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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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: June 30, 2010

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

For the transition period from _____________ to
_____________

Commission File No. 000-53432

TEC TECHNOLOGY, INC.(Name of Small Business Issuer in Its Charter)

|Delaware                                         | 13-4013027                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     

Xinqiao Industrial ParkJingde County, Anhui
Province, 242600Shenzhen, P.R. China(Address
of principal executive offices)

86 (755) 8323-2722(Registrants telephone
number, including area code)

N/A(Former name, 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 of 1934 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.

Yes [X]               No
[   ]

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 [   ]                No [   ]

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  [   ]                      | Accelerated
      filer                 
      [   ]
|--------------------------------------------------- | ----------------------------------------------------
|                                                    |                                                     
|Non-accelerated filer    [  
]                      | Smaller reporting company [X]                       
|(Do not check if a smaller
      reporting company) |                                                     

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).

Yes [    ]            
No [X]

The number of shares outstanding of each of the issuers
classes of common equity, as of August 13, 2010 is as follows:

|Common Stock, $.001 par value | 30,181,552
|----------------------------- | ----------

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TABLE OF CONTENTS

|PART
      I   | FINANCIAL
      INFORMATION                                                                 |   
|-------------- | ------------------------------------------------------------------------------------------- | --
|               |                                                                                             |   
|ITEM
      1.  | FINANCIAL
      STATEMENTS.                                                                 | 3 
|ITEM
      2.  | MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 24
|ITEM
      3.  | QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                           | 36
|ITEM
      4.  | CONTROLS
      AND PROCEDURES.                                                              | 36
|               |                                                                                             |   
|PART
      II  | OTHER
      INFORMATION                                                                     |   
|               |                                                                                             |   
|ITEM
      1.  | LEGAL
      PROCEEDINGS.                                                                    | 36
|ITEM
      1A. | RISK
      FACTORS.                                                                         | 36
|ITEM
      2.  | UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.                          | 36
|ITEM
      3.  | DEFAULTS
      UPON SENIOR SECURITIES.                                                      | 37
|ITEM
      4.  | (REMOVED
      AND RESERVED).                                                               | 37
|ITEM
      5.  | OTHER
      INFORMATION.                                                                    | 37
|ITEM
      6.  | EXHIBITS.                                                                                   | 37

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PART IFINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS
(UNAUDITED)JUNE 30, 2010 AND 2009OFTEC
TECHNOLOGY, INC. AND SUBSIDIARIESINDEX TO FINANCIAL
STATEMENTS



|Contents                                                                                                                | Page(s)
|----------------------------------------------------------------------------------------------------------------------- | -------
|Consolidated
      Balance Sheets as of June 30, 2010 and December 31, 2009 (unaudited)                                 | 1      
|Consolidated
      Statements of Operations for the three and six months ended June 30, 2010
      and 2009 (unaudited) | 2      
|Consolidated
      Statements of Cash Flows for the six months ended June 30, 2010 and 2009
      (unaudited)           | 3      
|Notes
      to the Financial Statements (unaudited)                                                                     | 4      

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TEC TECHNOLOGY, INC. (Incorporated in the State of Delaware,
United States of America)

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                           |   | June 30, 2010 |  |   | December 31, 2009 | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------- |  | - | ----------------- | 
|                                                                                                                                                                                           |   | (Unaudited)   |  |   | (Unaudited)       | 
|ASSETS                                                                                                                                                                                     |   |               |  |   |                   | 
|                                                                                                                                                                                           |   |               |  |   |                   | 
|Current assets                                                                                                                                                                             |   |               |  |   |                   | 
|Cash and cash equivalents                                                                                                                                                                  | $ | 1,708,052     |  | $ | 164,927           | 
|Accounts receivable,
      net of allowance for doubtful accounts -current portion                                                                                                         |   | 17,359,204    |  |   | 8,791,842         | 
|Inventory                                                                                                                                                                                  |   | 9,783,133     |  |   | 7,066,787         | 
|Deposits and prepaid
      expenses                                                                                                                                                        |   | 2,080,886     |  |   | 2,716,237         | 
|Other receivable                                                                                                                                                                           |   | 1,683,344     |  |   | 3,802,358         | 
|Taxes recoverable                                                                                                                                                                          |   | -             |  |   | 4,889             | 
|Total current assets                                                                                                                                                                       |   | 32,614,619    |  |   | 22,547,040        | 
|Property and equipment                                                                                                                                                                     |   |               |  |   |                   | 
|Property and equipment, net of
      accumulated depreciation                                                                                                                              |   | 3,714,259     |  |   | 3,353,841         | 
|Other assets                                                                                                                                                                               |   |               |  |   |                   | 
|Land use rights, net of accumulated
      amortization                                                                                                                                     |   | 2,039,015     |  |   | 2,051,837         | 
|Long term accounts
      receivable, net of allowance for doubtful accounts                                                                                                                |   | 136,068       |  |   | -                 | 
|                                                                                                                                                                                           |   | 2,175,083     |  |   | 2,051,837         | 
|Total assets                                                                                                                                                                               | $ | 38,503,961    |  | $ | 27,952,718        | 
|                                                                                                                                                                                           |   |               |  |   |                   | 
|LIABILITIES AND
      STOCKHOLDERS' EQUITY                                                                                                                                                 |   |               |  |   |                   | 
|                                                                                                                                                                                           |   |               |  |   |                   | 
|Current liabilities                                                                                                                                                                        |   |               |  |   |                   | 
|                                                                                                                                                                                           |   |               |  |   |                   | 
|Accounts payable                                                                                                                                                                           | $ | 12,422,388    |  | $ | 5,012,224         | 
|Other payable and accrued expenses                                                                                                                                                         |   | 5,137,663     |  |   | 3,251,687         | 
|Taxes payable                                                                                                                                                                              |   | 387,549       |  |   | 1,306,915         | 
|Customer deposits                                                                                                                                                                          |   | 62,156        |  |   | 113,867           | 
|Short term borrowings                                                                                                                                                                      |   | 12,557,325    |  |   | 12,733,709        | 
|                                                                                                                                                                                           |   | 30,567,081    |  |   | 22,418,402        | 
|Commitments and
      contingencies                                                                                                                                                        |   | -             |  |   | -                 | 
|Stockholders' equity                                                                                                                                                                       |   |               |  |   |                   | 
|Preferred "B" stock:
      10,000,000 authorized, none issued and     
      outstanding $0.001 par value                                                                                  |   |               |  |   |                   | 
|Common stock: 300,000,000 authorized
      $0.001 par value 30,182,522      and
      19,194,421 shares issued and outstanding June 30, 2010
      and      December 31, 2009 respectively | $ | 30,182        |  | $ | 19,195            | 
|Additional paid in
      capital                                                                                                                                                           |   | 962,126       |  |   | 951,605           | 
|Retained earnings                                                                                                                                                                          |   | 6,576,576     |  |   | 4,235,616         | 
|Accumulated other
      comprehensive income                                                                                                                                               |   | 367,996       |  |   | 327,900           | 
|Total stockholders' equity                                                                                                                                                                 |   | 7,936,880     |  |   | 5,534,316         | 
|Total liabilities and
      stockholders' equity                                                                                                                                           | $ | 38,503,961    |  | $ | 27,952,718        | 

See accompanying notes of these consolidated financial
statements

1

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TEC TECHNOLOGY, INC. (Incorporated in the State of Delaware,
United States of America)

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

|                                             |   | Three months  |   |   | Three months  |   |   | Six months    |   |   | Six months    |  
|-------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ------------- | -
|                                             |   | ended         |   |   | ended         |   |   | ended         |   |   | ended         |  
|                                             |   | June 30, 2010 |   |   | June 30, 2009 |   |   | June 30, 2010 |   |   | June 30, 2009 |  
|                                             |   | (Unaudited)   |   |   | (Unaudited)   |   |   | (Unaudited)   |   |   | (Unaudited)   |  
|Revenues                                     | $ | 9,427,220     |   | $ | 4,725,600     |   | $ | 14,606,979    |   | $ | 6,407,520     |  
|Cost of goods sold                           |   | 6,443,918     |   |   | 2,990,817     |   |   | 9,957,895     |   |   | 4,211,649     |  
|Gross profit                                 |   | 2,983,302     |   |   | 1,734,783     |   |   | 4,649,084     |   |   | 2,195,871     |  
|Selling and marketing expenses               |   | (486,367      | ) |   | (21,779       | ) |   | (789,867      | ) |   | (95,229       | )
|General and administrative expenses          |   | (363,402      | ) |   | (158,828      | ) |   | (644,948      | ) |   | (356,708      | )
|Net income from operations                   |   | 2,133,533     |   |   | 1,554,176     |   |   | 3,214,269     |   |   | 1,743,934     |  
|Other income (expenses)                      |   |               |   |   |               |   |   |               |   |   |               |  
|Government grant                             |   | 179,417       |   |   | 63,010        |   |   | 179,417       |   |   | 63,010        |  
|Other income                                 |   | 13,694        |   |   | 29,414        |   |   | 13,695        |   |   | 29,338        |  
|Interest expense                             |   | (292,217      | ) |   | (170,159      | ) |   | (679,560      | ) |   | (255,452      | )
|Net other income (expenses)                  |   | (99,106       | ) |   | (77,735       | ) |   | (486,448      | ) |   | (163,104      | )
|Net income before provision for income taxes |   | 2,034,427     |   |   | 1,476,441     |   |   | 2,727,821     |   |   | 1,580,830     |  
|Provision for income taxes                   |   | (209,868      | ) |   | (367,027      | ) |   | (386,861      | ) |   | (396,811      | )
|Net income                                   |   | 1,824,559     |   |   | 1,109,414     |   |   | 2,340,960     |   |   | 1,184,019     |  
|Other comprehensive gain                     |   |               |   |   |               |   |   |               |   |   |               |  
|Foreign currency translation gain            |   | 20,048        |   |   | (12,813       | ) |   | 40,096        |   |   | (16,747       | )
|Comprehensive income                         | $ | 1,844,607     |   | $ | 1,096,601     |   | $ | 2,381,056     |   | $ | 1,167,272     |  
|Weighted average numbers of common shares    |   |               |   |   |               |   |   |               |   |   |               |  
|Basic                                        |   | 22,856,798    |   |   | 19,194,421    |   |   | 22,856,798    |   |   | 19,194,421    |  
|Diluted                                      |   | 22,856,798    |   |   | 19,194,421    |   |   | 22,856,798    |   |   | 19,194,421    |  
|Earnings per share                           |   |               |   |   |               |   |   |               |   |   |               |  
|Basic                                        | $ | 0.08          |   | $ | 0.06          |   | $ | 0.10          |   | $ | 0.06          |  
|Diluted                                      | $ | 0.08          |   | $ | 0.06          |   | $ | 0.10          |   | $ | 0.06          |  

See accompanying notes of these consolidated financial
statements 2

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TEC TECHNOLOGY, INC. (Incorporated in the State of Delaware,
United States of America)

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                        |   | Six months    |   |   | Six months    |  
|--------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------- | -
|                                                                                        |   | ended         |   |   | ended         |  
|                                                                                        |   | June 30, 2010 |   |   | June 30, 2009 |  
|                                                                                        |   | (Unaudited)   |   |   | (Unaudited)   |  
|Cash flows from operating
      activities                                              |   |               |   |   |               |  
|Net income                                                                              | $ | 2,340,960     |   | $ | 1,184,019     |  
|Adjustments to
      reconcile net income to net cash provided by operating activities: |   |               |   |   |               |  
|Depreciation                                                                            |   | 129,824       |   |   | 73,445        |  
|Amortization of intangible assets                                                       |   | 21,127        |   |   | 21,110        |  
|Changes in operating assets and
      liabilities                                       |   |               |   |   |               |  
|Increase in inventory                                                                   |   | (2,716,346    | ) |   | (1,217,770    | )
|Decrease
      (increase) in deposits and prepaid expenses                              |   | 635,351       |   |   | (1,817,596    | )
|Increase in accounts receivable                                                         |   | (8,703,430    | ) |   | (3,414,988    | )
|Decrease
      (increase) in other receivable                                           |   | 2,119,014     |   |   | (1,304,119    | )
|Decrease in taxes recoverable                                                           |   | 4,889         |   |   | 92,151        |  
|(Decrease)
      increase in taxes payable                                              |   | (919,366      | ) |   | 105,034       |  
|Increase in accounts payable                                                            |   | 7,410,164     |   |   | 1,346,905     |  
|Decrease in
      customer deposits                                                     |   | (51,711       | ) |   | (28,811       | )
|Increase in other payable and accrued expenses                                          |   | 1,885,976     |   |   | 1,841,442     |  
|Net cash provided by (used in) operating
      activities                               |   | 2,156,452     |   |   | (3,119,178    | )
|Cash flows from investing
      activities                                              |   |               |   |   |               |  
|Purchases of property and equipment                                                     |   | (455,446      | ) |   | (334,335      | )
|Purchases of land use
      rights                                                      |   | -             |   |   | (1,643,546    | )
|Net cash used in investing activities                                                   |   | (455,446      | ) |   | (1,977,881    | )
|Cash flows from financing
      activities                                              |   |               |   |   |               |  
|Common stock issued                                                                     |   | 10,987        |   |   | -             |  
|Additional paid in
      capital raised                                                 |   | 10,521        |   |   | 290,276       |  
|Proceeds from short term borrowings                                                     |   | -             |   |   | 4,860,390     |  
|Repayment of short term
      borrowings                                                |   | (176,384      | ) |   | -             |  
|Net cash (used in) provided by financing
      activities                               |   | (154,876      | ) |   | 5,150,666     |  
|Effects on exchange rate
      changes on cash                                          |   | (3,005        | ) |   | 3,125         |  
|Increase in cash and cash equivalents                                                   |   | 1,543,125     |   |   | 56,732        |  
|Cash and cash equivalents,
      beginning of period                                    |   | 164,927       |   |   | 704,854       |  
|Cash and cash equivalents, end of period                                                | $ | 1,708,052     |   | $ | 761,586       |  
|Supplementary disclosures of
      cash flow information:                               |   |               |   |   |               |  
|Cash paid for interest                                                                  | $ | 679,560       |   | $ | 255,452       |  
|Cash paid for income
      taxes                                                        | $ | 386,861       |   | $ | 396,811       |  

