UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Duoyuan Printing, Inc.

Wyoming (State or Other Jurisdiction of Incorporation or Organization)		91-1922225 (IRS Employer Identification Number)

No. 3 Jinyuan Road
Daxing Industrial Development Zone
Beijing 102600, People’s Republic of China
(Address of Principal Executive Offices)

Tel: +86 10-6021-2222
(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of May 11, 2010, the Company had 30,563,217 shares of common stock, par value $0.001 per share, issued and outstanding.

 

 

DUOYUAN PRINTING, INC.

INDEX

		Page
PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35
PART II. OTHER INFORMATION			35
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 6. Exhibits			39
Signatures			40
EX-31.1
EX-31.2
EX-32.1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

DUOYUAN PRINTING, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS ASIAN FINANCIAL, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
AS OF MARCH 31, 2010 AND JUNE 30, 2009

						June 30,
						2009
		March 31,				As adjusted
		2010				(1)
Assets
Current assets:
Cash		$	91,224,531			$	31,044,070
Accounts receivable, net of allowance for doubtful accounts of $499,158 and $1,401,689 as of March 31, 2010 and June 30, 2009, respectively			49,144,143				37,259,616
Inventories			29,494,371				25,883,242
Other current assets			133,090				26,912
Total current assets			169,996,135				94,213,840
Plant and equipment, net			41,578,172				43,123,153
Other assets:
Intangible assets, net			3,865,322				3,939,476
Advances on equipment purchases			7,284,609				7,274,677
Total other assets			11,149,931				11,214,153
Total assets		$	222,724,238			$	148,551,146
Liabilities and Equity
Current liabilities:
Bank loans		$	14,376,600			$	14,357,000
Accounts payable			1,998,096				756,116
Accrued liabilities			1,175,195				2,251,419
Taxes payable			2,124,934				1,512,727
Total current liabilities			19,674,826				18,877,262
Warrants			7,588,389				1,180,477
Total liabilities			27,263,215				20,057,739
Commitments and contingencies
Equity:
Preferred stock; $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding as of March 31, 2010 and June 30, 2009			—				—
Common stock; $0.001 par value; 100,000,000 shares authorized; 30,563,217 shares issued and outstanding as of March 31, 2010 and 25,000,050 shares issued and outstanding as of June 30, 2009			30,563				25,000
Additional paid-in capital			74,567,372				27,263,040
Statutory reserves			11,693,438				9,428,573
Retained earnings			95,933,386				79,226,497
Accumulated other comprehensive income			10,990,337				10,788,585
Total Duoyuan Printing, Inc. shareholders’ equity			193,215,096				126,731,695
Noncontrolling interest			2,245,927				1,761,712
Total equity			195,461,023				128,493,407
Total liabilities and equity		$	222,724,238			$	148,551,146

DUOYUAN PRINTING, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS ASIAN FINANCIAL, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
FOR THE THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2010 AND 2009

		Three months ended								Nine months ended
		March 31								March 31
						2009								2009
		2010				As adjusted(2)				2010				As adjusted (2)
Revenues, net		$	23,403,356			$	17,411,937			$	99,106,325			$	80,428,651
Cost of revenues			11,099,977				8,354,157				46,453,081				37,293,982
Gross profit			12,303,379				9,057,780				52,653,244				43,134,669
Research and development expenses			461,286				285,994				1,454,119				1,470,595
Selling expenses			2,050,983				1,475,783				9,115,804				6,974,735
General and administrative expenses			3,680,503				1,056,541				8,799,149				3,332,876
Income from operations			6,110,607				6,239,462				33,284,171				31,356,463
Change in fair value of warrants			(2,452,121	)			30,271				(5,686,118	)			194,347
Other expenses			—				—				—				(956,936	)
Interest expense			(213,101	)			(210,648	)			(660,546	)			(637,387	)
Interest income and other income			55,220				104,309				128,467				173,496
Other expense, net			(157,881	)			(106,339	)			(532,079	)			(1,420,827	)
Income before provision for income taxes and noncontrolling interest			3,500,605				6,163,394				27,065,975				30,129,983
Provision for income taxes			2,295,043				1,180,761				7,553,521				3,711,891
Net income			1,205,562				4,982,633				19,512,453				26,418,092
Less: Net income attributable to noncontrolling interest			99,709				71,652				481,613				350,375
Net income attributable to Duoyuan Printing, Inc.		$	1,105,853			$	4,910,981			$	19,030,840			$	26,067,717
Net income per share attributable to Duoyuan Printing, Inc. common shareholders
Basic		$	0.04			$	0.20			$	0.68			$	1.04
Diluted		$	0.03			$	0.20			$	0.67			$	1.04
Weighted average shares used in calculating net income per share:
Basic			30,563,217				25,000,050				27,958,190				25,000,050
Diluted			31,575,934				25,000,050				28,312,903				25,000,050

DUOYUAN PRINTING, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS ASIAN FINANCIAL, INC.)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (unaudited)

		Common Stock												Retained earnings
																						Accumulated				Total Duoyuan
										Additional												other				Printing, Inc.												Total
		Number of								paid-in				Statutory								comprehensive				shareholders’				Noncontrolling								comprehensive
		shares				Amount				capital				reserves				Unrestricted				income				equity				interest				Total Equity				income
Balance, July 1, 2009			25,000,050			$	25,000			$	27,263,040			$	9,428,573			$	79,226,497			$	10,788,585			$	126,731,695			$	1,761,712			$	128,493,407			$
Cumulative effect of reclassification of warrants			—				—				(1,672,815	)			—				(59,086	)			—				(1,731,901	)			—				(1,731,901	)
Issuance of ordinary shares in connection with Initial Public Offering, net of offering costs			5,500,000				5,500				41,910,036				—				—				—				41,915,536				—				41,915,536
Stock-based compensation											6,057,064				—				—				—				6,057,064				—				6,057,064
Issuance of ordinary shares in connection with cashless exercise of warrants			63,167				63				1,010,047				—				—				—				1,010,110				—				1,010,110
Net income			—				—				—				—				19,030,840				—				19,030,840				481,613				19,512,453				19,512,453
Adjustment to statutory reserves			—				—				—				2,264,865				(2,264,865	)			—				—				—				—
Foreign currency translation adjustments			—				—				—				—				—				201,752				201,752				2,602				204,354				204,354
Balance, March 31, 2010			30,563,217			$	30,563			$	74,567,372			$	11,693,438			$	95,933,386			$	10,990,337			$	193,215,096			$	2,245,927			$	195,461,023			$	19,716,807

DUOYUAN PRINTING, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS ASIAN FINANCIAL, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009

		2010				2009
Cash Flows from Operating Activities:
Net income		$	19,512,453			$	26,418,092
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			2,758,582				2,095,986
Amortization			79,500				60,065
Change in allowance for bad debts			(904,075	)			—
Change in fair value of warrants			5,686,118				(194,347	)
Stock-based compensation			6,057,064				—
Foreign exchange transaction gain			—				(84,358	)
Write off of deferred expenses			—				587,347
Changes in operating assets and liabilities:
Accounts receivable			(10,924,745	)			(3,006,474	)
Inventories			(3,573,429	)			(4,870,619	)
Other current assets			(106,141	)			(9,168	)
Accounts payable			1,240,441				(726,516	)
Accrued liabilities			(1,077,601	)			144,756
Taxes payable			609,891				(442,570	)
Net cash provided by operating activities			19,358,058				19,972,194
Cash Flows from Investing Activities:
Purchase of equipment and improvements			(1,155,386	)			(5,270,119	)
Advances on equipment purchases			—				(10,562,227	)
Payments for capitalized interest			—				(257,388	)
Net cash used in investing activities			(1,155,386	)			(16,089,734	)
Cash Flows from Financing Activities:
Proceeds from bank loans			14,367,800				14,352,100
Payments for bank loans			(14,367,800	)			(11,423,100	)
Proceeds from Initial Public Offering, net of offering costs			41,915,537				—
Net cash provided by financing activities			41,915,537				2,929,000
Effect of Exchange Rate Changes on Cash			62,252				81,083
Increase in Cash			60,180,461				6,892,543
Cash, beginning of period			31,044,070				14,199,700
Cash, end of period		$	91,224,531			$	21,092,243
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest		$	655,974			$	893,333
Cash paid for income tax		$	7,001,395			$	3,783,775
Non-cash transactions:
Issuance of common stock for cashless warrants exercise		$	1,010,110			$	—

DUOYUAN PRINTING, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS ASIAN FINANCIAL, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010
(UNAUDITED)

1. ENTITIES

     Duoyuan Printing, Inc. owns 100% of the equity interest of Duoyuan Digital Press Technology Industries (China) Co., Ltd. (“Duoyuan China”) and Hunan Duoyuan Machinery Manufacturing Co., Ltd. (Hunan Machinery). Duoyuan China has two subsidiaries, a 99.4% ownership in Hunan Duoyuan Printing Machinery Co., Ltd. (Hunan Duoyuan) and 95% ownership in Langfang Duoyuan Digital Technology Co., Ltd. (Langfang Duoyuan).

     In addition, Duoyuan Printing, Inc. has established the following subsidiaries: Langfang Duoyuan Publishing Equipment Manufacturing Co., Ltd. (“Langfang Chuban”), Langfang Duoyuan Precision Manufacturing Co., Ltd. (“Langfang Jingmi”) and Langfang Duoyuan Shitong Packaging Equipment Co., Ltd. (“Langfang Shitong”). Langfang Chuban was established on November 20, 2009. Langfang Jingmi and Langfang Shitong were established on January 11, 2010. These entities did not have any operations during the three and nine months ended March 31, 2010.

2. BASIS OF PREPARATION

     (a) The accompanying unaudited condensed consolidated financial statements include the accounts of Duoyuan Printing, Inc. and its subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

     The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, as promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by US GAAP for completing annual financial statements. However, management believes that the disclosures are adequate to ensure the information presented is not misleading. US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, contingencies and results of operations. While management has based its assumptions and estimates on the facts and circumstances existing as of March 31, 2010, final amounts may differ from these estimates.

     In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results for the interim periods presented. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s audited financial statements on Form 10-K for the fiscal year ended June 30, 2009. The results of operations for the interim periods presented are not indicative of the operating results to be expected for any subsequent interim period or for the Company’s fiscal year ending June 30, 2010.

     Duoyuan Printing, Inc. uses the United States (“U.S.”) dollar as its reporting currency. The Company uses Chinese Renminbi (RMB) as its functional currency. The financial records of the Company’s People’s Republic of China (“PRC”) subsidiaries are maintained in Renminbi (“RMB”), their functional currency and the currency of the PRC. Their balance sheets are translated into U.S. dollars based on the exchange rate quoted by the People’s Bank of China as of the balance sheet date. Their statements of operations are translated using a weighted average exchange rate for the period. Translation adjustments are reflected in accumulated other comprehensive income in stockholders’ equity.

     The RMB is not freely convertible into U.S. dollars or other currencies. All foreign exchange transactions involving RMB must take place through the People’s Bank of China or other institutions authorized to buy and sell foreign currencies. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the People’s Bank of China.

     (b) The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements on Form 10-K for the fiscal year ended June 30, 2009 except for the adoption of the newly adopted accounting pronuncements set out in (1) below:

     (1) Newly Adopted Accounting Pronouncements

     Effective July 1, 2009, the Company adopted the new Accounting Standards Codification (the “ASC”) as issued by the FASB. The ASC has become the source of authoritative US GAAP recognized by the FASB to be applied by nongovernmental entities and provides that all such pronouncements carry an equal level of authority. The ASC is not intended to change or alter existing GAAP. The ASC is effective for interim and annual periods ending after September 15, 2009. The adoption of the ASC did not have any significant impact on the Company’s financial condition or results of operations.

