507   -   615,507 
                                             
Equity investment                              774,593           774,593 
                                             
Foreign currency translation gain(loss)  -   -   -   -   -   -   -   -   -   31,250   (31,250)
                                             
Balance at December 31, 2012  -   -   64,629,559   646,295   17,572,494   (489,258)  13,916,844   1,389,550   (4,946,453)  2,211,558   12,728,536 
See accompanying notes to the consolidated financial statements
36
CHINA CHANGJIANG MINING & NEW ENERGY CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009, 20082012 AND 20072011
(Stated in US Dollars)
 
  Year ended December 31, 2009 Year ended December 31, 2008 Year ended December 31, 2007
  $ $ $
Cash flows from financing activities      
Proceeds from notes payable - (6,009) (133,000)
Interest paid - (103,137) -
Common stock issued for  legal expense 45,000 90,000 -
Due to related parties 295,465 1,055,437 1,592,291
Due to shareholders 34,159 492,961 429,330
Net cash provided by/(used in) financing activities 374,624 1,529,252 1,888,621
       
Net increase (decrease) in cash and cash equivalents 5,277 (167,646) 1,791,944
Effect of foreign currency translation on cash (1,961) (288,335) (2,099,768)
Cash and cash equivalents at beginning of year 23,878 479,859 787,683
       
Cash and cash equivalents at end of year 27,194 23,878 479,859
  For the Years Ended December 31, 
  2012  2011 
       
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income/(loss) $615,507  $1,495,882 
Adjustments to reconcile net loss to net cash provided by operating activities:        
Depreciation and amortization  434,718   436,522 
Deferred tax assets  (14,361)  - 
Changes in operating assets and liabilities:        
Other current assets and prepayments  648,110   (263,287)
Other payables and accrued liabilities  (21,636)  554,037 
Advanced from customer  318,973   - 
         
CASH PROVIDED BY OPERATING ACTIVITIES  1,981,311   2,223,154 
         
CASH FLOWS FROM INVESTING ACTIVITIES        
Purchase of property, plant and equipment  (157,597)  (3,242)
Due from related parties  (639,559)  - 
         
CASH USED IN INVESTING ACTIVITIES  (797,156)  (3,242)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Proceeds from minority interest investment  774,593   - 
Repayment to related parties  (242,217)  (2,776,704)
Proceeds from shareholders  -   1,508,669 
         
CASH PROVIDED BY FINANCING ACTIVITIES  532,376   (1,268,035)
         
Effect of exchange rate changes on cash and cash equivalents  25,918   (1,028,119)
         
NET INCREASE (DECREASE) IN CASH  1,742,449   (76,242)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR $20,932  $97,174 
CASH AND CASH EQUIVALENTS AT END OF YEAR $1,763,381  $20,932 
         
Supplementary Disclosures for Cash Flow Information:        
         
Income taxes paid $-  $- 
         
NON-CASH INVESTING AND FINANCING ACTIVITIES        
         
Changes in restricted cash related to advance from customers  1,113,674   - 
         
Conversion from Preferred stock to Common Stock $-  $608,549 
 
48See accompanying notes to the consolidated financial statements
 
 
37
 
 
1.
1.ORGANIZATION AND PRINCIPAL ACTIVITIES

The Company was incorporated under the laws of the State of Delaware in 1969. The Company has had no operations or significant assets since incorporation to the year ended December 31, 2006.

Hong Kong Wah Bon Enterprise Limited ("Wah Bon") was incorporated in Hong Kong on July 7, 2006 as an investment holding company.

Shanxi Tai Ping Yang Xin Neng YuanShaanxi Pacific New Energy Development Company Limited ("Tai Ping Yang"Shaanxi Pacific") was incorporated as a limited liability company in the People's Republic of China ("PRC") on July 20, 2007 as an investment holding company.

Chang Jiang Shi You Neng Yuan Fa Zhan Gu Fen You Xian Gong Si ("Chang Jiang"Shaanxi Changjiang Mining & New Energy Co., Ltd (“Shaanxi Changjiang”) (formerly Weinan Industrial and Commercial Company Limited) was incorporated as a limited liability company in the PRC on March 19, 1999. The Company became a joint stock company in January 2006 with its business activities in investment holding and the development of a theme park in Xi’An, PRC.

In August 2005, Chang JiangShaanxi Changjiang contributed land use rights valued at $7,928,532 in lieu of cash to the registered capital of Shanxi Huanghe Wetland Park Company Limited ("Huanghe"), representing 92.93% of the equity of Huanghe. Huanghe was incorporated as a limited liability company in the PRC on August 9, 2005 as Shaanxi Chang JiangChangjiang Petroleum and Energy Development Co., Limited and is engaged in the development of a theme park in Xi’An,Huanghe Bay (Huanghe Nantan), Heyang County, Shaanxi Province, PRC.

On February 5, 2007, Chang JiangShaanxi Changjiang entered into an agreement with a third party to acquire 40% of the equity interest in Dongfang Mining Company Limited ("DongfangEast Mining") for $3,117,267 in cash. DongfangEast Mining is engaged in exploration for lead, zinc and gold for mining in Xi’An,Xunyan County, Shaanxi Province, PRC.

On March 22, 2007, Chang JiangShaanxi Changjiang entered into an agreement with the majority shareholder of Chang JiangShaanxi Changjiang to exchange its 92.93% interest in Huanghe for a 20% equity interest in DongfangEast Mining owned by this related party.
49
1. ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

On August 15, 2007, 97.2% of the shareholders of Chang JiangShaanxi Changjiang entered into a definitive agreement with Tai Ping YangShaanxi Pacific and the stockholders of Tai Ping YangShaanxi Pacific in which they disposed their ownership in Chang JiangShaanxi Changjiang to Tai Ping YangShaanxi Pacific for 98% of ownership in Tai Ping YangShaanxi Pacific and cash of $1,328,940 payable on or before December 31, 2007.
 
On September 2, 2007, Wah Bon acquired 100% ownership of Tai Ping YangShaanxi Pacific for a cash consideration of $128,205.