See accompanying notes of these consolidated financial
statements

3

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|1. | BUSINESS ORGANIZATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Highland Ridge, Inc. (the Company)(HGHN) (formerly
      known as Sea Green, Inc., Americom Networks Corp. and Americoman Networks
      International, Inc.) was incorporated on July 22, 1988 in the State of a
      Delaware, United States of America. On June 9, 2010, the Company changed
      its name from Highland Ridge, Inc. to TEC Technology, Inc. (HGHN).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | TEC Technology Limited (TEC) is a private corporation,
      under the Companies Laws of the Hong Kong (HK) on November 24, 2009.
      Both HGHN and TEC were both shell companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On February 22, 2010, TEC entered into an Equity
      Ownership Transfer Agreement (the Transfer Agreement) with Mr. Chun Lu,
      the existing sole shareholder of Anhui TEC Tower Co., Ltd (ATEC). On
      March 10, 2010, TEC acquired 100% of the outstanding shares. This
      acquisition was accounted for as a reverse merger with TEC Technology
      Limited being the legal acquirer. The accounting treatment for this
      transaction is essentially recapitalization of ATEC with TECs common
      stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On May 4, 2010, the Company entered into a Share Exchange
      Agreement, with TEC, and its sole stockholder, Mr. Hua Peng Phillip Wong,
      pursuant to which the Company acquired 10,000 shares of TEC, representing
      100% of the issued and outstanding capital stock, in exchange for
      19,194,421 shares of our common stock, par value $0.001, which constituted
      63.6% of the Companys issued and outstanding capital stock on a
      fully-diluted basis as of and immediately after the consummation of the
      transactions contemplated by the Share Exchange Agreement. TEC is a
      holding company for three PRC based operating subsidiaries (ATEC, ZTEC and
      STD) which are engaged in the design, production and sale of transmission
      towers for telecommunications service providers and electric utilities. On
      the same date, Mr. ChunLu, Chairman of the Board and Chief Executive
      Officer of HGHN, entered into an option agreement with TEC and Mr. Hua
      Peng Phillip Wong, the Companys controlling stockholder, pursuant to
      which Mr. Lu was granted an option to acquire 17,797,372 shares our common
      stock currently owned by Mr. Wong for an aggregate exercise price of
      $1,000,000. Mr. Lu may exercise this option, in whole but not in part,
      during the period commencing on the 365 thday following of the
      date of the option agreement and ending on the second anniversary of the
      date thereof contemplated by the Share Exchange Agreement, which effected
      a reverse acquisition of the TEC. The accounting treatment for this
      transaction is essentially recapitalization of TEC with HGHNs common
      stock.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | TEC established wholly owned Shuncheng Taida Technology
      Co., Ltd (STD) (the Operating Subsidiaries) incorporated in the
      Peoples Republic of China with limited liability on January 20, 2010.
      STDs capital has yet been introduced and it has not yet commenced
      operations. STDs main business will include engineering consultancy and
      design of mobile communication steel towers, microwave towers, angle steel
      towers, steel pipe towers and transmission cable towers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | ATEC is a private corporation, incorporated under the
      laws of the Peoples Republic of China (PRC) on July 3, 2007. ATECs
      principal activities are the development and manufacturing of mobile
      communication steel towers, microwave towers, angle steel towers, steel
      pipe towers and transmission cable towers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On December 7, 2009, ATEC purchased a 90% equity interest
      in Zheijiang TEC Tower Co., Limited (ZTEC), a PRC limited company with
      Ms. Yiping Zhu, an individual holder of the remaining 10% equity interest
      in ZTEC. ZTECs production facility is still under construction and it has
      not yet commenced operations. ZTECs main business will include the
      development and manufacturing of mobile communication steel towers,
      microwave towers, angle steel towers, steel pipe towers and transmission
      cable towers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company is located at Xinqiao Industrial Park, Jingde
      Country, Anhui Province, 242600, Peoples Republic of China.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES
|-- | --------------------------------------------

| | 2.1 | FISCAL YEAR                                                      
| | --- | -----------------------------------------------------------------
| |     |                                                                  
| |     | The Company has adopted December 31 as its fiscal year
      end.

4

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|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.2 | REPORTING ENTITIES                                                                      
| | --- | ----------------------------------------------------------------------------------------
| |     |                                                                                         
| |     | The accompanying consolidated financial statements
      include the following entities:

Name of
    Place of
    
    
    Date of
    Percentagesubsidiary
    incorporation
    Registered capital
    Paid - in capital
    incorporation
    of interest
    Principal activityTEC Technology Limited
      Hong Kong
      HK$10,000
      HK$10,000
      November 24, 2009
      100% directly
      Investment holdingAnhui TEC Tower Co ., Limited
      People's Republic of China
      RMB20,000,000
      RMB9,400,000
      July 3, 2007
      100% directly
      Development and manufacturing of mobile communication
        steel towers, microwave towers, angle steel towers, steel pipe towers
        and transmission cable towersZhejiang TEC Tower Co ., Limited
      People's Republic of China
      RMB89,000,000
      RMB17,800,000
      December 7, 2009
      90% directly
      The company has yet commenced its business of
        development and manufacturing of mobile communication steel towers, microwave
        towers, angle steel towers, steel pipe towers and transmission cable towersShuncheng Taida Technology Co., Limited
      People's Republic of China
      $1,000,000
      $Nil
      January 20, 2010
      100% directly
      The company has yet commenced its business of
        engineering consultancy and design of mobile communication steel towers,
        microwave towers, angle steel towers, steel pipe towers and transmission
        cable towers


| | 2.3 | BASIS OF CONSOLIDATION AND PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The consolidated financial statements are prepared in
      accordance with generally accepted accounting principles in the United
      States of America (US GAAP). In the opinion of management, the
      accompanying balance sheets, and statements of income, and cash flows and
      include all adjustments, consisting only of normal recurring items,
      considered necessary to give a fair presentation of operating results for
      the periods presented. All material inter-company transactions and
      balances have been eliminated in
consolidation.

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.3 | BASIS OF CONSOLIDATION AND PRESENTATION
      (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | On February 22, 2010, TEC entered into an Equity
      Ownership Transfer Agreement (the Transfer Agreement) with Mr. Chun Lu,
      the existing sole shareholder of Anhui TEC Tower Co., Ltd (ATEC). On
      March 10, 2010, the TEC acquired 100% of the outstanding shares. This
      acquisition was accounted for as a reverse merger with TEC Technology
      Limited being the legal acquirer. The accounting treatment for this
      transaction is essentially recapitalization of ATEC with TECs common
      stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | On March 10, 2010, TEC completed a reverse acquisition
      transaction through of 100% interest in ATEC, and became the immediate
      parent company of the group. On May 4, 2010, the Company entered into a
      Share Exchange Agreement, with TEC, and its sole stockholder, Mr. Hua Peng
      Phillip Wong, pursuant to which the Company acquired 10,000 shares of TEC,
      representing 100% of the issued and outstanding capital stock, in exchange
      for 19,194,421 shares of our common stock, par value $0.001, which
      constituted 63.6% of our issued and outstanding capital stock on a
      fully-diluted basis as of and immediately after the consummation of the
      transactions contemplated by the Share Exchange Agreement. TEC is a
      holding company for three PRC based operating subsidiaries (ATEC, ZTEC and
      STD) which are engaged in the design, production and sale of transmission
      towers for telecommunications service providers and electric utilities. On
      the same date, Mr. Chun Lu, Chairman of the Board and Chief Executive
      Officer of HGHN, entered into an option agreement with TEC and Mr. Hua
      Peng Phillip Wong, our controlling shareholder, pursuant to which Mr. Lu
      was granted an option to acquire 17,797,372 shares our common stock
      currently owned by Mr. Wong for an aggregate exercise price of $1,000,000.
      Mr. Lu may exercise this option, in whole but not in part, during the
      period commencing on the 365 thday following of the date of
      the option agreement and ending on the second anniversary of the date
      thereof contemplated by the Share Exchange Agreement, which effected a
      reverse acquisition of the TEC. The accounting treatment for this
      transaction is essentially recapitalization of TEC with HGHNs common
      stock.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Prior to the acquisition of ATEC by TEC, TEC and HGHN
      were both shell companies. For reporting purposes, the Company has assumed
      that Mr. Lu exercised his option immediately and thus HGHNN, TEC and ATEC
      are effectively under same control of Mr. Lu when the Company acquired
      ATEC. The acquisition transactions between (i) HGHN and TEC and (ii) TEC
      and ATEC are accounted for as reverse mergers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | For accounting purposes, the combination of the company
      and TEC was accounted for as a reverse merger with ATEC as the acquirer
      and HGHN and TEC as the acquired party and the acquisition of ZTEC and STD
      was accounted for under the acquisition method with TEC as the immediate
      parent corporation of both companies for legal purposes and the Company as
      the ultimate parent corporation. Accordingly the Companys financial
      statements have been prepared on a consolidated basis for the periods
      presented and the consolidated balance sheets, consolidated statements of
      income and other comprehensive income, stockholders equity and cash flows
      were presented as if the recapitalization had occurred at the beginning of
      the earliest period presented and the operations of the accounting
      acquired party from the date of stock exchange transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | HGHN, TEC, ATEC, ZTEC and STD are hereafter referred to
      as (the Company).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | Interim results are not necessarily indicative of results
      for a full year. The information included in this interim report should be
      read in conjunction with the information included in the Companys annual
      report on Form 10-K for the fiscal year ended December 31,
  2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

6

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.4 | USE OF ESTIMATES                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The preparation of consolidated financial statements
      requires us to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosures of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. Actual
      results may differ from those estimates.

| | 2.5 | ECONOMIC AND POLITICAL RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Companys business operations are conducted in the
      PRC and are subject to special considerations and risks not typically
      associated with companies in North America and Western Europe. Chinas
      political, economic and legal environments may influence the Companys
      business, financial condition and results of operations, including adverse
      effects by changes in governmental policies in laws and regulations,
      anti-inflationary measures, and rates and methods of
  taxation.

| | 2.6 | REVENUE RECOGNITION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Companys revenue recognition policies are in
      compliance with ASC 605. Sales revenue is recognized when all of the
      following have occurred: (i) persuasive evidence of an arrangement exists,
      (ii) delivery has occurred or services have been rendered, (iii) the price
      is fixed or determinable, and (iv) the ability to collect is reasonably
      assured. These criteria are generally satisfied at the time of shipment
      when risk of loss and title passes to the customer.                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Company recognizes revenue when the goods are
      delivered and title has passed. Sales revenue represents the invoiced
      value of goods, net of a value-added tax (VAT). All of the Companys
      products that are sold in the PRC are subject to a Chinese value-added tax
      at a rate of 17% of the gross sales price or at a rate approved by the
      Chinese local government. This VAT may be offset by the VAT paid by the
      Company on raw materials and other materials included in the cost of
      producing their finished product.

| | 2.7 | SHIPPING AND HANDLING                                                                                                                                                                                                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                              
| |     | Shipping and handling costs related to costs of goods
      sold are included in cost of sales and selling and marketing expenses
      which totaled $149,852 and $52,472 for the three months ended June 30,
      2010 and June 30, 2009. Shipping and handling costs amounted to $289,572
      and $94,784 for the six months ended June 30, 2010 and June 30,
    2009.

| | 2.8 | ADVERTISING                                                                                                                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                               
| |     | Advertising costs are expensed as incurred and totaled
      $1,539 and $459 for the three months ended June 30, 2010 and June 30,
      2009. Advertising costs amounted to $2,582 and $2,145 for the six months
      ended June 30, 2010 and June 30, 2009.

| | 2.9 | RESEARCH AND DEVELOPMENT COSTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Research and development costs include costs incurred to
      develop new products and are charged to operations when incurred. These
      costs totaled $nil as incurred for the three months ended June 30, 2010
      and June 30, 2009. Research and development costs amounted to $nil for the
      six months ended June 30, 2010 and June 30, 2009. The costs for
      development of new products and substantial enhancements to existing
      products are expensed as incurred until technological feasibility has been
      established, at which time any additional costs would be
    capitalized.

| | 2.10 | GOVERNMENT GRANTS                                                                                                                                                                                       
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                         
| |      | Government grants represent local authority grants to the
      company for infrastructure development. It is recognized on cash basis
      when the local authority approves the grant to the company.

7

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.11 | CASH AND CASH EQUIVALENTS                                                                                                                                                                                                                                                                                                                                                                                
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | Cash and cash equivalents comprise cash in bank and on
      hand, demand deposits with banks and other financial institutions, and
      short- term, highly liquid investments which are readily convertible into
      known amounts of cash and which are subject to an insignificant risk of
      changes in value, and have a short maturity of generally within three
      months when acquired.

| |                        |   | June 30, 2010 |  |   | December 31, 2009 | 
| | ---------------------- | - | ------------- |  | - | ----------------- | 
| |                        |   |               |  |   |                   | 
| | Cash and bank balances | $ | 1,708,052     |  | $ | 164,927           | 

| | 2.12 | FOREIGN CURRENCY TRANSLATION AND OTHER COMPREHENSIVE
      INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      | The reporting currency of the Company is the U.S.
      dollars. The functional currency of the Company is the Chinese Renminbi
      (RMB).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      | For those entities whose functional currency is other
      than the U.S. dollars, all assets and liabilities are translated into U.S.
      dollars at the exchange rate on the balance sheet date; shareholders
      equity is translated at historical rates and items in the statements of
      income and of cash flows are translated at the average rate for the
      period. Because cash flows are translated based on the average translation
      rate, amounts related to assets and liabilities reported in the statement
      of cash flows will not necessarily agree with changes in the corresponding
      balances in the balance sheet. Translation adjustments resulting from this
      process are included in accumulated other comprehensive income in the
      statement of shareholders equity. Transaction gains and losses that arise
      from exchange rate fluctuations on transactions denominated in a currency
      other than the functional currency are included in the results of
      operations as incurred.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      | Foreign currency translation gain included in accumulated
      other comprehensive income amounted to $367,996 of June 30, 2010 and
      $327,900 as of December 31, 2009. The balance sheet amounts with the
      exception of equity at June 30, 2010 and December 31, 2009 were translated
      at RMB6.79 to $1.00 and RMB6.82 to $1.00, respectively. The average
      translation rates applied to the statements of income and of cash flows
      for the three months ended June 30, 2010 and June 30, 2009 were RMB6.82 to
      $1.00 and RMB6.85 to $1.00.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | 2.13 | BUSINESS COMBINATIONS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | The Company adopted the accounting pronouncements
      relating to business combinations (primarily contained in ASC Topic 805
      Business Combinations), including assets acquired and liabilities
      assumed arising from contingencies. These pronouncements established
      principles and requirements for how the acquirer of a business recognizes
      and measures in its financial statements the identifiable assets acquired,
      the liabilities assumed, and any non-controlling interest in the acquire
      as well as provides guidance for recognizing and measuring the goodwill
      acquired in the business combination and determines what information to
      disclose to enable users of the financial statements to evaluate the
      nature and financial effects of the business combination. In addition,
      these pronouncements eliminate the distinction between contractual and
      non-contractual contingencies, including the initial recognition and
      measurement criteria and require an acquirer to develop a systematic and
      rational basis for subsequently measuring and accounting for acquired
      contingencies depending on their nature. Our adoption of these
      pronouncements will have an impact on the manner in which we account for
      any future acquisitions.

