10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________

FORM 10-Q

_____________________________

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

For the quarterly period ended March 31, 2012

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

For the transition period from ______to______.

HUIXIN WASTE WATER SOLUTIONS, INC.

(Exact name of registrant as specified in Charter)

Cayman Islands	000-52339	N/A
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employee Identification No.)

#99 Jianshe Road 3, Pengjiang District, Jiangmen City

Guangdong Province, 529000

People’s Republic of China

 (Address of principal executive office, Zip Code)

 _______________

 (86) (750) 395-9988

 (Registrant’s telephone number, including area code)

_______________

Not Applicable.

 (Former name, former address and former fiscal year, if changed since last report)

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 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. Yesx 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 x 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o                                                                                            Accelerated filer o   

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common equity: As of May 11, 2012, 19,600,305 ordinary shares, par value $0.00018254172 per share are issued and outstanding.

HUIXIN WASTE WATER SOLUTIONS, INC.

QUARTERLY REPORT ON FORM 10-Q

March 31, 2012

TABLE OF CONTENTS

PART 1 - FINANCIAL INFORMATION
		PAGE
Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II - OTHER INFORMATION
Item 6.	Exhibits	31
SIGNATURES		32

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, 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 (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

CERTAIN TERMS USED IN THIS QUARTERLY REPORT ON FORM 10-Q

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our Company,” or “the Company” are to the combined business of Huixin Waste Water Solutions, Inc. and its consolidated subsidiaries, Wealth Environmental Protection, Wealth Environmental, Jiangmen Huiyuan, and its variable interest entities, Jiangmen Wealth Water, Guizhou Yufeng, and Shangxi Wealth.

In addition, unless the context otherwise requires and for the purposes of this report only, references to the following terms have the meaning assigned to each of them hereof:

· “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

· “Guizhou Yufeng” refers to Guizhou Yufeng Melt Co., Ltd., a PRC limited company;

· “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

· “Jiangmen Huiyuan” refers Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. Ltd ., a wholly foreign owned enterprise organized under the PRC laws;

· “Jiangmen Wealth Water” refers to Jiangmen Wealth Water Purifying Agent Co., Ltd. , a PRC limited liability company;

· “Operating Company” or  “Operating Companies” refers to Jiangmen Huiyuan, Jiangmen Wealth Water, Guizhou Yufeng and Shangxi Wealth;

· “PRC,” “China,” and “Chinese,” refer to the People’s Republic of China;

· “Renminbi” and “RMB” refer to the legal currency of China;

· “SEC” refers to the United States Securities and Exchange Commission;

· “Securities Act” refers to the Securities Act of 1933, as amended;

· “Shanxi Wealth” refers to Shangxi Wealth Aluminate Materials Co., Ltd., a PRC limited company;

· “U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States;

· “Wealth Environmental Protection” refers to Wealth Environmental Protection Group, Inc., a British Virgin Islands company; and

· “Wealth Environmental Technology” refers to Wealth Environmental Technology Holding, Ltd., a Hong Kong company.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Page
Condensed Consolidated Balance Sheets as of March 31, 2012 (Unaudited) and December 31, 2011	2
Condensed Consolidated Statements of Income for the three months ended March 31, 2012 and 2011 (Unaudited)	3
Condensed Consolidated Statements of Comprehensive Income for the three months ended  March 31, 2012 and 2011 (Unaudited)	4
Condensed Consolidated Statement of Shareholders' Equity for the three months ended March 31, 2012 (Unaudited)	5-6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	8 – 21

1

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	March 31,		December 31,
	2012 (UNAUDITED)		2011
ASSETS
Current assets:
Cash and cash equivalents	$	58,769,051	$	26,383,537
Restricted cash		370,000		670,000
Accounts receivable		4,232,715		2,372,832
Note receivable		-		25,187,727
Interest receivable		-		156,085
Inventories		873,644		957,509
Advances to suppliers		1,302,629		3,825,386
Other current assets		14,258		14,168
Total current assets		65,562,297		59,567,244
Property, plant and equipment and land and mining rights, net		14,412,721		14,627,533
Total assets	$	79,975,018	$	74,194,777
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,759,466	$	1,855,530
Accrued expenses		1,142,965		1,533,878
Due to shareholders		15,226		15,226
Value added taxes payable		934,091		497,581
Other taxes payable		138,253		90,150
Income tax payable		1,712,250		1,286,537
Total current liabilities		5,702,251		5,278,902
Deferred income taxes		318,009		311,339
Total liabilities		6,020,260		5,590,241
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.000128 par value, 781,250 shares
authorized, 444,804 shares
issued and outstanding on March 31, 2012
and December 31, 2011		57		57
Common stock: $0.00018254172 par value, 39,062,500
shares authorized, 19,600,305 shares issued
and outstanding on March 31, 2012 and December 31, 2011		3,578		3,578
Additional paid-in capital		24,283,222		24,283,222
Accumulated other comprehensive income		6,932,079		6,492,658
Retained earnings (the restricted portion of retained earnings
is $496,396 on March 31, 2012 and December 31, 2011)		42,735,822		37,825,021
Total shareholders’ equity		73,954,758		68,604,536
Total liabilities and shareholders’ equity	$	79,975,018	$	74,194,777

The accompanying notes form an integral part of these consolidated financial statements

2

 HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended March 31,
	2012		2011
Net revenue	$	17,757,465	$	16,760,970
Cost of revenue		9,743,823		8,510,190
Gross profit		8,013,642		8,250,780
Operating expenses:
Selling and marketing		655,797		507,409
General and administrative		1,162,046		1,046,598
Research and development		151,727		136,959
Total operating expenses		1,969,570		1,690,966
Income from operations		6,044,072		6,559,814
Other income:
Interest income		567,587		28,268
Total other income		567,587		28,268
Income before provision for income taxes		6,611,659		6,558,082
Provision for income taxes		1,700,858		1,677,078
Net income		4,910,801		4,911,004
Less: cumulative dividends on preferred stock		100,081		100,081
Net income attributable to common shareholders	$	4,810,720	$	4,810,923
Net income per common share - basic	$	0.25	$	0.25
Net income per common share - diluted	$	0.23	$	0.23
Weighted average number of common shares outstanding - basic		19,600,305		19,600,305
Weighted average number of common shares outstanding - diluted		21,824,325		21,824,325

The accompanying notes form an integral part of these consolidated financial statements

3

HUIXIN WASTE WATER SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended March 31,
	2012			2011
Net income		$	4,910,801		$	4,911,004
Other comprehensive income -
foreign currency translation adjustments			439,421			288,738
Comprehensive income		$	5,350,222		$	5,199,742

The accompanying notes form an integral part of these consolidated financial statements

4

HUIXIN WASTE WATER SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three Months Ended March 31, 2012

									Additional
	Preferred Stock				Common Stock				Paid-In
	Shares		Amount		Shares		Amount		Capital
Balance as of
December 31, 2011		444,804	$	57		19,600,305	$	3,578	$	24,283,222
Net income		-		-		-		-		-
Other comprehensive
income - foreign
currency translation
adjustments		-		-		-		-		-
Balance as of
March 31, 2012		444,804	$	57		19,600,305	$	3,578	$	24,283,222

The accompanying notes form an integral part of these consolidated financial statements

5

HUIXIN WASTE WATER SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three Months Ended March 31, 2012

	Accumulated
	Other									Total
	Comprehensive			Retained Earnings						Shareholders’
	Income			Restricted			Unrestricted			Equity
Balance as of
December 31, 2011		$	6,492,658		$	496,396		$	37,328,625		$	68,604,536
Net income			-			-			4,910,801			4,910,801
Other comprehensive
income - foreign
currency translation
adjustments			439,421			-			-			439,421
Balance as of
March 31, 2012		$	6,932,079		$	496,396		$	42,239,426		$	73,954,758

The accompanying notes form an integral part of these consolidated financial statements

6

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	Three Months Ended March 31,
	2012			2011
Cash flows from operating activities:
Net income	$	4,910,801		$	4,911,004
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		330,625			313,881
Deferred income taxes		4,703			74,035
Changes in operating assets and liabilities:
Accounts receivable		(1,849,116	)		(1,119,958	)
Interest receivable		157,443			-
Inventories		90,157			(494,264	)
Advances to suppliers		2,553,005			-
Other current assets		-			6,868
Accounts payable		(108,340	)		2,161,653
Accrued expenses		(381,562	)		(532,289	)
Value added taxes payable		434,361			515,708
Other taxes payable		47,641			98,482
Income tax payable		418,514			575,124
Net cash provided by operating activities		6,608,232			6,510,244
Cash flows from investing activities:
Purchase of property, equipment and improvement		(22,168	)		(39,164	)
Proceeds collected on note receivable		25,406,908			-
Net cash provided by (used in) investing activities		25,384,740			(39,164	)
Cash flows from financing activities:
Decrease in restricted cash		300,000			667,203
Net cash provided by financing activities		300,000			667,203
Effect of exchange rate changes on cash and cash equivalents		92,542			207,464
Net increase in cash and cash equivalents		32,385,514			7,345,747
Cash and cash equivalents at the beginning of period		26,383,537			33,910,457
Cash and cash equivalents at the end of period	$	58,769,051		$	41,256,204
Supplemental disclosure of cash flow information:
Income taxes paid	$	1,277,641		$	1,677,078
Non-cash investing and financing activities:
Decrease in balance of due from shareholders
Through declaration and payment of dividend	$	-		$	290,072

The accompanying notes form an integral part of these consolidated financial statements

7

 HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) Organization, Nature of Business and Basis of Presentation

Huixin Waste Water Solutions, Inc. (“the Company” or “Huixin”) was incorporated in the Cayman Islands on December 7, 2006. The Company was originally organized as a “blank check” shell company to investigate and acquire a target company or business desiring to be a publicly held corporation. Wealth Environmental Protection Group, Inc. (“WEP”) was incorporated under the laws of the British Virgin Islands on June 3, 2010 to serve as an investment holding company. On December 15, 2010, the Company (i) closed a share exchange transaction pursuant to which it became the 100% parent of WEP, and (ii) assumed the operations of WEP and its subsidiaries.

