CONCENTRATION OF CREDIT RISK

NOTE 19. CONCENTRATION OF CREDIT RISK

As of June 30, 2014 and December 31, 2013, all of the Company’s cash balances in banks were maintained within the PRC where no rule or regulation currently in place to provide obligatory insurance for bank deposits in the event of bank failure. However, the Company has not experienced any losses in such accounts and believes it is not exposed to such risks on its cash balances in banks.

For the six months ended June 30, 2014 and 2013, the sales generated from oversea countries were $2,132,099 and $0, respectively. The accounts receivable as of June 30, 2014 and December 31, 2013 that were due from customers located outside of China was $669,878 and $0, respectively.

For the six months ended June 30, 2014, sales revenue generated from Deyufang Innovation Food (Beijing) Co., Ltd. accounted for 33.3% of the Company's consolidated gross revenue, while there was no single customer that accounted for greater than 10% of the Company's consolidated gross revenue for the six months ended June 30, 2013. As of June 30, 2014 the account receivable due from Deyufang Innovation Food (Beijing) Co., Ltd. accounted for 10.0% of the Company’s consolidated accounts receivable, while no single customer accounted for greater than 10% of the Company’s consolidated accounts receivable as of December 31, 2013.

- Definition

The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.

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