     Effective July 1, 2009, the Company adopted the provisions of an accounting standard regarding instruments that are indexed to an entity’s own stock. This accounting standard specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the statement of financial position would not be considered a derivative financial instrument. It provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the scope exception within the standards. See Note 10 — Warrants, for additional information.

     Effective July 1, 2009, the Company adopted an authoritative pronouncement issued by the FASB regarding noncontrolling interests in consolidated financial statements, which was retrospectively applied. The pronouncement requires noncontrolling interests to be separately presented as a component of stockholders’ equity in the unaudited condensed consolidated financial statements. See Note 11 — Noncontrolling interest, for additional information.

     Effective July 1, 2009, the Company adopted new authoritative accounting guidance on earnings per share, which provides that nonvested share-based payment awards containing nonforfeitable rights to dividends (whether paid or unpaid) are participating securities and will be included in the computation of earnings per share pursuant to the two-class method. The adoption of this pronouncement did not have any significant impact on the Company’s financial condition or results of operations.

     Effective July 1, 2009, the Company adopted new authoritative accounting guidance on estimating fair value when the volume and level of activity for the asset or liability have significantly decreased and requires disclosure of a change in valuation technique. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.

     (2) Recently Issued Accounting Pronouncements Not Yet Adopted

     On June 12, 2009, the FASB issued an authoritative pronouncement, which changes how a company determines whether an entity should be consolidated when such entity is insufficiently capitalized or is not controlled by the company through voting (or similar rights). The determination of whether a company is required to consolidate an entity is based on, among other things, the entity’s purpose and design and the company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. The pronouncement retains the scope of previously issued pronouncement but added entities previously considered qualifying special purpose entities, since the concept of these entities was eliminated by FASB. The pronouncement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2009. The Company does not expect the adoption of this pronouncement to have a significant effect on its consolidated financial position or results of operations.

     On September 23, 2009, the FASB issued an authoritative pronouncement regarding revenue arrangements with multiple deliverables. This pronouncement was issued in response to practice concerns related to accounting for revenue arrangements with multiple deliverables under the existing pronouncement. Although the new pronouncement retains the criteria under the exiting pronouncement on when delivered items in a multiple-deliverable arrangement should be considered separate units of accounting, it removes the separation criterion under the existing pronouncement that objective and reliable evidence of fair value of any undelivered items must exist for the delivered items to be considered a separate unit or separate units of accounting. The new pronouncement is effective for fiscal years beginning on or after June 15, 2010. Entities can elect to apply this pronouncement (1) prospectively to new or materially modified arrangements after the pronouncement’s effective date or (2) retrospectively for all periods presented. Early application is permitted; however, if the entity elects prospective application and early adopts this pronouncement after its first interim reporting period, it must also do the following in the period of adoption: (1) retrospectively apply this pronouncement as of the beginning of that fiscal year and (2) disclose the effect of the retrospective adjustments on the prior interim periods’ revenue, income before taxes, net income, and earnings per share. The Company is in the process of evaluating the effect of adoption of this pronouncement.

     On September 23, 2009, the FASB issued an authoritative pronouncement regarding software revenue recognition. This new pronouncement would amend the existing pronouncement to exclude from their scope all tangible products containing both software and nonsoftware components that function together to deliver the product’s essential functionality. That is, the entire product (including the software deliverables and non-software deliverables) would be outside the scope of ASC 985-605 and would be accounted for under other accounting literature (e.g., ASC 605-25). The new pronouncement includes factors that entities should consider when determining whether the software and non-software components function together to deliver the product’s essential functionality and are thus outside the revised scope of ASC 985-605. In addition, the new pronouncement includes examples illustrating how entities would apply the revised scope provisions. The pronouncement is effective for fiscal years beginning on or after June 15, 2010. Entities can elect to apply this pronouncement (1) prospectively to new or materially modified arrangements after the pronouncement’s effective date or (2) retrospectively for all periods presented. Early application is permitted; however, if the entity elects prospective application and early adopts this pronouncement after its first interim reporting period, it must also do the following in the period of adoption: (1) retrospectively apply this pronouncement as of the beginning of that fiscal year and (2) disclose the effect of the retrospective adjustments on the prior interim periods’ revenue, income before taxes, net income, and earnings per share. The Company is in the process of evaluating the effect of adoption of this pronouncement.

     In January 2010, the FASB issued authoritative guidance to improve disclosures about fair value measurements. This guidance amends previous guidance on fair value measurements to add new requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurement on a gross basis rather than on a net basis as currently required. This guidance also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. This guidance is effective for annual and interim periods beginning after December 15, 2009, except for the requirement to provide the Level 3 activities of purchases, sales, issuances, and settlements on a gross basis, which will be effective for annual and interim periods beginning after December 15, 2010. Early application is permitted and, in the period of initial adoption, entities are not required to provide the amended disclosures for any previous periods presented for comparative purposes. The Company does not expect the adoption of this pronouncement to have a significant impact on its financial condition or results of operations.

     On March 5, 2010, the FASB issued authoritative guidance to clarify the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Specifically, only one form of embedded credit derivative qualifies for the exemption — one that is related only to the subordination of one financial instrument to another. As a result, entities that have contracts containing an embedded credit derivative feature in a form other than such subordination may need to separately account for the embedded credit derivative feature. This guidance also has transition provisions, which permit entities to make a special one-time election to apply the fair value option to any investment in a beneficial interest in securitized financial assets, regardless of whether such investments contain embedded derivative features. This guidance is effective on the first day of the first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of any fiscal quarter beginning after March 5, 2010. The Company does not expect the adoption of this pronouncement to have a significant impact on its financial condition or results of operations.

     In March 2010, the FASB issued authoritative guidance on milestone method of revenue recognition. The scope of this consensus is limited to arrangements that include milestones relating to research or development deliverables. The guidance specifies guidance that must be met for a vendor to recognize consideration that is contingent upon achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. The guidance applies to milestones in arrangements within the scope of this consensus regardless of whether the arrangement is determined to have single or multiple deliverables or units of accounting. The guidance will be effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early application is permitted. Companies can apply this guidance prospectively to milestones achieved after adoption. However, retrospective application to all prior periods is also permitted. The Company does not expect the adoption of this pronouncement to have a significant impact on its financial condition or results of operations.

     In March 2010, the FASB issued authoritative guidance on effect of denominating the exercise price of a share-based payment award in the currency of the market in which the underlying equity securities trades and that currency is different from (1) entity’s functional currency, (2) functional currency of the foreign operation for which the employee provides services, and (3) payroll currency of the employee. The guidance clarifies that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should be considered an equity award assuming all other criteria for equity classification are met. The guidance will be effective for interim and annual periods beginning on or after December 15, 2010, and will be applied prospectively. Affected entities will be required to record a cumulative catch-up adjustment for all awards outstanding as of the beginning of the annual period in which the guidance is adopted. The Company is in the process of evaluating the effect of adoption of this pronouncement.

3. FINANCIAL INSTRUMENTS

     Financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued expenses, other payables, income taxes payable, and other taxes payable.

     The carrying values of these financial instruments approximate their fair values due to the short-term nature of these instruments. The Company does not use derivative instruments to manage risks.

4. CASH AND CASH EQUIVALENTS

     Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid investments, which are unrestricted as to withdrawal or use, and which have remaining maturities of three months or less when purchased.

5. ACCOUNTS RECEIVABLE

     Accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses. Management considers the following factors when determining the collectability of specific accounts: credit worthiness of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance for doubtful accounts is made based on aging of accounts receivable and on any specifically identified accounts receivable that may become uncollectible. The Company re-evaluated its accounting estimate on allowance for doubtful accounts for the three months ended March 31, 2010 and reversed a $1,113,248 bad debt provision.

     The components of accounts receivable as of March 31, 2010 and June 30, 2009 were as follows:

		March 31, 2010				June 30, 2009
Accounts receivable		$	49,643,301			$	38,661,305
Less: accounts receivable allowance			(499,158	)			(1,401,689	)
Total accounts receivable, net		$	49,144,143			$	37,259,616

6. INVENTORIES

     Inventories are stated at the lower of cost (weighted average method) or market. The components of inventories as of March 31, 2010 and June 30, 2009 were as follows:

		March 31, 2010				June 30, 2009
Raw materials		$	9,598,174			$	6,494,433
Work-in-process			13,409,729				13,125,837
Finished goods			6,486,468				6,262,972
Totals		$	29,494,371			$	25,883,242

7. LAND USE RIGHTS

     The Company amortizes the cost of the land use rights over their life, 50 years, using the straight-line method.

		March 31, 2010				June 30, 2009
Land use rights		$	4,493,302			$	4,487,176
Less: accumulated amortization			(627,980	)			(547,700	)
Total		$	3,865,322			$	3,939,476

     Total amortization expense for the three months ended March 31, 2010 and 2009 amounted to $39,404 and $20,027, respectively. Total amortization expense for the nine months ended March 31, 2010 and 2009 amounted to $79,500 and $60,065, respectively.

8. PLANT AND EQUIPMENT

     Plant and equipment consist of the following:

		March 31, 2010				June 30, 2009
Buildings		$	14,422,051			$	13,699,189
Office equipment			916,473				928,051
Motor vehicles			546,963				382,372
Plant and machinery			32,353,079				32,008,907
Construction-in-progress			4,292,379				4,286,527
Total			52,530,945				51,305,046
Less: accumulated depreciation			(10,952,773	)			(8,181,893	)
Plant and equipment, net		$	41,578,172			$	43,123,153

     Depreciation expense for the three months ended March 31, 2010 and 2009 amounted to approximately $940,000 and $751,000, respectively. Depreciation expense for the nine months ended March 31, 2010 and 2009 amounted to approximately $2,759,000 and $2,096,000, respectively.

     Land use right and the building in Hunan are collateralized for the bank loans (see Note 9). The carrying value of the collateralized land use right and the building as of March 31, 2010 and June 30, 2009 amounted to approximately $4,103,000 and $4,206,000, respectively.

     No interest costs were capitalized during the three months and nine months ended March 31, 2010 and 2009.

9. BANK LOANS

     The bank loans represent short-term loans due to a bank that are due normally within one year. These loans can be renewed with the bank. The loans are comprised of the following:

		March 31, 2010				June 30, 2009
Loan from Bank of Agriculture, due March 11, 2011, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings		$	1,467,000			$	1,465,000
Loan from Bank of Agriculture, due July 2, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			2,934,000				2,930,000
Loan from Bank of Agriculture, due July 9, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			2,934,000				2,930,000
Loan from Bank of Agriculture, due July 16, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			4,107,600				4,102,000
Loan from Bank of Agriculture, due July 23, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			2,934,000				2,930,000
Total		$	14,376,600			$	14,357,000

     As of March 31, 2010 and June 30, 2009, land use right and building in Hunan are collateralized for the bank loans (see Note 8).

     Total interest expense for the above short term loans, net of capitalized interest, amounted to approximately $213,000 and $210,000 for the three months ended March 31, 2010 and 2009, respectively. Total interest expense, net of capitalized interest, amounted to approximately $661,000 and $637,000 for the nine months ended March 31, 2010 and 2009, respectively.

