Asia Carbon Industries, Inc. (the "Company" or "we") was incorporated in the
State of Maryland on June 23, 2008. Through the steps described below, we became
the indirect holding company for Taiyuan Hongxing Carbon Black, Ltd.
("Hongxing"), a manufacturer of carbon black products in the People's Republic
of China ("PRC"), on December 29, 2009.
On November 10, 2008, we formed Jinzheng Liteweisi Carbon (Taiyuan) Co., Ltd.
("Liteweisi") as our wholly-owned subsidiary and a "wholly foreign-owned
enterprise" in the PRC.
The laws of the PRC place restrictions on round trip investments, which are
defined under PRC law as an acquisition of a PRC entity by an offshore special
purpose vehicle owned by one or more PRC residents.