8

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.14 | NON-CONTROLLING INTEREST IN CONSOLIDATED FINANCIAL
      STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |      | The Company adopted the accounting pronouncement on
      non-controlling interests in consolidated financial statements, which
      establishes accounting and reporting standards for the non-controlling
      interest in a subsidiary and for the deconsolidation of a subsidiary. This
      guidance is primarily contained in ASC Topic Consolidation. It clarifies
      that a non-controlling interest in a subsidiary is an ownership interest
      in the consolidated financial statements. The adoption of this standard
      has not had material impact on our consolidated financial
    statements.

| | 2.15 | PROPERTY AND EQUIPMENT                                                                                                                                                                                                              
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                     
| |      | Property and equipment are stated at cost less
      accumulated depreciation and any accumulated impairment losses. .
      Depreciation is calculated on a straight-line basis over the estimated
      useful life of the assets.

Assets Classifications
    Estimated useful lifeBuildings
    50 yearsPlant and machinery
    5 yearsFurniture, fixtures and office equipment
    5 yearsMotor vehicles
    5 years


Any gain or loss arising on the sale
or disposal of the asset is included in the income statement in the period the
item is sold or otherwise disposed. Maintenance and repairs of property and
equipment are charged to operations when incurred.

| |                                          |   | June 30, 2010 |   |   | December 31, 2009 |  
| | ---------------------------------------- | - | ------------- | - | - | ----------------- | -
| | Buildings                                | $ | 2,471,619     |   | $ | 2,425,451         |  
| | Plant and machinery                      |   | 1,290,185     |   |   | 1,062,185         |  
| | Furniture, fixtures and office equipment |   | 60,161        |   |   | 61,455            |  
| | Motor vehicles                           |   | 284,702       |   |   | 87,257            |  
| |                                          |   | 4,106,667     |   |   | 3,636,348         |  
| |                                          |   |               |   |   |                   |  
| | Less: Accumulated depreciation           |   | (392,408      | ) |   | (282,507          | )
| | Net book value                           | $ | 3,714,259     |   | $ | 3,353,841         |  

Depreciation expense was $69,326 and
$38,611 for the three months ended June 30, 2010 and June 30, 2009 respectively.
Depreciation expense was $129,824 and $73,445 for the six months ended June 30,
2010 and June 30, 2009

Expenditures for maintenance and
repairs are charged to expense as incurred, whereas major betterments are
capitalized as additions to property and equipment. The Company reviews its
property and equipment whenever events or changes in circumstances indicate that
the carrying value of certain assets might not be recoverable. In these
instances, the Company recognizes an impairment loss when it is probable that
the estimated cash flows are less than the carrying value of the asset. To date,
no such impairment losses have been recorded.

9

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|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.16 | LAND USE RIGHTS                                                                                                                                                                                                                                                                                                                                   
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                   
| |      | Private ownership of land is not permitted in the PRC.
      Instead, the ATEC has leased three lots of land at Xinqiao Industrial
      Park, Jingde Country, Anhui Province. The total cost of the first, the
      second and the third land use rights of ATEC was $2,112,867 and the lease
      expires in 2056, 2058 and 2058 respectively.
| |      |                                                                                                                                                                                                                                                                                                                                                   
| |      | Land use rights are amortized on the straight line basis
      over their respective lease periods. The lease period of land use rights
      located in an industrial park zone is 50
years.                                                                                                                                                     

| |                                |   | June 30, 2010 |   |   | December 31, 2009 |  
| | ------------------------------ | - | ------------- | - | - | ----------------- | -
| |                                |   |               |   |   |                   |  
| | Cost                           | $ | 2,121,509     |   | $ | 2,112,867         |  
| | Less: Accumulated amortization |   | (82,494       | ) |   | (61,030           | )
| | Net book value                 | $ | 2,039,015     |   | $ | 2,051,837         |  

| |      | Amortization expense was $10,563 and $10,555 for the
      three months ended June 30, 2010 and June 30, 2009 respectively.
      Amortization expense was $21,127 and $21,110 for the six months ended June
      30, 2010 and June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 2.17 | IMPAIRMENT OF LONG-LIVED ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | In accordance with ASC Topic 360,Accounting for the
      Impairment or Disposal of Long-Lived Assets, long-lived assets to be held
      and used are analyzed for impairment whenever events or changes in
      circumstances indicate that the related carrying amounts may not be
      recoverable. The Company reviews the carrying amount of its long-lived
      assets, including intangibles, for impairment, each reporting period. An
      asset is considered impaired when estimated future cash flows are less
      than the carrying amount of the asset. In the event the carrying amount of
      such asset is considered not recoverable, the asset is adjusted to its
      fair value. Fair value is generally determined based on discounted future
      cash flow. As of June 30, 2010 and December 31, 2009, the Company
      determined no impairment charges were necessary.    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 2.18 | CAPITALIZED INTERNAL-USE SOFTWARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | The Company capitalizes certain costs incurred to
      purchase or create internal-use software in accordance with ASC Topic
      350-40, Internal Use Software. To date, such costs have included
      external direct costs of materials and services incurred in the
      implementation of internal-use software and are included within computer
      hardware and software. Once the capitalization criteria have been met,
      such costs are classified as software and are amortized on a straight-line
      basis over five years once the software has been put into use. Subsequent
      additions, modifications, or upgrades to internal-use software are
      capitalized only to the extent that they allow the software to perform a
      task it previously did not perform. Software maintenance and training
      costs are expensed in the period in which they are
  incurred.

10

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|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.19 | INVENTORY                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      | Inventory consists primarily of raw materials, work in
      progress, and finished goods. Raw materials are stated at cost. Cost
      comprises direct materials and, where applicable direct labor costs and
      applicable overhead costs that has been incurred in bringing the inventory
      to its present location and condition. Finished goods are stated at the
      lower of cost (determined on first in first out method) or market
      value.

| |                  |   | June 30, 2010 |  |   | December 31, 2009 | 
| | ---------------- | - | ------------- |  | - | ----------------- | 
| |                  |   |               |  |   |                   | 
| | Raw materials    | $ | 6,945,420     |  | $ | 3,949,512         | 
| | Work in progress |   | 525,093       |  |   | 129,726           | 
| | Finished goods   |   | 2,312,620     |  |   | 2,987,549         | 
| |                  | $ | 9,783,133     |  | $ | 7,066,787         | 

| |      | The Company provides for inventory losses based on
      obsolescence and levels in excess of forecasted demand. In these cases,
      inventory is reduced to estimated realizable value based on historical
      usage and expected demand. Inherent in the Companys estimates of market
      value in determining inventory valuation are estimates related to economic
      trends, future demand for the Companys products, and technical
      obsolescence of products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 2.20 | ALLOWANCE FOR DOUBTFUL ACCOUNTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | The Company reduces gross trade accounts receivable by an
      allowance for doubtful accounts. The allowance for doubtful accounts is
      the Companys best estimate of the amount of probable credit losses in the
      Companys existing accounts receivable. The Company reviews its allowance
      for doubtful accounts on a regular basis and all past due balances are
      reviewed individually for collectability. Account balances are charged off
      against the allowance after all means of collection have been exhausted
      and the potential for recovery is considered remote. In general, the sale
      contracts provide 10% of the contract price as retention monies for 1 to 2
      years as warranty period. The customers will release retention monies
      after the expiry of warranty period as they have no claims for the
      products. Provision for doubtful accounts and bad debts written off for
      the three months ended June 30, 2010 and six months ended June 30, 2010
      are $nil.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | Aging of accounts receivable is
      as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                           |   | June 30, 2010 |   |   | December 31, 2009 | 
| | --------------------------------------------------------- | - | ------------- | - | - | ----------------- | 
| |                                                           |   |               |   |   |                   | 
| | within 3 months                                           | $ | 9,832,133     |   | $ | 8,398,448         | 
| | over 3 months and within 6 months                         |   | 7,527,071     |   |   | 152,797           | 
| | over 6 months and within 1
      year                     |   | -             |   |   | 240,597           | 
| | over 1 year                                               |   | 136,068       |   |   | -                 | 
| |                                                           |   | 17,495,272    |   |   | 8,791,842         | 
| |                                                           |   |               |   |   |                   | 
| | Less: reclassified as long
      term accounts receivable |   | (136,068      | ) |   | -                 | 
| |                                                           | $ | 17,359,204    |   | $ | 8,791,842         | 

Accounts receivable includes the
amounts of $3,457,974 (12.31.2009: $1,333,972) that was factored to the
Industrial and Commercial Bank, PRC for collection.

11

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.21 | DEPOSITS AND PREPAID
EXPENSES
| | ---- | -----------------------------

| |                                                         |   | June 30 , 2010 |  |   | December 31, 2009 | 
| | ------------------------------------------------------- | - | -------------- |  | - | ----------------- | 
| |                                                         |   |                |  |   |                   | 
| | Guarantee deposits                                      | $ | 1,093,187      |  | $ | 1,334,237         | 
| | Advances to suppliers                                   |   | 947,271        |  |   | 1,351,157         | 
| | Prepayment for purchase of
      property and equipment |   | 39,845         |  |   | 13,570            | 
| | Advances to logistic service providers                  |   | 583            |  |   | 9,938             | 
| | Utility deposits                                        |   | -              |  |   | 7,335             | 
| |                                                         | $ | 2,080,886      |  | $ | 2,716,237         | 

| |      | Guarantee deposits are provided to financial institutions
      in return for issuance of a corporate guarantee to financiers. Advances to
      suppliers are down payments or deposits for inventory purchases. The
      inventory is normally delivered within one to two months after the
      payments have been made.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                              
| | 2.22 | OTHER RECEIVABLE                                                                                                                                                                                                                                                                                                             

| |                                                           |   | June 30, 2010 |  |   | December 31, 2009 | 
| | --------------------------------------------------------- | - | ------------- |  | - | ----------------- | 
| |                                                           |   |               |  |   |                   | 
| | Due from former sole
      stockholder and his affiliates | $ | 104,577       |  | $ | 2,948,905         | 
| | Loan due from third parties                               |   | -             |  |   | 195,111           | 
| | Due from employees                                        |   | 784,790       |  |   | 655,238           | 
| | Due from third parties                                    |   | 644,585       |  |   | -                 | 
| | Others                                                    |   | 149,392       |  |   | 3,104             | 
| |                                                           | $ | 1,683,344     |  | $ | 3,802,358         | 

Due from former sole stockholder and
his affiliates and loan due from third parties are unsecured advances, interest
free and without fixed terms of repayment and are for the specific business
purposes. Due from employees are the amounts advanced for business transactions
on behalf of the company and will be reconciled on the completion of business
transactions.

12

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.23 | OTHER PAYABLE AND ACCRUED
  EXPENSES
| | ---- | ------------------------------------

| |                                                                |   | June 30, 2010 |  |   | December 31, 2009 | 
| | -------------------------------------------------------------- | - | ------------- |  | - | ----------------- | 
| | Due to former sole
      stockholder and his affiliates        | $ | 2,722,847     |  | $ | -                 | 
| | Loans due to third parties and local province
      government |   | 2,018,010     |  |   | 1,350,146         | 
| | Due to potential investors                                     |   | -             |  |   | 880,200           | 
| | Due to employees                                               |   | 165,861       |  |   | 18,015            | 
| | Due to factory builders                                        |   | 13,625        |  |   | -                 | 
| | Guarantee deposits payable to logistic
      service providers |   | 29,460        |  |   | -                 | 
| | Accruals                                                       |   | 186,685       |  |   | 49,754            | 
| | Others                                                         |   | 1,175         |  |   | 953,572           | 
| |                                                                | $ | 5,137,663     |  | $ | 3,251,687         | 

| |      | Due to former sole stockholder and his affiliates and
      loans due to third parties and local province government are unsecured,
      short term loans, interest free and without a fixed term of repayment and
      are for unspecific business purposes.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                
| | 2.24 | TAXES PAYABLE                                                                                                                                                                                                                                                  

| |                                                        |   | June 30, 2010 |  |   | December 31, 2009 | 
| | ------------------------------------------------------ | - | ------------- |  | - | ----------------- | 
| |                                                        |   |               |  |   |                   | 
| | Enterprise income tax payable                          | $ | 349,460       |  | $ | 1,290,966         | 
| | VAT payable                                            |   | 32,654        |  |   | -                 | 
| | City maintenance and
      construction levies payable |   | -             |  |   | 7,157             | 
| | Individual income tax payable                          |   | 551           |  |   | -                 | 
| | Sundry levies payable                                  |   | 1,151         |  |   | -                 | 
| | Stamp duty payable                                     |   | 1,476         |  |   | -                 | 
| | Education levies payable                               |   | 2,257         |  |   | 8,792             | 
| |                                                        | $ | 387,549       |  | $ | 1,306,915         | 

13

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.25 | FAIR VALUE OF
      FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | The Company follows paragraph 825-10-50-10 of the FASB
      Accounting Standards Codification for disclosures about fair value of its
      financial instruments and paragraph 820-10-35-37 of the FASB Accounting
      Standards Codification (Paragraph 820-10-35-37) to measure the fair
      value of its financial instruments. Paragraph 820-10-35-37 establishes a
      framework for measuring fair value in accounting principles generally
      accepted in the United States of America (U.S. GAAP), and expands
      disclosures about fair value measurements. To increase consistency and
      comparability in fair value measurements and related disclosures,
      Paragraph 820-10-35-37 establishes a fair value hierarchy which
      prioritizes the inputs to valuation techniques used to measure fair value
      into three (3) broad levels. The fair value hierarchy gives the highest
      priority to quoted prices (unadjusted) in active markets for identical
      assets or liabilities and the lowest priority to unobservable inputs. The
      three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37
      are described below:
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Level 1    Quoted market prices available
      in active markets for identical assets or liabilities as of the reporting
      date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Level 2    Pricing inputs other than
      quoted prices in active markets included in Level 1, which are either
      directly or indirectly observable as of the reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | Level 3    Pricing inputs that are
      generally observable inputs and not corroborated by market data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | The carrying amounts of the Companys financial assets
      and liabilities, such as cash and accrued expenses, approximate their fair
      values because of the short maturity of these instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | The Company does not have any assets or liabilities
      measured at fair value on a recurring or a non-recurring basis,
      consequently, the Company did not have any fair value adjustments for
      assets and liabilities measured at fair value at June 30, 2010 or December
      31, 2009, nor gains or losses are reported in the statement of income and
      other comprehensive income that are attributable to the change in
      unrealized gains or losses relating to those assets and liabilities still
      held at the reporting date for the fiscal period ended June 30, 2010 or
      December 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| | 2.26 | STOCK-BASED COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | As of June 30, 2010 and December 31, 2009, the Company
      had no stock-based compensation plans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 2.27 | RETIREMENT BENEFIT COSTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | PRC state managed retirement benefit programs are defined
      contribution programs and the payments to these programs are charged as
      expenses when employees have rendered service entitling them to the
      contribution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 2.28 | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | The Company accounts for income taxes under the
      provisions of ASC740 Accounting for Income Taxes.Under ASC 740,
      deferred tax assets and liabilities are determined based on the difference
      between the financial statement carrying amounts and tax bases of assets
      and liabilities using the tax bases of assets and liabilities using the
      enacted taxes rates in effect in the years in which the differences are
      expected to reverse. Provision for income taxes consist of taxes currently
      due plus deferred taxes. Since the Company had no operations within the
      United States there is no provision for US income taxes and there are no
      deferred tax amounts as of June 30, 2010.