10. WARRANTS

     As part of the liquidation damage related to prior year financing activities, during the year ended June 30, 2008, the Company issued 576,425 warrants with exercise price of $5.76. The warrants provide the holder with the right to request the Company to cash-settle the warrants. Therefore, the warrants were classified as liability and recorded at fair value of $1,447,936 on December 31, 2007, the grant date, with the change in fair value recorded in the income of current period. As of March 31, 2010, the fair value of these warrants was $2,563,359. A loss of $849,448 and $2,392,992 was recognized for the three and nine months ended March 31, 2010, respectively.

     During the nine months ended March 31, 2010, 214,720 warrants were exercised using the cashless exercise option. 63,167 of ordinary shares were issued to the warrant holders.

     The changes in the fair value of warrants issued were as follows:

		Amount
Balance, June 30, 2009		$	1,180,477
Transfer to additional paid in capital for warrants exercised			(1,010,110	)
Change in fair value			2,392,992
Balance, March 31, 2010		$	2,563,359

     In 2006, as part of the compensation to a placement agent, Roth Capital Partners, LLC (“Roth Capital”), the Company issued to Roth Capital warrants to acquire 613,260 shares of common stock, exercisable at any time after June 30, 2008. The warrants have a strike price equal to $4.21. In addition, the Company issued to CCG Investor Relations Partners, LLC (“CCG”), an investor relations firm, warrants to acquire 37,287 shares of common stock. The warrants have a strike price equal to $4.61. The warrants have terms ranging from four to five years, and will permit cashless or net exercise at all times. The shares underlying the warrants will have registration rights. The warrant contains a standard anti-dilution provision for stock dividends, stock splits, stock combination, recapitalization and a change of control transaction.

     Effective July 1, 2009, the Company adopted the provisions of an accounting standard regarding instruments that are indexed to an entity’s own stock. As a result, the 613,260 warrants issued to Roth Capital and 37,287 warrants issued to CCG previously treated as equity are no longer afforded equity treatment because the strike price of the warrants is denominated in the U.S. dollar, a currency other than the Company’s functional currency, the Chinese RMB. As a result, the warrants are not considered indexed to the Company’s own stock, and should be reclassified to liability and all changes in the fair value of these warrants are recognized currently in earnings until such time as the warrants are exercised or expire.

     Therefore, on July 1, 2009, the Company reclassified the fair value of these warrants, $1,731,901, from equity to liability as if these warrants were treated as a liability since their issuance in October 2006. The Company also reclassified $1,672,815 from additional paid-in capital, as a cumulative effect adjustment, $59,086, to the beginning retained earnings. As of March 31, 2010, the fair value of these warrants amounted to $5,025,030.

     The Company recorded a loss of $1,602,673 and $3,293,129, respectively, for the change of fair value of the warrants for the three and nine months ended March 31, 2010.

     The changes in the fair value of the warrants were as follows:

		Amount
Balance of warrants, July 1, 2009		$	—
Cumulative effect of reclassification of warrants			1,731,901
Change in fair value			3,293,129
Balance of warrants, March 31, 2010		$	5,025,030

     The fair value of warrants as of July 1, 2010 and March 31, 2010 was calculated using the Black-Scholes-Merton model with the following assumptions:

		July 1, 2009				March 31, 2010
Fair value of common share			$5.76				$10.8
Expected term			1.77 - 4				1.02-3.25
Expected volatility			70%				63% - 73%
Expected dividend yield			0%				0%
Risk-free interest rate			0.93% - 2.04%				0.41% - 1.73%

     Warrants outstanding, warrants exercisable, weighted average exercise price and average remaining life were as follows:

		Warrants				Warrants				Weighted Average				Average Remaining
		Outstanding				Exercisable				Exercise Price				Contractual Life
Balance, June 30, 2009			1,226,972				1,226,972				$4.95				4.25
Granted			—				—				—				—
Forfeited			—				—				—				—
Exercised			214,720				214,720				—				—
Balance, March 31, 2010			1,012,252				1,012,252				$4.78				3.17

11. NONCONTROLLING INTEREST

     Noncontrolling interest consists of the 5% interest of the noncontrolling shareholders in Langfang Duoyuan and 0.6% interest of the noncontrolling shareholders in Hunan Duoyuan. Effective July 1, 2009, the Company adopted an accounting standard regarding noncontrolling interests. The adoption of this new standard requires retrospective application of the presentation and disclosure requirements of the standard to all periods presented. Consequently, the noncontrolling interests in the amounts of $2,245,927 and $1,761,712 have been included as a component of total equity in the March 31, 2010 and June 30, 2009 consolidated balance sheets, respectively, whereas previously they were shown outside of equity.

12. INCOME TAXES

     The Company is subject to U.S. federal and state income taxes and the Company’s subsidiaries incorporated in the PRC are subject to PRC income taxes.

     Duoyuan Printing, Inc. was incorporated in the U.S. and has incurred net operating losses for income tax purposes for the nine months ended March 31, 2010. As of March 31, 2010, the net operating loss carryforwards for U.S. income taxes is $3,105,637 which may be available to reduce future years’ taxable income. These carryforwards will expire, if not utilized, starting in 2027 through 2029. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s limited operating history and continuing losses for U.S. income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero.

     The Company has cumulative undistributed earnings of foreign subsidiaries of approximately $115.1 million as of March 31, 2010, which is included in retained earnings on the consolidated balance sheets and will continue to be indefinitely reinvested in international operations. Additionally, the Chinese tax authorities have clarified that distributions made out of pre-January 1, 2008 retained earnings would not be subject to the withholding tax. The Company has not quantified the deferred income tax liability that would arise if earnings in the third quarter were to be distributed or were determined to be no longer permanently reinvested.

     Our effective tax rates were 19.8% and 12.4% for the nine months ended March 31, 2010 and 2009, respectively. The income tax rate for Duoyuan China in 2008 was 12.5%. Beginning on January 1, 2009, the income tax rate for Duoyuan China increased to 25.0% as a result of the expiration of preferential tax treatments granted to Duoyuan China in prior years. Hunan Duoyuan was tax exempted in 2009. Beginning on January 1, 2010, the income tax rate for Hunan Duoyuan increased to 25.0% as a result of the expiration of preferential tax treatments granted to Hunan Duoyuan in prior years.

     The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. There are no ongoing examinations by taxing authorities at this time.

13. VALUE ADDED TAX

     The Company is subject to a value added tax (“VAT”) in accordance with PRC laws at the standard rate, 17%, of the gross sales price. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished products. A credit is also available for VAT paid on the purchases of equipment.

     Sales and purchases are recorded net of VAT collected and paid.

14. SHIPPING AND HANDLING

     Shipping and handling costs related to goods sold are included in selling expenses. Shipping and handling costs were approximately $482,000 and $273,000 for the three months ended March 31, 2010, and 2009, respectively. Shipping and handling costs were approximately $1,228,000 and $1,107,000 for the nine months ended March 31, 2010 and 2009, respectively.

15. ADVERTISING COSTS

     Advertising costs are expensed as incurred and included in selling expenses. Advertising costs were approximately $42,000 and $41,000 for the three months ended March 31, 2010 and 2009, respectively, and approximately $1,443,000 and $795,000 for the nine months ended March 31, 2010 and 2009, respectively.

16. STOCK-BASED COMPENSATION

     On October 16, 2009, the Board of Directors approved the 2009 Omnibus Incentive Plan (the “Plan”) to provide additional incentives to the Company’s employees. The Plan provides for the grant of a share option and restricted ordinary shares.

     Under the Plan, the Company granted an option on November 6, 2009 to its Chief Financial Officer (“CFO”) to purchase 100,000 ordinary shares. In addition, the Company granted 875,000 nonvested share awards to certain executives and employees on November 6, 2009.

Share option

     The share option was granted at an exercise price of $8.50, vests over 4 years of continuous service, with 25% of the option to be vested on each of the second, third, fourth and fifth anniversaries of the CFO’s employment start date, and expire in ten years. Compensation expense is recognized on a graded vesting schedule for each tranche. The value of options granted was estimated on the date of the grant using the Black-Scholes-Merton model based on the following assumptions:

Expected term		6.2 years
Expected volatility			70	%
Expected dividend yield			0	%
Risk-free interest rate			2.45	%

     The Company used the closing price of the Company’s stock traded in the New York Stock Exchange as the fair value of the common stock as of the grant date. Since the Company did not have a trading history at the time the share option was granted, the expected volatility was based on the historical volatilities of comparable publicly traded companies engaged in a similar industry and/or operating in a similar region with a three to ten-year look back period, depending on the trading history of each comparable publicly traded company. The fair value of the options granted was $5.43 per share on the grant date. Accordingly, related compensation expense of $34,751 and $57,755, respectively, for the three and nine months ended March 31, 2010 is included in general and administrative expenses. The unrecognized compensation cost related to these options as of March 31, 2010 amounted to approximately $485,000, which will be recognized ratably over the weighted average period of approximately 3.5 years.

     The following is a summary of the option activity:

										Weighted				Weighted Average
										Average				Remaining
		Number of				Options				Exercise				Contractual Life				Aggregate
		Options				Exercisable				Price				(Years)				Intrinsic Value
Outstanding, June 30, 2009			—				—			$	—				—				—
Granted			100,000				—				8.50				—				—
Forfeited			—				—				—				—				—
Exercised			—				—				—				—				—
Outstanding, March 31, 2010			100,000				—			$	8.50				9.60			$	230,000

Nonvested share awards

     The value of the nonvested share awards was based on the initial public offering price of the Company’s stock on the date of the grant. The common shares under this grant are subject to a six-month cliff vesting period. Accordingly, the compensation expense is recognized ratably over this vesting period, and compensation expense of $3,698,204 and $5,999,309, respectively, for the three and nine months ended March 31, 2010 is recorded according to where the grantee’s regular compensation is recorded as follows:

		Three months ended				Nine months ended
		March 31, 2010				March 31, 2010
Cost of revenues		$	81,994			$	133,013
Research and development expenses			154,268				250,257
Selling expenses			224,006				363,837
General and administrative expenses			3,237,936				5,252,202
		$	3,698,204			$	5,999,309

     As of March 31, 2010, the unrecognized compensation cost related to the nonvested share awards amounted to approximately $1,438,000, which will be recognized ratably over the weighted average period of approximately 0.1 years.

