RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2014

9. RELATED PARTY TRANSACTIONS

On March 1, 2014, Xi’an TCH entered a loan agreement with Mr. Guohua Ku, a major shareholder and the Company's Chairman and CEO, pursuant to which Mr. Ku will loan the Company, from time to time, up to RMB 80 million ($13 million) for the Company’s operating needs. The loan bore no interest, had one-year term from the actual lending date, the Company can repay the principal in installment. As of March 31, 2014, the Company borrowed $7,247,241 from Mr. Ku, including $2,379,734 outstanding balance prior to the loan agreement date; and had $40,688 in advances from the Company’s management, which bore no interest, and payable upon demand of the management.

As of December 31, 2013, due to related parties totaled $2,420,391, including $2,379,734 advance from Mr. Ku, a major shareholder and the Company's Chairman and CEO; and $40,657 in advances from the Company’s management, which bore no interest, and were payable on demand. The $2,379,734 advance from the Company’s shareholder became short term, non-interest bearing, one-year loan as a result of the loan agreement entered on March 31, 2014.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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