China Yct Intl (PINK:CYIG)

Notwithstanding the efficiencies that we expect to realize from continued growth, we expect that several factors will cause our selling, general and administrative expenses to increase in the coming months:

• If we are successful in obtaining the funds to complete our manufacturing facility, we will initiate manufacturing activities. This will cause us to incur facility costs and the expense of administrative personnel.
• Although we have $4.32 million in property, plant and equipment on our balance sheet, we are not recording any significant amount of depreciation, since we have not put our facility into service yet. When we commence manufacturing, we will begin to depreciate our property – which will have a substantially larger book value at that time – and incur the expense as a general expense to the extent it is not allocable to cost of goods sold.

Source: SEC Form 10Q ( For the quarterly period ended June 30, 2009, page21)