Nf Energy Saving (OTC BB:NFEC)

On December 31, 2009, our outstanding accounts receivable was $12,510,875, which was due to the delay in the installation and operational testing of a number of products. For these contracts, the term of revenue recognition stated that part of payment had to be made after the installation and operating test. Therefore the delay in installation resulted in delayed payments and a significant amount of accounts receivable. By March 31, 2010, some of these delayed products have been installed and operating tests have been completed, and payments have been made. Therefore the amount of accounts receivable at March 31, 2010 had decreased by $5,539,111 from December 31, 2009. This money was used for the facility construction and project prepayment. For the three month period ended March 31, 2010, the Company had accounts receivable turnover of 309 days.

We anticipate we will need additional working capital in 2009 and in the future to fund our company’s new business plans to help the company to establish a manufacturing base for new energy equipment, to develop comprehensive energy saving infrastructure projects for municipalities, and to maintain our lead position in flow control equipment manufacturing. We may decide to pursue additional investments or debt financing to obtain additional cash resources to fund our company’s new business and other future developments.

Source: SEC Filing 10Q ( For the Quarterly Period Ended March 31, 2009, page 30)