On May 30, 2007, amended to July 5, 2007, North American Gaming and Entertainment Corporation (“North American”) entered into a Material Definitive Agreement, pursuant to which the shareholders of Chang JiangShaanxi Changjiang exchanged all their shares in Chang JiangShaanxi Changjiang for 500,000 shares of series C convertible preferred stock ("series C shares") in North American which carried the right of 1,218 votes per share and was convertible to 609,000,000 common shares. In connection with the exchange, Chang Jiang willShaanxi Changjiang also deliverdelivered $370,000 to North American and certain non-affiliates of North American will transfer to North American or its designee a total of 3,800,000 shares of common stock, par value of $0.01 per share, of North American which had been held for longer than 2 years by such non-affiliates, in exchange for the issuance by North American to each of such non-affiliates of 2,250,000 shares of common stock of North American. Issued and outstanding share of series C preferred stock shallwere automatically be converted into that number of fully paid and non-assessable shares of common stock based upon the conversion rate upon the filing by the Company of an amendment to its Certificate of Incorporation, increasing the number of authorized shares of common stock to 800,000,000 shares, changing the Company's name to China Changjiang Mining and& New Energy CompanyCo. Limited and implementing a one for ten reverse stock split. The transaction was closed on February 4, 2008 and Wah Bon becomesbecame a wholly owned subsidiary of North American.

There was a 10 to 1 reverse stock split for the Company’s common stock during December 2009 and all the shares information are retroactively restated to reflect the reverse stock split. The Company will affect the reverse stock splits upon obtaining regulatory approval. The preferred stock holders will not convert their C convertible preferred stock until after the completion of the reverse stock split.

On February 9, 2010, we filed a Certificate of Amendment to our Articles of Incorporation to effect a 1-for-10 reverse stock split of our common stock, subject to FINRA approval. The 1-for-10 reverse split was approved by FINRA on July 30, 2010, effective August 2, 2010.
50
1. ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

The Company was reincorporated from the state of Delaware to the state of Nevada with the intent to effect a statutory merger of the Delaware corporation "North American Gaming and Entertainment Corporation", into China Changjiang and to swopswap all issued and outstanding shares in the Delaware corporation for comparable shares in China Changjiang and dissolve the Delaware corporation. Up to the present, the statutory merger is in progress.

The members have limited liability for the obligations or debts of the entity.

The merger of North American and Wah Bon was treated for accounting purposes as a capital transaction and recapitalization by Wah Bon ("the accounting acquirer") and re-organization by North American ("the accounting acquiree"). The consolidated financial statements have been prepared as if the reorganization had occurred retroactively.
 
38
1ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

On February 4, 2008, (the "Closing Date") we acquired Hongkong Wah Bon Enterprise Limited ("Wah Bon") and its three subsidiaries: Shanxi Tai Ping Yang Xin Neng Yuan Development Company Limited ("Tai Ping Yang "); Shanxi Chang Jiang Shi You Neng Yuan Fa Zhan Gu Fen You Xian Gong Si ("Chang Jiang")Shaanxi Pacific; Shaanxi Changjiang and Dongfang Mining Company Limited ("Dongfang Mining".)East Mining. Wah Bon owns 100% of Tai Ping Yang. Tai Ping YangShaanxi Pacific. Shaanxi Pacific owns 97.2% of Chang Jiang;Shaanxi Changjiang; and Chang JiangShaanxi Changjiang owns 60% of DongfangEast Mining. The minority interests represent the minority shareholders' 2.8% and 40% share of the results of Chang JiangShaanxi Changjiang and DongfangEast Mining respectively.

Accordingly, the consolidated financial statements include the following:
(1)
(1)The consolidated balance sheet consisting of the net assets of the acquirer at historical cost and the net assets of the acquiree at historical cost.
 
(2)The statement of operations including the operations of the acquirer for the periods presented and the  operations of the acquiree from the date of the merger.
(2)The statement of operations including the operations of the acquirer for the periods presented and the operations of the acquiree from the date of the merger or the period presented.

China Changjiang, North American, Wah Bon, Tai Ping Yang, Chang JiangShaanxi Pacific, Shaanxi Changjiang and DongfangEast Mining are hereafter referred to collectively as "the Company".
 
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
51
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
(a)Method of Accounting
The Company maintains its accounts and prepares its financial statements using the accrual method accounting .The consolidated financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied.

(b)
(b)Principles of consolidation
The accompanying consolidated financial statements as of December 31,2007,200831, 2012 and 2009consolidate2011 consolidate the financial statements of North AmericanChina Changjiang and its 100% owned subsidiary Wah Bon, 100% owned subsidiary Tai  Ping  Yang,Shaanxi Pacific, 97.2% owned subsidiary Chang JiangShaanxi Changjiang, and 60% owned subsidiary DongfangEast Mining. The minority interests represent the minority shareholders' 2.8% and 40% shares of the results of Chang JiangShaanxi Changjiang and DongfangEast Mining respectively.
 