17. COMPREHENSIVE INCOME

     The comprehensive income included in the statement of stockholders’ equity relates to adjustments for foreign currency translation (see Note 2). Accumulated comprehensive income amounted to $10,990,337 and $10,788,585 as of March 31, 2010 and June 30, 2009, respectively. Asset and liability accounts at March 31, 2010 were translated at RMB 6.82 to $1.00, as compared to RMB 6.83 to $1.00 at June 30, 2009. The average translation rates applied to the consolidated statements of income for the nine months ended March 31, 2010 and 2009 were RMB 6.82 to $1.00 and RMB 6.83 to $1.00, respectively

18. EARNINGS PER SHARE

     The Company reports earnings per share in accordance with the provisions of the related accounting standard. This standard requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share is computed by dividing net income attributable to holders of common stock of Duoyuan Printing, Inc. by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

     The following is a reconciliation of the basic and diluted earnings per share computation:

		2010				2009
For the three months ended March 31:
Net income attributable to holders of common stocks of Duoyuan Printing, Inc.		$	1,105,853			$	4,910,981
Weighted average shares used in computing basic net income attributable to Duoyuan Printing, Inc. per share:
Basic			30,563,217				25,000,050
Dilutive effect of nonvested share awards			521,147				—
Dilutive effect of warrants			491,570				—
Dilutive effect of stock options			—				—
Diluted			31,575,934				25,000,050
Earnings per share:
Basic		$	0.04			$	0.20
Diluted		$	0.03			$	0.20

		2010				2009
For the nine months ended March 31:
Net income attributable to holders of common stocks of Duoyuan Printing, Inc.		$	19,030,840			$	26,067,717
Weighted average shares used in computing basic net income contributable to Duoyuan Printing, Inc. per share:
Basic			27,958,190				25,000,050
Dilutive effect of nonvested share awards			97,334				—
Dilutive effect of warrants			257,379				—
Dilutive effect of stock options			—				—
Diluted			28,312,903				25,000,050
Earnings per share:
Basic		$	0.68			$	1.04
Diluted		$	0.67			$	1.04

     At March 31, 2010, 1,012,252 warrants were included in the calculation of diluted earnings per share because the average fair value of common stock exceeded weighted average exercise price of warrants of $4.78. At June 30, 2009, 1,226,972 warrants, whose weighted average exercise price is $4.95, were excluded from the calculation of diluted earnings per share because of their anti-dilutive effect.

19. SEGMENT INFORMATION

     The Company’s chief operating decision maker is the Chief Executive Officer, who reviews consolidated results of operations prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Group; hence, the Company has only one operating segment.

     The Company operates in the PRC and all of the Group’s long-lived assets are located in the PRC. All of the Company’s revenues are generated from customers headquartered in the PRC.

     The gross revenues consist of the following products:

		Three Months Ended March 31,								Nine Months Ended March 31,
		2010				2009				2010				2009
		(dollars in thousands)
Pre-press
Computer-to-plate systems		$	1,028			$	924			$	2,980			$	2,771
Press
Single color small format			970				807				3,763				3,303
Single color large format			1,824				1,687				7,524				8,467
Multicolor small format			8,041				6,020				31,763				25,474
Multicolor large format			11,587				8,165				54,175				41,269
Adjustments			(47	)			(191	)			(1,099	)			(855	)
Total Revenues		$	23,403			$	17,412			$	99,106			$	80,429

     Adjustments to revenue include sales rebates paid to distributors as part of our incentive program that rewards those distributors who meet or exceed their sales targets for the three months period. The sales rebates are paid at the end of each quarter. Adjustments also include sales tax paid to the PRC taxing authorities for the sale of our products. Accordingly, these amounts are netted against revenues.

20. RELATED PARTY TRANSACTIONS

     The Company leased office space from Duoyuan China Water Recycle Technology Industry Co., a related party. On June 30, 2008, the Company and Duoyuan Water Recycle Technology Industry Co. terminated the lease pursuant to a termination agreement. The title of property transferred to Duoyuan Information Terminal Manufacture (Langfang) Co., Ltd., a related party, which Mr. Wenhua Guo is the sole shareholder. On July 1, 2008, the Company entered into a lease agreement with Duoyuan Information Terminal Manufacture (Langfang) Co., Ltd., from July 1, 2008 to December 31, 2009. On December 15, 2009, the Company renewed its lease agreement with Duoyuan Information Terminal Manufacture (Langfang) Co., Ltd., from January 1, 2010 to December 31, 2012. Total lease expense for the three-year term will be $988,987 (See Note 22).

     For the three months ended March 31, 2010 and 2009, rental expense related to this office lease amounted to $82,416 and $41,153, respectively. For the nine months ended March 31, 2010 and 2009, rental expense related to this office lease amounted to $164,721 and $123,457, respectively.

21. STATUTORY SURPLUS RESERVE FUND

     The Company is required to transfer 10% of its net income, as determined in accordance with the PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

     The transfer to this reserve must be made before distribution of any dividends to shareholders. For the three months ended March 31, 2010 and 2009, the Company transferred $514,301 and $819,372, respectively, to this reserve. For the nine months ended March 31, 2010 and 2009, the Company transferred $2,264,865 and $4,377,614, respectively, to this reserve. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any. It may also be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

22. OPERATING LEASES

     On July 1, 2008, the Company entered into a lease agreement (see Note 20) with Duoyuan Information Terminal Manufacture (Langfang) Co. Ltd. with annual lease payments totaling $164,610. On December 15, 2009, the Company renewed its lease agreement with Duoyuan Information Terminal Manufacture (Langfang) Co., Ltd., from January 1, 2010 to December 31, 2012 with fixed annual lease payments totaling $329,664.

     In addition, the Company leases sixteen sales offices in sixteen different Chinese provinces with various terms with latest office lease due to expire in December 2010. The monthly lease amounts for these offices are de minimis.

     Total lease expense for the three months ended March 31, 2010 and 2009 was $122,634 and $53,362, respectively. Total lease expense for the nine months ended March 31, 2010 and 2009 was $273,750 and $191,787, respectively. Total future minimum lease payments at March 31, 2010, are as follows:

Years ending June 30,		Amount
2010		$	412,775
2011			329,664
2012			247,243

23. RETIREMENT PLAN

     The Company’s retirement plan includes two parts. The first to be paid by the Company is 20% of the employee’s actual salary in the prior year. The other part, paid by the employee, is 8% of the actual salary. The Company’s contributions amounted to approximately $273,000 and $256,000 for the three months ended March 31, 2010 and 2009, respectively. The Company’s contributions amounted to approximately $819,000 and $769,000 for the nine months ended March 31, 2010 and 2009, respectively.

24. FAIR VALUE

     The accounting standards regarding fair value of financial instruments and related fair value measurements define financial instruments, define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement, and enhance disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and payables qualify as financial instruments and reflect reasonable estimates of fair value because of the short period of time between the origination of such instruments and their expected realization. The three levels of valuation hierarchy are defined as follows:

•		Level 1 inputs to the valuation methodology which are quoted prices (unadjusted) for identical assets or liabilities in active markets.
•		Level 2 inputs to the valuation methodology that includes quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, substantially for the full term of the financial instrument.
•		Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

     As of March 31, 2010, the Company held certain financial liabilities that are required to be measured at fair value on a recurring basis. These consisted of the Company’s warrants.

     As of March 31, 2010 and June 30, 2009, the Company’s management determined that certain inputs significant to the fair value measurement of the Company’s warrant liability falls under level 3 of the valuation hierarchy (i.e., the lowest level of input to the fair value measurement), and therefore it rendered the fair value measurement of the warrant liability under the same classification.

     There were no changes during the quarter ended March 31, 2010 to the Company’s valuation techniques used to measure the warrants liability fair values on a recurring basis. As of March 31, 2010, the Company did not have any non-financial assets or liabilities that are required to be measured at fair value on a recurring or non-recurring basis.

     The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities accounted for at fair value on a recurring basis.

Fair Value as of

Fair Value Measurement at March 31, 2010

March 31, 2010

using Fair Value Hierarchy

Liabilities

Level 1

Level 2

Level 3

Warrant liability

$

7,588,389

$

7,588,389

Fair Value as of

Fair Value Measurement at June 30, 2009

June 30, 2009

using Fair Value Hierarchy

Liabilities

Level 1

Level 2

Level 3

Warrant liability

$

1,180,477

$

1,180,477

25. COMMITMENTS AND CONTINGENCIES

Construction-in-progress

     Construction-in-progress relates to the building and equipment improvement initiative at the Langfang Duoyuan facility. On February 20, 2010, the Company entered into a construction agreement with China Construction Sixth Engineering Bureau Civil Engineering Co. Ltd. to build a new manufacturing facility. As of March 31, 2010, approximately $15 million remains outstanding on this agreement. This project is expected to be completed in September 2010.

Equipment purchase agreement

     In August 2008, Langfang Duoyuan entered into a packing material equipment purchase agreement with Beijing Jingneng Mechanical & Electrical Equipments Ltd. As of March 31, 2010, $378,696, or 5% of the total commitment, remains outstanding on this agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q for the quarter ended March 31, 2010 contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Generally, the words “believe,” “anticipate,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “predict,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements which include, but are not limited to, statements concerning expectations of us and our directors and officers regarding, among other things, working capital requirements, financing requirements, business prospects, trends affecting us and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Such statements are subject to certain risks and uncertainties, including the matters set forth in this quarterly report on Form 10-Q or other reports or documents we file with the Securities and Exchange Commission, or the SEC, from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We do not ordinarily make projections of our future operating results and undertake no obligation (and expressly disclaim any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by us with the SEC. In addition, the forward-looking statements in this quarterly report on Form 10-Q for the quarter ended March 31, 2010 involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of us to differ materially from those expressed in or implied by the forward-looking statements contained herein. Please see the “Risk Factors” in Item 1A of Part II of this quarterly report on Form 10-Q.

General Overview

Business

We are a leading offset printing equipment supplier in China, headquartered in Beijing. We design, manufacture and sell offset printing equipment used in the offset printing process. The offset printing process includes the following three stages: (1) “pre-press,” which is the transfer of images to printing plates; (2) “press,” which is the transfer of images from printing plates to another media, such as paper; and (3) “post-press,” which is the last step of the offset printing process that includes cutting, folding, binding, collating and packaging. We manufacture one product under the pre-press product category (a computer-to-plate system, or CTP system) and seventeen products across four product lines under the press product category (single color small format presses, single color large format presses, multicolor small format presses and multicolor large format presses). We plan to begin commercial production and sale of certain post-press products, including cold-set corrugated paper machines, which make corrugated cardboard paper, by the end of 2010. Through our technical innovation and precision engineering, we offer a broad range of quality and durable offset printing equipment at competitive prices. With over 85 distributors in over 65 cities and 28 provinces, we have one of the largest distribution networks for offset printing equipment suppliers in China. We believe our extensive network allows us to be closer to our end-user customers and enables us to be more responsive to local market demand.

Corporate History

We are organized under the law of the State of Wyoming. On October 6, 2006, we closed an equity transfer agreement with Duoyuan Investments Limited, or Duoyuan Investments, pursuant to which we acquired Duoyuan Digital Press Technology Industries (China) Co., Ltd., or Duoyuan China, and commenced our present line of offset printing equipment business. We conduct all of our business through our principal operating subsidiary, Duoyuan China, and three manufacturing subsidiaries, Langfang Duoyuan Digital Technology Co., Ltd., or Langfang Duoyuan, Hunan Duoyuan Printing Machinery Co., Ltd., or Hunan Duoyuan and Hunan Duoyuan Machinery Manufacturing Co., Ltd., or Hunan Machinery. Duoyuan China’s principal business activities include marketing and sale of our offset printing equipment, technical support to our distributors, as well as overall strategic planning and management of our business. Langfang Duoyuan’s principal business activities include the manufacturing of our CTP system, and two of our press products, namely our single color small format presses and multicolor small format presses. Hunan Duoyuan’s principal business activities include the manufacturing of two of our press products, namely our single color large format presses and multicolor large format presses. Hunan Machinery’s principal business activities include production and supply of key parts and components to the other manufacturing subsidiaries. Our majority shareholder is Duoyuan Investments, which is a British Virgin Islands company wholly owned by Wenhua Guo, our chairman of the board.

On November 2, 2006, we closed the transactions contemplated by a securities purchase agreement by and between us and certain investors, and issued an aggregate of 6,132,622 shares of our common stock to certain investors for an aggregate purchase price of $23.5 million. This private placement was made pursuant to the exemption from the registration provisions of the Securities Act provided by Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder, for issuances not involving a public offering.

