(17) Segment Reporting

Since March 10, 2010, Orient Paper Shengde started its operations and thereafter the Company manages its operations through two business operating segments: Orient Paper HB, which produces offset printing paper and corrugating medium paper, and Orient Paper Shengde, which produces digital photo paper. They are managed separately because each business requires different technology and marketing strategies.

The Company evaluates performance of its operating segments based on net income. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated between the operating segments based on gross revenue generated. The operating segments do share facilities in Xushui County, Baoding City, Hebei Province, China. All sales were sold to customers located in the PRC.

Summarized financial information for the two reportable segments is as follows:

	Three Months Ended
	March 31, 2018
	Orient Paper			Orient Paper			Not Attributable			Elimination		Enterprise-wide,
	HB			Shengde			to Segments			of Inter-segment		consolidated

Revenues	$	1,888,194		$	-		$	-		$	-	$	1,888,194
Gross profit		(695,308	)		-			-			-		(695,308	)
Depreciation and amortization		3,538,159			192,426			-			-		3,730,585
Loss from disposal of property, plant and equipment		10,376			-			-			-		10,376
Interest income		44,615			148			-			-		44,763
Interest expense		358,790			45,021			-			-		403,811
Income tax expense(benefit)		(472,636	)		(66,333	)		-			-		(538,969	)
Net income (loss)		(3,550,390	)		(198,724	)		(337,162	)		-		(4,086,276	)

	Three Months Ended
	March 31, 2017
	Orient Paper			Orient Paper			Not Attributable			Elimination		Enterprise-wide,
	HB			Shengde			to Segments			of Inter-segment		consolidated

Revenues	$	25,289,659		$	-		$	-		$	-	$	25,289,659
Gross profit		5,653,920			-			-			-		5,653,920
Depreciation and amortization		3,391,288			224,071			-			-		3,615,359
Loss from disposal of property, plant and equipment		-			-			-			-		-
Interest income		(17,709	)		(236	)		-			-		(17,945	)
Interest expense		679,084			-			-			-		679,084
Income tax expense(benefit)		687,570			(144,288	)		-			-		543,282
Net income (loss)		2,022,614			(97,623	)		(217,122	)		-		1,707,869

As of March 31, 2018

Orient Paper

Not Attributable

Elimination of

Enterprise-wide,

Shengde

to Segments

Inter-segment

consolidated

Total assets

195,292,154

26,744,370

15,932

222,052,456

As of December 31, 2017

Orient Paper

Not Attributable

Elimination of

Enterprise-wide,

Shengde

to Segments

Inter-segment

consolidated

Total assets

192,620,887

26,363,435

5,159

218,989,481