The accompanying consolidated financial statements as of December 31, 2006 consolidate the financial statements of Chang Jiang and its 92.93% owned subsidiary Huanghe. The minority interests represent  the minority shareholders' 7.07% share of the results of Huanghe.
(c) Business combinations and consolidated financial statements
(1) Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the carrying amount of the net assets obtained and amount of consideration paid for the combination (or the value of shares issued) is accounted for by an adjustment to the capital premium (or share premium) in the capital reserve. If the balance of the capital premium (or share premium) is insufficient, any excess is charged against retained earnings. The combination date is the date on which one combining enterprise effectively obtains control of the other combining enterprises.
(2)       Business combinations involving enterprises not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(c) Business combinations and consolidated financial statements (Continued)
(2)       Business combinations involving enterprises not under common control (Continued)
the business combination. Where 1) the aggregate of the fair value at the acquisition date of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds 2) the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognized as goodwill. Where 1) is less than 2), the difference is recognized in profit or loss for the current period. The costs of the issuance of equity or debt securities as a part of the consideration paid for the acquisition are included as a part of initial recognition amount of the equity or debt securities. Other acquisition-related costs arising from the business combination are recognized as expenses in the periods in which the costs are incurred. The difference between the fair value and the carrying amount of the assets transferred is recognized in profit or loss. The acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
The acquirer, at the acquisition date, allocates the cost of the business combination by recognizing the acquiree’s identifiable asset, liabilities and contingent liabilities at their fair value at that date.
In a business combination, the acquiree’s deductible temporary differences obtained by the Group are not recognized if the deductible temporary differences do not satisfy the criteria for recognition of deferred tax assets at the acquisition date. The Group recognizes the relevant deferred tax assets and reduces goodwill accordingly if within 12 months of the acquisition date, new or updated information indicates that at the acquisition date, the obtained deferred tax benefit is expected to be realized in future periods. If the goodwill is insufficient to be deducted, any remaining deferred tax benefits shall be recognized in profit or loss for the current period. All other acquired deferred tax benefit shall be included in profit or loss for the current period.
(3) Consolidated financial statements
The consolidated financial statements comprise the Company and its subsidiaries. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its operating activities. In assessing control, potential voting rights, such as warrants and convertible bonds, that are currently exercisable or convertible, are taken into account. The consolidated financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
52
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(c) Business combinations and consolidated financial statements (Continued)
(3 )Consolidated financial statements (Continued)
Where a subsidiary is acquired during a reporting period through a business combination involving enterprises under common control, the consolidated financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred at the date that the ultimate controlling party first obtained control. Therefore the opening balances and the comparative figures of the consolidated financial statements are restated. In the preparation of the consolidated financial statements, the subsidiary’s assets, liabilities and results of operations are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established.
Where a subsidiary is acquired during a reporting period through a business combination involving enterprises not under common control, the identifiable assets, liabilities and results of operations of the subsidiaries are consolidated into consolidated financial statements from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date.For a business combination not involving enterprises under common control and achieved in stages, the Group remeasures its previously-held equity interest in the acquiree to its fair value at the acquisition date. The difference between the fair value and the carrying amount is recognized as investment income for the current period; the amount recognized in other comprehensive income relating to the previously-held equity interest in the acquiree is reclassified as investment income for the current period.
Where the Company acquires a minority interest from a subsidiary’s minority shareholders or disposes of a portion of an interest in a subsidiary without a change in control, the difference between the amount by which the minority interests are adjusted and the amount of the consideration paid or received is adjusted to the capital reserve in the consolidated balance sheet. If the credit balance of capital reserve is insufficient, any excess is adjusted to retained earnings.
When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment, the remaining equity investment is remeasured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the former subsidiary’s net assets immediately before the loss of the control is recognized as investment income for the current period when control is lost. The amount recognized in other comprehensive income in relation to the former subsidiary’s equity investment is reclassified as investment income for the current period when control is lost.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(c) Business combinations and consolidated financial statements (Continued)
(3) Consolidated financial statements (Continued)
Minority interest is presented separately in the consolidated balance sheet within shareholders’ equity. Net profit or loss attributable to minority shareholders is presented separately in the consolidated income statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ portion of the opening balance of shareholders’ equity of the subsidiary, the excess is allocated against the minority interests.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the consolidated financial statements of the subsidiary based on the Company’s own accounting period or accounting policies. Intra-group balances and transactions, and any unrealised profit or loss arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(c)Business combinations and consolidated financial statements
 
The acquisition on March 22, 2007, which Chang JiangShaanxi Changjiang entered into an agreement with the majority stockholder of Chang JiangShaanxi Changjiang to exchange its 92.93% interest in Huanghe for 20% equity interest in DongfangEast Mining owned by this related party; the acquisition on August 15, 2007, which 97.2% of the stockholders of Chang JiangShaanxi Changjiang entered into a definitive agreement with Tai Ping YangShaanxi Pacific and the stockholders of Tai Ping YangShaanxi Pacific pursuant to which they disposed their ownership in Chang JiangShaanxi Changjiang to Tai Ping YangShaanxi Pacific for 98% of ownership in Tai Ping Yang;Shaanxi Pacific; The acquisition on September 2, 2007, in which Wah Bon acquired 100% ownership of Tai Ping YangShaanxi Pacific at a consideration of $128,205 in cash were all accounted for as a reorganization of entities under common control.
 
53
(d)
(d)Basis of Presentation
The Company's consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in the United States of America ("US GAAP").

This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company, which are prepared in accordance with the accounting principles and the relevant
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Basis of Presentation (Continued)
financial regulations applicable to enterprises with limited liabilities established in the PRC ("PRC GAAP"), the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company to present them in conformity with US GAAP.

(e)
(e)Economic and Political Risks
The Company's operations are conducted in the PRC and involve risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
 
(f)
39
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f)Use of Estimates
In preparing of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and machinery. Actual results could differ from those estimates.

(g)
(g)Concentrations of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, notes receivable and amounts due from a related party. The Company places its cash with financial institutions with high-credit ratings and quality. In addition, the Company conducts periodic reviews of the related party financial conditions and payment practices.
 
(h)
(h)Cash and Cash Equivalents
The Company considers all highly liquid investments with initial maturities of three months or less to be cash equivalents.

54
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i)
(i)Property, plant and equipment

Property, plant and equipment, are stated at cost less depreciation and amortization and accumulated impairment loss. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives. Estimated useful lives are as follows:

Machinery5 years
Motor vehicles10 years
Furniture and office equipment5 years
 
(j)Intangible assets
 
55All land belongs to the State in PRC. Enterprises and individuals can pay the State a fee to obtain a right to use a piece of land for commercial purpose or residential purpose for an initial period of 50 years or 70 years, respectively. The land use right can be sold, purchased, and exchanged in the market. The successor owner of the land use right will reduce the amount of time which has been consumed by the predecessor owner.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(j) Intangible assets
We have exploration rights for a 61.27acquired the 5.71 sq.km land use right parcel, in the Jiao Shan Zhai Mining Area, located in Xunyang County in theHeyang Country, Shaanxi Province of China.in 2005. Our land use rights are amortized over their fifty year term.We have performed tests on the site but we have not begun mining activity. We originally plannedterm from October 2001 to participate in constructing a theme park business on the parcel, but have delayed those plans while we direct our resources on the mining opportunities.October 2051. We have leased our land use right to Huanghe, wet land park Co.,Ltd. Therefore we can focus our management inand began to generate the mining segment.rent revenue for the year ended December 31, 2011.
 