In November 2009, we completed our initial public offering of 6,455,918 common shares, including 5,500,000 common shares offered by us and 955,918 common shares offered by the selling shareholders, at an initial public offering price of $8.50 per common share. Our shares are listed on the New York Stock Exchange under the symbol “DYP.”

Changes in PRC Tax Regulations

Our Chinese subsidiaries have enjoyed significant tax preferential treatments. These preferential tax treatments were applicable to foreign invested manufacturing enterprises scheduled to operate for a period of not less than ten years in accordance with the Foreign Invested Enterprise Income Tax Law, or FIE Income Tax Law, which was effective until December 31, 2007. The additional tax that would otherwise be payable without such preferential tax treatments totaled $7.9 million for the year ended June 30, 2008 and $4.3 million for the year ended June 30, 2009. The additional tax that would otherwise be payable without such preferential tax treatments totaled $2.0 million for the nine months ended March 31, 2010.

As a result of recent changes in the FIE Income Tax Law, we expect that our tax expenses in the future will be significantly higher. In addition, as explained below, some of the tax preferences we previously received were granted by local governments and not supported by relevant state laws and regulations. As a result, our Chinese subsidiaries may be ordered by relevant authorities to refund these tax benefits. In addition, as a result of the changes in Chinese tax laws, our historical operating results will not be indicative of our operating results for future periods.

Revenue

Our revenue is reported net of value-added taxes, or VAT, that are levied on our products. As of March 31, 2010, all of our products were subject to a VAT at a rate of 17% of the gross sales price. We also offer sales rebates as an incentive for large purchase orders. These sales rebates are recorded as a reduction of our revenue.

We derive all of our revenue from the sale of our offset printing equipment to distributors in China. We sell products in the pre-press and press product categories of offset printing equipment. Substantially all our revenue is derived from the sale of our press printing equipment. Pre-press printing equipment comprised approximately 4.4% of our revenue and press printing equipment comprised approximately 95.6% of our revenue for the three months ended March 31, 2010, as adjusted for sales rebates. For the three months ended March 31, 2010, within the press product category of printing equipment, we derived 83.9% of our revenue from the sale of our multicolor (small and large format) presses, before adjustment for sales rebates.

Our multicolor (small and large format) presses were our best selling products for the three months ended March 31, 2010. For the three months ended March 31, 2010, our multicolor large format presses accounted for approximately 49.5% of our revenue and our multicolor small format presses accounted for approximately 34.4% of our revenue, before adjustment for sales rebates. The following table provides a breakdown of our revenue, by product category:

		Three Months Ended March 31,																Nine Months Ended March 31,
		2010								2009								2010								2009
						% of								% of								% of								% of
		$				revenues				$				revenues				$				revenues				$				revenues
		(dollars in thousands)
Pre-press
Computer-to-plate systems			1,028				4.4	%			924				5.3	%			2,980				3.0	%			2,771				3.4	%
Press
Single color small format			970				4.1	%			807				4.6	%			3,763				3.8	%			3,303				4.1	%
Single color large format			1,824				7.8	%			1,687				9.7	%			7,524				7.6	%			8,467				10.5	%
Multicolor small format			8,041				34.4	%			6,020				34.6	%			31,763				32.0	%			25,474				31.7	%
Multicolor large format			11,587				49.5	%			8,165				46.9	%			54,175				54.7	%			41,269				51.3	%
Adjustments			(47	)			-0.2	%			(191	)			-1.0	%			(1,099	)			-1.1	%			(855	)			-1.1	%
Total Revenues			23,403				100.0	%			17,412				100.0	%			99,106				100.0	%			80,429				100.0	%

Sales to distributors in China account for all of our revenue. We use an extensive distribution network to reach a broad end-user customer base. We generally make sales on a purchase order and short-term agreement basis. We do not have long-term volume purchase contracts with any of our distributors. No single distributor accounted for more than 4% of our revenue during the three months ended March 31, 2010.

Adjustments to revenue accounted for 0.2% for the three months ended March 31, 2010, for sales rebates paid to distributors as part of our incentive program that rewards those distributors who meet or exceed their sales targets for the three months period. Adjustments also include sales tax paid to the PRC taxing authorities for the sale of our products. We provide sales rebates, or discounts of 2% to 4%, to distributors based on purchase orders and cash receipts. The greater the dollar amount of the purchase order and cash receipts, the higher the percentage rebate we offer to our distributors. These sales rebates are paid at the end of each quarter. We intend to continue this incentive program.

Raw Material Costs

Our principal raw materials are steel, iron and electronic components. We produce a substantial majority of our key components in-house through Hunan Machinery. We purchase all other raw materials and components from Chinese suppliers. The relatively low operation, labor and raw material costs in China have historically allowed us to maintain our low cost of revenue. However, as the global economy continues to recover, we expect our raw material costs will increase.

As we focus on manufacturing more advanced products and new product lines, we may find it necessary to use more expensive raw materials and components. We plan to mitigate future increases in raw material and component costs by using more common resources across our product lines, increasing in-house manufacturing of our key components and adopting more uniform manufacturing and assembly practices. In addition, to minimize and control raw material waste and increase production efficiency, we continue to make investments to improve and further automate our manufacturing process.

Employee Share-Based Compensation Expenses

We account for employee share-based compensation expenses at the fair value of the share awards on the date of grant and recognized over the service period for awards expected to vest. The fair value of nonvested stock units is determined based on the number of shares granted and the quoted price of our common stock.

On November 6, 2009, we granted certain employees, including members of our executive management team, but excluding our chief executive officer and chief financial officer, 875,000 nonvested shares. All of the common shares subject to these grants vested six months following the grant. The compensation expense was recognized ratably over the vesting period. As a result of these common share grants to our employees, we incurred employee share-based compensation charges of $3.7 million during the three months ended March 31, 2010 and $6.0 million during the nine months ended March 31, 2010, based on the initial public offering price of $8.50 per common share on the New York Stock Exchange on November 6, 2009.

During the three and nine months ended March 31, 2010, the compensation expense of $3,698,204 and $5,999,309, respectively, was recorded according to where the grantee’s regular compensation was recorded as follows:

		Three Months				Nine Months
		Ended March				Ended March
		31, 2010				31, 2010
Cost of revenues		$	81,994			$	133,013
Research and development expense			154,268				250,257
Selling expense			224,006				363,837
General and administrative expense			3,237,936				5,252,202
		$	3,698,204			$	5,999,309

We currently estimate that we will record compensation expense of $1.4 million during the three months ended June 30, 2010 in line with the six month vesting schedule as discussed above.

In addition, on November 6, 2009, we granted our chief financial officer an option to purchase up to 100,000 common shares at the initial public offering price. One quarter of these options vested on October 1, 2010, with the remainder of the options vesting ratably on a monthly basis through October 1, 2013. This grant resulted in additional stock-based compensation expense of $0.06 million for the nine months ended March 31, 2010.

Results of Operations

The following table sets forth selected data from our consolidated statements of income for the periods indicated as a percentage of revenue:

		Three Months Ended March 31,																Nine Months Ended March 31,
		2010								2009								2010								2009
		$				%				$				%				$				%				$				%
		(dollars in thousands)
Revenue, net			23,403				100	%			17,412				100	%			99,106				100	%			80,429				100	%
Cost of revenue			11,100				47	%			8,354				48	%			46,453				47	%			37,294				46	%
Gross profit			12,303				53	%			9,058				52	%			52,653				53	%			43,135				54	%
Research and development			461				2	%			286				2	%			1,454				1	%			1,471				2	%
Selling expenses			2,051				9	%			1,476				8	%			9,116				9	%			6,975				9	%
General and administrative expenses			3,680				16	%			1,057				6	%			8,799				9	%			3,333				4	%
Income from operations			6,111				26	%			6,239				36	%			33,284				34	%			31,356				39	%
Change of the fair value of warrants			(2,452	)			-11	%			30				0	%			(5,686	)			-6	%			194				0	%
Other expenses			—				—				—				—				—				—				(957	)			-1	%
Interest expense and other charges			(213	)			-1	%			(211	)			-1	%			(661	)			-1	%			(637	)			-1	%
Interest income			55				0	%			105				0	%			129				0	%			174				0	%
Other expense, Net			(158	)			-1	%			(106	)			-1	%			(532	)			-1	%			(1,420	)			-2	%
Income before provision for income taxes and noncontrolling interest			3,501				15	%			6,163				35	%			27,066				27	%			30,130				37	%
Provision for income taxes			2,295				-10	%			1,181				7	%			7,553				8	%			3,712				4	%
Net income			1,206				5	%			4,982				28	%			19,513				19	%			26,418				33	%
Less: Net income attributable to noncontrolling interest			100				0	%			71				0	%			482				0	%			350				0	%
Net income attributable to Duoyuan Printing, Inc.			1,106				5	%			4,911				28	%			19,031				19	%			26,068				33	%

Comparison of Three Months Ended March 31, 2010 and March 31, 2009

Revenue

Our revenue increased by $6.0 million, or 34.4%, from $17.4 million for the three months ended March 31, 2009 to $23.4 million for the three months ended March 31, 2010, primarily as a result of an increase in sale of our higher priced and higher margin multicolor presses during this period. Revenue for our pre-press printing equipment for the three months ended March 31, 2010 increased by $0.1 million, or 11.2%, when compared to the three months ended March 31, 2009. Also, revenue for our press printing equipment for the three months ended March 31, 2010 increased by $5.7 million, or 34.4%, when compared to the three months ended March 31, 2009.

Pre-press Printing Equipment. Revenue from our CTP system equipment increased by $0.1 million, or 11.2%, from $0.9 million during the three months ended March 31, 2009 to $1.0 million for the three months ended March 31, 2010. We increased our sales by showcasing our CTP system in one additional exhibition and trade show during the three months ended March 31, 2010, compared to the three months ended March 31, 2009.

Press Printing Equipment.

Revenue from the sale of our press printing equipment increased by $5.7 million, or 34.4%, from $16.7 million during the three months ended March 31, 2009 to $22.4 million for the three months ended March 31, 2010, before adjustment for sales rebates. This increase was primarily due to an increase in sales of our multicolor (small and large format) presses.

Single color small format press. Revenue for our single color small format presses increased by $0.2 million, or 20.2%, from $0.8 million during the three months ended March 31, 2009 to $1.0 million during the three months ended March 31, 2010, before adjustment for sales rebates. Overall, we sold more single color small format presses during the three months ended March 31, 2010 when compared to the three months ended March 31, 2009 as we increased promotion of our newest single color small format press, Model DY56T, which was introduced in April 2009. In addition, the demand for our other single color small format presses increased as we promoted our single color small format presses in three additional exhibitions and trade shows during the three months ended March 31, 2010, compared to the three months ended March 31, 2009. During the three months ended March 31, 2010, we attended more exhibitions and trade shows in the second tier cities to increase the demand of our single color presses.

Single color large format press. Revenue for our single color large format presses increased by $0.1 million, or 8.1%, from $1.7 million during the three months ended March 31, 2009 to $1.8 million during the three months ended March 31, 2010, before adjustment for sales rebates. Our revenue increased as we introduced a new single color large format press, Model DY 104, in March 2010. In addition, sale of our other single color large format presses increased during the three months ended March 31, 2010, compared to the three months ended March 31, 2009, as we participated in three additional exhibitions and trade shows. During the three months ended March 31, 2010, we attended more exhibitions and trade shows in the second tier cities to increase the demand of our single color presses.