The share exchange transaction has been treated as a recapitalization of WEP, with Huixin emerging as the surviving legal entity and WEP is considered as the acquirer for accounting purpose.  Prior to the recapitalization, the Huixin had essentially no assets or liabilities and issued approximately 96% of its outstanding shares to the shareholders of WEP and their designees in the recapitalization. The historical consolidated financial statements of WEP are retroactively presented as the financial statements of Huixin.   A summary of the Company subsidiaries is currently as follows:

	Domicile and
	Date of	Paid -In		Effective
Name and Location	Incorporation	Capital		Ownership	Activities
Wealth Environmental Protection Group, Inc  (“WEP”)	British Virgin Islands June 3, 2010	$	7,000	100% Owned	Holding Company
Wealth Environmental Technology Holding Ltd.(“Wealth Technology”) Hong Kong	Hong Kong June 18, 2010	$	1,299	100% Owned	Holding Company
Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. (“Jiangmen Huiyuan”) Jiangmen, Guandong Province	Peoples Republic Of China (“PRC”) July 22, 2010	$	15,082	100% Owned - Wholly Foreign Owned Entity (“WFOE”)	Holding Company
Jiangmen Wealth Water Purifying Agent Co., Ltd (“Jiangmen Wealth Water”)  Jiangmen, Guandong Province	PRC April 25, 2003	$	4,049,060	100% Control  Through Contractual Arrangements	Manufacturing of water purifying agents
Guizhou Yufeng Melt Co., Ltd. (“Guizhou Yufeng”) Guizhou Province	PRC  March 25, 2005	$	4,233,854	100% Control Through Contractual Arrangements	Manufacturer of HAC Powder using bauxite and limestone from mines controlled under mining rights agreements
Shangxi Wealth Aluminate Materials Co., Ltd (“Shangxi Weath”) Shangxi Province	PRC April 8, 2004	$	6,786,056	100% Control Through Contractual Arrangements	Manufacturer of HAC Powder using bauxite and limestone from mines controlled under mining rights agreements

8

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) Organization, Nature of Business and Basis of Presentation, continued

On September 29, 2010, Jiangmen Huiyuan entered into a series of contractual agreements with Jiangmen Wealth Water, and its shareholders, in which Jiangmen Huiyuan effectively assumed management of the business activities of Jiangmen Wealth Water and has the right to appoint all executives and senior management and the members of the board of directors of Jiangmen Wealth Water. The contractual arrangements are comprised of a series of agreements, including an Exclusive Business Cooperation Agreement, Exclusive Option Agreement, Equity Interest Pledge Agreement and Power of Attorney, through which Jiangmen Huiyuan has the right to provide exclusive complete business support and technical and consulting service to Jiangmen Wealth Water for an annual fee in the amount of Jiangmen Wealth Water’s yearly net profits after tax. Additionally, Jiangmen Wealth Water’s shareholders have pledged their rights, titles and equity interest in Jiangmen Wealth Water as security for Jiangmen Huiyuan to collect consulting and services fees provided to Jiangmen Wealth Water through an Equity Pledge Agreement. In order to further reinforce Jiangmen Huiyuan’s rights to control and operate Jiangmen Wealth Water, the shareholders of Jiangmen Wealth Water have granted Jiangmen Huiyuan the exclusive right and option to acquire all of their equity interests in Jiangmen Wealth Water through an Exclusive Option Agreement.

Jiangmen Wealth Water owns all of the issued and outstanding capital stock of Guizhou Yufeng, and Shanxi Wealth. During the years ended December 31, 2009 and 2008, Mr. Tan and his spouse, Ms. Hong Yu Du (“Ms. Du”) directly or through an affiliated company, had controlling equity interests in Jiangmen Wealth Water, Guizhou Yufeng and Shanixi Wealth.   In August and September 2010, through a restructuring process, Jiangmen Wealth Water paid $74,705 and $463,160 to acquire 100% equity interest of Guizhou Yufeng and 62% equity interest of Shainxi Wealth, respectively. On December 27, 2010 the Company acquired the remaining 38% equity interest of Shainxi Wealth owned by Mr. Tan through declared a dividend payable of $290,072 to Mr. Tan on Jan 3, 2011.  Mr. Tan and Ms. Du collectively owned 100% of Jiangmen Wealth Water and its subsidiaries after this restructuring.

Based on Jiangmen Huiyuan’s contractual relationship with Jiangmen Wealth, the Company has determined that a variable interest entity has been created and therefore Jiangmen Wealth is considered a consolidated subsidiary of the Company. Additionally, because all of the companies are currently under common control, the series of agreements and restructurings referred to above have been accounted for as a reorganization of the entities and the financial statements have been prepared as if the reorganization had occurred retroactively.  Accordingly these financial statements present the consolidated operating results, assets and liabilities of Wealth and its subsidiaries, which are collectively referred to as the “Company”.

The Company produces and sells water purifying agents and high-performance aluminate calcium (HAC) powder, the core ingredient of its water purifying agents in China.

The accompanying condensed consolidated balance sheet as of December 31, 2011, which has been derived from the audited consolidated financial statements and the accompanying unaudited condensed consolidated financial statements, has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations and the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the financial position of Huixin as of March 31, 2012, the results of operations, and cash flows for the three-month periods ended March 31, 2012 and March 31, 2011. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2011. The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results which may be expected for the entire fiscal year.

9

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(2) Summary of Significant Accounting Policies

Reverse Stock Split

On December 15, 2011, the Board of Directors and the stockholders of the Company approved and implemented a reverse stock split in a ratio of 1 share to 1.42610718 shares of the Company’s common stock. Par value of the common stock has been changed to $0.00018254172 per share. Accordingly, all references to numbers of common shares and per-share data in the accompanying condensed consolidated financial statements and notes have been retroactively adjusted to reflect the effects of the reverse stock split.

Principles of Consolidation

These condensed consolidated financial statements present the consolidated accounts of WEP and its subsidiaries, Wealth Technology, Jiangmen Huiyan, and its variable interest entities, Jiangmen Wealth Water, Guizhou Yunfeng and Shanxi Wealth, which are collectively referred to as the “Company”. This presentation is based upon the retroactive treatment of series of agreements and restructurings of companies under common control as described in Note (1).

All inter-company transactions and balances have been eliminated in preparation of the condensed consolidated financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include collectibility of accounts receivable, useful lives and impairment of property and equipment, mineral reserves available for mining production, total expected use of mineral reserves and value and realizability of intangible assets.  Actual results could differ from those estimates.

Segments

For the three months ended March 31, 2012 and 2011, the Company’s operations have been broken down into segment based on production facility, in the manner that management reviews operations on a regular basis. All our operations revolve around the production of water purification agents made to similar specifications. All of the Company’s segments have similar assets, customers and distribution methods, and their economic characteristics are similar with regard to their gross margin percentages.

Currency Reporting

The Company’s operations in the PRC use the local currency, Renminbi (“RMB”), as their functional currency, whereas amounts reported in the accompanying condensed consolidated financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise. As such, the condensed consolidated balance sheets of the Company have been translated into U.S. dollars at the current rates as of March 31, 2012  and December 31, 2011 and the condensed consolidated statements of income have been translated into U.S. dollars at the weighted average rates during the periods the transactions were recognized.

The resulting translation gain adjustments are recorded as other comprehensive income in the condensed consolidated statements of comprehensive income and as a separate component of equity in the condensed consolidated balance sheets.

10

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(2) Summary of Significant Accounting Policies, continued

Revenue Recognition

The Company’s main source of revenue is generated from sales of water purifying agents and high-performance calcium aluminates powder. The Company recognizes revenue when there is persuasive evidence of a sales arrangement, delivery and acceptance by the customer has occurred, the sales price is fixed or determinable, and collection is probable. Under the Company’s typical sales terms for both water purifying agents and HAC powder, the Company recognizes revenue when product is shipped from its production facilities because shipments are made FOB shipping point with the customer bearing all shipping costs and title and risk of loss transferring to the customer upon shipment. Sales terms for water purifying agents and HAC powder do not include customer acceptance provisions, the right of return (unless the product is proven to be defective) or other post-delivery obligations. The Company has not experienced any significant returns associated with defective product.

Value added taxes represent amounts collected on behalf of specific government agencies that require remittance of tax by specified dates. Value added taxes are collected at the time of sales and are detailed on invoices provided to customers. The Company accounts for value added taxes on a net basis. The Company recorded and paid sales related taxes based on a percentage of the value added taxes and reported the revenue net of the sales related taxes.

Major Customers

During the three months ended March 31, 2012 and 2011, there was no customer accounted for 10% or more of our net revenue.

Major Suppliers

During the three months ended March 31, 2012 and 2011, certain suppliers accounted for more than 10% of the Company’s total net purchases as follows:

	Three Months Ended
	March 31, 2012			March 31, 2011
Supplier 1		19	%		17	%
Supplier 2		15	%		12	%

Value-Added Tax (“VAT”)

Enterprises or individuals, who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value-added tax in accordance with the PRC laws. The value-added tax standard rate for sales made by the Company is 17% of the gross sales price and the Company records its revenue net of VAT. 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 the sales of the finished products. When the Company purchases raw materials, the VAT incurred by the Company, and subject to credit, generally varies from 6% to 17% depending on the type of materials or services purchased. There is a significant difference in the VAT that the Company incurs on purchases and the amount the Company bills to customers for sales of HAC powder and water purifying agents due to the fact that the Company converts raw materials from their mined state to finished product and is responsible for the substantial portion of increased value in its products.

11

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(2) Summary of Significant Accounting Policies, continued

Value-Added Tax (“VAT”), continued

Following is an analysis of VAT billed to the Company on purchases, VAT billed by the Company on sales and VAT remitted to PRC during the three months ended March 31, 2012 and 2011, with information related to the liability for uncollected or unremitted VAT at March 31, 2012 and 2011:

	Three Months			Three Months
	Ended			Ended
	March 31, 2012			March 31, 2011
VAT billed to customers for sales during the period	$	3,452,348		$	3,244,561
Less: VAT billed to the Company for purchases during the period		1,201,546			1,265,190
Net VAT on transactions took place during the period		2,250,802			1,979,371
Amount remitted to the PRC		(1,814,292	)		(1,461,187	)
VAT payable at beginning of period		497,581			389,053
VAT payable at period end	$	934,091		$	907,237

	As of		As of
	March 31,		March 31,
	2012		2011
Liabilities for taxes collected but not remitted	$	319,081	$	648,696
Liabilities for taxes billed to customers but not collected
from the customers or remitted to PRC		615,010		258,541
VAT payable at period end	$	934,091	$	907,237

New Accounting Pronouncements Not Yet Adopted

In December 2011, the FASB issued ASU No. 2011-11, Topic 210 - Balance Sheet: Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 will be effective for fiscal years beginning on or after January 1, 2013, with retrospective application for all comparable periods presented. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.

12

 HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(3) Note Receivable

On August 29, 2011, the Company entered into a secured note receivable agreement with a non-related party in the amount of $14,087,748 (RMB90,000,000) which was increased to approximately $25,187,727 (RMB160,000,000) in December 2011. The note carried an annual interest rate of 9%. This note originally expired on November 28, 2011 but was extended to March 31, 2012, and was secured by the debtor’s land use right, certain tangible assets and all the business operation rights. Interest receivable related to this note amounted to $156,085 as of December 31, 2011. As of March 28, 2012, the note receivable and interest receivable were fully repaid.

(4) Earnings Per Share

Basic net earnings per share is computed using the weighted-average number of common shares outstanding. The dilutive effect of potential common shares outstanding is included in diluted net earnings per share. The computations of basic net earnings per share and diluted net earnings per share for three months ended March 31, 2012 and 2011 are as follows:

	Three Months Ended March 31,
	2012		2011
Net income attributable to common shareholders - Basic	$	4,810,720	$	4,810,923
Add: cumulative dividends attributable to
6% convertible preferred stock		100,081		100,081
Net income attributable to
common shareholders - Diluted	$	4,910,801	$	4,911,004
Weighted average number of common shares
outstanding - Basic		19,600,305		19,600,305
Dilutive effect of preferred stock conversion		2,224,020		2,224,020
Weighted average number of common shares
outstanding - Diluted		21,824,325		21,824,325
Earnings per share:
Basic	$	0.25	$	0.25
Diluted	$	0.23	$	0.23

13

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(5) Restricted Cash

The Company has certain restricted cash as a result of the execution of the following agreements:

 Holdback Escrow Agreement

In connection with the Private Placement took place in December 2010, the Company entered into a Holdback Escrow Agreement with Anslow & Jaclin, LLP (“A&J”), the escrow agent, and AAI, as investor representative (the “Holdback Escrow Agreement”), pursuant to which $2,167,203 was deposited with the escrow agent to be distributed upon the satisfaction of certain covenants set forth in the Subscription Agreement. Pursuant to the Holdback Escrow Agreement, the $1,500,000 shall be released to the Company upon the hiring of a chief financial officer on terms acceptable to AAI (the “Chief Financial Officer Holdback”) and $667,203 shall be released to us upon appointment of the required independent directors to our board of directors. In March 2011, pursuant to the Holdback Escrow Agreement, $667,203 was released to us upon appointment of the required independent directors to our board of directors.