From 2003 until the present, Dongfang Mining has held licenses for the exploration of minerals and precious metals in the Shaanxi Province of the People's Republic of China. Dongfang Mining was granted an exploration right for lead, zinc and gold at Gan Gou and Guan Zi Gou, Xunyang County, Shaanxi Province, PRC, on December 31, 2006. The Company engaged the Geology and Mineral Bureau of Shaanxi to conduct a preliminary survey which reported preliminary positive findings for mineral deposits at this site.
(k)Impairment of long-lived assets
 
(k) Long-lived assets
The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. There was no impairment of long-lived assets underfor the Statementsyears ended December 31, 2012 and 2011.
(l) Equity-method investment
An affiliated company over which the Company has the ability to exercise significant influence, but does not have a controlling interest is accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of Financial Accounting Standards Nos. 142the investee of between 20% and 144 "Accounting50%, and other factors, such as representation on the investee’s Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Company’s share of earnings of equity affiliate is included in the accompanying consolidated statements of operations below provision for Goodwillincome taxes.
40

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(m)Fair value of financial instruments
The Company adopted ASC Topic 820 “Fair Value Measurements and OtherDisclosures” (“ASC 820”) (formerly SFAS No. 157, “Fair Value Measurements”), ASC 820 use of financial instruments Intangible Assets" and "Accounting for Impairment or Disposal of Long-Lived Assets" ("SFAS No. 142 and 144"). In accordance with SFAS No. 142ASC Topic 820 defines fair value, establishes a three level valuation hierarchy for disclosures of fair value measurement and 144, long-lived assets, goodwillenhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and certain identifiable intangible assets held and used by the Company are reviewed for impairment annually or whenever events or changes in circumstances indicate thatpayables qualify as financial instruments. Management concluded the carrying amountvalues

are a reasonable estimate of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset's carrying amount, the asset is  written down to its fair value. The Company believes that no impairment of furniture and equipment.
(l) Fair value of financial instruments
Statement of Financial Accounting Standards No. 107, "Disclosure About Fair Value of Financial      Instruments," requires certain disclosures regarding the fair value of financial instruments. Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
The carrying value of current assets and liabilities approximate their fair value because of the short period of time between the origination of such instruments and their short-term nature.expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows:

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.

It is management’s opinion that as of December 31, 2012, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(m) Goodwill
Goodwill arising on an acquisition of a subsidiary represents the excess of the cost of acquisition over the company’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the relevant business at the date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses.
Capitalized goodwill arising on an acquisition of a subsidiary is presented separately in the consolidated balance sheet
For the purposes of impairment testing, goodwill arising from an acquisition is allocated to each of the relevant cash-generating units, or groups of cash-generating units, that are expected to benefit from the acquisition. A cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the unit may be impaired. For goodwill arising on an acquisition during  a fiscal year, the cash-generating unit to which goodwill has been allocated is tested for impairment before the end of that fiscal year. When the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, an impairment loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first, and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in the consolidated income statement. An impairment loss for goodwill is not reversed in subsequent periods.
On disposal of a subsidiary, the attributable amount of goodwill capitalised is included in the determination of the amount of profit or loss on disposal.
Goodwill in the amount of arose on acquisition of 40% interest in Dongfang for $3,117,267 on February 6, 2007.
56
(n) Impairment loss of goodwill
Determining whether goodwill has been impaired requires estimation of its value to the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. Where the actual future cash flow are less than expected, a material impairment loss may arise.
The goodwill which arose on acquisition of Dongfang was identified to be fully impaired and we reduced goodwill by $22,786,715 to zero, effective in 2007. Relevant information refers to Note 8.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o)
(n)Foreign Currency Translation
The Group maintains its consolidated financial statements in the functional currency. The functional currency of the Company is US dollar (“USD”), the functional currency of "Wah Bon" is Hong Kong dollar (“ HKD”), and the functional currency of "Tai Ping Yang""Shaanxi Pacific", "Chang Jiang""Shaanxi Changjiang" and "Dongfang"East Mining" are the Renminbi (“RMB”). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purposes, the consolidated financial statements of the Company, "Wah Bon", "Tai Ping Yang""Shaanxi Pacific", "Chang Jiang""Shaanxi Changjiang" and "Dongfang"East Mining" which are prepared using the functional currency have been translated into United States dollars (“USD”). Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.
 
Exchange rates applied for the foreign currency translation during the period are as follows:
 
USD to RMB
2009.12.31
2008.12.31
2007.12.31
  2012.12.31  2011.12.31 
Period end US$ : RMB exchange rate6.82826.83467.3046 6.2855 6.3009 
Average periodic US$ : RMB exchange rate6.83147.0696  7.5567 6.3125 6.3761 
 
USD to HKD
2009.12.31
2008.12.31
2007.12.31
  2012.12.31  2011.12.31 
Period end US$ : UHK exchange rate7.75497.74997.8007 7.7522 7.7694 
Average periodic US$ : UHK exchange rate7.75247.77537.7864 7.7986 7.7763 
 
HK$ is pegged to US$ and hence there is no significant translation adjustment impact on these consolidated financial statements.
57
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o) Foreign Currency Translation (Continued)
RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.
 
(p)
41
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o)Related Party

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, member of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting party might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Cash flows from due from related parties are classified as cash flows from investing activities. Cash flows from due to related parties are classified as cash flows from financing activities.

(p)Revenue Recognition
The Company operated in two reportable segments,recognizes revenue when the earnings process is complete, both significant risks and rewards of ownership are transferred or services have been rendered and accepted, the selling price is fixed or determinable, and collectability is reasonably assured.

The Company currently leased the land use right to Huanghe for the development and operation of a theme parkpark. The Company generally collects the annual rent every year, and exploration inthen recognizes land use right leasing revenue over the years ended December 31, 2009, 2008beneficial period described by the agreement, as the revenue is realized or realizable and 2007.        earned.

(q)Income Taxes
 
(q) Income Taxes
The Company utilizes SFAS No. 109, “Accounting for Income Taxes,” codified in FASB ASC Topic 740, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
 
(r) ASC 740-10-25 clarifies the accounting for uncertain tax positions and requires that an entity recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as a component of income tax expense in the consolidated statements of income.
(r)Comprehensive Income/Loss
Comprehensive income/loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a consolidated financial statement that is presented with the same prominence as other financial statements. At present, the only component of other comprehensive income is the company’s foreign currency translation adjustment.

