Exhibit 99.1
MUDANJIANG, DONGXING GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR 2004(1-9 )
2004 dong Xing hibshman
------------ ------------ ------------
Revenues RMB US $
Real Estate $ 81,596,487 9,856,856
Retail 60,876,898 7,353,929
------------ ------------ ------------
Total Revenues 142,473,385 17,210,785 --
Cost of Sales
Real Estate 63,719,596 7,697,327
Retail 52,562,211 6,349,515
------------ ------------ ------------
Total Cost of Sales 116,281,807 14,046,842 --
------------ ------------ ------------
Gross Profit 26,191,578 3,163,943 --
------------ ------------ ------------
Operating Expenses
Selling 2,485,088 300,199
General and administration 4,125,735 498,389 6,953
Depreciation and amortization 2,988,211 360,976
Bad debt expenses 2,681,433 323,917
------------ ------------ ------------
Total Operating Expenses 12,280,467 1,483,480 6,953
------------ ------------ ------------
Income from Operations 13,911,111 1,680,462 -6,953
------------ ------------ ------------
Other Income [Expenses]
Interest expense 6,781,100 819,157 3,522
Other income-net 2,076,311 250,818
------------ ------------ ------------
4,704,789 568,339 3,522
------------ ------------ ------------
------------ ------------ ------------
Income Before Provision for Income Taxes 9,206,322 1,112,124 -10,475
------------ ------------ ------------
Provision for Income Taxes
Current 5,544,244 669,745
Deferred
------------ ------------ ------------
5,544,244 669,745 0
------------ ------------ ------------
Net Income(Loss) $ 3,662,078 442,379 -10,475
============ ============ ============
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MUDANJIANG, DONGXING GROUP CO., LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY
FOR THE YEARS 30,9,2004. 31, 2003, 2002 AND 2001
January 1, 2001 - Balance $ (79,414)
Net Income - 2001 (10,475)
-------------
Members' Equity at December 31, 2001 $ (89,889)
Contributions 1,667,015
Net Income - 2002 442,379
-------------
Members' Equity at December 31, 2002 $ 2,019,505
Contributions --
Net Income - 2003 161,603
-------------
Members' Equity at December 31, 2003 $ 2,181,107
=============
Contibutions rmb35,936,981
Net Income -2004(1-9) 3,662,078
Members'Equity at sep 30,2004 rmb39,599,059
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MUDANJIANG, DONGXING GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEP.30
December 31 hibshman
2003 2004 9/30/2004
------------ ------------ ------------ ------------
ASSETS
Real Estate us $ RMB US $
Cash $ 43,669 $ 1,561,648 $ 188,647
Inventory 5,781,456 48,239,780 5,827,365
Construction in progress -
Residential -- --
Commercial 4,986,288
Total construction in progress 4,986,288 -- --
Other receivables,net 3,337,960 92,811,466 11,211,625
Due from affiliated Company 86,610 788,654 95,269
Due from related parties 210,136 1,988,761 240,242
Property and equipment 455,362 5,208,249 629,156
Land lease 3,586,301 12,880,560 1,555,972
Other 164,397 1,456,832 175,985
------------ ------------ ------------
Total Real Estate 18,652,179 164,935,950 19,924,263
------------ ------------ ------------
Retail
Cash 195,261 1,859,657 224,647
Inventory 253,035 2,683,125 324,122
Other receivables,net 211,893 2,006,531 242,389
Due from related parties 28,550 351,687 42,484
Property and equipment 7,028,242 73,116,387 8,832,460
Land lease 156,613 1,286,746 155,439
Other 119,150 348,695 42,122
------------ ------------ ------------
Total Retail 7,992,743 81,652,830 9,863,662
other-cash 19,737
------------ ------------ ------------ ------------
TOTAL ASSETS $ 26,644,923 $246,588,780 $ 29,787,925 $ 19,737
============ ============ ============ ============
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MUDANJIANG, DONGXING GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS - CONTINUED
30.SEP. 2004
adjustments
Dec 31 2004 2004 to make balance 9/30/2004
------------- ------------- ------------- -------------
LIABILITIES AND MEMBERS' EQUITY
us $ RMB US $
Real Estate
Short-term advances 3,720,640 $ 26,808,153 $ 3,238,425
Mortgage loans 1,011,562 12,333,608 1,489,900
Other loans payable 1,971,510 18,453,260 2,229,154
Accounts payable and accrued expenses 7,283,398 38,849,516 8,349 4,701,371
Land lease obligation 1,394,795 12,650,789 1,528,215
Customer deposits 0 5,809,200 701,751
Due to related parties 226,060 4,347,981 525,236
Tax payable 1,360,644 18,760,199 2,266,232
Other liabilities 122,116 11,290,287 1,363,867
------------- -------------
Total Real Estate 17,090,724 149,302,993 18,044,151
Retail
Short term advance 2,718,000 27,899,100 3,370,211
Other loans payble 198,112 3,680,355 444,587
Accounts payable and accrued expenses 2,119,936 21,678,230 2,618,730
Land lease obligation 132,204 1,875,432 226,552
Customer deposits 623,977 8,891,650 1,074,111
Due to related parties 32,616 282,058 34,073
Tax payable 414,529 1,417,129 171,189
Other liabilities 335,849 3,170,255 382,967
------------- -------------
Total Retail 6,575,223 68,894,209 8,322,420
Other
Convertible notes payable
Accounts payable and accrued expenses
Total other
COMMITMENTS AND CONTINGENT LIABILITIES
MEMBERS' EQUITY
Members' contributions 2,339,268 19,415,924 (6,176) 2,339,268
Members' subscriptions -549,640 (4,562,012) 1,451 (549,640)
Retained earnings 1,189,348 13,537,666 442,379 1,631,727
------------- -------------
Total members' equity 2,978,975 28,391,578 3,421,354
------------- -------------
Total liabilities and members' equity 26,644,923 $ 246,588,780 $ 29,787,925
============= =============
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MUDANJIANG, DONGXING GROUP CO., LTD AND SUBSIDIARY
PRO-FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
Revenues $17,210,785
Cost of sales 14,046,842
-----------
Gross Profit 3,163,943
Operating expenses 1,490,433
-----------
Income from operations 1,673,509
Other expenses, net 571,861
-----------
Income before provision for taxes 1,101,649
Income taxes 669,745
-----------
Net Income $ 431,904
===========
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MUDANJIANG, DONGXING GROUP CO., LTD AND SUBSIDIARY
PRO-FORMA CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2004
ASSETS
Cash $ 433,031
Inventory 6,151,487
Receivables 11,454,014
Due from affiliates and related parties 377,996
Fixed assets 11,173,027
Other assets 218,108
-----------
Total assets $29,807,661
===========
LIABILITIES AND MEMBERS' EQUITY
Accounts payable and accrued expenses $ 7,344,040
Loans payable 10,834,277
Land lease obligations 1,754,767
Due to affiliates and related parties 559,309
Taxes payable 2,437,421
Other liabilities 3,522,696
-----------
Total liabilites 26,452,510
-----------
Members' contributions 2,273,065
Less members' subscriptions receivable -549,640
Retained Earnings 1,631,727
-----------
Total members' equity 3,355,151
-----------
-----------
Total liabilities and members' equity $29,807,661
===========
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