ZhenDing Financials

Zhen Ding Resources acquired, through its wholly-owned California company Z&W Zhen Ding Corporation, 70% of a Chinese Joint Venture Company Jin Xian Zhen Ding Mining Co., Ltd.

The following information provides the un-audited financial 
condition of this Joint Venture as at December 31, 2006.

Updated financial information reflecting the merger with the Company will be available shortly.

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Financial Information

Zhen Ding Resources Inc. (NV), through its wholly-owned California company Z&W Zhen Ding Corporation, currently owns a 70% interest in a Chinese Joint Venture Company Jin Xian Zhen Ding Mining Co., Ltd.


As such the Financial Condition of this JV Company fairly represents the financial condition Of Zhen Ding NV adjusted for a 70% only interest in the JV Company.
The following is an un-audited financial statement of

JIN XIAN ZHEN DING MINING CO., LTD (A COMPANY IN THE DEVELOPMENT STAGE)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Jing Xian Zhen Ding Mining Co., Ltd is organized as a Sino-Foreign Equity Joint Venture company under the Laws of the People’s Republic of China governing such ventures, and entered into on October 12, 2006 between Jing Xian Xin Zhou Huangjin Co,.Ltd  oft  Wuxi Village, Langqiao Town, Jing County, Anhui Province, China and Z&W Zhen Ding Corporation of 8861 W.Katella Ave. Anaheim, CA 92804.

The current equity participation of each partner is:

Jing Xian Xin Zhou 30%

Z&W Zhen Ding (CA), 70%.

Jing Xian Zhen Ding prepared its financial statements in accordance with generally accepted accounting principles (GAAP). This basis of accounting involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

Financial statement items are recorded at historical cost and may not necessarily represent current values.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Certain amounts included in the financial statements are estimated based on currently available information and management’s judgment as to the outcome of future conditions and circumstances.

Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of financial statements and actual results could differ from the estimates and assumptions.

Every effort is made to ensure the integrity of such estimates.

Fair value of financial instruments:
The carrying amounts reported in the balance sheet for cash and equivalents, receivables, accounts payable and accrued liabilities approximate their fair values because of the immediate or short term maturity of these instruments.

Intangible assets

Intangible assets consist principally of intellectual property and rights related to the technology to process and dispose of waste created by pulp and paper companies.

Intangible assets are amortized on a straight line basis over 5 years.

Impairment of long-lived assets:
Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows expected to be generated by the asset.
 If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

The fair value of an asset is the amount at which the asset could be bought or sold in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

Quoted market prices in active markets are the best evidence of fair value and shall be used as the basis for the measurement, if available. If quoted market prices are not available, the estimate of fair value shall be based on the best information available in the circumstances.

The estimate of fair value shall consider prices for similar assets and the results of valuation techniques to the extent available in the circumstances.

Valuation techniques include the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, option-pricing models, matrix pricing and fundamental analysis.

Cash and cash equivalents:
The Company considers all highly liquid investments with original maturities of ninety days or less to be cash and cash equivalents. Such investments are valued at quoted market prices.

Property, equipment and depreciation:
Property and equipment are stated at cost less accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives as follows when the property and equipment is placed in service:

Estimate Useful Life (In Years)

Office Furniture and Equipment 10
Computer Equipment 3
Machinery and Equipment 10

Repairs and maintenance are charged to operations as incurred, and expenditures for significant improvements are capitalized.

The cost of property and equipment retired or sold, together with the related accumulated depreciation, are removed from the appropriate asset and depreciation accounts, and the resulting gain or loss is included in operations.

Revenue Recognition:
The Company’s revenues recognized to date are consultation services.

Revenue from consulting services are recognized when the services are rendered. In December 1999, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 101 (“SAB 101”), “Revenue Recognition,” which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC.

SAB 101 outlines the basic criteria that must be met to recognize revenue and provide guidance for disclosures related to revenue recognition policies.

Management believes that Jing Xian’s revenue recognition practices are in conformity with the guidelines of SAB 101 .

Earnings (Loss) per share calculation:
Earnings (Loss) per common share are calculated under the provisions of SFAS No. 128, “Earnings per Share,” which establishes standards for computing and presenting earnings per share.

SFAS No. 128 requires the Company to report both basic earnings (loss) per share, which is based on the weighted-average number of common shares outstanding during the period, and diluted earnings (loss) per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive common shares outstanding.

Options and warrants are not considered in calculating diluted earnings (loss) per share since considering such items would have an anti-dilutive effect.

NOTE 3 – REMINBI to US DOLLAR CONVERSION

An average of 6.25  RMB per USD was used.