On May 20, 2011, the Holdback Escrow Agreement was amended to provide that as soon as practicable following the Offering, the Company shall employ a chief financial officer meeting certain requirements and to permit the “Lead Investor” (as defined in the Subscription Amendment) to authorize the escrow agent appointed pursuant to the Holdback Escrow Agreement to disburse a portion of the Chief Financial Officer Holdback, such portion not to exceed $750,000 in the aggregate, to the Company (a “Good Faith Disbursement”). Pursuant to Holdback Escrow Agreement, as amended on May 20, 2011, $750,000 was released to the Company as Good Faith Disbursement. On December 1, 2011, the Holdback Escrow Agreement was further amended to provide for a series of disbursements from the Chief Financial Officer Holdback to the Company of $100,000 commencing on December 1, 2011 and continuing on the first day of each successive month thereafter until the remaining balance of the Chief Financial Officer Holdback is disbursed to the Company (the “Monthly Disbursements”). As of March 31, 2012 and December 31, 2011, $250,000 and $550,000, respectively, remained unreleased.

Investor Relations Escrow Agreement

The Company entered into an investor relations escrow agreement with Anslow & Jaclin, LLP, the escrow agent, and Access America Investments, LLC, as representative of the investors, pursuant to which $120,000 was deposited with the escrow agent to be distributed in incremental amounts to pay our investor relations firm, the choice of which is subject to the approval of Access America Investments, LLC, which approval cannot be unreasonably withheld. As of March 31, 2012 and December 31, 2011, $120,000 remained unreleased as the Company has not hired any investor relations firm.

14

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(6) Inventories

A summary of inventories is as follows:

	March 31, 2012		December 31, 2011
Raw Materials	$	629,791	$	674,114
Work in progress		49,278		-
Finished goods		194,575		283,395
	$	873,644	$	957,509

Inventories are stated at the lower of cost or market. The weighted average cost method is used to account for the Company inventories. 

(7) Property, Plant and Equipment and Land and Mining Rights

A summary of property, plant and equipment and land and mining rights is as follows:

	March 31, 2012		December 31, 2011
Leasehold improvement	$	3,342,141	$	3,321,044
Production equipment		6,761,242		6,715,532
Furniture and fixtures		446,881		441,857
Automobiles		332,176		313,333
Land use rights		2,290,809		2,276,347
Mining rights		9,030,132		8,973,128
		22,203,381		22,041,241
Less: Accumulated depreciation		7,790,660		7,413,708
	$	14,412,721	$	14,627,533

15

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(7) Property, Plant and Equipment and Land and Mining Rights, continued

Depreciation and amortization expense was $330,625 and $313,881 for the three months ended March 31, 2012 and 2011, respectively.  A breakdown of depreciation and amortization expenses is summarized as follows:

	Three Months Ended March 31,
	2012		2011
Depreciation of plant, equipment and improvements	$	185,678	$	170,378
Amortization of land use rights		12,658		12,130
Amortization of mining rights		132,289		131,373
	$	330,625	$	313,881

At March 31, 2012 and December 31, 2011, the Company holds mining rights to two limestone mines and two bauxite mines from which they are allowed to produce:

•   300,000 tons of limestone, from which the calcium needed for production of its products is derived

•   350,000 tons of bauxite, from which the aluminum for production of its products is derived.

During the three months ended March 31, 2012 and 2011, the Company had production from its limestone and bauxite mines as follows (in tons):

	Three Months Ended March 31,
	2012		2011
Limestone		23,643		24,501
Bauxite		57,304		59,069

(8) Income Taxes

The Company has not recorded a provision for U.S. federal income tax for the three months ended March 31, 2012 and 2011 because substantially all of the Company’s operations are conducted in the PRC.

On March 16, 2007, the National People’s Congress of China approved the new Corporate Income Tax Law of the PRC (New CIT Law), which is effective from January 1, 2008. Under the New CIT Law, the statutory corporate income tax rate applicable to most companies, including the Company is 25%. In accordance with the New CIT Law, enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC territory are considered PRC resident enterprises and subject to the PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. As of March 31, 2012, no detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of March 31, 2012, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. However, the Company has analyzed the applicability of this law, as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012, and the Company has accrued and paid PRC tax on such basis. The Company will continue to monitor changes in the interpretation or guidance of this law.

16

 HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(8) Income Taxes, continued

The New CIT Law also imposes a 10% withholding income tax for dividends distributed by a foreign invested enterprise to its immediate holding company outside China. Such dividends were exempted from PRC tax under the previous income tax law and regulations.

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises had completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities.

The Company conducts substantially all of its business in PRC and it is subject to PRC income taxes at a 25% statutory tax rate in 2012 and 2011.  Following is a reconciliation of the Company’s income tax provision of $1,700,858 and $1,677,078 for the three months ended March 31, 2012 and 2011, respectively, respectively, to the expected US statutory rate of 34%:

	Three Months Ended March 31,
	2012			2011
Computed tax at the U.S. federal statutory rate of 34%	$	2,247,964		$	2,229,748
Tax rate difference between the US and PRC on foreign earnings		(595,049	)		(590,227	)
Change in valuation allowance		65,131			40,878
Other		(17,188	)		(3,321	)
	$	1,700,858		$	1,677,078

17

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(8) Income Taxes, continued

At March 31, 2012 and December 31, 2011, differences between the basis of assets and liabilities reported in the accompanying financial statements and those recognized for tax reporting purposes in the PRC, and the related deferred taxes were as follows:

	As of			As of
	March 31,			December 31,
	2012			2011
Deferred tax assets:
Net operating losses	$	1,130,862		$	1,065,731
Liability for social insurance premiums and provident housing funds		75,000			75,000
Total deferred tax assets		1,205,862			1,140,731
Deferred tax liabilities:
Difference between book and tax amortization on mining rights		(393,009	)		(386,339	)
Total deferred tax liabilities		(393,009	)		(386,339	)
Net deferred tax assets before valuation allowance		812,853			754,392
Valuation allowance		(1,130,862	)		(1,065,731	)
Net deferred tax liabilities	$	(318,009	)	$	(311,339	)

The Company accounts for uncertainty in income taxes in accordance with applicable accounting standards, which prescribe a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These accounting standards also provide guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.

(9) Shareholders’ Equity

General Reserve Fund

In accordance with the PRC Regulations on Enterprises with Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A WOFE is required to allocate at least 10% of its annual after-tax profit to the General Reserve Fund until the balance of such fund has reached 50% of its respective registered capital.  A non- wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare and Bonus Fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. As a result, $496,396 has been appropriated to the accumulated statutory reserves (included in the retained earnings) by the Company as of March 31, 2012 and December 31, 2011 and the balance represents a fully funded General Reserve Fund:

18

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(9) Shareholders’ Equity

Following is an analysis of the general fund by subsidiary at March 31, 2012 and December 31, 2011:

			General
	Registered Capital		Reserve Fund
Jiangmen Huiyuan	$	-	$	-
Jiangmen Wealth Water		61,981		38,801
Guizhou Yufeng		61,981		39,211
Shangxi Wealth		619,806		418,384
	$	743,768	$	496,396

(10) Related Party Balances and Transactions

During the three months ended March 31, 2011, the Company declared and paid a dividend in the amount of $290,072 to Mr. Ming Zhou Tan (“Mr. Tan”) to acquire his remaining 38% equity interest in Shanxi Wealth. As of March 31, 2012 and December 31, 2011, amount due to shareholders totaled $15,226.

19

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(11) Segment Information

The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company has three operating segments identified by manufacturing facility and each segment is operated in a separate subsidiary. The Company primarily evaluates performance based on income before income taxes and excluding non-recurring items. The operations and product produced by the Company’s various segments are as follows: 

· Jiangmen Wealth Water produces water purification agents for specific industrial uses such as the  treatment of waste water from paper mills, decolorization agent to treat waste water that contains active dyes, acid dyes and direct dyes produced in the textile and printing industry, and other industry specific water purification applications. The Company uses HAC powder produced by the Guizhou Yefeng segment in the production of its water purification agents.

· Guizhou Yefeng produces HAC powder from calcium and aluminum derived from its limestone and bauxite mines. The HAC powder is used by Jiangmen Wealth Water in the production of its water purification agents and is also sold to outside customers for waste water treatment.

· Shanxi Wealth produces HAC powder from calcium and aluminum derived from its limestone and bauxite mines. The HAC powder is sold to outside customers for waste water treatment.

· Other represents the cost of corporate activities and eliminations

The segment data presented below was prepared on the same basis as the Company’s consolidated financial statements:

For the three months ended March 31, 2012
	Jiangmen
	Wealth Water		Guizhou Yefeng		Shanxi Wealth		Corporate			Eliminations			Total
Net revenue	$	8,971,234	$	3,588,278	$	7,258,311	$	-		$	(2,060,358	)	$	17,757,465
Cost of revenue		5,660,752		1,942,449		4,200,980		-			(2,060,358	)		9,743,823
Gross profit		3,310,482		1,645,829		3,057,331		-			-			8,013,642
Selling and marketing		251,885		71,510		332,402		-			-			655,797
General and administrative		427,835		141,287		294,171		298,753			-			1,162,046
Research and development		142,914		8,813		-		-			-			151,727
Income from operations	$	2,487,848	$	1,424,219	$	2,430,758	$	(298,753	)	$	-		$	6,044,072

20

HUIXIN WASTE WATER SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(11) Segment Information, continued

For the three months ended March 31, 2011
	Jiangmen Wealth Water		Guizhou Yefeng		Shanxi Wealth		Corporate			Eliminations			Total
Net revenue	$	8,395,018	$	3,352,569	$	6,963,091	$	-		$	(1,949,709	)	$	16,760,969
Cost of revenue		5,044,112		1,663,680		3,752,106		-			(1,949,709	)		8,510,189
Gross profit		3,350,906		1,688,889		3,210,985		-			-			8,250,780
Selling and marketing		248,041		75,090		184,278		-			-			507,409
General and administrative		416,441		139,594		266,353		224,210			-			1,046,598
Research and development		136,959		-		-					-			136,959
Income from operations	$	2,549,465	$	1,474,205	$	2,760,354	$	(224,210	)	$	-		$	6,559,814

As of March 31, 2012
	Jiangmen Wealth Water		Guizhou Yefeng		Shanxi Wealth		Corporate		Eliminations			Total
Current assets	$	41,025,8864	$	11,805,689	$	19,968,858	$	6,276,668	$	(13,514,804	)	$	65,562,297
Property, plant and equipment,
land use and
mining rights		2,679,662		4,884,027		6,849,032		-		-			14,412,721
Total assets	$	43,705,548	$	16,689,716	$	26,817,890	$	6,276,668	$	(13,514,804	)	$	79,975,018

21

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

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

Company Overview

We are a leading producer and distributer of water purifying agent and High-performance Aluminate Calcium (HAC) powder, the core component of water purifying agent. We manufactured and distributed approximately 290,000 and 240,000 tons water purifying agent and 277,000 and 230,000 tons of high calcium aluminates powder for the years ended December 31, 2012 and 2011, respectively. Our products are distributed in the southern, south-western, mid-eastern, and eastern part of China. We supply water purifying products for industries such as printing and dyeing, paper making, municipal wastewater, phosphorus removal, and oil removal from washing water.