(s)
(s)Earning/Loss per share
Basic earning/loss per share is computed by dividing earning/loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earning/loss per share is computed in a manner similar to basic earning/loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(t)Recent Accounting Pronouncements

(t) Recent Accounting Pronouncements
In December 2007,February 2013, the FASB issued Statement 141 (Revised 2007), "Business Combinations". This statement provides guidanceASU 2013-02, “Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income” (“ASU 2013-02”).Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on improving the relevance, representational faithfulness, and comparabilityface of information that a reporting entity providesthe financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial reports about a business combination and its effects. This Statementstatements. The amendments in this update will becomebe effective where is the acquisition date is on or after thefor fiscal periods beginning of the first annual reporting period beginning on or after December 15, 2008.2012. The Companyadoption of ASU 2013-02 is currently evaluating the impact this new Standard, but believes that it will not expected to have a material impact on the Company'sCompany’s consolidated financial position.statements.

In December 2007,October 2012, the FASB issued Statement 160, "Non-controlling InterestsASU 2012-04, “Technical Corrections and Improvements” in Financial Statement - an amendmentAccounting Standards Update No. 2012-04 ("ASU 2012-04"). The amendments in this update cover a wide range of ARB No. 51", which establishes accountingtopics in the Accounting Standards Codification. These amendments include technical corrections and reporting standardsimprovements to improve the relevance, comparability,Accounting Standards Codification and transparency of financial  informationconforming amendments related to fair value measurements. The amendments in its consolidated financial   statements that include an outstanding non-controlling interest in one or more subsidiaries. This effectivethis update will be effective for all full fiscal and interim periods beginning after December 15, 2008.2012. The Companyadoption of ASU 2012-04 is currently evaluating the impact this new Standard, but believes that it will not expected to have a material impact on the Company'sCompany’s consolidated financial position.position, results of operations or cash flows.
 
In April 2008, the FASB issued FASB Staff Position No. 142-3, DETERMINATION OF THE USEFUL LIFE OF INTANGIBLE ASSETS (“FSP No. 142-3”) to improve the consistency between the useful life of a recognized intangible asset (under SFAS No. 142) and the period of expected cash flows used to measure the fair value of the intangible asset (under SFAS No. 141(R)). FSP No. 142-3 amends the factors to be considered when developing renewal or extension assumptions that are used to estimate an intangible asset’s useful life under SFAS No. 142. The guidance in the new staff position is to be applied prospectively to intangible assets acquired after December 31, 2008. In addition, FSP No.142-3 increases the disclosure requirements related to renewal or extension assumptions. The Company does not believe implementation of FSP No. 142-3 have a material impact on its financial statements.
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42
 
 
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In May 2008,August 2012, the FASB issued statementAccounting Standards Update (“ASU”) 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 162, THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This statement identifiesupdate amends various SEC paragraphs pursuant to the sourcesissuance of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “the Meaning
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(t) Recent Accounting Pronouncements (Continued)
of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The Company is currently evaluating the impact this new Standard, but believes that it will not have a material impact on the Company's financial position.
In May 2009, the FASB issued FSP SFAS 165 “Subsequent Events”. The objective of this Statement is to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for the interim and annual periods ending after June 15, 2009, which is now codified as FASB ASC 855 “Subsequent Events”.SAB No. 114. The adoption of FASB ASC 855 didASU 2012-03 is not expected to have a material impact on the Company’s consolidated financial position, results of operations andor cash flows. Effective February 24, 2010, the Company adopted Accounting Standards Update (“ASU”) No. 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements”, which removes the requirement to disclose the date through which subsequent events
Other accounting standards that have been evaluated. Theissued or proposed by FASB that do not require adoption of the ASU diduntil a future date are not expected to have a material impact on the Company’sconsolidated financial position, resultsstatements upon adoption.

3.RESTRICTED CASH

The Restricted cash of operations and cash flows.
In$ 1,113,674 (RMB7,000,000) represents the amount received by the escrow account in June 2009,2012. According to the FASB issued SFAS 168, “The FASB Accounting Standards CodificationTM andtransfer contract for the Hierarchymines exploration rights, the escrow account would be deposited in $ 1,113,674 (RMB7,000,000) within the 3 days after the signature of Generally Accepted Accounting Principles - a replacement of FASB Statement No 162”, which supersedes all existing non-SEC accounting and reporting standards. The codification does not change GAAP but rather organizes ittransfer contract. When the mines transfer transaction was accomplished, the amount would be authorized by both parties to deposit into a new hierarchy with two levels: authoritative and non-authoritative. All authoritative GAAP carries equal weight and is organized in a topical structure. The adoption of SFAS 168 did not have a material impact on the Company’s financial position, results of operations and cash flows.
In September 2009,bank account. At the FASB issued ASU No. 2009-06, “Income Taxes (Topic 740): Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities”, and it provides implementation guidance on accounting for uncertainty in income taxes effective for interim and annual reporting period ending on or after September 15, 2009. The adoption of ASU No. 2009-06 did not have any impact on the Company's financial position, results of operations and cash flows.
In October 2009, the FASB issued ASU No. 2009-13 “Multiple-Deliverable Revenue Arrangements: a consensusend of the FASB Emerging Issues Task Force” that provides amendments tofirst quarter of 2013, the criteria for separating consideration in multiple-deliverable arrangements. As a resultDepartment of these amendments, multiple-deliverable revenue arrangements will be separated in more circumstances than under existing U.S. GAAP. The ASU doesLand and Resources of Shaanxi Province has approved this by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling
59
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(t) Recent Accounting Pronouncements (Continued)
price used for each deliverable will be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. A vendor will be required to determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. This ASU also eliminates the residual method of allocationmines transfer transaction, and will require that arrangement consideration be allocated at the inceptionall of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the overall arrangement proportionally to each deliverable based on its relative selling price. Expanded disclosures of qualitative and quantitative information regarding application of the multiple-deliverable revenue arrangement guidance are also required under the ASU. The ASU does not apply to arrangements for which industry specific allocation and measurement guidance exists, such as long-term construction contracts and software transactions. The ASU is effective beginning January 1, 2011. While the Company does not believe this Update will have a material impact, it is currently evaluating the impact of this update on the Company's financial statements.contact amount has been settled.

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3.       
4.OTHER CURRENT ASSETS AND PREPAYMENTS
Other current assets and prepayments of $107,217 mainly consist of loansrepresents the small amount advances to related parties, which are interest free, unsecured and repayable on demand.the employees.
 