14

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.28 | INCOME TAXES (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | The provision for income tax is based on the results for
      the year as adjusted for items, which are non-assessable or disallowed. It
      is calculated using tax rates that have been enacted or substantively
      enacted at the balance sheet date. Deferred tax is accounted for using the
      balance sheet liability method in respect of temporary differences arising
      from differences between the carrying amount of assets and liabilities in
      the financial statements and the corresponding tax basis used in the
      computation of assessable tax profit. In principle, deferred tax
      liabilities are recognized for all taxable temporary differences, and
      deferred tax assets are recognized to the extent that it is probable that
      taxable profit will be available against which deductible temporary
      differences can be utilized.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | Deferred income taxes are calculated at the tax rates
      that are expected to apply to the period when the asset is realized or the
      liability is settled. Deferred tax is charged or credited in the income
      statement, except when it related to items credited or charged directly to
      equity, in which case the deferred tax is also dealt with in equity.
      Deferred tax assets and liabilities are offset when they relate to income
      taxes levied by the same taxation authority and the Company intends to
      settle its current tax assets and liabilities on a net basis.                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 2.29 | PRODUCT WARRANTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | Substantially all of the Companys products are covered
      by a standard warranty of 1 to 2 years for products. In the event of a
      failure of products covered by this warranty, the Company must repair or
      replace the software or products or, if those remedies are insufficient,
      and at the discretion of the Company, provide a refund. The Company
      provides nil% of sales income for product warranties for the three months
      ended and the six months ended June 30, 2010 and June 30, 2009 in the
      warranty reserve to reflect estimated material and labor costs of
      maintenance for potential or actual product issues but for which the
      Company expects to incur an obligation. The product warranty reserve was
      $nil at June 30, 2010 and December 31, 2009.                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 2.30 | RELATED PARTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | Parties are considered to be related to the company if
      the company has the ability, directly or indirectly, to control the party,
      or exercise significant influence over the party in making financial and
      operating decisions, or where the company and the party are subject to
      common control. Related parties may be individuals (being members of key
      management personnel, significant shareholders and/or their close family
      members) or other entities which are under the significant influence of
      related parties of the company.                                                                                                                                                                                                                                                                                                             

15

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.31 | CONCENTRATIONS OF CREDIT RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | The Company's operations are carried out in the PRC.
      Accordingly, the Company's business, financial condition and results of
      operations may be influenced by the political, economic and legal
      environment in the PRC, and by the general state of the PRC's economy. The
      Company's operations in the PRC are subject to specific considerations and
      significant risks not typically associated with companies in North America
      and Western Europe. The Company's results may be adversely affected by
      changes in governmental policies with respect to laws and regulations,
      anti-inflationary measures, currency conversion and remittance abroad, and
      rates and methods of taxation, among other things.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | Cash includes demand deposits in accounts maintained with
      state owned banks within the Peoples Republic of China. Total cash (not
      including restricted cash balances) in these banks on June 30, 2010 and
      December 31, 2009 amounted to $1,690,574 and $138,251, of which no
      deposits are covered by insurance. The Company has not experienced any
      losses in such accounts and believes it is not exposed to any risks on its
      cash in bank accounts.                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | Accounts receivable are derived from revenue earned from
      customers located primarily in the Peoples Republic of China. We perform
      ongoing credit evaluations of customers and have not experienced any
      material losses to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      | The Company had 5 major customers whose revenue
      individually represented the following percentages of the Companys total
      revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

June 30, 2010
      
      
      June 30, 2009
      
      
      June 30, 2010
      
      
      June 30, 2009Shenzhen Zhongxing Kangxun
      
      41.18%
      
      
      27.22%
      
      
      37.71%
      
      
      30.79%Neimenggu Hengxin Tower Co Ltd
      
      38.60%
      
      
      -
      
      
      24.85%
      
      
      -Nanjing Daji Tower
      
      -
      
      
      -
      
      
      10.33%
      
      
      -Hangzhou Debao Electronic Machinary
      
      -
      
      
      -
      
      
      10.22%
      
      
      -Customer E
      
      12.44%
      
      
      53.85%
      
      
      8.01%
      
      
      54.38%Customer F
      
      2.91%
      
      
      -
      
      
      -
      
      
      7.23%Customer G
      
      2.35%
      
      
      -
      
      
      -
      
      
      -Customer H
      
      -
      
      
      9.80%
      
      
      -
      
      
      3.67%Customer I
      
      -
      
      
      2.78%
      
      
      -
      
      
      2.05%97.48%
      
      
      93.65%
      
      
      91.12%
      
      
      98.12%


16

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------

| | 2.31 | CONCENTRATIONS OF CREDIT RISK
(CONTINUED)                                                                                                                       
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                 
| |      | The company had 5 major customers whose accounts
      receivables balance individually represented of the Companys total
      accounts receivable as follows:

| |                                         |  | 40,359 |  |  | December 31, 2009 | 
| | --------------------------------------- |  | ------ |  |  | ----------------- | 
| |                                         |  |        |  |  |                   | 
| | Shenzhen Zhongxing Kangxun              |  | 39.76% |  |  | 31.71%            | 
| | Neiminggu Hengxin Tower                 |  | 24.31% |  |  | -                 | 
| | Shanxi Jinnent Steel
      Construction |  | 15.63% |  |  | 31.00%            | 
| | Customer D                              |  | 6.47%  |  |  | 24.55%            | 
| | Nanjing Daji Tower                      |  | 4.95%  |  |  | -                 | 
| | Customer F                              |  | -      |  |  | 5.83%             | 
| | Customer G                              |  | -      |  |  | 4.36%             | 
| |                                         |  | 91.12% |  |  | 97.45%            | 

|3. | WEIGHTED AVERAGE NUMBER OF SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On May 4, 2010, the Company entered into a Share Exchange
      Agreement which has been accounted for as a reverse merger since there has
      been a change of control. The Company computes the weighted-average number
      of common shares outstanding in accordance with ASC Topic 805 Business
      Combination which states that in calculating the weighted average shares
      when a reverse merger takes place in the middle of the year, the number of
      common shares outstanding from the beginning of that period to the
      acquisition date shall be computed on the basis of the weighted average
      number of common shares of the legal acquiree (the accounting acquirer)
      outstanding during the period multiplied by the exchange ratio established
      in the merger agreement. The number of common shares outstanding from the
      acquisition date to the end of that period shall be the actual number of
      common shares of the legal acquirer (the accounting acquiree) outstanding
      during that period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | EARNINGS PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | As prescribed in ASC Topic 260 Earning per
      Share, Basic Earnings per Share (EPS) is computed by dividing net
      income available to common stockholders by the weighted average number of
      common stock shares outstanding during the year. Diluted EPS is computed
      by dividing net income available to common stockholders by the
      weighted-average number of common stock shares outstanding during the year
      plus potential dilutive instruments such as stock options and warrants.
      The effect of stock options on diluted EPS is determined through the
      application of the treasury stock method, whereby proceeds received by the
      Company based on assumed exercises are hypothetically used to repurchase
      the Companys common stock at the average market price during the
      period.                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | For the three months ended June 30, 2010 and June 30,
      2009, basic and diluted earnings per share amount to $0.08 and $0.06,
      respectively. For the six months ended June 30, 2010 and June 30, 2009,
      basic and diluted earnings per share amount to $0.10 and $0.06,
      respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5. | ACCUMULATED OTHER COMPREHENSIVE INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | ASC Topic 220 Comprehensive Incomeestablishes
      standards for reporting and displaying comprehensive income and its
      components in financial statements. Comprehensive income is defined as the
      change in stockholders equity of a business enterprise during a period
      from transactions and other events and circumstances from non-owner
      sources. The comprehensive income for all periods presented includes both
      the reported net income and net change in cumulative translation
      adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

17

---

|6. | RECENT ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In June 2009, the FASB approved the FASB Accounting
      Standards Codification (the Codification) as the single source of
      authoritative nongovernmental U.S. GAAP to be launched on July 1, 2009.
      The Codification does not change current U.S. GAAP, but is intended to
      simplify user access to all authoritative U.S. GAAP by providing all the
      authoritative literature related to a particular topic in one place. All
      existing accounting standard documents will be superseded and all other
      accounting literature not included in the Codification will be considered
      non- authoritative. The Codification is effective for interim and annual
      periods ending after September 15, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In August 2009, the FASB issued the FASB Accounting
      Standards Update No. 2009-04 Accounting for Redeemable Equity Instruments
      - Amendment to Section 480-10-S99 which represents an update to section
      480-10-S99, distinguishing liabilities from equity, per EITF Topic D-98,
      Classification and Measurement of Redeemable Securities . The Company does
      not expect the adoption of this update to have a material impact on its
      consolidated financial position, results of operations or cash
    flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In August 2009, the FASB issued the FASB Accounting
      Standards Update No. 2009-05 Fair Value Measurement and Disclosures Topic
      820  Measuring Liabilities at Fair Value , which provides amendments to
      subtopic 820-10, Fair Value Measurements and Disclosures  Overall, for
      the fair value measurement of liabilities. This update provides
      clarification that in circumstances in which a quoted price in an active
      market for the identical liability is not available, a reporting entity is
      required to measure fair value using one or more of the following
      techniques: 1. A valuation technique that uses: a. The quoted price of the
      identical liability when traded as an asset b. Quoted prices for similar
      liabilities or similar liabilities when traded as assets. 2. Another
      valuation technique that is consistent with the principles of topic 820;
      two examples would be an income approach, such as a present value
      technique, or a market approach, such as a technique that is based on the
      amount at the measurement date that the reporting entity would pay to
      transfer the identical liability or would receive to enter into the
      identical liability. The amendments in this update also clarify that when
      estimating the fair value of a liability, a reporting entity is not
      required to include a separate input or adjustment to other inputs
      relating to the existence of a restriction that prevents the transfer of
      the liability. The amendments in this update also clarify that both a
      quoted price in an active market for the identical liability when traded
      as an asset in an active market when no adjustments to the quoted price of
      the asset are required are Level 1 fair value measurements. The Company
      does not expect the adoption of this update to have a material impact on
      its consolidated financial position, results of operations or cash
      flows
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In September 2009, the FASB issued the FASB Accounting
      Standards Update No. 2009-08 Earnings Per Share  Amendments to Section
      260- 10-S99, which represents technical corrections to topic 260-10-S99,
      Earnings per share, based on EITF Topic D-53, Computation of Earnings Per
      Share for a Period that includes a Redemption or an Induced Conversion of
      a Portion of a Class of Preferred Stock and EITF Topic D-42, The Effect of
      the Calculation of Earnings per Share for the Redemption or Induced
      Conversion of Preferred Stock . The Company does not expect the adoption
      of this update to have a material impact on its consolidated financial
      position, results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In September 2009, the FASB issued the FASB Accounting
      Standards Update No. 2009-09 Accounting for Investments -Equity Method
      and Joint Ventures and Accounting for Equity-Based Payments to
      Non-Employees . This update represents a correction to Section
      323-10-S99-4, Accounting by an Investor for Stock-Based Compensation
      Granted to Employees of an Equity Method Investee. Additionally, it adds
      observer comment Accounting Recognition for Certain Transactions Involving
      Equity Instruments Granted to Other Than Employees to the Codification.
      The Company does not expect the adoption to have a material impact on its
      consolidated financial position, results of operations or cash
    flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

18

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|6. | RECENT ACCOUNTING PRONOUNCEMENTS
  (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In September 2009, the FASB issued the FASB Accounting
      Standards Update No. 2009-12 Fair Value Measurements and Disclosures
      Topic 820  Investment in Certain Entities That Calculate Net Assets Value
      Per Share (or Its Equivalent) , which provides amendments to Subtopic
      820-10, Fair Value Measurements and Disclosures-Overall, for the fair
      value measurement of investments in certain entities that calculate net
      asset value per share (or its equivalent). The amendments in this update
      permit, as a practical expedient, a reporting entity to measure the fair
      value of an investment that is within the scope of the amendments in this
      update on the basis of the net asset value per share of the investment (or
      its equivalent) if the net asset value of the investment (or its
      equivalent) is calculated in a manner consistent with the measurement
      principles of Topic 946 as of the reporting entitys measurement date,
      including measurement of all or substantially all of the underlying
      investments of the investee in accordance with Topic 820. The amendments
      in this update also require disclosures by major category of investment
      about the attributes of investments within the scope of the amendments in
      this update, such as the nature of any restrictions on the investors
      ability to redeem its investments a the measurement date, any unfunded
      commitments (for example, a contractual commitment by the investor to
      invest a specified amount of additional capital at a future date to fund
      investments that will be make by the investee), and the investment
      strategies of the investees. The major category of investment is required
      to be determined on the basis of the nature and risks of the investment in
      a manner consistent with the guidance for major security types in U.S.
      GAAP on investments in debt and equity securities in paragraph
      320-10-50-1B. The disclosures are required for all investments within the
      scope of the amendments in this update regardless of whether the fair
      value of the investment is measured using the practical expedient. The
      Company does not expect the adoption to have a material impact on its
      consolidated financial position, results of operations or cash
    flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In October 2009, the Financial Accounting Standards Board
      issued an Accounting Standards Update (ASU) regarding accounting for
      own- share lending arrangements in contemplation of convertible debt
      issuance or other financing. This ASU requires that at the date of
      issuance of the shares in a share-lending arrangement entered into in
      contemplation of a convertible debt offering or other financing, the
      shares issued shall be measured at fair value and be recognized as an
      issuance cost, with an offset to additional paid-in capital. Further,
      loaned shares are excluded from basic and diluted earnings per share
      unless default of the share-lending arrangement occurs, at which time the
      loaned shares would be included in the basic and diluted
      earnings-per-share calculation. This ASU is effective for fiscal years
      beginning on or after December 15, 2009, and interim periods within those
      fiscal years for arrangements outstanding as of the beginning of those
      fiscal years. The Company is currently assessing the impact of this ASU on
      its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In December 2009, FASB issued ASU No. 2009-16, Accounting
      for Transfers of Financial Assets. This Accounting Standards Update amends
      the FASB Accounting Standards Codification for the issuance of FASB
      Statement No. 166, Accounting for Transfers of Financial Assetsan
      amendment of FASB Statement No. 140.The amendments in this Accounting
      Standards Update improve financial reporting by eliminating the exceptions
      for qualifying special-purpose entities from the consolidation guidance
      and the exception that permitted sale accounting for certain mortgage
      securitizations when a transferor has not surrendered control over the
      transferred financial assets. In addition, the amendments require enhanced
      disclosures about the risks that a transferor continues to be exposed to
      because of its continuing involvement in transferred financial assets.
      Comparability and consistency in accounting for transferred financial
      assets will also be improved through clarifications of the requirements
      for isolation and limitations on portions of financial assets that are
      eligible for sale accounting. The Company does not expect the adoption of
      this ASU to have a material impact on its consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