Our products are manufactured and distributed by our Operating Companies. Jiangmen Wealth Water is engaged in the production and sale of water purifying agents. Water purifying agent’s core raw material is HAC powder, which is exclusively supplied by Guizhou Yufeng, a wholly owned subsidiary of Jiangmen Wealth Water. Although Guizhou Yufeng sells HAC powder to third party customers, it prioritizes the supply to Jiangmen Wealth Water over third party customers and ensures that its supply meets the demand of Jiangmen Wealth Water before products being sold to other customers. Shanxi Wealth also manufactures HAC powder and distributes all of its products to third party customers. HAC powder’s core raw materials are aluminates ore and limestone from, respective obtained from their self-owned mines.

Results of Operations

The following table shows key components of our results of operations during the three months ended March 31, 2012 and 2011, in both dollars and as a percentage of our total revenue.

	Three Months Ended March 31,
	2012		% of Revenue			2011		% of Revenue
Net revenue	$	17,757,465		100.00	%	$	16,760,970		100.00	%
Cost of revenue		9,743,823		54.87	%		8,510,190		50.77	%
Gross profit		8,013,642		45.13	%		8,250,780		49.23	%
Operating expenses:
Selling and marketing		655,797		3.69	%		507,409		3.03	%
General and administrative		1,162,046		6.54	%		1,046,598		6.24	%
Research and development		151,727		0.86	%		136,959		0.82	%
Total operating expenses		1,969,570		11.09	%		1,690,966		10.09	%
Income from operations		6,044,072		34.04	%		6,559,814		39.14	%
Other income:
Interest income		567,587		3.19	%		28,268		0.17	%
Total other income		567,587		3.19	%		28,268		0.17	%
Income before provision for income taxes		6,611,659		37.23	%		6,588,082		39.31	%
Provision for income taxes		1,700,858		9.58	%		1,677,078		10.01	%
Net income	$	4,910,801		27.65	%	$	4,911,004		29.30	%

22

Three Months Ended March 31, 2012  and March 31, 2011:

Revenue:

Revenue increased by $996,495 or 5.95%, to $17,757,465 for three months ended March 31, 2012 from $16,760,970 for the three months ended March 31, 2011. The increase in revenue for the three months ended March 31, 2012 was primarily due the appreciation of the average foreign currency exchange rate of RMB against US dollars for approximately 4.2%, increase of selling prices of purifying agents by approximately 5.5% and increase of selling prices of HAC powder of approximately 2.7% which were offset by the decrease in sales quantities of purifying agents by approximately 1.8%  during the three months ended March 31, 2012 as compared to those during the same period of 2011.

Our revenue from sales of water purifying agents for the three months ended March 31, 2012 was $8,971,234 and for the three months ended March 31, 2011 was $8,395,018, representing an increase of $576,216 or approximately 6.86%.   The increase was primarily due to the effects of an approximately 4.2% foreign currency appreciation and approximately 5.5% selling price increases which were partially offset by decreases in sales quantities by approximately 1.8% during the three months ended March 31, 2012 as compared to those in the same period of 2011.

Our revenue from sales of HAC powder for the three months ended March 31, 2012 was $8,786,231 and for the three months ended March 31, 2011 was $8,365,952, representing an increase of $420,279 or approximately 5.02%.  The increase was primarily due to the effects of an approximately 4.2% foreign currency appreciation and approximately 2.7% selling price increases during the three months ended March 31, 2012 as compared to those in the same period of 2011.  The sales quantities were flat during the three months ended March 31, 2012 as compared to those in the same period of 2011. 

Cost of Revenue:

Cost of revenue increased by $1,233,633, or 14.5%, to $9,743,823 for the three months ended March 31, 2012 from $8,510,190 for the three months ended March 31, 2011.  The increase in the cost of revenue was mainly due to the increase of raw material costs, labor and overhead cost.  Since the increases of raw materials and overhead cost  have been at a faster pace than the increases of our sales prices, the cost of revenue ratio to revenue was higher during the three months ended March 31, 2012 as compared to that of the same period in 2011.

Cost of revenue from sales of water purifying agents for the three months ended March 31, 2012 were $5,660,752, an increase of $616,640 or 12.22%, from $5,044,112 for the same period in 2011.   As a percentage of net revenue, cost of revenue from sales of water purifying agents was 63.10% and 60.08% for the three months ended March 31, 2012 and 2011, respectively. The increase of cost of revenue from sales of water purifying agents was primarily attributable to the increase of raw material prices, labor and overhead cost.

Cost of revenue from sales of HAC powder for the three months ended March 31, 2012 were $4,083,071, an increase of $616,994 or 17.8%, from $3,466,077 for the same period in 2011.    As a percentage of net revenue, cost of revenue from sales of HAC powder approximated 46.47% and 41.43% for the three months ended March 31, 2012 and 2011, respectively. The increase of cost of revenue from sales of HAC powder was primarily attributable to the increase of raw material prices and overall labor and overhead cost increase.

23

Gross profit and Gross Profit Margin:

Our gross profit decreased by $237,138 or 2.87% to $8,013,642 for the three months ended March 31, 2012 from $8,250,780 for the three months ended March 31, 2011. Our gross profit margin (gross profit divided by net revenue) decreased to 45.13% for the three months ended March 31, 2012 from 49.23% for the three months ended March 31, 2011.  The decrease in gross margin was primarily due to the increases of raw materials, labor and overhead cost at a faster pace than the increases of our sales prices.

Selling and Marketing Expenses:

Our selling and marketing expenses increased by $148,388 or 29.24% to $655,797 for the three months ended March 31, 2012 from $507,409 for the three months ended March 31, 2011.  The increase in our selling and marketing expenses in the three months ended March 31, 2012 was primarily attributable to increase of commission expense related to the establishment of commission policy in Shangxi Weath beginning January 2012.

General and Administrative Expenses:

Our general and administrative expenses increased by $115,448 or 11.03% to $1,162,046 for the three months ended March 31, 2012 from $1,046,598 for the three months ended March 31, 2011.  The increase in our general and administrative expenses was primarily attributable to the increase of professional expense and general increases in our overall expenses including payroll, benefits and other office expenses.

Research and Development Cost:

We incurred $151,727 and $136,959 for the three months ended March 31, 2012 and 2011, respectively.  We continue to incur expenses to improve and develop new products.   We expect to continue increasing our research and development efforts to enhance the competitiveness of our products.

Other income:

Our interest income increased by $539,139 or 1,908% to $567,587 for the three months ended March 31, 2012 from $28,268 for the three months ended March 31, 2011.  The increase was primarily due to the increase in cash balance in banks as a result of our continuous increase in profits.  In addition, we earned interest income at a rate of 9% on a secured note receivable in the amount of approximately $25 million which generated approximately $541,000 in interest income for the three months ended March 31, 2012.  Such note receivable was fully repaid in March 2012.

Net Income:

Net income for the three months ended March 31, 2012 was virtually unchanged as compared to that for the same period of 2011.  Our revenue increased by approximately 5.95% during the three months ended March 31, 2012 as compared to that in the same period of 2011.  Our cost of revenue increased 14.5% during the three months ended March 31, 2012 due to the increases in raw material cost, labor and overhead cost, which caused our gross profit to be lower than that of the same period of 2011.  Such decrease in profit was offset by the increase of our interest income on the 9% interest earned on the secured note receivable.

24

Liquidity and Capital Resources

We had an unrestricted cash balance of approximately $58.8 million as of March 31, 2012, as compared to $26.3 million as of December 31, 2011.  In addition, we had approximately $370,000 in restricted cash as of March 31, 2012, as compared to $670,000 as of December 31, 2011. Our restricted cash is held by Access America Investments, LLC (“AAI”) as a security deposit for hiring a qualified chief financial officer (“CFO”) and investor relation firm.  

On May 20, 2011, the Holdback Escrow Agreement, which was executed in connection with the private placement took place in December 2010, was amended to provide that as soon as practicable following the Offering, the Company shall employ a chief financial officer meeting certain requirements and to permit the “Lead Investor” (as defined in the Subscription Amendment) to authorize the escrow agent appointed pursuant to the Holdback Escrow Agreement to disburse a portion of the Chief Financial Officer Holdback, such portion not to exceed $750,000 in the aggregate, to the Company (a “Good Faith Disbursement”). Pursuant to Holdback Escrow Agreement, as amended on May 20, 2011, $750,000 was released to us as Good Faith Disbursement. On December 1, 2011, the Holdback Escrow Agreement was further amended to provide for a series of disbursements from the Chief Financial Officer Holdback to the Company of $100,000 commencing on December 1, 2011 and continuing on the first day of each successive month thereafter until the remaining balance of the Chief Financial Officer Holdback is disbursed to the Company (the “Monthly Disbursements”). As of March 31, 2012, $250,000 remained unreleased related to the Holdback Escrow Agreement and $120,000 remained unreleased related to the Investor Relations Escrow Agreement.

Our funds are kept in financial institutions located in China, and banks and other financial institutions in the PRC, which do not provide insurance for funds held on deposit.  In the event of a bank failure, we may incur loss for our funds on deposit.  In addition, we are subject to the regulations of the PRC, which restrict the transfer of cash from China, except under certain specific circumstances. Accordingly, such funds may not be readily available to us to satisfy obligations that have been incurred outside the PRC.  In addition, as of March 31, 2012, the Company had cash deposits of approximately $58.5 million, placed with several banks in the PRC, where there is currently no rule or regulation in place for obligatory insurance of accounts with banks and financial institutions. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in accounts with banks and financial institutions.

We had working capital of approximately $59.9 million and $54.3 million as of March 31, 2012 and December 31, 2011, respectively. The increase of working capital was primarily due to the increase in cash flow generated from our profitable operations.

Our accounts receivable has been a relatively insignificant portion of our current assets, representing $4.2 million and $2.4 million, or 6.5% and 4.0% of total current assets, as of March 31, 2012 and December 31, 2011, respectively.  We began to offer longer credit terms to our good standing customers starting 2011 per the requests of our customers due to the tightening monetary policies imposed by the Government in 2011.  If customers responsible for a significant amount of accounts receivable were to become insolvent or otherwise unable to pay for our products, or to make payments in a timely manner, our liquidity and results of operations could be adversely affected. An economic or industry downturn could materially adversely affect the servicing of these accounts receivable, which could result in longer payment cycles, increased collections costs and defaults in excess of management’s expectations. A significant deterioration in our ability to collect on accounts receivable could affect our cash flow and working capital position and could also impact the cost or availability of financing available to us.