4.       NOTES RECEIVABLE
In March 2004, the Company entered into a convertible secured promissory note with a third party due September 2004. Pursuant to the term of note together with pledge agreement and operating agreement, the Company is initially advance up to $150,000 with interest and may advance an additional $150,000 and has the option to convert the total advances into a 25% interest in such third party.
As of December 31, 2007 the note is in default on the repayment schedule but no recoverability problem due to the note receivable is collateralized to the note payable to a related party.
5.       DUE FROM RELATED PARTIES - CURRENT
Due from related parties represents the amount which the related parties owed the Company for advances made on an unsecured basis, repayable on demand and interest free.
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6.       
5.PROPERTY, PLANT AND EQUIPMENT
 
The following is a summary of property, plant and equipment:
 
 December 31, 2009 December 31, 2008 December 31, 2007
 $ $ $ 
December 31,
2012
 
December 31,
2011
 
Cost           
Machinery - - 2,226
Motor vehicles 278,249 277,989 260,102 $258,271  $301,535 
Office equipment 58,221 60,703 52,787  67,741   65,909 
Total 336,470 338,692 315,115  326,012   367,444 
              
Accumulated depreciation (135,386) (103,108) (62,099)  (223,732)   (222,108) 
              
Property, plant and equipment, net 201,084 235,584 253,016 $102,280  $145,336 
 
Depreciation expenses for the years ended December 31, 2009, 20082012 and 20072011 were $36,755, $35,779$27,456 and $23,675,$35,046 respectively.
 
7.       
6.INTANGIBLE ASSET
The following is a summary of intangible asset:
   December 31, 2009 December 31, 2008 December 31, 2007
  $ $ $
Cost      
 Coal mining right 18,744,677 18,727,124 17,522,165
Accumulated Amortization (2,146,978) (1,740,056) (1,249,238)
       
Intangible asset, net 16,597,699 16,987,068 16,272,927
 
December 31,
2012
 
December 31,
2011
 
     
Cost of Land use right $20,363,122  $20,313,352 
Accumulated Amortization of Land use right  (3,587,160)   (3,172,125) 
Intangible Asset, net $16,775,962  $17,141,227 
 
The difference for the balance of cost was mainly due to the fluctuation of exchange rate of USD to RMB.

Amortization expenses were approximately $405,100, $391,451$407,262 and $359,903$401,476 for the years ended December 31, 2009, 20082012, and 2007,2011, respectively.
62
 
 
43
 
 
8. GOODWILL
7.DUE FROM RELATED PARTIES – NON CURRENT
  December 31, 2009 December 31, 2008 December 31, 2007
  $ $ $
Cost 22,786,715 22,786,715 22,786,715
       
Impairment (22,786,715) (22,786,715) (22,786,715)
       
Carrying Value - - -

The balance of $2,863,074 due from related parties represents the loan owned from related parties, which are unsecured and repayable on demand.

Due from related parties consists of the following.
 
Goodwill arose on acquisition of 40% interest in Dongfang at the consideration of $3,117,267 on February 6, 2007.
  
December 31,
2012
  
December 31,
2011
  Interest
Du Kang Liquor Development Co., Ltd $795,482   793,537  interest free for the first year and bear interest in the
Shaanxi Du Kang Liquor Group Co., Ltd $-   573,001  benchmark lending rate over the same period afterwards
Zhongke Aerospace & Agriculture Development Stock Co.,Ltd $449,447   448,349  interest free
Shaanxi Huanghe Bay Springs Lake Theme Park Ltd  1,193,222   -  interest free
Shaanxi Changfa Industrial Co., LTD $365,922   365,027  interest free
Mr Chen Weidong $45,876   32,229  interest free
Shaanxi Changjiang Zhongxiayou Investment Co.,Ltd $13,125   12,935  interest free
Total  2,863,074   2,225,078   
 
Impairment testingThe balance of goodwill
During$45,876 as of December 31,2012 was the year ended 31 December 2007, the Group has performed an impairment testing of goodwill arose on acquisition of 60% interest in Dongfang. As Dongfang sustained a negative cash flowadvance to our CEO for the year ended 31 December 2007 and such position is expected to continue in the foreseeable future has recognized an impairment loss of $22,786,715 in relation to goodwill from the on acquisition of Dongfang for the year ended 31 December 2007. As a result, the goodwill was fully impaired.Company's business.
 
9.
8.OTHER PAYABLES AND ACCRUED EXPENSES
The following is a summary of other payables and accrued liabilities:
 
 December 31, 2009 December 31, 2008 December 31, 2007 
December 31,
2012
 
December 31,
2011
 
 $ $ $     
Interest payable - - 75,434
Tax payable $510,173  $442,263 
Salary and welfare payable 20,029 16,328 11,333  24,734   24,674 
Accrued audit and consultant fee - - 45,048
Other payable 51,150 50,259 33,430  170,225   135,559 
 71,179 66,587 165,245 $705,132  $602,496 
 
10.       DUE TO RELATED PARTY – NON CURRENTThe tax payable of $510,173 includes income tax payable of $287,328, business tax payable of $222,735 and other tax payable of $110.
We borrowed RMB23, 560,000 form our director, Mr. Shi Qingdong by over
44
9.DUE TO RELATED PARTIES
The balance of $1,858,861 due to related parties represents the period from September,2007loan owed to July, 2010.The loan isrelated parties, which are interest free, unsecured and repayable on demand.demandtwelve months after December 31, 2012.

Due to related parties consists of the following.

  
December 31,
2012
  
December 31,
2011
 
       
Due to Huiton World Property Superintendent Company $397,741  $396,769 
Due to Zhongke Lvxiang Development Stock Co., Ltd $1,113,674   1,110,952 
Due to Shaanxi Changjiang electricity & new energy Co.,Ltd $292,876   294,883 
Due to Du Kang Liquor Development Co., Ltd $-   65,200 
Due to Du Kang Liquor Marketing co.,Ltd $-   130,140 
Due to Baishui Du Kang Brand Management Co.,Ltd $9,546   101,573 
Due to Shaanxi Xidenghui Technology Co. Ltd. $970   969 
Due to Shaanxi Dukang Liquor Group Co.,Ltd $44,054   - 
Total $1,858,861   2,100,486 
 
11.       RELATED PARTY TRANSACTIONS
10.DUE TO SHAREHOLDERS
Apart
The balance of $4,186,907 due to shareholders represents the loan owed to the shareholders, which are interest free, unsecured and repayable on demand. twelve months after December 31, 2012.

