UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC  20549





FORM
10-K





x ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934




For the
fiscal year ended June 30, 2009




or





 ̈ TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934





For
the transition period from _________ to _____________





Commission
file number: 000-51336





BEFUT International Co.,
Ltd.


(Exact
name of registrant as specified in its charter)





Nevada
              20-2777600(State
      or other jurisdiction of
                incorporation
      or organization)
              (IRS
      Employer Identification No.)





No. 90-1
Hongji Street


Xigang
District Dalian City


Liaoning Province, PRC,
116011


(Address
of Principal Executive Offices) (Zip Code)





Registrant’s
telephone number:  (011)-86-411-83678755





Securities
registered pursuant to Section 12(b) of the Act: None.





Securities
registered pursuant to Section 12(g) of the Act: Common Stock, Par Value
$0.001 Per Share





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes    ̈
     No   x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.  Yes  
 ̈
     No  x





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 report(s)), 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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.    ̈





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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer o
                  Accelerated
      filer oNon-accelerated
      filer o
                    Do
      not check if a smaller reporting company
                  Smaller
      reporting company x




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
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter: $56,606 as of December 31, 2008, based on the average bid and asked
price ($0.083) of the Company’s common stock on such date as reported by
the Over-the-Counter Bulletin Board. Shares of voting stock held by each
executive officer and director of the registrant and each person who
beneficially owns 10% or more of the registrant’s outstanding voting stock has
been excluded from the calculation. This determination of affiliated status may
not be conclusive for other purposes.





The
number of outstanding shares of the registrant’s common stock on September 30,
2009 was 29,510,971.





Documents
Incorporated by Reference: None.











FORM 10-K
ANNUAL REPORT


FISCAL
YEAR ENDED JUNE 30, 2009





TABLE
OF CONTENTS




PAGEPART IItem 1.
              
              Business
              
              3Item 1A.
              
              Risk
      Factors
              
              13Item
      1B.
              
              Unresolved
      Staff Comments
              
              13Item 2.
              
              Properties
              
              13Item 3.
              
              Legal
      Proceedings
              
              14Item 4.
              
              Submission
      of Matters to a Vote of Security Holders
              
              14PART IIItem 5.
              
              Market
      for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
              
              14Item 6.
              
              Selected
      Financial Data
              
              16Item 7.
              
              Management’s
      Discussion and Analysis of Financial Condition and Results
      of Operations
              
              16Item 7A.
              
              Quantitative
      and Qualitative Disclosures about Market Risk
              
              22Item 8.
              
              Financial
      Statements and Supplementary Data
              
              22Item 9.
              
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
              
              23Item 9A.(T)
              
              Controls
      and Procedures
              
              23Item 9B.
              
              Other
      Information
              
              24PART IIIItem 10.
              
              Directors,
      Executive Officers and Corporate Governance
              
              24Item 11.
              
              Executive
      Compensation
              
              25Item 12.
              
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholders Matters
              
              27Item 13.
              
              Certain
      Relationships and Related Transactions, and Director
      Independence
              
              29Item 14.
              
              Principal
      Accountant Fees and Services
              
              30PART IVItem 15.
              
              Exhibits
      and Financial Statement Schedules
              
              30SIGNATURES
              
              S-1EXHIBIT
      INDEX
              
              E-1FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
              
              F-1





2





FORWARD-LOOKING
STATEMENTS





Certain
statements in this Report, and the documents incorporated by reference herein,
constitute "forward-looking statements". Such forward-looking statements include
statements, which involve risks and uncertainties, regarding, among other
things, (a) our projected sales, profitability, and cash flows, (b) our growth
strategies, (c) anticipated trends in our industries, (d) our future financing
plans, and (e) our anticipated needs for, and use of, working capital. They are
generally identifiable by use of the words “may,” “will,” “should,”
“anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,”
“ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or
the negative of these words or other variations on these words or comparable
terminology. These statements may be found under “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and
“Business,” as well as in this Report generally. Actual events or results
may differ materially from those discussed in forward-looking statements as a
result of various factors and matters described in this report generally. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this filing will in fact occur. You
should not place undue reliance on these forward-looking
statements.





The
forward-looking statements speak only as of the date on which they are made,
and, except to the extent required by federal securities laws, we undertake no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events.




Unless
otherwise noted, all currency figures in this filing are in U.S. dollars.
References to "yuan" or "RMB" are to the Chinese yuan (also known as the
renminbi). According to Xe.com as of September 30, 2009, US $1.00 = 6.8314 yuan
(or 1 yuan = US$ 0.1464).




The
"Company", "we," "us," "our," and the "Registrant" refer to (i) BEFUT
International Co., Ltd. (“BEFUT”), (ii) BEFUT Corporation, a corporation
incorporated in the State of Nevada (“Befut Nevada”); (ii) Hongkong BEFUT Co.,
Ltd. (“Befut Hongkong”), a wholly-owned subsidiary of Befut Nevada incorporated
under the laws of Hong Kong; (iii) WFOE, a corporation organized under the laws
of the People’s Republic of China (the “PRC”) that is wholly owned by Befut
Hongkong; (vi) Dalian Befut, a corporation organized under the laws of the PRC
which is the captive manufacturing company to WFOE; (vii) Dalian Marine Cable
Co., Ltd., a corporation organized under the laws of the PRC which is 86.6%
owned by Dalian Befut (“Befut Marine”); and (viii) Dalian Befut Zhong Xing
Switch Co., Ltd (“Befut Zhong Xing”), a corporation organized under the laws of
the PRC which is 70% owned by Dalian Befut.