25

We provide our major customers with payment terms ranging from 30 to 90 days. It takes approximately one day to mine our raw materials and deliver the raw materials to our Guizhou and Shangxi facilities. We can manufacture the HAC powder and water purification agent within one day. Therefore the average time from mining the raw materials to completion of our products is approximately 2 days. Depending on the locations of our customers, delivery time ranges between a few hours to three days.  We have frequent communications with our customers about their needs for our products.  Our customers send us purchase orders 2 to 4 weeks prior to the requested delivery dates.   We typically estimate our required raw materials for production at each month end for the following month based on the purchase orders received at month end.  Since our production lead time for HAC powder and purifying agent is very short, we keep relatively small amounts of inventories. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Allowance for doubtful accounts is based on our assessment of the aging of accounts receivable, the collectability of specific customer accounts, our history of bad debts, and the general condition of the industry.

Our aging of accounts receivables could result in our inability to collect receivables requiring us to increase our allowance for doubtful accounts, which would decrease our net income and working capital.  We experienced no bad debt expense during three months ended March 31, 2012 and the year ended December 31, 2011. As of March 31, 2012, we believed it was appropriate not to record any bad debt expense primarily due to the subsequent collections made on our accounts receivable and our historical ability to collect our accounts receivable. Bad debt expense was $0 for the three months ended March 31, 2012 and the year ended December 31, 2011.

On August 29, 2011, we entered into a secured note receivable agreement with a non-related party in the amount of $14,087,748 (RMB90,000,000) which was increased to approximately $25,187,727 (RMB160,000,000) in December 2011. The note carried an annual interest rate of 9%. This note originally expired on November 28, 2011 but was extended to March 31, 2012, and was secured by the debtor’s land use right, certain tangible assets and all the business operation rights. Interest receivable related to this note amounted to $156,085 as of December 31, 2011. As of March 28, 2012, the note receivable was fully repaid.  Through this note, we were able to earn interest income with our cash at a much higher interest rate than what was being offered by our banks which is generally less than 1% annual interest rate.  During the three months ended March 31, 2012, we earned approximately $541,000 in interest income on this note receivable.

Inventories amounted to approximately $874,000 as of March 31, 2012, as compared to approximately $958,000 as of December 31, 2011.   Since our mines can provide stable and sufficient supplies of raw materials for our productions and our stable relationship with other suppliers, we have not experienced any shortage in raw materials as our sales continue to grow.  We do not need to maintain large amounts of raw materials.  We might expect to experience increase in our inventory levels in future, including both of raw material and finished goods to meet the market demands.

We are required to contribute for our employees to the Chinese government’s social insurance funds, including pension insurance, medical insurance, unemployment insurance, job injuries insurance, maternity insurance, and housing provident funds in accordance with relevant regulations. Total contributions to the funds are approximately $262,000 for the three months ended March 31, 2012.  We expect that the amount of our contribution to the government’s social insurance funds and housing provident funds will increase in the future as we expand our workforce and operations.  In the years prior to December 31, 2010, we have approximately $300,000 of insufficient contribution of social insurance premiums and housing provident funds and potential penalties which are included in the accrued expenses.

The ability of the Company to pay dividends may be restricted due to the foreign exchange control policies and availability of cash balance of the Chinese operating subsidiaries. A majority of our revenue being earned and currency received are denominated in RMB, which is subject to the exchange control regulation in China, and, as a result, we may unable to distribute any dividends outside of China due to PRC exchange control regulations that restrict our ability to convert RMB into US Dollars. Accordingly, the Company’s funds may not be readily available to us to satisfy obligations which have been incurred outside the PRC, which could adversely affect our business and prospects or our ability to meet our cash obligations.

Future Capital Expenditure

In future years, as we accelerate expansion, we expect continued capital expenditure for adding manufacturing equipment, expanding workshops and harbors, and modernizing existing equipment. We believe that such expansion will have a material impact on liquidity, capital resources and/or results of operation.  However, we believe our existing cash, cash equivalents and cash flows from operations and proceeds from the completed financing in December 2010 will be sufficient to meet our presently anticipated future cash needs to bring all of our facilities into full production. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

26

It is management’s intention to expand our operations as quickly as reasonably practicable to capitalize on the demand opportunity for our products.  We regularly review our cash funding requirements and attempt to meet those requirements through a combination of cash on hand, cash provided by operations and available borrowings under bank lines of credit.  We believe that we can continue meeting our cash funding requirements for our business in this manner over the next twelve months.

We do not have a present plan with respect to steps to expand our production or a reasonable estimate of the capital expenditures associated with the expansion.

Cash Flow

	Three Months Ended March 31,
	2012		2011
Net cash provided by operating activities	$	6,608,232	$	6,510,244
Net cash provided by (used for) investing activities		25,384,740		(39,164	)
Net cash provided by financing activities		300,000		667,203
Effect of exchange rate changes on cash and cash equivalents		92,542		207,464
Cash and cash equivalents at the beginning of period		26,383,537		33,910,457
Cash and cash equivalents at the end of period	$	58,769,051	$	41,256,204

Net cash provided by operating activities was approximately $6.6 million for the three months ended March 31, 2012, compared to $6.5 million for the three months ended March 31, 2011. The increase of net cash provided by operating activities was primarily due to a decrease of advances to suppliers in the amount of $2.6 million which was partially offset by the increase of accounts receivable of $1.8 million during the three months ended March 31, 2012.  During the three months ended March 31, 2011, net cash provided by operating activities was attributable to increase of accounts payable in the amount of $2.2 million which was partially offset by increase in accounts receivable of $1.1 million. 

Investing activity during the three months ended March 31, 2012 included cash collected on the note receivable in the amount of $25.4 million.  In addition, we purchased equipment of $22,168 and $39,164 during the three months ended March 31, 2012 and 2011, respectively.

Financing activities included releases of restricted cash pursuant to the Holdback Escrow Agreements and related Amendments to the original agreements in the amounts of $300,000 and $667,203 during the three months ended March 31, 2012 and 2011, respectively.

Based upon our present plans, we believe that cash on hand and cash flow from operations will be sufficient to fund our capital needs in the next twelve months. We expect that our primary sources of funding in the next twelve months will be from cash flow from operations. However, our ability to maintain sufficient liquidity depends partially on our ability to achieve anticipated levels of revenue, while continuing to control our cost of revenue and other operating expenses. If we do not have sufficient cash, we would have to obtain additional debt financing or equity financing through other external sources, which may not be available on acceptable terms, or at all. Failure to maintain financing arrangements on acceptable terms would have a material adverse effect on our business, results of operations and financial condition.

27

Reconciliation of the Effect of Exchange Rates on Cash and Cash Equivalents

Our cash accounts are denominated in RMB and the absolute amount of RMB that we hold is unaffected by the change in the exchange rate of the RMB, our functional currency,  as compared to the US Dollar, our reporting currency. The effect of exchange rate changes on cash represents changes in the value of our cash accounts because the USD to RMB exchange rate has changed during the reporting periods. When the USD declines in value against the RMB, the translation of our financial statements at year end exchange rates yields an increase in the reported amount of cash in USD. A summary of the effect of exchange rates on cash and cash equivalents follows:

	Three Months Ended March 31,
	2012			2011
Effect on beginning cash at period end exchange rate	$	167,213		$	186,500
Effect from operating activities during the period		(15,554	)		21,091
Effect from investing activities during the period		(59,117	)		(127	)
Effect from financing activities during the period		-			-
Effect of exchange rate changes on cash	$	92,542		$	207,464

Critical Accounting Policies, Estimates and Assumptions

The SEC defines critical accounting policies as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and those that require significant judgments and estimates.

The discussion and analysis of our financial condition and results of operations is based upon our financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities. On an on-going basis, we evaluate our estimates including the allowance for doubtful accounts, the salability and recoverability of inventory, income taxes and contingencies. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.

Revenue recognition.  We recognize revenue from the sales of products. Sales are recognized when the following four revenue criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectivity is reasonably assured. Revenue is presented net of value added tax (“VAT”), sales rebates and returns.  No return allowance is made as product returns are insignificant based on historical experience.

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Allowance for doubtful accounts. In estimating the collectability of accounts receivable we analyze historical write-offs, changes in our internal credit policies and customer concentrations when evaluating the adequacy of our allowance for doubtful accounts. Differences may result in the amount and timing of expenses for any period if we make different judgments or use different estimates. Our accounts receivable represent a significant portion of our current assets and total assets. Our realization on accounts receivable, expressed in terms of United States dollars may be affected by fluctuations in currency rates since the customer’s currency is frequently a currency other than United States dollars.

Inventories. Inventories comprise of raw materials and finished goods which are stated at the lower of cost or market. Substantially all inventory costs are determined using the weighted average basis. Costs of finished goods include materials, direct labor, and manufacturing overhead before the goods are ready for sale. Inventory costs do not exceed net realizable value.

Taxation

Cayman Islands

The Government of the Cayman Islands does not, under existing legislation, impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax upon us or our shareholders. The Cayman Islands are not party to a double tax treaty with any country that is applicable to any payments made to or by us.

We have received an undertaking from the Governor-in-Cabinet of the Cayman Islands that, in accordance with section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, for a period of 20 years from April 2006 no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums by us due under a debenture or other obligation.

Hong Kong

Our indirect subsidiary, Wealth Environmental Technology, was incorporated in Hong Kong and under the current laws of Hong Kong, is subject to Profits Tax of 16.5%. No provision for Hong Kong Profits Tax has been made as Wealth Environmental Technology has no taxable income.

China

Before the implementation of the New EIT Law, FIEs established in the PRC, unless granted preferential tax treatments by the PRC government, were generally subject to an earned income tax, or EIT, rate of 33%, which included a 30% state income tax and a 3% local income tax. On March 16, 2007, the National People’s Congress of China passed the New EIT Law, and on November 28, 2007, the State Council of China passed the EIT Law Implementing Rules which took effect on January 1, 2008. The EIT Law and its implementing rules impose a unified EIT of 25% on all domestic-invested enterprises and FIEs, unless they qualify under certain limited exceptions.

In addition to the changes to the current tax structure, under the New EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our organization’s global income will be subject to PRC income tax of 25%. For detailed discussion of PRC tax issues related to resident enterprise status, see “Risk Factors – Risks Related to Our Business – Under the New Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China contained in our Current Report on Form 8-K dated December 15, 2010, as amended. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

In addition, the New EIT Law and its implementing rules generally provide that a 10% withholding tax applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation of such enterprises’ shareholder has a tax treaty with China that provides for a different withholding arrangement. In this regard, we expect that 10% withholding tax will apply to dividends paid to Wealth Environmental Technology by Jiangmen Huiyuan.

Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income and non-tax deductible expenses incurred. Our management carefully monitors these legal developments and will timely adjust our effective income tax rate when necessary.

New Accounting Pronouncements Not Yet Adopted

In December 2011, the FASB issued ASU No. 2011-11, Topic 210 - Balance Sheet: Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 will be effective for fiscal years beginning on or after January 1, 2013, with retrospective application for all comparable periods presented. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.

29

Off Balance Sheet Transactions

We do not have any off-balance sheet transactions.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Smaller reporting companies are not required to provide the information required by this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our President and Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of March 31, 2012, pursuant to Rule 13a-15(b) under the Exchange Act.  Based on that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that , as of the end of the period covered by this report, our disclosure controls and procedures were not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms due to the material weakness related to a lack of accounting personnel with sufficient experience in maintaining books and records and preparing financial statements in accordance with U.S. GAAP, which existed as of December 31, 2011 and December 31, 2010, that have not been fully remediated as of March 31, 2012.

