Note 7. Equity Method Investment in Joint Venture

9 Months Ended

Sep. 30, 2014

Note 7. Equity Method Investment in Joint Venture

NOTE 7. EQUITY METHOD INVESTMENT IN JOINT VENTURE

On November 9, 2009, Sichuan Apollo Solar Science & Technology Co. Ltd. (“Sichuan Apollo”), a wholly-owned foreign subsidiary of the Company, entered into a joint venture agreement (the “Agreement”) with Bengbu Design & Research Institute for Glass Industry (“Bengbu”) and a local Chinese government agency (the “Agency”). The Joint Venture (“JV”) was formed to conduct research and development related to glass used in the production of thin film solar cells and manufacture thin film solar cells. Under the terms of the agreement, Benghu and the Agency own an aggregate of 65% of the JV and Sichuan Apollo owns the remaining 35%. The Company accounts for this investment under the equity method of accounting.

Summarized financial information for our investment in the JV assuming a 100% ownership interest is as follows:

	September 30, 2014		September 30, 2013
Statement of operations
Revenues	$	23,106	$	25,628
Cost of sales		47,651		54,367
Gross profit		(24,545)		(28,739)
Operating Loss		(212,047)		(789,550)
Loss before income tax		(219,047)		(789,550)

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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APOLLO SOLAR ENERGY, INC. 10-Q