Multicolor small format press. Revenue for our multicolor small format presses increased by $2.0 million, or 33.6%, from $6.0 million during the three months ended March 31, 2009 to $8.0 million during the three months ended March 31, 2010, before adjustment for sales rebates. We believe the increased sales of our multicolor small format press were partially a result of our increased marketing activities. We promoted our multicolor small format press through ten additional exhibitions and trade shows during the three months ended March 31, 2010 when compared to three months ended March 31, 2009. Furthermore, we introduced a new model, DY552, in September 2009, which generated additional revenue of $1.2 million for us during the three months ended March 31, 2010.

Multicolor large format press. Revenue for our multicolor large format presses increased by $3.4 million, or 41.9%, from $8.2 million during the three months ended March 31, 2009 to $11.6 million during the three months ended March 31, 2010, before adjustment for sales rebates. We believe the increased sales of our multicolor large format presses were partially a result of our increased marketing activities. In the three months ended March 31, 2010, we promoted our multicolor presses in 13 additional exhibitions and trade shows when compared with the three months ended March 31, 2009. Revenue from our new multicolor large format presses, Model DY474II and Model PZ-4660AL, which were introduced in November 2008 and February 2009, respectively, continued to be strong as we increased the promotion of these new models through exhibitions and trade shows. Also, we believe sales of these products continued to increase as the customers became more familiar with the functionality of these products. The overall increase in revenue from these two models was $2.5 million. Furthermore, combined sale of our other multicolor large format presses increased during the three months ended March 31, 2010 compared to the three months ended March 31, 2009.

Cost of Revenue

Our cost of revenue can vary significantly from quarter to quarter, but generally it is in proportion to the number of products we sell in any given quarter. We typically incur higher costs in the first and second quarters of each fiscal year primarily due to the increase in the volume of our products sold.

Our cost of revenue increased by $2.7 million, or 32.9%, from $8.4 million for the three months ended March 31, 2009 to $11.1 million for the three months ended March 31, 2010. This increase was primarily due to an increase in the volume of our products sold during this period, particularly sales of our multicolor presses. This increase in sales contributed to the increase in consumption of raw materials and components across our pre-press and press product categories as our revenue increased by 34.4% from the three months ended March 31, 2009 to the three months ended March 31, 2010. As a percentage of revenue, our cost of revenue decreased 0.6% from 48.0% for the three months ended March 31, 2009 to 47.4% for the three months ended March 31, 2010.

Gross Profit

As a result of the factors above, our gross profit increased by $3.2 million, or 35.8%, from $9.1 million for the three months ended March 31, 2009 to $12.3 million for the three months ended March 31, 2010. The increase in our gross profit during this period was due to the increase in our revenues by 34.4%. Our gross profit margins increased 0.6% from 52.0% for the three months ended March 31, 2009 to 52.6% for the three months ended March 31, 2010. Our gross profit percentage increased because of increased sales of higher margin multicolor presses.

Selling Expenses

Our selling expenses increased by $0.6 million, or 39.0%, from $1.5 million for the three months ended March 31, 2009 to $2.1 million for the three months ended March 31, 2010. This increase was primarily due to an increase in salary expense to our sales professionals and in shipping expenses for delivery of our products. Our salary expense increased as we paid more commissions due to the increase in sales. Our shipping expenses increased because we sold more units during the three months ended March 31, 2010 compared to the three months ended March 31, 2009.

As a percentage of revenue, our selling expenses increased 0.3% from 8.5% for the three months ended March 31, 2009 to 8.8% for the three months ended March 31, 2010. This increase was mainly because our shipping expenses increased as we shipped a higher number of units of multicolor presses during the three months ended March 31, 2010 compared to the three months ended March 31, 2009. Per unit shipping cost of multicolor presses are higher than the single color presses due to their size and weight.

General and Administrative Expenses

General and administrative expenses increased by $2.6 million, or 248.4%, from $1.1 million for the three months ended March 31, 2009 to $3.7 million for the three months ended March 31, 2010. This increase was mainly due to $3.3 million share-based compensation expense related to our grant of restricted share awards to certain employees in our management and administration division and share options to our CFO in November 2009. However, this increase was offset by the reduction of our allowance for doubtful accounts by $1.1 million.

As a percentage of revenue, general and administrative expenses increased 9.6% from 6.1% for the three months ended March 31, 2009 to 15.7% for the three months ended March 31, 2010. This increase was mainly due to our share-based compensation expense for nonvested stock and stock options granted in November 2009.

Research and Development Expenses

Our research and development expenses increased by $0.2 million, or 61.3%, from $0.3 million for the three months ended March 31, 2009 to $0.5 million for the three months ended March 31, 2010. For the three months ended March 31, 2010, our research and development efforts were mainly focused on developing two new products (a new CTP system and a new multicolor large format press) as well as the planned packaging equipment product, our cold-set corrugated paper machine, which are scheduled to be released in calendar 2010. In addition, we introduced a new single color large format press, Model DY104, in March 2010. During the three months ended March 31, 2009, our research and development efforts were focused on developing or enhancing two new and existing press products, Model PZ 4660-AL, which was introduced in February 2009 and Model DY 552, which was introduced in September 2009.

As a percentage of revenue, research and development expenses increased 0.4% from 1.6% for the three months ended March 31, 2009 to 2.0% for the three months ended March 31, 2010.

Income from Operations

Income from operations decreased by $0.1 million, or 2.1%, from $6.2 million for the three months ended March 31, 2009 to $6.1 million for the three months ended March 31, 2010.

The decrease was due to our share-based compensation expense of $3.7 million from nonvested stock and stock options granted in November, 2009. Excluding the impact of this expense, our income from operations for the three months ended March 31, 2010 would have been $9.8 million.

We believe excluding the impact of our share-based compensation expense on our income from operations is a non-GAAP financial measure as contemplated by SEC Regulation G, Rule 100. This non-GAAP measure is discussed further, and reconciled to their applicable U.S. GAAP-based measures, on page 33.

Change in Fair Value of Warrants

Loss from change in fair value of warrants increased by $2.5 million from gain of $0.03 million for the three months ended March 31, 2009 to a loss of $2.5 million for the three months ended March 31, 2010. Financial instruments represent warrants issued to unrelated investors in our 2006 private placement offering as well as warrants issued to the private placement offering agent and investment relations firm for their services.

The warrants are recorded as a liability on the balance sheet. The fair value of the warrants changes depending on the market price of underlying common stock, the exercise period, volatility and the risk-free interest rate. Any increase or decrease in the liability is recorded as income or loss in the income statement. We will experience some uncertainty in our income statement as we are subject to these increases or decreases until either all warrants are exercised or the exercise period has expired.

Other Expense

Our other expenses increased by $0.1 million, or 48.5%, from $0.1 million for the three months ended March 31, 2009 to $0.2 million for the three months ended March 31, 2010. We had interest expense of $0.2 million from our short-term borrowing during the three months ended March 31, 2010 as well as during the three months ended March 31, 2009. The interest expense is offset by interest income.

Net Income Attributable to Noncontrolling Interest

Our noncontrolling interest stayed constant at $0.1 million for the three months ended March 31, 2009 and 2010, respectively.

Provision for Income Taxes

Our provision for income taxes increased by $1.1 million, or 94.4%, from $1.2 million for the three months ended March 31, 2009 to $2.3 million for the three months ended March 31, 2010. This increase was primarily due to the increase in our revenue by 34.4% over the same period and an increase in the income tax rate applicable to Hunan Duoyuan, which was tax exempted in 2009. Beginning on January 1, 2010, the income tax rate for Hunan Duoyuan increased to 25.0% as a result of the expiration of preferential tax treatments granted to Hunan Duoyuan in prior years. Our effective tax rates were 19.4% for the three months ended March 31, 2009 and 25.0% for the three months ended March 31, 2010.

Duoyuan China began paying income tax in January 1, 2006. The income tax rate for Duoyuan China prior to January 1, 2008 was 16.5% and the income tax rate for Duoyuan China from January 1, 2008 to December 31, 2008 was 12.5%. Beginning January 1, 2009, the income tax rate for Duoyuan China increased to 25.0%. Langfang Duoyuan began paying income tax in January 1, 2008 at a rate of 25.0%. Hunan Machinery was subject to an income tax rate of 25.0% upon its inception on January 8, 2010.

Net Income Attributable to Duoyuan Printing, Inc.

As a result of the foregoing, our net income attributable to Duoyuan Printing, Inc. decreased by $3.8 million, or 77.5%, from $4.9 million for the three months ended March 31, 2009 to $1.1 million for the three months ended March 31, 2010. This decrease was mainly due to our share-based compensation expense of $3.7 million for nonvested stock and stock options granted in November 2009 and change in fair value of warrants of $2.5 million. Excluding the impact of these expenses, our net income in the three months ended March 31, 2010 would have been $7.3 million.

As a percentage of revenue, our net income attributable to Duoyuan Printing, Inc. decreased 23.5% from 28.2% for the three months ended March 31, 2009 to 4.7% for the three months ended March 31, 2010. This decrease was mainly due to our share-based compensation expense for nonvested stock and stock options granted in November 2009 and change in fair value of warrants. Excluding the impact of these expenses, as a percentage of revenue, our net income in the three months ended March 31, 2010 would have been 31.2%.

We believe excluding the impact of our share-based compensation expense and change in fair value of warrants on our net income are non-GAAP financial measures as contemplated by SEC Regulation G, Rule 100. These non-GAAP measures are discussed further, and reconciled to their applicable U.S. GAAP-based measures, on page 33.

Comparison of Nine Months Ended March 31, 2010 and March 31, 2009

Revenue

Our revenue increased by $18.7 million, or 23.2%, from $80.4 million for the nine months ended March 31, 2009 to $99.1 million for the nine months ended March 31, 2010, primarily as a result of an increase in volume of products sold during this period. Revenue for our pre-press printing equipment increased by $0.2 million, or 7.5%, from $2.8 million for the nine months ended March 31, 2009 to $3.0 million for the nine months ended March 31, 2010. In addition, revenue for our press printing equipment for the nine months ended March 31, 2009 increased by $18.7 million, or 23.8%, when compared to the nine months ended March 31, 2010. This increase in revenue was mainly attributable to an increase in the volume of our higher price, higher margin multicolor presses sold during this period.

Pre-press Printing Equipment. Revenue of our CTP system equipment increased by $0.2 million, or 7.5%, from $2.8 million during the nine months ended March 31, 2009 to $3.0 million for the nine months ended March 31, 2010. We increased our sale by showcasing our CTP system in two additional exhibition and trade show during the nine months ended March 31, 2010 compared to the nine months ended March 31, 2009.

Press Printing Equipment.

Revenue from the sale of our press printing equipment increased by $18.7 million, or 23.8%, from $78.5 million during the nine months ended March 31, 2009 to $97.2 million for the nine months ended March 31, 2010, before adjustment for sales rebates. This increase was primarily due to an increase in demand for our multicolor (small and large format) presses.

