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.