19

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|6. | RECENT ACCOUNTING PRONOUNCEMENTS
  (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In January 2010, FASB issued ASU No. 2010-01, Accounting
      for Distributions to Shareholders with Components of Stock and Cash. The
      amendments in this Update clarify that the stock portion of a distribution
      to shareholders that allows them to elect to receive cash or stock with a
      potential limitation on the total amount of cash that all shareholders can
      elect to receive in the aggregate is considered a share issuance that is
      reflected in EPS prospectively and is not a stock dividend for purposes of
      applying Topics 505 and 260 (Equity and Earnings Per Share). The
      amendments in this update are effective for interim and annual periods
      ending on or after December 15, 2009, and should be applied on a
      retrospective basis. The Company adopted this standard and has determined
      the standard does not have material effect on the Companys consolidated
      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In January 2010, FASB issued ASU No. 2010-02 regarding
      accounting and reporting for decreases in ownership of a subsidiary. Under
      this guidance, an entity is required to deconsolidate a subsidiary when
      the entity ceases to have a controlling financial interest in the
      subsidiary. Upon deconsolidation of a subsidiary, and entity recognizes a
      gain or loss on the transaction and measures any retained investment in
      the subsidiary at fair value. In contrast, an entity is required to
      account for a decrease in its ownership interest of a subsidiary that does
      not result in a change of control of the subsidiary as an equity
      transaction. This ASU clarifies the scope of the decrease in ownership
      provisions, and expands the disclosures about the deconsolidation of a
      subsidiary or de-recognition of a group of assets. This ASU is effective
      for beginning in the first interim or annual reporting period ending on or
      after December 31, 2009. The Company does not expect the adoption of this
      ASU to have a material impact on its consolidated financial statements In
      January 2010, FASB issued ASU No. 2010-02  Accounting and Reporting for
      Decreases in Ownership of a Subsidiary  a Scope Clarification. The
      amendments in this Update affect accounting and reporting by an entity
      that experiences a decrease in ownership in a subsidiary that is a
      business or nonprofit activity. The amendments also affect accounting and
      reporting by an entity that exchanges a group of assets that constitutes a
      business or nonprofit activity for an equity interest in another entity.
      The amendments in this update are effective beginning in the period that
      an entity adopts SFAS No. 160, Non-controlling Interests in Consolidated
      Financial Statements  An Amendment of ARB No. 51. If an entity has
      previously adopted SFAS No. 160 as of the date the amendments in this
      update are included in the Accounting Standards Codification, the
      amendments in this update are effective beginning in the first interim or
      annual reporting period ending on or after December 15, 2009. The
      amendments in this update should be applied retrospectively to the first
      period that an entity adopted SFAS No. 160. The Company adopted this
      standard and has determined the standard does not have material effect on
      the Companys consolidated financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In January 2010, FASB issued ASU No. 2010-06  Improving
      Disclosures about Fair Value Measurements. This update provides amendments
      to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers
      in and out of Levels 1 and 2. A reporting entity should disclose
      separately the amounts of significant transfers in and out of Level 1 and
      Level 2 fair value measurements and describe the reasons for the
      transfers. 2) Activity in Level 3 fair value measurements. In the
      reconciliation for fair value measurements using significant unobservable
      inputs (Level 3), a reporting entity should present separately information
      about purchases, sales, issuances, and settlements (that is, on a gross
      basis rather than as one net number). This update provides amendments to
      Subtopic 820-10 that clarify existing disclosures as follows: 1) Level of
      disaggregation. A reporting entity should provide fair value measurement
      disclosures for each class of assets and liabilities. A class is often a
      subset of assets or liabilities within a line item in the statement of
      financial position. A reporting entity needs to use judgment in
      determining the appropriate classes of assets and liabilities. 2)
      Disclosures about inputs and valuation techniques. A reporting entity
      should provide disclosures about the valuation techniques and inputs used
      to measure fair value for both recurring and nonrecurring fair value
      measurements. Those disclosures are required for fair value measurements
      that fall in either Level 2 or Level 3.The new disclosures and
      clarifications of existing disclosures are effective for interim and
      annual reporting periods beginning after December 15, 2009, except for the
      disclosures about purchases, sales, issuances, and settlements in the roll
      forward of activity in Level 3 fair value measurements. Those disclosures
      are effective for fiscal years beginning after December 15, 2010, and for
      interim periods within those fiscal years. The Company is currently
      evaluating the impact of this ASU, however, the Company does not expect
      the adoption of this ASU to have a material impact on its consolidated
      financial statements.                                                                                                                                                                                               

20

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|6. | RECENT ACCOUNTING PRONOUNCEMENTS
  (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In February 2010, the FASB issued Accounting Standards
      Update 2010-09, Subsequent Events (Topic 855): Amendments to Certain
      Recognition and Disclosure Requirements, or ASU 2010-09. ASU 2010-09
      primarily rescinds the requirement that, for listed companies, financial
      statements clearly disclose the date through which subsequent events have
      been evaluated. Subsequent events must still be evaluated through the date
      of financial statement issuance; however, the disclosure requirement has
      been removed to avoid conflicts with other SEC guidelines. ASU 2010-09 was
      effective immediately upon issuance and was adopted in February
    2010.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|7. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | No Hong Kong corporate income tax has been provided in
      the financial statements, as TEC did not have any assessable profits for
      the six months ended June 30, 2010 and June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Beginning January 1, 2008, the new Enterprise Income Tax
      (EIT) law replaced the existing laws for Domestic Enterprises (DEs)
      and Foreign Invested Enterprises (FIEs). The new standard EIT rate of
      25% replaced the 33% rate currently applicable to both DEs and FIEs. The
      Company is currently evaluating the impact that the new EIT will have on
      its financial condition. Beginning January 1, 2008, China unified the
      corporate income tax rule on foreign invested enterprises and domestic
      enterprises. The unified corporate income tax rate is 25%.                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Provision for income tax of the Companys subsidiary ATEC
      is made at unified EIT rate of 25% for the three months ended March 31,
      2010 but ATEC is entitled for refund 10% according to local preferential
      tax policy for manufacture of high technology products for three years
      from January 1, 2010 to December 31, 2013. As effect, provision for income
      tax of the Companys subsidiary ATEC is made at local preferential EIT
      rate of 15% for the six months ended June 30, 2010.                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The companys subsidiaries, ZTEC and STD, have not yet
      commenced their businesses, no provisions for income tax are made for the
      three months ended and six months ended June 30, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The following table reconciles the U.S statutory rates to
      the Companys effective tax rate for the three months ended and six months
      ended June 30, 2010:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Six months endedJune 30, 2010$U.S. Statutory rates
    
    34%Foreign income not recognized in USA
    
    (34)%China Enterprise income tax rate for high
      technology
    
    15%Total provision for income taxes
    
    15%


Provision for income taxes is as
follows:

Three months
      ended
    
    
    Three months
      ended
    
    
    Six months ended
    
    
    Six months endedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Income taxTEC - Hong Kong profits
      tax
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -ATEC - China EIT
    
    209,868
    
    
    367,027
    
    
    386,861
    
    
    396,811ZTEC and STD - China
      EIT
    
    -
    
    
    -
    
    
    -
    
    
    -Deferred tax
    
    -
    
    
    -
    
    
    -
    
    
    -$
    209,868
    
    $
    367,027
    
    $
    386,861
    
    $
    396,811


21

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|8. | SHORT TERM BORROWINGS                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                          
|   | There are no provisions in the Companys bank borrowings
      that would accelerate repayment of debt as a result of a change in credit
      ratings or a material adverse change in the Companys business. Under
      certain agreements, the Company has the option to retire debt prior to
      maturity, either at par or at a premium over
par.

| |                                                                                                                                                                                                                                                     |   | June 30, 2010 |  |   | December 31, 2009 | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | ----------------- | 
| |                                                                                                                                                                                                                                                     |   |               |  |   |                   | 
| |                                                                                                                                                                                                                                                     |   |               |  |   |                   | 
| | Loan from Industrial and
      Commercial Bank, Jingde Country Branch,
      PRC          Interest
      rate 7.47% per annum with personal guarantees of
      Messr.          ChunLu
      and YiPing Zhu                                         | $ | 4,013,925     |  | $ | 4,041,585         | 
| | Huishang Bank, Hefei branch, PRC                                                                                                                                                                                                                    |   | -             |  |   | 2,200,500         | 
| | China Merchant Bank, Heifei
      branch, PRC                                                                                                                                                                                                       |   | 1,178,400     |  |   | 1,173,600         | 
| | China Everbright Bank, Heifei branch,
      PRC          Interest
      rate 5.31% per annum with corporate and
      personal          guarantees
      of Zhongrung Trust Investment Co Ltd and
      Messr.          LuChun
      and YiPing Zhu |   | 4,419,000     |  |   | 4,401,000 -       | 
| | Huishang Bank, Xuancheng
      branch, PRC                                                                                                                                                                                                          |   | 2,946,000     |  |   | 682,304           | 
| | The Economic Standing Committee of Jinde
      Country, PRC                                                                                                                                                                                         |   | -             |  |   | 234,720           | 
| |                                                                                                                                                                                                                                                     | $ | 12,557,325    |  | $ | 12,733,709        | 

| |                                                                                                                                                                                                                                                     |   | June 30, 2010 |  |   | December 31, 2009 | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | ----------------- | 
| |                                                                                                                                                                                                                                                     |   |               |  |   |                   | 
| |                                                                                                                                                                                                                                                     |   |               |  |   |                   | 
| | Loan from Industrial and
      Commercial Bank, Jingde Country Branch,
      PRC          Interest
      rate 7.47% per annum with personal guarantees of
      Messr.          ChunLu
      and YiPing Zhu                                         | $ | 4,013,925     |  | $ | 4,041,585         | 
| | Huishang Bank, Hefei branch, PRC                                                                                                                                                                                                                    |   | -             |  |   | 2,200,500         | 
| | China Merchant Bank, Heifei
      branch, PRC                                                                                                                                                                                                       |   | 1,178,400     |  |   | 1,173,600         | 
| | China Everbright Bank, Heifei branch,
      PRC          Interest
      rate 5.31% per annum with corporate and
      personal guarantees          of
      Zhongrung Trust Investment Co Ltd and Messr. ChunLu
      and          YiPing
      Zhu |   | 4,419,000     |  |   | 4,401,000 -       | 
| | Huishang Bank, Xuancheng
      branch, PRC                                                                                                                                                                                                          |   | 2,946,000     |  |   | 682,304           | 
| | The Economic Standing Committee of Jinde
      Country, PRC                                                                                                                                                                                         |   | -             |  |   | 234,720           | 
| |                                                                                                                                                                                                                                                     | $ | 12,557,325    |  | $ | 12,733,709        | 

|9. | COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company has authorized Preferred B stock of
      10,000,000 shares of $0.001 each amounting to $10,000. As of June 30, 2010
      and December 31, 2009, the Company has issued and outstanding none shares.
      The Company has authorized common stock of 300,000,000 shares of $0.001
      each amounting to $300,000. As of June 30, 2010, the Company has issued
      and outstanding shares of 30,182,522 ordinary shares, respectively of par
      value of $0.001 each and amounting to $30,182.

22

---

|10. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Total lease expenses for the three months ended June 30,
      2010 and June 30, 2009 were $3,225 and $nil, respectively. Total lease
      expenses for the six months ended June 30, 2010 and June 30, 2009 were
      $5,343 and $nil, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The future minimum lease payments as of June 30, 2010 and
      December 31, 2009 were $nil.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | From time to time and in the ordinary course of business,
      the Company may be subject to various claims, charges, and litigation. As
      of June 30, 2010 and December 31, 2009, the Company did not have any
      pending claims, charges, or litigation that it expects would have a
      material adverse effect on its consolidated balance sheets, consolidated
      statements of income or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|11. | PRODUCT LINE INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company sells towers, which are used by customers in
      various industries. The production process, class of customer, selling
      practice and distribution process are the same for all towers. The
      Companys chief operating decision-makers (i.e. chief executive officer
      and his direct reports) review financial information presented on a
      consolidated basis, accompanied by disaggregated information about
      revenues by product lines for purposes of allocating resources and
      evaluating financial performance. There are no segment managers who are
      held accountable for operations, operating results and plans for levels or
      components below the consolidated unit level. The Company considers itself
      to be operating within one reportable segment. The Company does not have
      long-lived assets located in foreign countries. The Company's net revenue
      from external customers by main product lines is as
  follows:

Three months ended
    
    
      Three months ended
    
    
    Six months ended
    
    
    Six months endedJune 30, 2010
    
    
      June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Domestic salesCommunication towers
    $
      3,935,310
    
    $
      1,286,094
    
    $
    7,077,759
    
    $
    2,312,142Electricity supply
      towers
    
      5,150,696
    
    
      3,375,096
    
    
    6,925,361
    
    
    3,955,033Export salesCommunication towers
    
      223,727
    
    
      -
    
    
    236,098
    
    
    -Electricity supply towers
    
      117,487
    
    
      64,410
    
    
    367,761
    
    
    140,345$
      9,427,220
    
    $
      4,725,600
    
    $
    14,606,979
    
    $
    6,407,520


|12. | RELATED PARTIES TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | For the three months ended June 30, 2010 and June 30,
      2009, there was cash and non-cash compensation of $3,887 and $660
      respectively awarded to, earned by, or paid to any of the Companys
      executive officers or directors. For the six months ended June 30, 2010
      and June 30, 2009, there was cash and non-cash compensation of $4,459 and
      $660 respectively awarded to, earned by, or paid to any of the Companys
      executive officers or directors.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | In addition to the transactions and balances as disclosed
      elsewhere in these consolidated financial statements, during the period,
      the Company had no other significant related party transactions.                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|13. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | As required by ASC Topic 855 Subsequent Events,the Company has evaluated subsequent events that have occurred through
      August 15, 2010, the date the consolidated financial statements were
      issued.                                                                                                                                                                                                                                                                           

23

---

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

This report contains forward-looking statements. The
forward-looking statements are contained principally in the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." These statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements. These risks and
uncertainties include, but are not limited to, the factors described in the
section captioned "Risk Factors" in our Current Report on Form 8-K, filed with
the SEC on May 10, 2010. In some cases, you can identify forward-looking
statements by terms such as "anticipates," appears, "believes," "could,"
"estimates," "expects," "intends," "may," "plans," "potential," "predicts,"
"projects," "should," "would" and similar expressions intended to identify
forward-looking statements. Forward-looking statements reflect our current views
with respect to future events and are based on assumptions and subject to risks
and uncertainties. Given these uncertainties, you should not place undue
reliance on these forward-looking statements.