Single color small format press. Revenue for our single color small format presses increased by $0.5 million, or 13.9%, from $3.3 million during the nine months ended March 31, 2009 to $3.8 million during the nine months ended March 31, 2010, before adjustment for sales rebates. Overall, we sold more single color small format presses during the nine months ended March 31, 2010 when compared to the nine months ended March 31, 2009 as we increased promotion of our newest single color small format press, Model DY56T, which was introduced in April 2009. However, the increase from the sale of this new model was offset by the decrease in sale of our other single color small format presses. Sales of our other single color small format presses decreased as we promoted these other models in fewer exhibitions and tradeshows during the nine months ended March 31, 2010 compared to the nine months ended March 31, 2009. During the nine months ended March 31, 2010, our promotional efforts were primarily focused on multicolor (small and large formats) presses.

Single color large format press. Revenue for our single color large format presses decreased by $1.0 million, or 11.1%, from $8.5 million during the nine months ended March 31, 2009 to $7.5 million during the nine months ended March 31, 2010, before adjustment for sales rebates. Although we participated in more exhibitions and trade shows during the nine months ended March 31, 2010 when compared to the nine months ended March 31, 2009, we decreased the promotion of single color large format presses in these events. Our promotional efforts were more focused on multicolor presses during the nine months ended March 31, 2010. In addition, revenue decreased because the sale of a model with lower sales price (but higher gross profit margin) increased and the sale of a model with higher sales price (but lower gross profit margin) decreased during the nine months ended March 31, 2010 when compared to the nine months ended March 31, 2009.

Multicolor small format press. Revenue for our multicolor small format presses increased by $6.3 million, or 24.7%, from $25.5 million during the nine months ended March 31, 2009 to $31.8 million during the nine months ended March 31, 2010, before adjustment for sales rebates. We believe the increased demand for our multicolor small format press was partially a result of our increased marketing activities. We promoted our multicolor small format press through 23 additional exhibitions and trade shows during the nine months ended March 31, 2010 when compared to the nine months ended March 31, 2009. Specifically, we increased promotion of Model DY456, mostly used by commercial printers that print books, magazines, corporate brochures, product catalogues, labels and small packages. Furthermore, we introduced a new model, DY552, in September 2009 which generated additional revenue of $5.7 million for us.

Multicolor large format press. Revenue for our multicolor large format presses increased by $12.9 million, or 31.3%, from $41.3 million during the nine months ended March 31, 2009 to $54.2 million during the nine months ended March 31, 2010, before adjustment for sales rebates. We believe the increased demand for our multicolor large format presses was partially a result of our increased marketing activities. In the nine months ended March 31, 2010, we participated in 69 exhibitions and trade shows, an increase of 31 exhibitions and trade shows when compared with the nine months ended March 31, 2009. We increased the sale of our new multicolor large format presses, Model DY474II and Model PZ-4660AL, which were introduced in November 2008 and February 2009, respectively. We increased the promotion of these new models through exhibitions and trade shows. Also, demand for these products increased as the customers became more familiar with the functionality of our products. The overall increase in revenue from these two models was $23.8 million. Revenue from the sale of these models was offset by the decrease in revenue from the sale of our existing models, DY474 and PZ-4660.

Cost of Revenue

Our cost of revenue can vary significantly from quarter to quarter, but generally it is in proportion to the number of products we sell in any given quarter. We typically incur higher costs in the first and second quarters of each fiscal year primarily due to the increase in the volume of our products sold.

Our cost of revenue increased by $9.2 million, or 24.6%, from $37.3 million for the nine months ended March 31, 2009 to $46.5 million for the nine months ended March 31, 2010. This increase was primarily due to an increase in the volume of our products sold during this period, particularly sales of our multicolor presses. This increase in sales contributed to the increase in consumption of raw materials and components across our pre-press and press product categories as our revenue increased by 23.2% from the nine months ended March 31, 2009 to the nine months ended March 31, 2010. As a percentage of revenue, our cost of revenue increased 0.5% from 46.4% for the nine months ended March 31, 2009 to 46.9% for the nine months ended March 31, 2010. The increase was mainly due to the increase in our depreciation expense as we have invested substantial amount of capital expenditures in the prior years.

Gross Profit

As a result of the factors above, our gross profit increased by $9.6 million, or 22.1%, from $43.1 million for the nine months ended March 31, 2009 to $52.7 million for the nine months ended March 31, 2010. However, our gross profit margins decreased 0.5% from 53.6% for the nine months ended March 31, 2009 to 53.1% for the nine months ended March 31, 2010. The decrease in our gross profit margins during this period was due to the increase in our depreciation expense as we have expended substantial amounts of capital expenditures in the prior years.

Selling Expenses

Our selling expenses increased by $2.1 million, or 30.7%, from $7.0 million for the nine months ended March 31, 2009 to $9.1 million for the nine months ended March 31, 2010. This increase was primarily due to an increase in salary expense to our sales professionals and in expenses related to advertising and exhibitions and trade shows as we participated in more number of exhibitions and trade shows during the nine months ended March 31, 2010 compared to the nine months ended March 31, 2009. In addition, our shipping expenses increased as we sold more units during the nine months ended March 31, 2010 compared to the nine months ended March 31, 2009.

As a percentage of revenue, our selling expenses increased 0.5% from 8.7% for the nine months ended March 31, 2009 to 9.2% for the nine months ended March 31, 2010. This increase was mainly due to the general increase of advertising rates by 20% to 120%. Also, we participated in more numbers of exhibitions and trade shows during the nine months ended March 31, 2010 compared to the nine months ended March 31, 2009 in an effort to expand our brand recognition and strengthen customer loyalty.

General and Administrative Expenses

General and administrative expenses increased by $5.5 million, or 164.0%, from $3.3 million for the nine months ended March 31, 2009 to $8.8 million for the nine months ended March 31, 2010. This increase was mainly due to $5.3 million share-based compensation expense related to our grant of nonvested share awards to certain employees in our management and administration division and share options to our CFO in November, 2009. In addition, our general and administrative expenses increased due to increases in professional fees. Our professional fees increased mainly due to engagement of an outside consultant for our Sarbanes-Oxley (SOX) Section 404 compliance. However, these increases were offset by the reduction of our allowance for doubtful accounts of $0.9 million.

As a percentage of revenue, general and administrative expenses increased 4.8% from 4.1% for the nine months ended March 31, 2009 to 8.9% for the nine months ended March 31, 2010. This increase was mainly due to our share-based compensation expense for restricted stock and stock options granted in November 2009.

Research and Development Expenses

Our research and development expenses stayed constant at $1.5 million for the nine months ended March 31, 2009 and 2010. For the nine months ended March 31, 2010, our research and development efforts were mainly focused on developing new press products as well as our planned packaging equipment, cold-set corrugated paper machine. We introduced a new multicolor small format press, Model DY 552, in September 2009 and a new single color large format press, Model DY 104, in March 2010. We are also in the process of developing two new products, a CTP system and a multicolor large format press. For the nine months ended March 31, 2009, our research and development efforts were focused on developing or enhancing several new and existing press products, which were all introduced to the market during the fiscal year ended June 30, 2009.

As a percentage of revenue, research and development expenses decreased 0.3% from 1.8% for the nine months ended March 31, 2009 to 1.5% for the nine months ended March 31, 2010.

Income from Operations

Income from operations increased by $1.9 million, or 6.1%, from $31.4 million for the nine months ended March 31, 2009 to $33.3 million for the nine months ended March 31, 2010. Excluding the impact of the share-based compensation expense of $6.1 million, our income from operations in the nine months ended March 31, 2010 would have been $39.3 million. We believe excluding the impact of our share-based compensation expense from our income from operations is non-GAAP financial measures as contemplated by SEC Regulation G, Rule 100. This non-GAAP measure is discussed further, and reconciled to their applicable U.S. GAAP-based measures, on page 33.

The increase in income from operations was due to the increased multicolor press sales, which generated higher revenue for us.

Change in Fair Value of Warrants

Loss from change in fair value of warrants increased by $5.9 million from gain of $0.2 million for the nine months ended March 31, 2009 to a loss of $5.7 million for the nine months ended March 31, 2010. Financial instruments represent warrants issued to unrelated investors from the 2006 private placement offering as well as warrants issued to the private placement offering agent and investment relations firm for their services.

The warrants are recorded as a liability on the balance sheet. The fair value of the warrants changes depending on the market price of the underlying common stock, exercise period, volatility and risk free rate. Any increase or decrease in the liability is recorded as income or loss in the income statement. We are subject to these increases or decreases until either all warrants are exercised or the exercise period has expired.

Other Expense

Our other expenses decreased by $0.9 million, or 62.6%, from $1.4 million for the nine months ended March 31, 2009 to $0.5 million for the nine months ended March 31, 2010. We had interest expense of $0.7 million from our short-term borrowing during the nine months ended March 31, 2010 as well as during the nine months ended March 31, 2009. Also, during the nine months ended March 31, 2009 in accordance with SEC Staff Accounting Bulletin, Topic 5A, we expensed certain expenses incurred in connection with our proposed initial public offering in the amount of $1.0 million due to market uncertainty. We did not have such expense during the nine months ended March 31, 2010 as we successfully completed our initial public offering in November, 2009.

Net Income Attributable to Noncontrolling Interest

Our noncontrolling interest increased by $0.1 million, or 37.5%, from $0.4 million for the nine months ended March 31, 2009 to $0.5 million for the nine months ended March 31, 2010. The increase in noncontrolling interest is mainly due to the increase of net income in Langfang Duoyuan and Hunan Duoyuan.

Provision for Income Taxes

Our provision for income taxes increased by $3.8 million, or 103.5%, from $3.7 million for the nine months ended March 31, 2009 to $7.5 million for the nine months ended March 31, 2010. This increase was primarily due to the increase in our revenue by 23.2% over the same period and the increase in income tax rate for Duoyuan China and Hunan Duoyuan. The income tax rate for Duoyuan China in 2008 was 12.5%. Beginning on January 1, 2009, the income tax rate for Duoyuan China increased to 25.0% as a result of the expiration of preferential tax treatments granted to Duoyuan China in prior years. Hunan Duoyuan was tax exempted in 2009. Beginning on January 1, 2010, the income tax rate for Hunan Duoyuan increased to 25.0% as a result of the expiration of preferential tax treatments granted to Hunan Duoyuan in prior years. Our effective tax rates were 12.4% for the nine months ended March 31, 2009 and 19.8% for the nine months ended March 31, 2010. Langfang Duoyuan began paying income tax in January 1, 2008 at a rate of 25.0%. Hunan Machinery was subject to an income tax rate of 25.0% upon its inception on January 8, 2010.

Net Income Attributable to Duoyuan Printing, Inc.

As a result of the foregoing, our net income attributable to Duoyuan Printing, Inc. decreased by $7.1 million, or 27.0%, from $26.1 million for the nine months ended March 31, 2009 to $19.0 million for the nine months ended March 31, 2010. This decrease was mainly due to our share-based compensation expense of $6.1 million for nonvested stock and stock options granted on November 2009 and change in fair value of warrants of $5.7 million. Excluding the impact of these expenses, our net income in the nine months ended March 31, 2010 would have been $30.8 million.

As a percentage of revenue, our net income attributable to Duoyuan Printing, Inc. decreased 13.2% from 32.4% for the nine months ended March 31, 2009 to 19.2% for the nine months ended March 31, 2010. This decrease was mainly due to our share-based compensation expense for nonvested stock and stock options granted in November 2009 and change in fair value of warrants. Excluding the impact of these expenses, as a percentage of revenue, our net income in the nine months ended March 31, 2010 would have been 31.1%.

