1353970--3/23/2009--China_XD_Plastics_Co

related topics

{stock, price, share}

{regulation, change, law}

{operation, international, foreign}

{cost, operation, labor}

{cost, regulation, environmental}

{system, service, information}

{stock, price, operating}

{control, financial, internal}

{loss, insurance, financial}

{interest, director, officer}

{personnel, key, retain}

{property, intellectual, protect}

{acquisition, growth, future}

{competitive, industry, competition}

{product, liability, claim}

Risks related to doing business in China China is a developing nation governed by a one-party government and may be more susceptible to political, economic, and social upheaval than other nations. The PRC s laws, regulations and policies, and changes to them, may limit our ability to operate profitably or prevent us from operating at all. All of our assets are located in China. So any dividends or proceeds from liquidation are subject to the approval of the relevant Chinese government agencies. Because our funds are held in banks which do not provide insurance, the failure of any bank in which we deposit our funds could affect our ability to continue in business. Anti-inflation measures may be ineffective or harm our ability to do business in China. Governmental control of currency conversions may affect the value of your investment. The fluctuation of the exchange rate of the renminbi against the dollar could reduce the value of your investment. Recently-modified SAFE regulations may restrict our ability to remit profits out of China as dividends. China s legal and judicial system may not adequately protect our business and operations and the rights of foreign investors. Risks related to our business Our limited operating history makes it difficult to evaluate our future prospects and results of operations. We expect to incur costs related to our planned expansion and growth into new plants and ventures which may not prove to be profitable. Moreover, any delays in our expansion plans could cause our profits to decline and jeopardize our business. Our business and operations are growing rapid. If we fail to effectively manage our operation, our business and operating results could be harmed. The capital investments that we plan may result in dilution of the equity of our present shareholders. We operate in a highly competitive marketplace, which could adversely affect our sales and financial condition. Related party transactions may pose risks to our inventory. An inability to protect our intellectual property rights could reduce the value of our products, services and brand An increase in raw material prices could increase Xinda s costs and decrease its profits. We rely on Mr. Jie Han, Our Chairman and Chief Executive Officer, for the management of our business, and the loss of his services could significantly harm our business and prospects. Difficulties with hiring, employee training and other labor issues could disrupt our operations. Increased environmental regulation in China could increase our costs of operation. We may have difficulty establishing adequate management and financial controls in China. We may incur significant costs to ensure compliance with U.S. corporate governance and accounting requirements. We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively. We have limited business insurance coverage. The Company is not likely to hold annual shareholder meetings in the next few years. Our Chief Executive Officer has a large degree of control on us through his position and stock ownership and his interests may differ from other stockholders. Risks related to Series B Preferred Stock . We do not intend to pay cash dividends in the foreseeable future. There is currently a very limited trading market for our common stock. Our common stock is subject to the Penny Stock Regulations. Our common stock is illiquid and subject to price volatility unrelated to our operations. Enforcement against us or our directors and officers may be difficult.

Full 10-K form ▸

1353970--3/23/2009--China_XD_Plastics_Co_Ltd