Also, forward-looking statements represent our estimates and
assumptions only as of the date of this report. You should read this report with
the understanding that our actual future results may be materially different
from what we expect. Except as required by law, we assume no obligation to
update any forward-looking statements publicly, or to update the reasons actual
results could differ materially from those anticipated in any forward-looking
statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the
purposes of this report only:

- "TEC Technology, Inc.," the "Company," "we," "us," and "our" refer to the
  combined business of TEC Technology, Inc. (formerly Highland Ridge, Inc.) and
  its direct and indirect subsidiaries, TEC Technology Limited, or "TEC," a Hong
  Kong limited company, and its wholly owned subsidiaries, Anhui TEC Tower Co.,
  Ltd., or "TEC Tower," a PRC limited Company, and Shuncheng Taida Technology
  Co., Ltd., "Shuncheng," a PRC limited company; and TEC Tower's wholly owned
  subsidiary, Zhejiang TEC Tower Co., Ltd., or "ZTEC," as the case may be;
- "Hong Kong" refers to the Hong Kong Special Administrative Region of the
  People's Republic of China;
- "Exchange Act" means the Securities Exchange Act of 1934, as amended;
- "PRC," "China," and "Chinese," refer to the People's Republic of China;
- "Renminbi" and "RMB" refer to the legal currency of China;
- "Securities Act" are to the Securities Act of 1933, as amended; and
- "U.S. dollars," "dollars" and "$" refer to the legal currency of the United
  States.

|Throughout this report, we have converted RMB to U.S.
      dollars as follows: |                  
|------------------------------------------------------------------------------- | -----------------
|June 30, 2010                                                                   |                  
|Balance sheet                                                                   | RMB 6.80 to $1.00
|Statement of income and comprehensive income                                    | RMB 6.83 to $1.00
|                                                                                |                  
|December 31, 2009                                                               |                  
|Balance sheet                                                                   | RMB 6.84 to $1.00
|                                                                                |                  
|June 30, 2009                                                                   |                  
|Statement of income and comprehensive
      income                              | RMB 6.84 to $1.00

24

---

Overview of Our Business

Through our indirect Chinese subsidiary, Anhui TEC Tower, we
are primarily engaged in the design, production and sale of transmission towers
and related products used in high voltage electric power transmission and
wireless communications. We sell our tower products to prime contractors on
large transmission projects for electric utility companies or telecommunications
service providers, who are developing and constructing the projects for end
customers. Our electric transmission towers currently support 35kv, 110kv,
220kv, and 500kv transmission lines and we plan to build towers that support
Ultra High Voltage (UHV) tower lines of 750+kv DC or 1000+kv AC transmission
lines. Our wireless communication towers include single-tube towers, 4-strut
towers and roof top towers for the 2G, 3G, and microwave market. We plan to
expand our business in the near future to enter the communication base station
system integration market and to offer tower installation and maintenance
services. Our towers are primarily made of steel, but some contain aluminum or
other alloy materials.

Our revenues currently are, and historically have been,
generated from the sale of our tower products. Our revenues increased from $4.73
million in the three months ended June 30, 2009, to $9.43 million in the three
months ended June 30, 2010, representing a compounded growth rate of
approximately 99.5% . In the future we expect to offer installation and
maintenance services that we believe will generate an additional revenue stream.
To date we have generated no material revenues from such services.

Our headquarters are located in Anhui Province in southeastern
  China and our international sales network is operated from our branch office
  in the Shenzhen Special Economic Zone.

Executive Overview of Quarterly Results

The following summarizes certain key financial information for
the second fiscal quarter.

- Revenue: Revenue was $9.43 million for the three months ended
  June 30, 2010, an increase of $4.70 million, or 99.5%, from $4.73 million for
  the same period last year.
- Gross Profit and Margin: Gross profit was $2.98 million for
  the three months ended June 30, 2010, an increase of $1.25 million, or 72.0%,
  from $1.73 million for the same period last year. Gross margin was 31.6% for
  the three months ended June 30, 2010 as compared to 36.7% for the same period
  last year, a 5% drop mainly due to slight downward price adjustment in the
  overall China power transmission industry and upward shift in material (steel)
  pricing.
- Net Income: Net income was $1.82 million for the three months
  ended June 30, 2010, an increase of $0.71 million, or approximately 64.5%,
  from $1.11 million for the same period of last year.
- Fully diluted net income per share: Fully diluted net income
  per share was approximately $0.08 for the three months ended June 30, 2010,
  based on 2,856,798 diluted common shares outstanding, as compared to
  approximately $0.06 for the same period last year, based on 30,181,582 diluted
  common shares outstanding.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following
  factors:

- Growth in the Chinese Economy. We operate our manufacturing
  facilities in China and derive over 50% of our revenues from sales to
  customers in China. Economic conditions in China, therefore, affect virtually
  all aspects of our operations, including the demand for our products, the
  availability and prices of our raw materials and our other expenses. Despite
  the global economic turmoil and economic slowdown during much of 2008 and
  2009, China experienced economic growth, achieving a 8.7% growth in gross
  domestic product during 2009, with a fourth quarter rate of 10.7%. China
  appears to be emerging from the economic slowdown and is expected to
  experience continued growth. There are concerns and predictions of overheating
  in the high-end real estate market, which may slow down fixed asset
  investments in the real estate market, but such slow down is not expected to
  have a substantial adverse effect on investment in power transmission and
  communications markets which relate domestic infrastructure.

25

---

- Product Development and Brand Recognition. We believe that in
  order to compete effectively in this market, we need to constantly improve the
  quality of our products and deliver new, innovative products. As such, we face
  the challenge of expanding our research and development capacity. We need to
  maintain a strong and sufficient research and development team and identify
  the right directions for our research and development. We also face the
  long-term challenge of developing our brand recognition. We plan to focus on
  building a reputation for quality and excellent customer service within our
  industry instead of on advertising. We believe that our sales and service team
  is key to developing the company's brand recognition and value.
- Growth of Transmission Projects. Sales of our tower products
  are dependent on the continued availability of transmission projects both in
  China and in emerging overseas markets. Growth in the domestic market depends
  primarily on China's continued investment in the electric transmission
  industry, in accordance with its 11th5-Year Plan, mainly through
  its investment in the state run electric transmission utility companies, State
  Grid Corporation of China and China Southern Power Grid, and in dozens of
  provincial level grid companies that supply regional and local grids. So far,
  China's investment in electric transmission has totaled over $100 billion,
  approximately 25% of which was spent on towers and related products and
  services, and we expect this investment to continue for the next 5-7 years.
  China's wireless communications market has also grown considerably in the past
  decade, with an estimated 700 million mobile phone users in China as of
  September 2009. Continued growth in the wireless communications market will
  depend on the success of planned service provider infrastructure investment of
  over $60 billion in the next five years, with the bulk of this amount expected
  to be allocated to tower and base station development. Continued growth in
  transmission projects in the developing overseas electric transmission and
  wireless communication markets will similarly depend on continued investments
  in these overseas markets, such as Africa's reported $3.2 billion annual
  investment in mobile communication infrastructure per year through 2010 and
  annual investments in the Middle East, Africa, and South America totaling over
  $15 billion a year, with annual growth rate of over 10%. We believe that if
  planned investments in electric and wireless communications projects in China
  and abroad continue, we will realize increased opportunities to sell our tower
  products and planned maintenance services.

Taxation

United States and Hong Kong

We are subject to United States tax at a tax rate of 34%. No
provision for income taxes in the United States has been made as we have no
income taxable in the United States. Our indirect subsidiary, TEC, 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
TEC HK has no taxable income.

China

Beginning January 1, 2008, the New EIT Law imposes a unified
EIT of 25% on all domestic invested enterprises and FIEs, unless they qualify
under certain limited exceptions. Under the New EIT Law, companies designated as
High- and New-Technology Enterprises may enjoy a reduced national enterprise
income tax of 15%. ATEC has applied for High- and New-Technology Enterprise
designation and has received the certificate, and is entitled for 15% income tax
rate from January, 2010. 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  Under the New EIT Law, we may be
classified as a resident enterprise' of China. Such classification will likely
result in unfavorable tax consequences to us and our non-PRC stockholders."

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. TEC
is considered an FIE and is directly held by our subsidiary in Hong Kong.
According to a 2006 tax treaty between the Mainland and Hong Kong, dividends
payable by an FIE in China to the company in Hong Kong who directly holds at
least 25% of the equity interests in the FIE will be subject to a no more than 5% withholding tax. We expect that
such 5% withholding tax will apply to dividends paid to TEC Tower by TEC, but
this treatment will depend on our status as a non-resident enterprise.

26

---

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.

Results of Operations

Three Months Ended June 30, 2010 Compared to Three Months
Ended June 30, 2009

The following table sets forth key components of our unaudited
results of operations for the periods indicated, both in dollars and as a
percentage of our net sales.

|                                             |   | Three Months Ended |  
|-------------------------------------------- | - | ------------------ | -
|                                             |   | June 30,           |  
|                                             |   | 2010               |  
|                                             |   | (Unaudited)        |  
|                                             |   |                    |  
|                                             |   |                    |  
|                                             |   | In USD             |  
|                                             |   | million            |  
|Net sales                                    | $ | 9.43               |  
|Cost of goods sold                           |   | (6.44              | )
|Gross profit                                 |   | 2.98               |  
|Selling, general and administrative expenses |   | (0.85              | )
|Operating income                             |   | 2.13               |  
|Interest expenses                            |   | (0.29              | )
|Other
      income                           |   | 0.19               |  
|Income (Loss) before income taxes            |   | 2.03               |  
|Provision for income taxes                   |   | (0.21              | )
|Net income                                   | $ | 1.82               |  

Net sales. Our net sales are mainly generated from sales
of our tower products. Our net sales increased $4.70 million, or 99.5%, to $9.43
million for the three months ended June 30, 2010 from $4.73 million during the
same period in 2009. This increase in our net sales during the three months
ended June 30, 2010, was mainly due to an increase in the number of large
customers in the Chinese power industry and an increase in sales of our products
to the overseas communications market. In response to market conditions, we
modestly reduced the pricing of some of our power transmission tower products,
but this was offset by the increase in sales volume. During the period, 56% of
revenue came from the power industry, and 44% from the communications industry.

Cost of goods sold. Our cost of goods sold includes the
direct costs of our raw materials, primarily steel, as well as the cost of labor
and overhead. Our cost of goods sold increased $3.45 million, or 115.5%, to
$6.44 million in the three months ended June 30, 2010, from $2.99 million during
the same period in 2009. The increase in our cost of goods sold was primarily
due to an increase in sales during the 2010 period. As a percentage of revenue,
our cost of goods sold increased from 63.3% in the three months ended June 30,
2009, to 68.4% during the same period in 2010. The increase ratio of cost of
goods sold to revenue reflected a recent slight downward adjustment in price in
our power transmission tower products, combined with a slight increase in the
price of steel in China.

Gross profit. Our gross profit is equal to the
difference between our revenue and our cost of goods sold. Our gross profit
increased $1.25 million, or 72.0%, to $2.98 million in the three months ended
June 30, 2010, from $1.73 million during the same period in 2009. Gross profit
as a percentage of revenue was 31.6% and 36.7% for three months ended June 30,
2010 and 2009, respectively.

Selling, general and administrative expenses. General
and administrative expenses consist primarily of compensation and benefits to
our general management, finance and administrative staff, professional advisor
fees, bad debts reserve and other expenses incurred in connection with general operations, and our selling expenses
consist primarily of compensation and benefits to our sales and marketing staff,
sales commission, cost of advertising, promotion, business travel, after-sale
support, transportation costs and other sales related costs. In the three months
ended June 30, 2010, our selling, general and administration expenses rose to
$0.85 million, or 370.5%, from $0.18 million during the same period in 2009. The
increase in costs was largely attributable to the establishment and expansion of
our sales team in Shenzhen, and to increased costs incurred from generating
additional sales.

27

---

Other income. Other income is mainly income generated
from the recycling of scrap metal and grant from local government to incentivize
TEC business growth.

Interest expense.Interest expense increased $0.12
million, to $0.29 million, or 71.7%, in the three months ended June 30, 2010,
from $0.17 million during the same period in 2009. Our interest payment in 2010
is expected to be comparable to that of end of 2009; however, the total amount
of short-term loan in the second quarter of 2009 was about half of the current
level. In addition, interest expense also included the costs of TECs loan
guarantees.

Income (loss) before Income Taxes. Our income before
income taxes increased by $0.55 million, or 37.8%, to $2.03 million in the three
months ended June 30, 2010, from a net income of $1.48 million during the same
period in 2009.

Income Taxes. Our income tax provisions decreased by
$0.16 million, or 42.8%, to $0.21 million in the three months ended June 30,
2010, from $0.37 million during the same period in 2009. Since January 2010, TEC
has qualified as a government recognized high-tech enterprise and has since been
enjoying tax rate reduction from 25% to 15%.

Net (Loss) Income. In the three months ended June 30,
2010, we generated a net income of $1.82 million, an increase of $0.71 million,
or 64.5%, from $1.11 during the same period in 2009. This increase was
attributable to TECs increased sales volume, which doubled from the same period
last year, but was slightly offset by decreased prices of tower products in the
China power market and the slight increase in material costs.

Six Months Ended June 30, 2010 Compared to Six Months
Ended June 30, 2009

The following table sets forth key components of our unaudited
results of operations for the periods indicated, both in dollars and as a
percentage of our net sales.

|                                             |   | Six Months Ended |  
|-------------------------------------------- | - | ---------------- | -
|                                             |   | June 30,         |  
|                                             |   | 2010             |  
|                                             |   | (Unaudited)      |  
|                                             |   |                  |  
|                                             |   |                  |  
|                                             |   | In USD           |  
|                                             |   | million          |  
|Net sales                                    | $ | 14.6             |  
|Cost of goods sold                           |   | (9.96            | )
|Gross Profit                                 |   | 4.65             |  
|Selling, general and administrative expenses |   | (1.43            | )
|Operating income                             |   | 3.21             |  
|Interest expenses                            |   | (0.68            | )
|Other
      income                           |   | 0.19             |  
|Income (Loss) before income Taxes            |   | 2.73             |  
|Provision for income taxes                   |   | (0.39            | )
|Net income                                   | $ | 2.34             |  

Net sales. Our net sales increased $8.19 million, or
128.0%, to $14.60 million for the six months ended June 30, 2010 from $6.41
million during the same period in 2009. The increase in our net sales was
primarily attributable to increased sales to a larger customer base in the power transmission industry and an increased volume of
sales to customers in the overseas communications market. The increased sales volume was modestly
offset by a reduction in the per-unit pricing of transmission tower products due
to industry pricing pressures. Approximately half of our revenue for the six
month period ended June 30, 2010 was from the power industry, with the other
half generated from sales to customers in the communications industry.