Due to shareholders consists of the following.
  
December 31,
2012
  
December 31,
2011
 
       
Due to Wang Shengli $2,192,966   2,187,606 
Due to Zhang Hongjun  1,394,798   1,391,389 
Due to Chen Min $599,143   597,705 
   4,186,907   4,176,700 
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11.SALES REVENUE

The details of Sales revenue are as follows:

  
For the year ended December 31,
2012
  
For the year ended December 31,
2011
 
Land use right leasing $1,188,119  $1,176,267 
Mines exploitation compensation  -   1,568,357 
Total $1,188,119  $2,744,624 

The Company entered into a lease and complementary agreements with the related company Huanghe dated July 26, 2010. According to the agreements, a piece of land with the area of 5,706,666.67 square meters was leased to Huanghe for traveling and amusement from January 1, 2011 to December 31, 2029. The annual rent in US dollars is approximately $1,188,119 (equivalent to RMB7,500,000).
12.INCOME TAX

China Changjiang is incorporated in the United States and has not incurred net operating income as for income tax purposes for the years ended December 31, 2012 and 2011. The Company’s other subsidiaries are subject to income tax described below.
Hong Kong
Wah Bon is incorporated in Hong Kong and subject to Hong Kong profits tax. Wah Bon has no operating profit or tax liabilities during the period presented.
PRC

On March 16, 2007, the National People’s Congress passed the new Enterprise Income Tax Law (“the new EIT Law”), which was effective as of January 1, 2008.

The key changes for the new EIT Law are:

a)The new EIT Law imposes a single income tax rate of 25% for most domestic enterprises and foreign investment enterprises.

b)The Companies established before March 16, 2007 continue to enjoy tax holiday treatment approved by local government for a grace period of either for the next 5 years or until the tax holiday term is completed, whichever is sooner.

c)Entities that qualify as “High and New Technology Enterprises” are entitled to the preferential lower tax rate of 15%.

d)The new EIT Law grants tax holiday to entities operating in certain beneficial industries, such as environmental protection, energy – saving, etc. Entities in beneficial industries enjoy a three-year tax exempt and a three-year period with 50% reduction in the income tax rates.
46
Shaanxi Pacific, Shaanxi Changjiang and East Mining are incorporated in the PRC and subject to the above new EIT. All of these three subsidiaries are subject to effective income tax rate of 25% for the year ended December 31, 2012 and 2011. Shaanxi Pacific did not incur any operating income for the years ended December 31, 2012 and 2011.

The new EIT Law also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purpose and consequently be subject to the PRC income tax at the rate of 25% for its worldwide income. The Implementing Rules of the new EIT Law merely defines the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” On April 22, 2009, the PRC State Administration of Taxation further issued a notice entitled “Notice regarding Recognizing Offshore-Established Enterprises Controlled by PRC Shareholders as Resident Enterprises Based on Their place of Effective Management.” Under this notice, a foreign company controlled by a PRC company or a group of PRC companies shall be deemed as a PRC resident enterprise, if (ⅰ)the senior management and the core management departments in charge of its daily operations mainly function in the PRC; (ⅱ) its financial decisions and human resource decisions are subject to decisions or approvals of persons or institutions in the PRC; (ⅲ) its major assets, accounting books, company sales, minutes and files of board meetings and shareholders’ meetings are located or kept in the PRC; and (ⅳ) more than half of the directors or senior management personnel with voting rights reside in the PRC. Based on a review of surrounding facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the new EIT Law, should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to September 19, 2008.

The new EIT Law also imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the previous income tax regulations. The United States of America, where the Company is incorporated, has such tax treaty with China.
The provision for taxes on earnings consisted of:

  
For the year ended December 31,
2012
  
For the year ended December 31,
2011
 
PRC Enterprise Income Tax $(14,265)  $283,246 
United States Federal Income Tax $-  $- 
Income tax expense (benefit), net $(14,265)  $283,246 

The income taxes expense (benefit), which is all incurred in PRC, consists of the following:

  
For the year ended December 31,
2012
  
For the year ended December 31,
2011
 
Current income tax expense $-  $445,734 
Deferred income tax benefit $(14,265) $(162,488)
Income tax, net $(14,265) $283,246 
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The following table reconciles the statutory U.S. federal income tax rate to the Company’s effective income tax rate:

  
For the year ended December 31,
2012
  
For the year ended December 31,
2011
 
U.S. Federal statutory rate  35%  35%
PRC Statutory rate (25%) difference  -10%  -10%
Changes in valuation allowance for DTA  0%  -9%
Effective income tax rate  25%  16%
As of December 31, 2012, the Company had net taxable operating losses of approximately $22,640,132 carried forward for the future years. The PRC Income Tax allows the enterprises to offset their future taxable income with taxable operating losses carried forward in a 5-year period. Although the Company turned loss into profits for the year ended December 31, 2011 and 2012, the Management believes that the Company’s cumulative losses arising from recurring business in recent years constituted significant negative evidence that most of the deferred tax assets would not be realizable and this evidence outweighed the expectations that the Company would generate future taxable income. The valuation allowance of $5,645,768 was recorded.
Components of the Company’s net deferred tax assets are set forth below:
  
December 31,
2012
  
December 31,
2011
 
Deferred tax assets      
Net operating loss carry-forward $5,660,033  $5,902,507 
Total of Deferred tax assets $5,660,033  $5,902,507 
Less: valuation allowance $(5,645,768) $(5,902,507)
Net deferred assets $14,265  $- 

Accounting for Uncertainty in Income Taxes

The Company adopted the provisions of Accounting for Uncertainty in Income Taxes. The provisions clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with the standard “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The provisions of Accounting for Uncertainty in Income Taxes also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.

The Company may from time to time be assessed interest or penalties by major tax jurisdictions. In the event it receives an assessment for interest and/or penalties, it will be classified in the financial statements as tax expense.
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13.RELATED PARTY TRANSACTIONS
In addition to the other transactions and balances disclosed elsewhere in the financial statements, the Company had no material transactionsleased the land use right to Huanghe, a company with its related parties during the periods presented.same controlling person, and generated rent revenue of $1,188,119 for the year ended December 31, 2012.
 