Remediation Activities

We implemented or in the process of implementing the following measures to remediate the material weakness identified above:

(1)  We hired a consultant with extensive experience in U.S. GAAP and SEC reporting in May 2011 to better improve our knowledge of U.S. GAAP and SEC reporting.

(2)  We hired a qualified chief financial officer in June 2011 to improve our internal control over financial reporting.

(3)  We plan to provide training to our accounting personnel to improve their knowledge of U.S. GAAP.

However there is no guarantee that such remediation activities can effectively cure our material weakness as identified above.

Changes in Internal Control over Financial Reporting

No changes were made to our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended March 31, 2012, the Company's management implemented or continued to implement the steps set forth above under “Remediation Activities” to improve the quality of its internal control over financial reporting.

30

PART II—OTHER INFORMATION

Item 6. Exhibits.

(a)  Exhibits

Exhibit Number	Description
31.1*	Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.

*Filed with this report.

+In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

**Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HUIXIN WASTE WATER SOLUTIONS, INC.
Dated: May 14, 2012	By:	/s/ Mingzhuo Tan
		Mingzhuo Tan President and Chief Executive Officer (Duly authorized officer and principal executive officer)

Dated: May 14, 2012	By:	/s/ Tin Nang (Chris) Lui
		Tin Nang (Chris) Lui Chief Financial Officer (Duly authorized officer, principal financial officer and chief accounting officer )

32

Exhibit Index

Exhibit Number	Description
31.1*	Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.

*Filed with this report.

+In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

**Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.

33

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Mingzhuo Tan, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Huixin Waste Water Solutions, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

       5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.     

	Huixin Waste Water Solutions, Inc.
Date: May 14, 2012	By:	/s/ Mingzhuo Tan
		Mingzhuo Tan
		President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Tin Nang (Chris) Lui, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Huixin Waste Water Solutions, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

       5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.     

	Huixin Waste Water Solutions, Inc.
Date: May 14, 2012	By:	/s/ Tin Nang (Chris) Lui
		Tin Nang (Chris) Lui
		Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q for the period ended March 31, 2012 (the “Report”) by Huixin Waste Water Solutions, Inc. (the “Company”), I, Mingzhuo Tan, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Huixin Waste Water Solutions, Inc.
Date: May 14, 2012	By:	/s/ Mingzhuo Tan
		Mingzhuo Tan
		President and Chief Executive Officer (Principal Executive Officer)

This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by §906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q for the period ended March 31, 2012 (the “Report”) by Huixin Waste Water Solutions, Inc. (the “Company”), I, Tin Nang (Chris) Lui, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Huixin Waste Water Solutions, Inc
Date: May 14, 2012	By:	/s/ Tin Nang (Chris) Lui
		Tin Nang (Chris) Lui
		Chief Financial Officer (Principal Financial Officer)

This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by §906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished upon request.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

(2) Summary of Significant Accounting Policies

Reverse Stock Split

On December 15, 2011, the Board of Directors and the stockholders of the Company approved and implemented a reverse stock split in a ratio of 1 share to 1.42610718 shares of the Company’s common stock. Par value of the common stock has been changed to $0.00018254172 per share. Accordingly, all references to numbers of common shares and per-share data in the accompanying condensed consolidated financial statements and notes have been retroactively adjusted to reflect the effects of the reverse stock split.

Principles of Consolidation

These condensed consolidated financial statements present the consolidated accounts of WEP and its subsidiaries, Wealth Technology, Jiangmen Huiyan, and its variable interest entities, Jiangmen Wealth Water, Guizhou Yunfeng and Shanxi Wealth, which are collectively referred to as the “Company”. This presentation is based upon the retroactive treatment of series of agreements and restructurings of companies under common control as described in Note (1).

All inter-company transactions and balances have been eliminated in preparation of the condensed consolidated financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include collectibility of accounts receivable, useful lives and impairment of property and equipment, mineral reserves available for mining production, total expected use of mineral reserves and value and realizability of intangible assets.  Actual results could differ from those estimates.

Segments

For the three months ended March 31, 2012 and 2011, the Company’s operations have been broken down into segment based on production facility, in the manner that management reviews operations on a regular basis. All our operations revolve around the production of water purification agents made to similar specifications. All of the Company’s segments have similar assets, customers and distribution methods, and their economic characteristics are similar with regard to their gross margin percentages.

Currency Reporting

The Company’s operations in the PRC use the local currency, Renminbi (“RMB”), as their functional currency, whereas amounts reported in the accompanying condensed consolidated financial statements and disclosures are stated in U.S. dollars, the reporting currency of the Company, unless stated otherwise. As such, the condensed consolidated balance sheets of the Company have been translated into U.S. dollars at the current rates as of March 31, 2012  and December 31, 2011 and the condensed consolidated statements of income have been translated into U.S. dollars at the weighted average rates during the periods the transactions were recognized.

The resulting translation gain adjustments are recorded as other comprehensive income in the condensed consolidated statements of comprehensive income and as a separate component of equity in the condensed consolidated balance sheets.

Revenue Recognition

The Company’s main source of revenue is generated from sales of water purifying agents and high-performance calcium aluminates powder. The Company recognizes revenue when there is persuasive evidence of a sales arrangement, delivery and acceptance by the customer has occurred, the sales price is fixed or determinable, and collection is probable. Under the Company’s typical sales terms for both water purifying agents and HAC powder, the Company recognizes revenue when product is shipped from its production facilities because shipments are made FOB shipping point with the customer bearing all shipping costs and title and risk of loss transferring to the customer upon shipment. Sales terms for water purifying agents and HAC powder do not include customer acceptance provisions, the right of return (unless the product is proven to be defective) or other post-delivery obligations. The Company has not experienced any significant returns associated with defective product.

Value added taxes represent amounts collected on behalf of specific government agencies that require remittance of tax by specified dates. Value added taxes are collected at the time of sales and are detailed on invoices provided to customers. The Company accounts for value added taxes on a net basis. The Company recorded and paid sales related taxes based on a percentage of the value added taxes and reported the revenue net of the sales related taxes.

Major Customers

During the three months ended March 31, 2012 and 2011, there was no customer accounted for 10% or more of our net revenue.

Major Suppliers

During the three months ended March 31, 2012 and 2011, certain suppliers accounted for more than 10% of the Company’s total net purchases as follows:

	Three Months Ended
	March 31, 2012			March 31, 2011
Supplier 1		19	%		17	%
Supplier 2		15	%		12	%

Value-Added Tax (“VAT”)

Enterprises or individuals, who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value-added tax in accordance with the PRC laws. The value-added tax standard rate for sales made by the Company is 17% of the gross sales price and the Company records its revenue net of VAT. 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 the sales of the finished products. When the Company purchases raw materials, the VAT incurred by the Company, and subject to credit, generally varies from 6% to 17% depending on the type of materials or services purchased. There is a significant difference in the VAT that the Company incurs on purchases and the amount the Company bills to customers for sales of HAC powder and water purifying agents due to the fact that the Company converts raw materials from their mined state to finished product and is responsible for the substantial portion of increased value in its products.

Following is an analysis of VAT billed to the Company on purchases, VAT billed by the Company on sales and VAT remitted to PRC during the three months ended March 31, 2012 and 2011, with information related to the liability for uncollected or unremitted VAT at March 31, 2012 and 2011:

	Three Months			Three Months
	Ended			Ended
	March 31, 2012			March 31, 2011
VAT billed to customers for sales during the period	$	3,452,348		$	3,244,561
Less: VAT billed to the Company for purchases during the period		1,201,546			1,265,190
Net VAT on transactions took place during the period		2,250,802			1,979,371
Amount remitted to the PRC		(1,814,292	)		(1,461,187	)
VAT payable at beginning of period		497,581			389,053
VAT payable at period end	$	934,091		$	907,237

	As of		As of
	March 31,		March 31,
	2012		2011
Liabilities for taxes collected but not remitted	$	319,081	$	648,696
Liabilities for taxes billed to customers but not collected
from the customers or remitted to PRC		615,010		258,541
VAT payable at period end	$	934,091	$	907,237

New Accounting Pronouncements Not Yet Adopted

In December 2011, the FASB issued ASU No. 2011-11, Topic 210 - Balance Sheet: Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU 2011-11 will be effective for fiscal years beginning on or after January 1, 2013, with retrospective application for all comparable periods presented. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.

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Organization, Nature of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2012

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

(1) Organization, Nature of Business and Basis of Presentation

Huixin Waste Water Solutions, Inc. (“the Company” or “Huixin”) was incorporated in the Cayman Islands on December 7, 2006. The Company was originally organized as a “blank check” shell company to investigate and acquire a target company or business desiring to be a publicly held corporation. Wealth Environmental Protection Group, Inc. (“WEP”) was incorporated under the laws of the British Virgin Islands on June 3, 2010 to serve as an investment holding company. On December 15, 2010, the Company (i) closed a share exchange transaction pursuant to which it became the 100% parent of WEP, and (ii) assumed the operations of WEP and its subsidiaries.

The share exchange transaction has been treated as a recapitalization of WEP, with Huixin emerging as the surviving legal entity and WEP is considered as the acquirer for accounting purpose.  Prior to the recapitalization, the Huixin had essentially no assets or liabilities and issued approximately 96% of its outstanding shares to the shareholders of WEP and their designees in the recapitalization. The historical consolidated financial statements of WEP are retroactively presented as the financial statements of Huixin.   A summary of the Company subsidiaries is currently as follows:

	Domicile and
	Date of	Paid -In		Effective
Name and Location	Incorporation	Capital		Ownership	Activities
Wealth Environmental Protection Group, Inc  (“WEP”)	British Virgin Islands June 3, 2010	$	7,000	100% Owned	Holding Company
Wealth Environmental Technology Holding Ltd.(“Wealth Technology”) Hong Kong	Hong Kong June 18, 2010	$	1,299	100% Owned	Holding Company
Jiangmen Huiyuan Environmental Protection Technology Consultancy Co. (“Jiangmen Huiyuan”) Jiangmen, Guandong Province	Peoples Republic Of China (“PRC”) July 22, 2010	$	15,082	100% Owned - Wholly Foreign Owned Entity (“WFOE”)	Holding Company
Jiangmen Wealth Water Purifying Agent Co., Ltd (“Jiangmen Wealth Water”)  Jiangmen, Guandong Province	PRC April 25, 2003	$	4,049,060	100% Control  Through Contractual Arrangements	Manufacturing of water purifying agents
Guizhou Yufeng Melt Co., Ltd. (“Guizhou Yufeng”) Guizhou Province	PRC  March 25, 2005	$	4,233,854	100% Control Through Contractual Arrangements	Manufacturer of HAC Powder using bauxite and limestone from mines controlled under mining rights agreements
Shangxi Wealth Aluminate Materials Co., Ltd (“Shangxi Weath”) Shangxi Province	PRC April 8, 2004	$	6,786,056	100% Control Through Contractual Arrangements	Manufacturer of HAC Powder using bauxite and limestone from mines controlled under mining rights agreements

On September 29, 2010, Jiangmen Huiyuan entered into a series of contractual agreements with Jiangmen Wealth Water, and its shareholders, in which Jiangmen Huiyuan effectively assumed management of the business activities of Jiangmen Wealth Water and has the right to appoint all executives and senior management and the members of the board of directors of Jiangmen Wealth Water. The contractual arrangements are comprised of a series of agreements, including an Exclusive Business Cooperation Agreement, Exclusive Option Agreement, Equity Interest Pledge Agreement and Power of Attorney, through which Jiangmen Huiyuan has the right to provide exclusive complete business support and technical and consulting service to Jiangmen Wealth Water for an annual fee in the amount of Jiangmen Wealth Water’s yearly net profits after tax. Additionally, Jiangmen Wealth Water’s shareholders have pledged their rights, titles and equity interest in Jiangmen Wealth Water as security for Jiangmen Huiyuan to collect consulting and services fees provided to Jiangmen Wealth Water through an Equity Pledge Agreement. In order to further reinforce Jiangmen Huiyuan’s rights to control and operate Jiangmen Wealth Water, the shareholders of Jiangmen Wealth Water have granted Jiangmen Huiyuan the exclusive right and option to acquire all of their equity interests in Jiangmen Wealth Water through an Exclusive Option Agreement.