28

---

Cost of goods sold. Our cost of goods sold increased
$5.75 million, or 136.4%, to $9.96 million in the six months ended June 30,
2010, from $4.21 million during the same period in 2009. The increases were
primarily due to and in line with increased sales volume during the six month
period ended June 30, 2010. As a percentage of revenue, our cost of goods sold
increased from 65.7% in the six months ended June 30, 2009, to 68.2% during the
same period in 2010, due to downward shift in transmission product per unit
price in the China power industry, and upward shift in the costs of steel.

Gross profit. Our gross increased $2.45 million, or
111.7%, to $4.65 million in the six months ended June 30, 2010, from $2.20
million during the same period in 2009. Gross profit as a percentage of revenue
was 31.8% and 34.3% for six months ended June 30, 2010 and 2009, respectively.
The increases in the gross profit reflected TECs continued success in marketing
and sales to both China and international markets; while the 2.5% reduction in
gross margin resulted from our increased cost of sales relative to revenue and
a slight decrease in per unit pricing.

Selling, general and administrative expenses. In the six
months ended June 30, 2010, our selling, general and administration expenses
rose to $1.43 million, or 217.5%, from $0.45 million during the same period in
2009. The increase in our selling, general and administrative expenses was
primarily attributable to our establishment of a dedicated sales office in
Shenzhen in September 2009 and increased professional fees associated with our
public reporting company status, which combined to result in an increase to
selling, general and administrative expenses.

Other income. Other income is mainly generated from the
recycling of scrap metal and one-time government grant in the amount of $0.18
million received by TEC in recognition of TECs growing business and to
incentivize its further growth.

Interest expense.Interest expense increased $0.42
million, to $0.68 million, or 166.0%, in the six months ended June 30, 2010,
from $0.26 million during the same period in 2009, reflecting TECs increase in
short-term loans through the 2009 period, which have largely remained at $12
million since the end of 2009.

Income (loss) before Income Taxes. Our income before
income taxes increased by $1.15 million, or 72.6%, to $2.73 million in the six
months ended June 30, 2010, from a net income of $1.58 million during the same
period in 2009.

Income taxes. Our income tax provisions decreased by
$0.01 million, or 2.5%, to $0.39 million in the six months ended June 30, 2010,
from $0.40 million during the same period in 2009. The amount of taxes paid
stayed at the same level, as two factors offset each other: income before taxes
increased by about 75% while the income tax rate has been dropped to 15% from
25% since January 2001 after TEC became qualified as a high technology
enterprise.

Net (Loss) income. In the six months ended June 30,
2010, we generated a net income of $2.34 million, an increase of $1.16 million,
or 97.7%, from $1.18 during the same period in 2009.

Liquidity and Capital Resources

The following table sets forth a summary of our cash flows for
the periods indicated:

Cash Flow (all amounts in millions U.S. dollars)

|                                                    |   | Six Months Ended |  
|--------------------------------------------------- | - | ---------------- | -
|                                                    |   | June
      30,   |  
|                                                    |   | 2010             |  
|                                                    |   | (Unaudited)      |  
|Net cash provided by (used in) operating activities | $ | 2.16             |  
|Net cash provided (used in) investing activities    |   | (0.46            | )
|Net cash provided by (used in) financing activities |   | (0.15            | )

|Effects of exchange rate change in cash                    |  | (0.003 | ) |  | (0.003 | )
|---------------------------------------------------------- |  | ------ | - |  | ------ | -
|Net increase (decrease) in
      cash and cash equivalents |  | 1.54   |   |  | 0.06   |  
|Cash and cash equivalent at beginning of the
      quarter |  | 0.16   |   |  | 0.70   |  
|Cash and cash equivalent at
      end of the quarter       |  | 1.71   |   |  | 0.76   |  

29

---

Operating activities

Net cash provided in operating activities was $2.16 million for
the six months ended June 30, 2010, as compared to $3.12 million net cash used
by operating activities for the same period in 2009.  The change in net
cash from operating activities from period to period was primarily attributable
to the collection of $2.1 million in Other Receivables during the 2010 period,
as compared to an increase in Accounts Receivable which resulted in negative
operating cash flow during the 2009 period.

Investing activities

Net cash used in investing activities for the six months ended
June 30, 2010 was $0.46 million, as compared to $1.98 million net cash used in
the same period in 2009. The 77% decrease in net cash used in investment was
mainly attributable to our purchase of $1.64 million in land use rights during
the 2009 period. Our investment in equipment increased from $0.33 million to
$0.46 million to further augment our production capabilities.

Financing activities

Net cash used in financing activities for the six months ended
June 30, 2010 was $0.15 million, as compared to $5.15 million net cash provided
in the same period in 2009. During the first half of 2009, we borrowed $4.9
million in a short term loan. During the first half of 2010, our short-term debt
remained at the same level.

Capital Expenditures

Our capital expenditures for the six months ended June 30, 2010
and 2009 were $0.46 million and $1.98 million, respectively, representing the
total amount of investment activities. Our capital expenditures during the
second quarter of 2010 consisted solely of capital expenditures relating to the
construction of additional production lines, as compared the second quarter of
2009 when we purchased and acquired land use rights. As of June 30, 2010, we had
cash and cash equivalents of $1.71 million, primarily consisting of cash on hand
and demand deposits.

To date, we have financed our operations primarily through cash
flows from operations, augmented by short-term bank loans and equity
contributions by our stockholders. We believe that our cash on hand and cash
flow from operations will meet a portion of our present cash needs and we will
require additional cash resources, including loans, to meet our expected capital
expenditures and working capital requirements for the next 12 months. We may,
however, in the future, require additional cash resources due to changed
business conditions, implementation of our strategy expand our marketing efforts
and increase brand awareness, or acquisitions we may decide to pursue. If our
own financial resources are insufficient to satisfy our capital requirements, we
may seek to sell additional equity or debt securities or obtain additional
credit facilities. The sale of additional equity securities could result in
dilution to our stockholders. The incurrence of indebtedness would result in
increased debt service obligations and could require us to agree to operating
and financial covenants that would restrict our operations. Financing may not be
available in amounts or on terms acceptable to us, if at all. Any failure by us
to raise additional funds on terms favorable to us, or at all, could limit our
ability to expand our business operations and could harm our overall business
prospects.

Loan Commitments

As of June 30, 2010, we did not hold any long-term loans. Our
short-term bank loans, totaling $12.6 million, are as follows:

30

---

|Bank                                            |   | Amount  |  |  | Maturity Date     |  |  | Interest |  |  | Duration        | 
|----------------------------------------------- | - | ------- |  |  | ----------------- |  |  | -------- |  |  | --------------- | 
|                                                |   | (USD    |  |  |                   |  |  | Rate     |  |  |                 | 
|                                                |   | million |  |  |                   |  |  |          |  |  |                 | 
|China Everbright Bank, Hefei Branch             | $ | 4.4     |  |  | November 25, 2010 |  |  | 5.31%    |  |  | 12 months       | 
|Industrial and Commercial Bank, Longshou Branch | $ | 0.29    |  |  | December 9, 2010  |  |  | 5.31%    |  |  | 12
      months | 
|Industrial and Commercial Bank, Longshou Branch | $ | 1.09    |  |  | September10, 2010 |  |  | 4.86%    |  |  | 6 months        | 
|Industrial and Commercial Bank, Longshou Branch | $ | 0.29    |  |  | March 21, 2010    |  |  | 5.31%    |  |  | 12
      months | 
|Industrial and Commercial Bank, Longshou Branch | $ | 0.26    |  |  | July 12, 2010     |  |  | 4.86%    |  |  | 6 months        | 
|Industrial and Commercial Bank, Longshou Branch | $ | 0.88    |  |  | April 1, 2011     |  |  | 5.31%    |  |  | 12
      months | 
|Industrial and Commercial Bank, Longshou Branch | $ | 1.17    |  |  | December 2, 2010  |  |  | 4.86%    |  |  | 6 months        | 
|Huishang Bank, Xuancheng Branch                 | $ | 2.93    |  |  | February 10, 2011 |  |  | 8.76%    |  |  | 12
      months | 
|China Merchant Bank, Hefei Branch               | $ | 1.17    |  |  | September 30,2010 |  |  | 5.31%    |  |  | 12 months       | 
|Total                                           | $ | 12.6    |  |  |                   |  |  |          |  |  |                 | 

We have a RMB 10,000,000 (approximately $1,464,129) revolving
line of credit with the Hefei Sipailou Branch of China Merchants Bank, pursuant
to a crediting agreement, dated September 27, 2009, between TEC Tower and the
bank. This revolving line of credit is guaranteed by Anhui Sea-Converge
Guarantee Co., Ltd., an unaffiliated company. The crediting agreement will
terminate on September 27, 2010.

We also have at our disposal a RMB 6,300,000 revolving line of
credit with the Longshou Sub-branch of Xuancheng Branch of Industrial and
Commercial Bank of China, pursuant to a Collateral Agreement between TEC Tower
and the bank. The line of credit is secured by TEC Tower's land use rights. To
date, the Company has only utilized RMB 2,000,000 (approximately $292,826) of
the line of credit. The line of credit will terminate on October 7, 2011.

Obligations under Material Contracts

Except with respect to the loan obligations disclosed under the
"Loan Commitments" heading, we have no obligations to pay cash or deliver
cash to any other party.

Inflation

There is upward inflationary pressure in both material costs
and labor costs in China; however, the overall inflation in China in 2010 seems
to be confined  around 3% according to the China National Development and
Reform Commission, and is predicted to remain at the level. Compared to the same
period in 2009, material costs  mainly costs of steel  inched up in 2010, and
contributed to narrowed gross profit margin. Our management will closely monitor
the price change in travel industry and continually maintain effective cost
control in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity or capital expenditures or capital resources that is
material to an investor in our securities.

Seasonality

Our operating results and operating cash flows historically
have been subject to seasonal variations. Our revenues usually increase over
each quarter of the calendar year with the first quarter usually the slowest
quarter because fewer projects are undertaken during and around the Chinese
spring festival.

31

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Critical Accounting Policies

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires our
management to make assumptions, estimates and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and
results of operation. Critical accounting policies are those that are most
important to the portrayal of our financial conditions and results of operations
and require management's difficult, subjective, or complex judgment, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods. Certain accounting
estimates are particularly sensitive because of their significance to financial
statements and because of the possibility that future events affecting the
estimate may differ significantly from management's current judgments. We
believe the following critical accounting policies involve the most significant
estimates and judgments used in the preparation of our financial statements:

- Basis of Consolidation and Presentation.The consolidated
  financial statements are prepared in accordance with generally accepted
  accounting principles in the United States of America ("US GAAP"). In the
  opinion of management, the accompanying balance sheets, and statements of
  income, and cash flows and include all adjustments, consisting only of normal
  recurring items, considered necessary to give a fair presentation of operating
  results for the periods presented. All material inter-company transactions and
  balances have been eliminated in consolidation.
- Business Combinations.The Company adopted the accounting
  pronouncements relating to business combinations (primarily contained in ASC
  Topic 805 "Business Combinations"), including assets acquired and liabilities
  assumed arising from contingencies. These pronouncements established
  principles and requirements for how the acquirer of a business recognizes and
  measures in its financial statements the identifiable assets acquired, the
  liabilities assumed, and any non-controlling interest in the acquire as well
  as provides guidance for recognizing and measuring the goodwill acquired in
  the business combination and determines what information to disclose to enable
  users of the financial statements to evaluate the nature and financial effects
  of the business combination. In addition, these pronouncements eliminate the
  distinction between contractual and non-contractual contingencies, including
  the initial recognition and measurement criteria and require an acquirer to
  develop a systematic and rational basis for subsequently measuring and
  accounting for acquired contingencies depending on their nature. Our adoption
  of these pronouncements will have an impact on the manner in which we account
  for any future acquisitions.
- Non-Controlling Interest in Consolidated Financial Statements.The Company adopted the accounting pronouncement on non-controlling
  interests in consolidated financial statements, which establishes accounting
  and reporting standards for the non-controlling interest in a subsidiary and
  for the deconsolidation of a subsidiary. This guidance is primarily contained
  in ASC Topic "Consolidation." It clarifies that a non-controlling interest in
  a subsidiary is an ownership interest in the consolidated financial
  statements. The adoption of this standard has not had material impact on our
  consolidated financial statements.
- Use of estimates.The preparation of consolidated financial
  statements requires us to make estimates and assumptions that affect the
  reported amounts of assets and liabilities and disclosures of contingent
  assets and liabilities at the date of the financial statements and the
  reported amounts of revenues and expenses during the reporting period. Actual
  results may differ from those estimates.
- Allowance for doubtful accounts.The Company reduces gross
  trade accounts receivable by an allowance for doubtful accounts. The allowance
  for doubtful accounts is the Company's best estimate of the amount of probable
  credit losses in the Company's existing accounts receivable. The Company
  reviews its allowance for doubtful accounts on a regular basis and all past
  due balances are reviewed individually for collectability. Account balances
  are charged off against the allowance after all means of collection have been
  exhausted and the potential for recovery is considered remote.
- Impairment of long-lived assets.The Company reviews the
  carrying amount of its long-lived assets, including intangibles, for
  impairment, each reporting period. An asset is considered impaired when
  estimated future cash flows are less than the carrying amount of the asset. In
  the event the carrying amount of such asset is considered not recoverable, the
  asset is adjusted to its fair value. Fair value is generally determined based
  on discounted future cash flow. As of December 31, 2009 and December 31, 2008,
  the Company determined no impairment charges were necessary.
- Property, plant and equipment, net.Property and equipment
  are stated at cost less accumulated depreciation and any accumulated
  impairment losses. Depreciation is calculated on a straight-line basis over
  the estimated useful life of the assets. Any gain or loss arising on the sale
  or disposal of the asset is included in the income statement in the period the
  item is sold or otherwise disposed. Maintenance and repairs of property and
  equipment are charged to operations when incurred.