We believe excluding the impact of our share-based compensation expense and change in fair value of warrants on our net income are non-GAAP financial measures as contemplated by SEC Regulation G, Rule 100. These non-GAAP measures are discussed further, and reconciled to their applicable U.S. GAAP-based measures, on page 33.

Liquidity and Capital Resources

As of March 31, 2010, we had cash and cash equivalents of $91.2 million, accounts receivable of $49.1 million and inventories of $29.5 million. Our working capital was approximately $150.3 million with a current ratio of 8.64 to 1 and our equity was $193.2 million, as of March 31, 2010. We relied primarily on cash flow from operating activities and our bank loans for our capital requirements for the nine months ended March 31, 2010. We also raised $41.9 million from our initial public offering on November 6, 2009. We believe that our existing cash, cash flow from operating activities and our bank loans will be sufficient to meet our presently anticipated cash needs for at least the next 12 months.

Sources and Uses of Cash

The following table sets forth cash flow data for the periods indicated:

		Nine Months Ended March 31,
		2009				2010
		(dollars in thousands)
Net cash provided by operating activities		$	19,972			$	19,358
Net cash used in investing activities		$	(16,090	)		$	(1,155	)
Net cash provided by financing activities		$	2,929			$	41,915

Net cash provided by operating activities. Net cash provided by operating activities decreased by $0.6 million, or 3.1%, from $20.0 million for the nine months ended March 31, 2009 to $19.4 million for the nine months ended March 31, 2010. The decrease in operating cash flow was mainly due to the increase in accounts receivable of $10.9 million and increase in inventory of $3.6 million during the nine months ended March 31, 2010. This decrease in cash flow was offset by an increase in cash flow from $17.9 million in net income during the nine months ended March 31, 2010, as well as adding back non-cash expenses, including share-based compensation, of $6.1 million, and a change in fair value of warrants of $5.7 million.

Our accounts receivable increased mainly due to our increased sales, and in particular, increased sale of our multicolor (small and large formats) presses. The inventory increased because we bought more raw materials for the future production of our products. During the nine months ended March 31, 2010, we recorded share-based compensation of $6.1 million and change in fair value of derivative instruments of $5.7 million. These expenses are added back because they both are non-cash transactions.

Net cash used in investing activities. Net cash used in investing activities decreased by $14.9 million, or 92.8%, from $16.1 million for the nine months ended March 31, 2009 to $1.2 million for the nine months ended March 31, 2010. The main uses of our cash in investing included payment of $0.3 million for purchase of testing equipment for our press products and $0.2 million for vehicles for our increased sales and marketing activities including meetings with our distributors as well as participation in exhibits and trade shows. In addition, we spent $0.7 million to make various improvements to our offices.

In connection with our entry into the cold-set corrugated paper machine business and efforts to upgrade our existing facilities, we expect to increase net cash used in investing activities. We began building a new factory in Langfang to manufacture cold-set corrugated paper machines. In addition, we plan to make additional capital expenditures during the remainder of 2010 to improve our manufacturing facility in our Hunan Duoyuan facility. We also plan to improve our foundry and our surface treatment workshop to realize additional manufacturing efficiencies.

Net cash provided by financing activities. Net cash provided by financing activities increased by $39.0 million, or 1,331.1%, from $2.9 million for the nine months ended March 31, 2009 to $41.9 million for the nine months ended March 31, 2010. On a net basis, we did not borrow any additional funds during this period. Also, in November 2009, we completed an initial public offering of 5,500,000 common shares at a price of $8.50 per common shares. The net proceeds from the IPO totaled $41.9 million.

As of March 31, 2010 and June 30, 2009, the carrying amounts for our bank loans were as follows:

		March 31, 2010				June 30, 2009
Loan from Bank of Agriculture, due March 11, 2011, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings		$	1,467,000			$	1,465,000
Loan from Bank of Agriculture, due July 2, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			2,934,000				2,930,000
Loan from Bank of Agriculture, due July 9, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			2,934,000				2,930,000
Loan from Bank of Agriculture, due July 16, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			4,107,600				4,102,000
Loan from Bank of Agriculture, due July 23, 2010, interest rate of 5.841% per annum, interest only paid quarterly, secured by land use rights and buildings			2,934,000				2,930,000
Total		$	14,376,600			$	14,357,000

As of March 31, 2010, we had five short-term loans in the aggregate amount of $14.4 million pursuant to our line of credit with Bank of Agriculture, Chongwen branch, in China. Each loan has an expiration date of no longer than one year. The aggregate loan amount of $14.4 million has an interest rate of 5.841%. Interest on our loans is paid quarterly. The loans outstanding as of March 31, 2010 are secured by our plant and land use rights for our Hunan facility. We plan to either repay the debt as it matures or refinance the debt. These loans were made under our RMB100.0 million ($14.6 million) revolving credit line. We are allowed to refinance these loans by entering into new short-term loan agreements.

Banks in China are subject to national banking regulations and may withdraw the credit line if regulations change. If the bank were to withdraw our credit line, we would use cash on hand or external financing to repay amounts outstanding. We provide our financial information as well as other documentation required by the bank on a quarterly basis. We have not had any indication from the bank that it intends to not renew the short-term loan agreements. We are continually monitoring our relationship with the Bank of Agriculture in light of the economic conditions and the recent changes in the government policies.

Capital Expenditures

Our capital expenditures for the nine months ended March 31, 2010 were $1.2 million. Our capital expenditures for the nine months ended March 31, 2010 were used primarily for purchase of testing equipment for our press products, vehicles for our increased sales and marketing and improvements to our offices. Our current planned capital expenditures are in connection with the launch of the proposed cold-set corrugated paper machine business. We began building a new factory in Langfang to manufacture cold-set corrugated paper machines. In addition, we plan to make additional capital expenditures during the remainder of 2010 for improvement of our manufacturing facility in our Hunan Duoyuan facility. We plan to improve our foundry and our surface treatment workshop to realize additional manufacturing efficiencies.

Our future capital requirements will depend on many factors including our rate of revenue growth, the timing and extent of spending to support research and development efforts, the expansion of manufacturing and sales activities and the introduction of new products. As we have in connection with our anticipated launch of our cold-set corrugated paper machine, we may enter into agreements or letters of intent with respect to potential investments in, or acquisitions of, complementary businesses, products or technologies, which may require us to seek additional equity or debt financing. The sale of additional equity securities or convertible debt securities would result in additional dilution to our shareholders. Additional debt would result in increased interest expense and could result in covenants that would restrict our operations. We have not made arrangements to obtain additional financing and additional financing, if required, may be unavailable in amounts or on terms acceptable to us, if at all.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements.

Contractual Obligations

The contractual obligations presented in the table below represent our estimates of future payments under fixed contractual obligations and commitments as of March 31, 2010. Changes in our business needs or interest rates, as well as actions by third parties and other factors, may cause these estimates to change. Because these estimates are complex and necessarily subjective, our actual payments in future periods are likely to vary from those presented in the table.

						Less than 1								3-5				More than 5
Obligations		Total				Year				1-3 Years				Years				Years
		(in thousands)
Long Term Debt Obligations		$	—			$	—			$	—			$	—			$	—
Capital Lease Obligations		$	—			$	—			$	—			$	—			$	—
Operating Lease Obligations		$	990			$	413			$	577			$	—			$	—
Purchase Obligations		$	15,379			$	15,379			$	—			$	—			$	—
Repayment Obligations under Line of Credit		$	14,377			$	14,377			$	—			$	—			$	—
Total		$	30,746			$	30,169			$	577			$	—			$	—

We had an office lease agreement with Duoyuan Information Terminal Manufacture (Langfang) Co., Ltd., a related party. This lease expired on December 31, 2009. We renewed our lease with Duoyuan Information Terminal Manufacture (Langfang) Co., Ltd., a related party. The new lease commences on January 1, 2010 and will expire on December 31, 2012. The rent commitment on the new lease is $0.9 million. In addition, we lease sales offices in sixteen Chinese provinces, with the latest lease to expire on December 2010. The remaining rent commitment was $0.1 million as of March 31, 2010.

In August 2008, Langfang Duoyuan entered into a packing material equipment purchase agreement with Beijing Jingneng Mechanical & Electrical Equipments Ltd. and agreed to pay the remaining 40% upon completion. As of March 31, 2010, $0.4 million, or 5% of the total commitment, remains on this agreement.

In February, 2010, the Company entered into a construction agreement with China Construction Sixth Engineering Bureau Civil Engineering Co. Ltd. to build a new manufacturing facility in Langfang. As of March 31, 2010, approximately $15 million remains outstanding on this agreement.

We plan to finance our contractual obligations with cash from our operations and from our short term borrowing.

Other than the contractual obligations set forth and described above, we do not have any other operating lease obligations, purchase obligations, or repayment obligations under line of credit.

Critical Accounting Policies

Our critical accounting principles remain consistent with those reported in our annual report on Form 10-K for the year ended June 30, 2009, as filed with the SEC and as amended.

Recently Issued Accounting Pronouncements

See Note 2 to our Notes to Condensed Consolidated Financial Statements for the period ended March 31, 2010 (Unaudited) for discussion of recent accounting pronouncements.

Non-GAAP Financial Measures

In addition to the results reported in accordance with U.S. GAAP, we have included in this filing certain non-GAAP financial measures, including “non-GAAP operating income” and “non-GAAP net income attributable to Duoyuan Printing, Inc.” These financial measures are not consistent with U.S. GAAP because they do not reflect certain share-based compensation expenses and changes in fair value of warrants. We provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures as calculated and presented in accordance with U.S. GAAP.

We believe that these non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to our financial condition and results of operations. We believe that these non-GAAP measures, in combination with our financial results calculated in accordance with U.S. GAAP, provide investors with additional perspective regarding the impact of certain share-based compensation expenses and changes in fair value of derivative instruments. We further believe that these excluded items do not accurately reflect the underlying performance of our continuing operations for the periods in which they are incurred, even though some of these excluded items may be incurred and reflected in our U.S. GAAP financial results in the foreseeable future.

In order to provide a better understanding of the impact that certain specified items had on our operations, the analysis that follows reports “non-GAAP operating income” and “non-GAAP net income attributable to Duoyuan Printing, Inc.” for the periods indicated, excluding certain share-based compensation expenses and changes in fair value of derivative instruments. We believe these financial measures are non-GAAP financial information as contemplated by SEC Regulation G, Rule 100, and the accompanying table reconciles these measures to the corresponding U.S. GAAP-based measures presented in our consolidated statements of operations.

DUOYUAN PRINTING, INC. AND SUBSIDIARIES
(FORMERLY KNOWN AS ASIAN FINANCIAL, INC.)
RECONCILIATION OF GAAP TO NON-GAAP RESULTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2010 AND 2009

		Three months ended								Nine months ended
		March 31								March 31
		2010				2009				2010				2009
Operating income		$	6,110,607			$	6,239,462			$	33,284,171			$	31,356,463
Adjustments:
Stock-based compensation			3,732,955				—				6,057,064				—
Non-GAAP operating income		$	9,843,562			$	6,239,462			$	39,341,235			$	31,356,463
Net Income attributable to Duoyuan Printing, Inc.		$	1,105,853			$	4,910,981			$	19,030,840			$	26,067,717
Adjustments:
Change in fair value of warrants			2,452,121				(30,271	)			5,686,118				(194,347	)
Stock-based compensation			3,732,955				—				6,057,064				—
Non-GAAP net income attributable to Duoyuan Printing, Inc.		$	7,290,929			$	4,880,710			$	30,774,022			$	25,873,370