Jiangmen Wealth Water owns all of the issued and outstanding capital stock of Guizhou Yufeng, and Shanxi Wealth. During the years ended December 31, 2009 and 2008, Mr. Tan and his spouse, Ms. Hong Yu Du (“Ms. Du”) directly or through an affiliated company, had controlling equity interests in Jiangmen Wealth Water, Guizhou Yufeng and Shanixi Wealth.   In August and September 2010, through a restructuring process, Jiangmen Wealth Water paid $74,705 and $463,160 to acquire 100% equity interest of Guizhou Yufeng and 62% equity interest of Shainxi Wealth, respectively. On December 27, 2010 the Company acquired the remaining 38% equity interest of Shainxi Wealth owned by Mr. Tan through declared a dividend payable of $290,072 to Mr. Tan on Jan 3, 2011.  Mr. Tan and Ms. Du collectively owned 100% of Jiangmen Wealth Water and its subsidiaries after this restructuring.

Based on Jiangmen Huiyuan’s contractual relationship with Jiangmen Wealth, the Company has determined that a variable interest entity has been created and therefore Jiangmen Wealth is considered a consolidated subsidiary of the Company. Additionally, because all of the companies are currently under common control, the series of agreements and restructurings referred to above have been accounted for as a reorganization of the entities and the financial statements have been prepared as if the reorganization had occurred retroactively.  Accordingly these financial statements present the consolidated operating results, assets and liabilities of Wealth and its subsidiaries, which are collectively referred to as the “Company”.

The Company produces and sells water purifying agents and high-performance aluminate calcium (HAC) powder, the core ingredient of its water purifying agents in China.

The accompanying condensed consolidated balance sheet as of December 31, 2011, which has been derived from the audited consolidated financial statements and the accompanying unaudited condensed consolidated financial statements, has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations and the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the financial position of Huixin as of March 31, 2012, the results of operations, and cash flows for the three-month periods ended March 31, 2012 and March 31, 2011. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2011. The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results which may be expected for the entire fiscal year.

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Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 58,769,051	$ 26,383,537
Restricted cash	370,000	670,000
Accounts receivable	4,232,715	2,372,832
Note receivable	0	25,187,727
Interest receivable	0	156,085
Inventories	873,644	957,509
Advances to suppliers	1,302,629	3,825,386
Other current assets	14,258	14,168
Total current assets	65,562,297	59,567,244
Property, plant and equipment and land and mining rights, net	14,412,721	14,627,533
Total assets	79,975,018	74,194,777
Current liabilities:
Accounts payable	1,759,466	1,855,530
Accrued expenses	1,142,965	1,533,878
Due to shareholders	15,226	15,226
Value added taxes payable	934,091	497,581
Other taxes payable	138,253	90,150
Income tax payable	1,712,250	1,286,537
Total current liabilities	5,702,251	5,278,902
Deferred income taxes	318,009	311,339
Total liabilities	6,020,260	5,590,241
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.000128 par value, 781,250 shares authorized, 444,804 shares issued and outstanding on March 31, 2012 and December 31, 2011	57	57
Common stock: $0.00018254172 par value, 39,062,500 shares authorized, 19,600,305 shares issued and outstanding on March 31, 2012 and December 31, 2011	3,578	3,578
Additional paid-in capital	24,283,222	24,283,222
Accumulated other comprehensive income	6,932,079	6,492,658
Retained earnings (the restricted portion of retained earnings is $496,396 on March 31, 2012 and December 31, 2011	42,735,822	37,825,021
Total shareholders’ equity	73,954,758	68,604,536
Total liabilities and shareholders’ equity	$ 79,975,018	$ 74,194,777

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Condensed Consolidated Statements of Shareholders' Equity (USD $)	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Retained Earning, Appropriated	Retained Earnings, Unappropriated
Balance at Dec. 31, 2011	$ 68,604,536	$ 57	$ 3,578	$ 24,283,222	$ 6,492,658	$ 496,396	$ 37,328,625
Balance (Shares) at Dec. 31, 2011	0	444,804	19,600,305	0	0	0	0
Net income	4,910,801	0	0	0	0	0	4,910,801
Other comprehensive income - foreign currency translation adjustments	439,421	0	0	0	439,421	0	0
Ending Balance at Mar. 31, 2012	$ 73,954,758	$ 57	$ 3,578	$ 24,283,222	$ 6,932,079	$ 496,396	$ 42,239,426
Ending Balance (Shares) at Mar. 31, 2012	0	444,804	19,600,305	0	0	0	0

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net income	$ 4,910,801	$ 4,911,004
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	330,625	313,881
Deferred income taxes	4,703	74,035
Changes in operating assets and liabilities:
Accounts receivable	(1,849,116)	(1,119,958)
Interest receivable	157,443	0
Inventories	90,157	(494,264)
Advances to suppliers	2,553,005	0
Other current assets	0	6,868
Accounts payable	(108,340)	2,161,653
Accrued expenses	(381,562)	(532,289)
Value added taxes payable	434,361	515,708
Other taxes payable	47,641	98,482
Income tax payable	418,514	575,124
Net cash provided by operating activities	6,608,232	6,510,244
Cash flows from investing activities:
Purchase of property, equipment and improvements	(22,168)	(39,164)
Proceeds collected on note receivable	25,406,908	0
Net cash provided by (used in) investing activities	25,384,740	(39,164)
Cash flows from financing activities:
Decrease in restricted cash	300,000	667,203
Net cash provided by financing activities	300,000	667,203
Effect of exchange rate changes on cash and cash equivalents	92,542	207,464
Net increase in cash and cash equivalents	32,385,514	7,345,747
Cash and cash equivalents at the beginning of period	26,383,537	33,910,457
Cash and cash equivalents at the end of period	58,769,051	41,256,204
Supplemental disclosure of cash flow information:
Income taxes paid	1,277,641	1,677,078
Non-cash investing and financing activities:
Decrease in balance of due from shareholders Through declaration and payment of dividend	$ 0	$ 290,072

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Statement Of Financial Position [Abstract]
Preferred Stock, Par value	$ 0.000128	$ 0.000128
Preferred Stock, Shares Authorized	781,250	781,250
Preferred Stock, Shares Issued	444,804	444,804
Preferred Stock, Shares Outstanding	444,804	444,804
Common Stock, Par Value	$ 0.00018300000	$ 0.00018300000
Common Stock, Shares Authorized	39,062,500	39,062,500
Common Stock, Shares Issued	19,600,305	19,600,305
Common Stock, Shares Outstanding	19,600,305	19,600,305
Restricted Portion of Retained Earnings	$ 496,396	$ 496,396

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Related Party Balances and Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

(10) Related Party Balances and Transactions

During the three months ended March 31, 2011, the Company declared and paid a dividend in the amount of $290,072 to Mr. Ming Zhou Tan (“Mr. Tan”) to acquire his remaining 38% equity interest in Shanxi Wealth. As of March 31, 2012 and December 31, 2011, amount due to shareholders totaled $15,226.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	May 11, 2012
Document and Entity [Abstract]
Entity Registrant Name	Huixin Waste Water Solutions, Inc.
Entity Central Index Key	0001381807
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2012
Entity Well-Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		19,600,305

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Segement Information

3 Months Ended

Mar. 31, 2012

Segment Reporting, Disclosure Of Other Information About Entitys Reportable Segments [Abstract]

Segment Reporting Disclosure [Text Block]

(11) Segment Information

The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company has three operating segments identified by manufacturing facility and each segment is operated in a separate subsidiary. The Company primarily evaluates performance based on income before income taxes and excluding non-recurring items. The operations and product produced by the Company’s various segments are as follows: 

· Jiangmen Wealth Water produces water purification agents for specific industrial uses such as the  treatment of waste water from paper mills, decolorization agent to treat waste water that contains active dyes, acid dyes and direct dyes produced in the textile and printing industry, and other industry specific water purification applications. The Company uses HAC powder produced by the Guizhou Yefeng segment in the production of its water purification agents.

· Guizhou Yefeng produces HAC powder from calcium and aluminum derived from its limestone and bauxite mines. The HAC powder is used by Jiangmen Wealth Water in the production of its water purification agents and is also sold to outside customers for waste water treatment.

· Shanxi Wealth produces HAC powder from calcium and aluminum derived from its limestone and bauxite mines. The HAC powder is sold to outside customers for waste water treatment.

· Other represents the cost of corporate activities and eliminations

The segment data presented below was prepared on the same basis as the Company’s consolidated financial statements:

For the three months ended March 31, 2012
	Jiangmen
	Wealth Water		Guizhou Yefeng		Shanxi Wealth		Corporate			Eliminations			Total
Net revenue	$	8,971,234	$	3,588,278	$	7,258,311	$	-		$	(2,060,358	)	$	17,757,465
Cost of revenue		5,660,752		1,942,449		4,200,980		-			(2,060,358	)		9,743,823
Gross profit		3,310,482		1,645,829		3,057,331		-			-			8,013,642
Selling and marketing		251,885		71,510		332,402		-			-			655,797
General and administrative		427,835		141,287		294,171		298,753			-			1,162,046
Research and development		142,914		8,813		-		-			-			151,727
Income from operations	$	2,487,848	$	1,424,219	$	2,430,758	$	(298,753	)	$	-		$	6,044,072

For the three months ended March 31, 2011
	Jiangmen Wealth Water		Guizhou Yefeng		Shanxi Wealth		Corporate			Eliminations			Total
Net revenue	$	8,395,018	$	3,352,569	$	6,963,091	$	-		$	(1,949,709	)	$	16,760,969
Cost of revenue		5,044,112		1,663,680		3,752,106		-			(1,949,709	)		8,510,189
Gross profit		3,350,906		1,688,889		3,210,985		-			-			8,250,780
Selling and marketing		248,041		75,090		184,278		-			-			507,409
General and administrative		416,441		139,594		266,353		224,210			-			1,046,598
Research and development		136,959		-		-					-			136,959
Income from operations	$	2,549,465	$	1,474,205	$	2,760,354	$	(224,210	)	$	-		$	6,559,814