32

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- Revenue recognition.The Company's revenue recognition policies
    are in compliance with ASC 605. Sales revenue is recognized when all of the
    following have occurred: (i) persuasive evidence of an arrangement exists,
    (ii) delivery has occurred or services have been rendered, (iii) the price
    is fixed or determinable, and (iv) the ability to collect is reasonably assured.
    These criteria are generally satisfied at the time of shipment when risk of
    loss and title passes to the customer. The Company recognizes revenue when
    the goods are delivered and title has passed. Sales revenue represents the
    invoiced value of goods, net of a value-added tax (VAT). All of the Company's
    products that are sold in the PRC are subject to a Chinese value-added tax
    at a rate of 17% of the gross sales price or at a rate approved by the Chinese
    local government. This VAT may be offset by the VAT paid by the Company on
    raw materials and other materials included in the cost of producing their
    finished product.
- Research and development costs.Research and development costs
    include costs incurred to develop new products and are charged to operations
    when incurred. These costs totaled $6,507 and $Nil as incurred for the years
    ended December 31, 2009 and December 31, 2008, respectively. The costs for
    development of new products and substantial enhancements to existing products
    are expensed as incurred until technological feasibility has been established,
    at which time any additional costs would be capitalized.
- Foreign currency translation.Reporting currency of the Company
    is the U.S. dollars. The functional currency of the Company is the Chinese
    Renminbi (RMB). For those entities whose functional currency is other than
    the US dollars, all assets and liabilities are translated into U.S. dollars
    at the exchange rate on the balance sheet date; shareholders' equity is translated
    at historical rates and items in the statements of income and of cash flows
    are translated at the average rate for the period. Because cash flows are
    translated based on the average translation rate, amounts related to assets
    and liabilities reported in the statement of cash flows will not necessarily
    agree with changes in the corresponding balances in the balance sheet. Translation
    adjustments resulting from this process are included in accumulated other
    comprehensive income in the statement of shareholders' equity. Transaction
    gains and losses that arise from exchange rate fluctuations on transactions
    denominated in a currency other than the functional currency are included
    in the results of operations as incurred.

Recent Accounting Pronouncements

In June 2009, the FASB approved the "FASB Accounting Standards
Codification" (the "Codification") as the single source of authoritative
nongovernmental U.S. GAAP to be launched on July 1, 2009. The Codification does
not change current U.S. GAAP, but is intended to simplify user access to all
authoritative U.S. GAAP by providing all the authoritative literature related to
a particular topic in one place. All existing accounting standard documents will
be superseded and all other accounting literature not included in the
Codification will be considered non-authoritative. The Codification is effective
for interim and annual periods ending after September 15, 2009.

In August 2009, the FASB issued the FASB Accounting Standards
Update No. 2009-04 "Accounting for Redeemable Equity Instruments - Amendment to
Section 480-10-S99" which represents an update to section 480-10-S99,
distinguishing liabilities from equity, per EITF Topic D-98, Classification and
Measurement of Redeemable Securities . The Company does not expect the adoption
of this update to have a material impact on its consolidated financial position,
results of operations or cash flows.

In August 2009, the FASB issued the FASB Accounting Standards
Update No. 2009-05 "Fair Value Measurement and Disclosures Topic 820  Measuring
Liabilities at Fair Value," which provides amendments to subtopic 820-10, Fair
Value Measurements and Disclosures  Overall, for the fair value measurement of
liabilities. This update provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using one or more of the
following techniques: (1) a valuation technique that uses (a) the quoted price
of the identical liability when traded as an asset or (b) quoted prices for
similar liabilities or similar liabilities when traded as assets; (2) another
valuation technique that is consistent with the principles of Topic 820, such as
a present value technique, which is an income approach, or a technique that is
based on the amount at the measurement date that the reporting entity would pay
to transfer the identical liability or would receive to enter into the identical
liability, which is a market approach. The amendments in this update clarify
that when estimating the fair value of a liability, a reporting entity is not required to include a
separate input or adjustment to other inputs relating to the existence of a
restriction that prevents the transfer of the liability. The amendments in this
update also clarify that both a quoted price in an active market for the
identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the asset are required are Level 1 fair value
measurements. The Company does not expect the adoption of this update to have a
material impact on its consolidated financial position, results of operations or
cash flows.

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In September 2009, the FASB issued the FASB Accounting
Standards Update No. 2009-08 "Earnings Per Share Amendments to Section
260-10-S99", which represents technical corrections to topic 260-10-S99,
Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share
for a Period that includes a Redemption or an Induced Conversion of a Portion of
a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of
Earnings per Share for the Redemption or Induced Conversion of Preferred Stock .
The Company does not expect the adoption of this update to have a material
impact on its consolidated financial position, results of operations or cash
flows.

In September 2009, the FASB issued the FASB Accounting
Standards Update No. 2009-09 "Accounting for Investments - Equity Method and
Joint Ventures and Accounting for Equity-Based Payments to Non-Employees." This
update represents a correction to Section 323-10-S99-4, Accounting by an
Investor for Stock-Based Compensation Granted to Employees of an Equity Method
Investee. Additionally, it adds observer comment Accounting Recognition for
Certain Transactions Involving Equity Instruments Granted to Other Than
Employees to the Codification. The Company does not expect the adoption to have
a material impact on its consolidated financial position, results of operations
or cash flows.

In September 2009, the FASB issued the FASB Accounting
Standards Update No. 2009-12 "Fair Value Measurements and Disclosures Topic 820
 Investment in Certain Entities That Calculate Net Assets Value Per Share (or
Its Equivalent)," which provides amendments to Subtopic 820-10, Fair Value
Measurements and Disclosures-Overall, for the fair value measurement of
investments in certain entities that calculate net asset value per share (or its
equivalent). The amendments in this update permit, as a practical expedient, a
reporting entity to measure the fair value of an investment that is within the
scope of the amendments in this update on the basis of the net asset value per
share of the investment (or its equivalent) if the net asset value of the
investment (or its equivalent) is calculated in a manner consistent with the
measurement principles of Topic 946 as of the reporting entity's measurement
date, including measurement of all or substantially all of the underlying
investments of the investee in accordance with Topic 820. The amendments in this
update also require disclosures by major category of investment about the
attributes of investments within the scope of the amendments in this update,
such as the nature of any restrictions on the investor's ability to redeem its
investments at the measurement date, any unfunded commitments (for example, a
contractual commitment by the investor to invest a specified amount of
additional capital at a future date to fund investments that will be make by the
investee), and the investment strategies of the investees. The major category of
investment is required to be determined on the basis of the nature and risks of
the investment in a manner consistent with the guidance for major security types
in U.S. GAAP on investments in debt and equity securities in paragraph
320-10-50-1B. The disclosures are required for all investments within the scope
of the amendments in this update regardless of whether the fair value of the
investment is measured using the practical expedient. The Company does not
expect the adoption to have a material impact on its consolidated financial
position, results of operations or cash flows.

In October 2009, the Financial Accounting Standards Board
issued an Accounting Standards Update ("ASU") regarding accounting for own-share
lending arrangements in contemplation of convertible debt issuance or other
financing. This ASU requires that at the date of issuance of the shares in a
share-lending arrangement entered into in contemplation of a convertible debt
offering or other financing, the shares issued shall be measured at fair value
and be recognized as an issuance cost, with an offset to additional paid-in
capital. Further, loaned shares are excluded from basic and diluted earnings per
share unless default of the share-lending arrangement occurs, at which time the
loaned shares would be included in the basic and diluted earnings-per-share
calculation. This ASU is effective for fiscal years beginning on or after
December 15, 2009, and interim periods within those fiscal years for
arrangements outstanding as of the beginning of those fiscal years. The Company
is currently assessing the impact of this ASU on its consolidated financial
statements.

In December 2009, FASB issued ASU No. 2009-16, Accounting for
Transfers of Financial Assets. This Accounting Standards Update amends the FASB
Accounting Standards Codification for the issuance of FASB Statement No. 166,Accounting for Transfers of Financial Assetsan amendment of FASB Statement No.
140.The amendments in this Accounting Standards Update improve financial
reporting by eliminating the exceptions for qualifying special-purpose entities
from the consolidation guidance and the exception that permitted sale accounting
for certain mortgage securitizations when a transferor has not surrendered
control over the transferred financial assets. In addition, the amendments
require enhanced disclosures about the risks that a transferor continues to be
exposed to because of its continuing involvement in transferred financial
assets. Comparability and consistency in accounting for transferred financial assets will also be improved through
clarifications of the requirements for isolation and limitations on portions of
financial assets that are eligible for sale accounting. The Company does not
expect the adoption of this ASU to have a material impact on its consolidated
financial statements.

34

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In January 2010, FASB issued ASU No. 2010-01 Accounting for
Distributions to Shareholders with Components of Stock and Cash. The amendments
in this Update clarify that the stock portion of a distribution to shareholders
that allows them to elect to receive cash or stock with a potential limitation
on the total amount of cash that all shareholders can elect to receive in the
aggregate is considered a share issuance that is reflected in EPS prospectively
and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity
and Earnings Per Share). The amendments in this update are effective for interim
and annual periods ending on or after December 15, 2009, and should be applied
on a retrospective basis. The Company adopted this standard and has determined
the standard does not have material effect on the Company's consolidated
financial statements.

In January 2010, FASB issued ASU No. 2010-02 regarding
accounting and reporting for decreases in ownership of a subsidiary. Under this
guidance, an entity is required to deconsolidate a subsidiary when the entity
ceases to have a controlling financial interest in the subsidiary. Upon
deconsolidation of a subsidiary, and entity recognizes a gain or loss on the
transaction and measures any retained investment in the subsidiary at fair
value. In contrast, an entity is required to account for a decrease in its
ownership interest of a subsidiary that does not result in a change of control
of the subsidiary as an equity transaction. This ASU clarifies the scope of the
decrease in ownership provisions, and expands the disclosures about the
deconsolidation of a subsidiary or de-recognition of a group of assets. This ASU
is effective for beginning in the first interim or annual reporting period
ending on or after December 31, 2009. The Company does not expect the adoption
of this ASU to have a material impact on its consolidated financial statements
In January 2010, FASB issued ASU No. 2010-02  Accounting and Reporting for
Decreases in Ownership of a Subsidiary  a Scope Clarification. The amendments
in this Update affect accounting and reporting by an entity that experiences a
decrease in ownership in a subsidiary that is a business or nonprofit activity.
The amendments also affect accounting and reporting by an entity that exchanges
a group of assets that constitutes a business or nonprofit activity for an
equity interest in another entity. The amendments in this update are effective
beginning in the period that an entity adopts SFAS No. 160, "Non-controlling
Interests in Consolidated Financial Statements  An Amendment of ARB No. 51." If
an entity has previously adopted SFAS No. 160 as of the date the amendments in
this update are included in the Accounting Standards Codification, the
amendments in this update are effective beginning in the first interim or annual
reporting period ending on or after December 15, 2009. The amendments in this
update should be applied retrospectively to the first period that an entity
adopted SFAS No. 160. The Company adopted this standard and has determined the
standard does not have material effect on the Company's consolidated financial
statements.

In January 2010, FASB issued ASU No. 2010-06  Improving
Disclosures about Fair Value Measurements. This update provides amendments to
Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out
of Levels 1 and 2. A reporting entity should disclose separately the amounts of
significant transfers in and out of Level 1 and Level 2 fair value measurements
and describe the reasons for the transfers. 2) Activity in Level 3 fair value
measurements. In the reconciliation for fair value measurements using
significant unobservable inputs (Level 3), a reporting entity should present
separately information about purchases, sales, issuances, and settlements (that
is, on a gross basis rather than as one net number). This update provides
amendments to Subtopic 820-10 that clarify existing disclosures as follows:

(1) Level of disaggregation: A reporting entity should provide
fair value measurement disclosures for each class of assets and liabilities. A
class is often a subset of assets or liabilities within a line item in the
statement of financial position. A reporting entity needs to use judgment in
determining the appropriate classes of assets and liabilities.

(2) Disclosures about inputs and valuation techniques: A
reporting entity should provide disclosures about the valuation techniques and
inputs used to measure fair value for both recurring and nonrecurring fair value
measurements.

Those disclosures are required for fair value measurements that
fall in either Level 2 or Level 3. The new disclosures and clarifications of
existing disclosures are effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosures about purchases,
sales, issuances, and settlements in the roll forward of activity in Level 3
fair value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years. The Company is currently evaluating the impact of this ASU, however, the
Company does not expect the adoption of this ASU to have a material impact on
its consolidated financial statements.

35

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In February 2010, the FASB issued Accounting Standards Update
2010-09, "Subsequent Events (Topic 855): Amendments to Certain Recognition and
Disclosure Requirements," or ASU 2010-09. ASU 2010-09 primarily rescinds the
requirement that, for listed companies, financial statements clearly disclose
the date through which subsequent events have been evaluated. Subsequent events
must still be evaluated through the date of financial statement issuance,
however, the disclosure requirement has been removed to avoid conflicts with
other SEC guidelines. ASU 2010-09 was effective immediately upon issuance and
was adopted in February 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Not Applicable.

ITEMS 4 AND 4A(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act) that are designed to ensure that
information that would be required to be disclosed in Exchange Act reports is
recorded, processed, summarized and reported within the time period specified in
the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including to our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.

As required by Rule 13a-15 under the Exchange Act, our
management, including Mr. Chun Lu, our Chief Executive Officer and Mr. Yuhua
Yang, our Chief Financial Officer, evaluated the effectiveness of the design and
operation of our disclosure controls and procedures as of June 30, 2010. Based
on that evaluation, Messrs. Lu and Yang concluded that as of June 30, 2010, and
as of the date that the evaluation of the effectiveness of our disclosure
controls and procedures was completed, our disclosure controls and procedures
were effective in accordance with Rule 13a-15(e).

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended June 30, 2010, there were no
changes in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits
and legal proceedings, which arise, in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these,
or other matters, may arise from time to time that may harm our business. We are
currently not aware of any such legal proceedings or claims that we believe will
have a material adverse affect on our business, financial condition or operating
results.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS

We have not sold any equity securities during the quarter ended
June 30, 2010 which sale was not previously disclosed in a current report on
Form 8-K filed during that period.

36

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

We have no information to include that was required to be but
was not disclosed in a report on Form 8-K during the period covered by this Form
10-Q. There have been no material changes to the procedures by which security
holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or
incorporated by reference:

|Exhibit |                                                                                                                    
|------- | -------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                        
|31.1    | Certifications
        of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002
|31.2    | Certifications
        of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002
|32.1    | Certifications
        of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002
|32.2    | Certifications
        of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002

SIGNATURES

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

|                       | TEC TECHNOLOGY, INC.                                                
|---------------------- | --------------------------------------------------------------------
|                       |                                                                     
|Dated: August 16, 2010 | /s/ Chun Lu                                                         
|                       | Chun Lu                                                             
|                       | Chief Executive Officer                                             
|                       | (Principal Executive Officer)                                       
|                       |                                                                     
|                       |                                                                     
|Dated: August 16, 2010 | /s/ Yuhua Yang                                                      
|                       | Yuhua Yang                                                          
|                       | Chief Financial Officer                                             
|                       | (Principal Financial Officer and Principal
      Accounting Officer)

37

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EXHIBIT INDEX

|Exhibit Number | Description                                                                                                        
|-------------- | -------------------------------------------------------------------------------------------------------------------
|31.1           | Certifications
        of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002
|31.2           | Certifications
        of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002
|32.1           | Certifications
        of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002
|32.2           | Certifications
        of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002

38

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