12.       COMMON STOCK
14.SEGMENT INFORMATION
At December 31, 2007, we had outstanding 24,216,058 shares of par value $0.01 common stock. The Company's Common Stock was traded over-the-counter and quoted from time to time in the OTC Bulletin
Board under the trading symbol "NAGM.OB". Consequently, there is currently no established public trading market for the Company's Common Stock.
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On December 25, 2009, the Company issued 4,500,000 shares of common stock to 2 persons, Mr. Donald R. Monroe and Mr. Stanley F. Wilson as a result of our 1-for-10 reverse stock split each individual now holds 225,000 shares of common stock.
The 10 for 1 reverse split was effectuated for all of the 37,716,588 common shares came from the original shareholders before the exchange.
As a result, the total common shares of China Changjiang after the conversion should be 3,774,625, with the par value of $0.01.
13.  PREFERRED STOCK
On July 17, 2007, the Registrant received all signatures and deposits required to make effective that certain Agreement Concerning the Exchange of Common Stock between the Registrant, Shanxi Chang Jiang Shi You Neng Yuan Fa Zhan Gu Fen You Xian Gong Si ("Chang Jiang"), and the shareholders of Chang Jiang (the "Agreement"), pursuant to which the Registrant will acquire 80% of the outstanding shares of Chang Jiang through the acquisition of 100% of the outstanding shares of the indirect parent of Chang Jiang, in exchange for the issuance by the registrant to the shareholders of Chang Jiang of 500,000 shares of Series C Convertible Preferred Stock ("Series C Preferred") of the Registrant (the  "Exchange"). The Series C shares will be reduced by an amount sufficient to issue 4,500,000 shares of common stock to Capital Advisory Services, Inc. for its consulting services in connection with the acquisition.
In connection with the Exchange, Chang Jiang will deliver $370,000 to the Registrant and certain non-affiliates of the Registrant will transfer to Chang Jiang or its designee a total of 3,800,000 shares of Common Stock, par value $0.01 per share ("Common Stock"), of the Registrant which had been held for longer than 2 years by such non-affiliates, in exchange for the issuance by the Registrant to each such non-affiliate of 2,250,000 shares of Common Stock of the Registrant. The date of the original agreement was May 30, 2007, amended to July 5, 2007, but in all respects subject to signatures, regulatory approvals in China and deposits with Chang Jiang's attorneys, which were completed on July 17, 2007. Closing of the Agreement will occur upon satisfaction of all conditions, including due diligence and completion of the audit of Chang Jiang's consolidated financial statements.
As a result of the Exchange pursuant to the Agreement described above, the Registrant will experience a change in control. The shareholders of Chang Jiang, through their ownership of 500,000 shares of the Registrant's Series C Preferred, will control the Registrant, as each share of Series C Preferred carries with it the right to vote and convert into 1,218 shares of Common Stock of the Registrant, which, upon voting or conversion of all shares of Series C Preferred, will equal at least 96% of the total issued and outstanding Common Stock of the Registrant on a fully diluted basis.
On February 4, 2008, we completed the Exchange pursuant to the Plan of Exchange (the "Exchange"), by and among us, Chang Jiang, and the Chang Jiang Shareholders. Under the Agreement, the Wah Bon shareholders received 500,000 shares of Series C Convertible Preferred Stock. The shares of Series C Preferred Stock each carry the right to 1,218 votes per share and will be convertible into common stock at a rate sufficient to yield an aggregate of 609 Million pre-split common shares upon conversion.
14.       SEGMENT INFORMATION

The Company operatesoriginally operated in twothree reportable segments, theme park andLand use right leasing, exploration for mineral ores is there any segment reportingand solar PV energy. The Company stripped off the mining business in the financial statementJune 2012, and operated in two segments thereafter. The solar PV energy business did not generated revenue for the yearsyear ended December 31, 2009, 20082012. Summarized information by business segment for the year ended December 31, 2012 and 2007.2011 is as follows.

  
For the year ended December 31,
2012
  
For the year ended December 31,
2011
 
Revenue      
Land use right leasing $1,188,119  $1,176,267 
Mines exploitation compensation  -   1,568,357 
Cost of revenue        
Land use right leasing  66,535   65,871 
Mines exploitation compensation  -   87,828 
Gross Profits        
Land use right leasing  1,121,584   1,110,396 
Mines exploitation compensation  -   1,480,529 
 
The Company evaluates segment performance based on income from operations. As a result, the components of operating income for one segment may not be comparable to another segment.
 
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15.SUBSEQUENT EVENT

The Company has complete the transfer procedures for the mines exploration rights transfer agreement signed in June 2012, and the final payment of $954,578 (RMB6,000,000) was deposited in the escrow account during the first quarter of 2013. The total restricted cash of $2,068,252 (RMB13,000,000) in the escrow account should be relieved by authorized of both parties. As of the reporting date, the restricted cash was not relieved.

The Company is applying for the Building-integrated photovoltaic (BIPV) demonstration project of Weinan City for Baisui Project. Which is the way to obtain the subsidy funds. This EPC project, with a total investment amount of $1,166,615 (RMB7,341,740), commenced construction in March 2013 and is expected to be completed at the end of 2013.
 
 
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHINA CHANGJIANG MINING AND NEW
ENERGY COMPANY, LTD.
(Registrant)
 
CHINA CHANGJIANG MINING AND NEW
ENERGY COMPANY, LTD.
(Registrant)
Date: April 26, 2012May 10, 2013By/s/ Chen Wei Dong
  Chen Wei Dong
  Chief Executive Officer and President
 
   
Date :  April 26,2012Date: May 10, 2013By/s/ Li Ping
  Li Ping
 Chief Financial Officer
  
Chief Financial Officer
(Principal Financial Officer)
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Name
 
Capacity
 
Date
     
/s/ Chen Wei Dong Chief Executive Officer President and Chairman April 26, 2012May 10, 2013
  
President and
Chairman of Board of Directors
(Principal (Principal Executive Officer)
  
     
/s/ Li Ping Chief Financial OfficerApril 26, 2012
(Principal (Principal Financial Officer) May 10, 2013
     
/s/ Zhang Hong Jun Director April 26, 2012
May 10, 2013
     
/s/ Wang Sheng Li Director April 26, 2012
May 10, 2013
     
/s/ Tian Hai Long Director April 26, 2012May 10, 2013
/s/ Chen MinDirector May 10, 2013
/s/ Li PingDirector May 10, 2013
 
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