As of March 31, 2012
	Jiangmen Wealth Water		Guizhou Yefeng		Shanxi Wealth		Corporate		Eliminations			Total
Current assets	$	41,025,8864	$	11,805,689	$	19,968,858	$	6,276,668	$	(13,514,804	)	$	65,562,297
Property, plant and equipment,
land use and
mining rights		2,679,662		4,884,027		6,849,032		-		-			14,412,721
Total assets	$	43,705,548	$	16,689,716	$	26,817,890	$	6,276,668	$	(13,514,804	)	$	79,975,018

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Condensed Consolidated Statements of Income (Unaudited) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net revenue	$ 17,757,465	$ 16,760,970
Cost of revenue	9,743,823	8,510,190
Gross profit	8,013,642	8,250,780
Operating expenses:
Selling and marketing	655,797	507,409
General and administrative	1,162,046	1,046,598
Research and development	151,727	136,959
Total operating expenses	1,969,570	1,690,966
Income from operations	6,044,072	6,559,814
Other income:
Interest income	567,587	28,268
Total other income	567,587	28,268
Income before provision for income taxes	6,611,659	6,558,082
Provision for income taxes	1,700,858	1,677,078
Net income	4,910,801	4,911,004
Less: cumulative dividends on preferred stock	100,081	100,081
Net income attributable to common shareholders	$ 4,810,720	$ 4,810,923
Net income per common share - basic	$ 0.25	$ 0.25
Net income per common share - diluted	$ 0.23	$ 0.23
Weighted average number of common shares outstanding - basic	19,600,305	19,600,305
Weighted average number of common shares outstanding - diluted	21,824,325	21,824,325

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Restricted Cash

3 Months Ended

Mar. 31, 2012

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents Disclosure [Text Block]

(5) Restricted Cash

The Company has certain restricted cash as a result of the execution of the following agreements:

 Holdback Escrow Agreement

In connection with the Private Placement took place in December 2010, the Company entered into a Holdback Escrow Agreement with Anslow & Jaclin, LLP (“A&J”), the escrow agent, and AAI, as investor representative (the “Holdback Escrow Agreement”), pursuant to which $2,167,203 was deposited with the escrow agent to be distributed upon the satisfaction of certain covenants set forth in the Subscription Agreement. Pursuant to the Holdback Escrow Agreement, the $1,500,000 shall be released to the Company upon the hiring of a chief financial officer on terms acceptable to AAI (the “Chief Financial Officer Holdback”) and $667,203 shall be released to us upon appointment of the required independent directors to our board of directors. In March 2011, pursuant to the Holdback Escrow Agreement, $667,203 was released to us upon appointment of the required independent directors to our board of directors.

On May 20, 2011, the Holdback Escrow Agreement was amended to provide that as soon as practicable following the Offering, the Company shall employ a chief financial officer meeting certain requirements and to permit the “Lead Investor” (as defined in the Subscription Amendment) to authorize the escrow agent appointed pursuant to the Holdback Escrow Agreement to disburse a portion of the Chief Financial Officer Holdback, such portion not to exceed $750,000 in the aggregate, to the Company (a “Good Faith Disbursement”). Pursuant to Holdback Escrow Agreement, as amended on May 20, 2011, $750,000 was released to the Company as Good Faith Disbursement. On December 1, 2011, the Holdback Escrow Agreement was further amended to provide for a series of disbursements from the Chief Financial Officer Holdback to the Company of $100,000 commencing on December 1, 2011 and continuing on the first day of each successive month thereafter until the remaining balance of the Chief Financial Officer Holdback is disbursed to the Company (the “Monthly Disbursements”). As of March 31, 2012 and December 31, 2011, $250,000 and $550,000, respectively, remained unreleased.

Investor Relations Escrow Agreement

The Company entered into an investor relations escrow agreement with Anslow & Jaclin, LLP, the escrow agent, and Access America Investments, LLC, as representative of the investors, pursuant to which $120,000 was deposited with the escrow agent to be distributed in incremental amounts to pay our investor relations firm, the choice of which is subject to the approval of Access America Investments, LLC, which approval cannot be unreasonably withheld. As of March 31, 2012 and December 31, 2011, $120,000 remained unreleased as the Company has not hired any investor relations firm.

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Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

(4) Earnings Per Share

Basic net earnings per share is computed using the weighted-average number of common shares outstanding. The dilutive effect of potential common shares outstanding is included in diluted net earnings per share. The computations of basic net earnings per share and diluted net earnings per share for three months ended March 31, 2012 and 2011 are as follows:

	Three Months Ended March 31,
	2012		2011
Net income attributable to common shareholders - Basic	$	4,810,720	$	4,810,923
Add: cumulative dividends attributable to
6% convertible preferred stock		100,081		100,081
Net income attributable to
common shareholders - Diluted	$	4,910,801	$	4,911,004
Weighted average number of common shares
outstanding - Basic		19,600,305		19,600,305
Dilutive effect of preferred stock conversion		2,224,020		2,224,020
Weighted average number of common shares
outstanding - Diluted		21,824,325		21,824,325
Earnings per share:
Basic	$	0.25	$	0.25
Diluted	$	0.23	$	0.23

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

(8) Income Taxes

The Company has not recorded a provision for U.S. federal income tax for the three months ended March 31, 2012 and 2011 because substantially all of the Company’s operations are conducted in the PRC.

On March 16, 2007, the National People’s Congress of China approved the new Corporate Income Tax Law of the PRC (New CIT Law), which is effective from January 1, 2008. Under the New CIT Law, the statutory corporate income tax rate applicable to most companies, including the Company is 25%. In accordance with the New CIT Law, enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC territory are considered PRC resident enterprises and subject to the PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. As of March 31, 2012, no detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of March 31, 2012, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. However, the Company has analyzed the applicability of this law, as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012, and the Company has accrued and paid PRC tax on such basis. The Company will continue to monitor changes in the interpretation or guidance of this law.

The New CIT Law also imposes a 10% withholding income tax for dividends distributed by a foreign invested enterprise to its immediate holding company outside China. Such dividends were exempted from PRC tax under the previous income tax law and regulations.

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises had completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities.

The Company conducts substantially all of its business in PRC and it is subject to PRC income taxes at a 25% statutory tax rate in 2012 and 2011.  Following is a reconciliation of the Company’s income tax provision of $1,700,858 and $1,677,078 for the three months ended March 31, 2012 and 2011, respectively, respectively, to the expected US statutory rate of 34%:

	Three Months Ended March 31,
	2012			2011
Computed tax at the U.S. federal statutory rate of 34%	$	2,247,964		$	2,229,748
Tax rate difference between the US and PRC on foreign earnings		(595,049	)		(590,227	)
Change in valuation allowance		65,131			40,878
Other		(17,188	)		(3,321	)
	$	1,700,858		$	1,677,078

At March 31, 2012 and December 31, 2011, differences between the basis of assets and liabilities reported in the accompanying financial statements and those recognized for tax reporting purposes in the PRC, and the related deferred taxes were as follows:

	As of			As of
	March 31,			December 31,
	2012			2011
Deferred tax assets:
Net operating losses	$	1,130,862		$	1,065,731
Liability for social insurance premiums and provident housing funds		75,000			75,000
Total deferred tax assets		1,205,862			1,140,731
Deferred tax liabilities:
Difference between book and tax amortization on mining rights		(393,009	)		(386,339	)
Total deferred tax liabilities		(393,009	)		(386,339	)
Net deferred tax assets before valuation allowance		812,853			754,392
Valuation allowance		(1,130,862	)		(1,065,731	)
Net deferred tax liabilities	$	(318,009	)	$	(311,339	)

The Company accounts for uncertainty in income taxes in accordance with applicable accounting standards, which prescribe a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These accounting standards also provide guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements.

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Inventories

3 Months Ended

Mar. 31, 2012

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

(6) Inventories

A summary of inventories is as follows:

	March 31, 2012		December 31, 2011
Raw Materials	$	629,791	$	674,114
Work in progress		49,278		-
Finished goods		194,575		283,395
	$	873,644	$	957,509

Inventories are stated at the lower of cost or market. The weighted average cost method is used to account for the Company inventories. 

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Property, Plant and Equipment and Land Use and Mining Rights

3 Months Ended

Mar. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

(7) Property, Plant and Equipment and Land and Mining Rights

A summary of property, plant and equipment and land and mining rights is as follows:

	March 31, 2012		December 31, 2011
Leasehold improvement	$	3,342,141	$	3,321,044
Production equipment		6,761,242		6,715,532
Furniture and fixtures		446,881		441,857
Automobiles		332,176		313,333
Land use rights		2,290,809		2,276,347
Mining rights		9,030,132		8,973,128
		22,203,381		22,041,241
Less: Accumulated depreciation		7,790,660		7,413,708
	$	14,412,721	$	14,627,533

Depreciation and amortization expense was $330,625 and $313,881 for the three months ended March 31, 2012 and 2011, respectively.  A breakdown of depreciation and amortization expenses is summarized as follows:

	Three Months Ended March 31,
	2012		2011
Depreciation of plant, equipment and improvements	$	185,678	$	170,378
Amortization of land use rights		12,658		12,130
Amortization of mining rights		132,289		131,373
	$	330,625	$	313,881

At March 31, 2012 and December 31, 2011, the Company holds mining rights to two limestone mines and two bauxite mines from which they are allowed to produce:

•   300,000 tons of limestone, from which the calcium needed for production of its products is derived

•   350,000 tons of bauxite, from which the aluminum for production of its products is derived.

During the three months ended March 31, 2012 and 2011, the Company had production from its limestone and bauxite mines as follows (in tons):

	Three Months Ended March 31,
	2012		2011
Limestone		23,643		24,501
Bauxite		57,304		59,069

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Shareholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

(9) Shareholders’ Equity

General Reserve Fund

In accordance with the PRC Regulations on Enterprises with Foreign Investment, an enterprise established in the PRC with foreign investment is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A WOFE is required to allocate at least 10% of its annual after-tax profit to the General Reserve Fund until the balance of such fund has reached 50% of its respective registered capital.  A non- wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare and Bonus Fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. As a result, $496,396 has been appropriated to the accumulated statutory reserves (included in the retained earnings) by the Company as of March 31, 2012 and December 31, 2011 and the balance represents a fully funded General Reserve Fund:

Following is an analysis of the general fund by subsidiary at March 31, 2012 and December 31, 2011:

			General
	Registered Capital		Reserve Fund
Jiangmen Huiyuan	$	-	$	-
Jiangmen Wealth Water		61,981		38,801
Guizhou Yufeng		61,981		39,211
Shangxi Wealth		619,806		418,384
	$	743,768	$	496,396

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net income	$ 4,910,801	$ 4,911,004
Other comprehensive income -
foreign currency translation adjustments	439,421	288,738
Comprehensive income	$ 5,350,222	$ 5,199,742

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Note Receivable

3 Months Ended

Mar. 31, 2012

Note Receivable [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(3) Note Receivable

On August 29, 2011, the Company entered into a secured note receivable agreement with a non-related party in the amount of $14,087,748 (RMB90,000,000) which was increased to approximately $25,187,727 (RMB160,000,000) in December 2011. The note carried an annual interest rate of 9%. This note originally expired on November 28, 2011 but was extended to March 31, 2012, and was secured by the debtor’s land use right, certain tangible assets and all the business operation rights. Interest receivable related to this note amounted to $156,085 as of December 31, 2011. As of March 28, 2012, the note receivable and interest receivable were fully repaid.