PART
I





ITEM 1.
            BUSINESS





Overview





We are one of the largest developers,
manufacturers and distributors of wire and cable products in Northeastern China
(a region covering the provinces of Heilongjiang, Jilin and Liaoning in China).
We are engaged in the production of traditional cables, including metallurgy and
electric power system cables. We are also engaged in the production of specialty
cables, including marine cable, mine specialty cable, nuclear cable, and
petrochemical cable. We have the technical capability for the production of
large-scale marine cable, a segment with significantly higher profit margins
which we intend to pursue. Our traditional cable products are primarily focused
on serving end-user applications in the telecommunication, electrical utility,
and transportation (including automotive) markets. Our specialty cable products
are mainly used for marine building, nuclear power plants, mining corporations
and petrochemical enterprises.





We are headquartered in the city of
Dalian, which is situated at the tip of China’s Liaodong Peninsula. Dalian is a
trading and financial center in Northeastern Asia. We have established a branch
office at Beijing and representative offices at eight cities such as Tianjin,
Shenyang, Jilin, Benxi, Harbin, Tongliao, Zhengzhou, and Tangshan. Currently, we
only sell our products in China.





Company
History





We are a holding company and conduct
substantially all of our production, marketing, finance, research and
development, and administrative activities through our indirect subsidiaries
located in the PRC. We were incorporated in the State of Nevada under the name
“Frezer, Inc.” on May 2, 2005.





3





Prior to its formation on May 2, 2005,
the company was a wholly-owned subsidiary of BMXP Holdings, Inc., then known as
Bio-Matrix Scientific Group, Inc. (“BMXG”), a Delaware corporation engaged
primarily in the development of medical devices. The board of directors of BMXG
voted to distribute all shares of the Company’s common stock, par value $0.001
per share (the “Common Stock”), held by BMXG to holders of BMXG common stock of
record as of May 31, 2005. On June 15, 2005, these stockholders received one
share of the Company’s Common Stock for each share of BMXG common stock. On June
1, 2005, the Company filed a registration statement on Form 10-SB with the
Securities and Exchange Commission (the “SEC”).  Upon effectiveness of
such registration statement, the Company has been subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).





From
inception to July 11, 2006 the Company’s objective was to operate in the field
of stem cell banking and regenerative medicine.  However, on July 11,
2006, the Company’s board of directors (the “Board of Directors”) unanimously
approved resolutions to abandon all plans to develop a stem cell banking
facility and market that facility's services.





On February 22, 2007, the Company
experienced a change in control as a result of purchase of an aggregate of
3,500,000 shares of Common Stock by KI Equity Partners IV, LLC ("KI Equity"), a
Delaware limited liability company. Following such change in control, the
Company became a shell company with nominal assets, no employees and no active
business operations.





On January 10, 2008, the Company's
Board of Directors adopted, and holders of a majority of our issued and
outstanding shares of Common Stock approved, by written consent, a 1-for-20
reverse stock split of the Company's common stock outstanding, with special
treatment for certain of the Company's stockholders to preserve round lot
stockholders.





On March 13, 2009, the Company
experienced another change in control as a result of Befut Nevada’s purchase of
2,176,170 shares of the Company’s Common Stock, or 51% of the then outstanding
shares from three shareholders of the Company. Immediately after such change in
control, the Company acquired Befut Nevada, a holding company formed in the
state of Nevada and its indirect operating subsidiaries in the PRC, including
Dalian Befut. On the same day, the Company consummated a private placement of
$500,000 by issuing convertible notes with attached warrants to four individual
accredited investors.





Dalian Befut was incorporated on June
13, 2002 under the laws of PRC. It is currently owned by eight individuals in
the PRC, among whom, Mr. Hongbo Cao and Mr. Tingmin Li are the largest
shareholders having an aggregate of 90% of its equity interests. Pursuant to a
series of agreements, including Original Equipment Manufacturer Agreement,
Intellectual Property License Agreement and Non-competition Agreement, all of
which were dated February 16, 2009 by and between Dalian Befut and WFOE (the
“OEM Agreements”), Dalian Befut is controlled by WFOE and is a captive
manufacturer to it as Dalian Befut is contractually precluded form engaging in
business with any other person or entity.





On April 14, 2006, Befut Marine was
incorporated by Dalian Befut. Its current shareholders are Dalian Befut (having
86.6% of the equity interest) and three individual shareholders, namely, Mr.
Tingmin Li (having 6% of the equity interest), Mr. Hongbo Cao (having a 4%
equity interest) and Mr. Qingye Meng (having a 3.4% of the equity interest). The
three individuals are also shareholders of Dalian Befut. Befut Marine conducts
all of our marketing and production of marine cables.





On June 18, 2009, the Company
effectuated a company name change from “Frezer, Inc.” to “BEFUT International
Co., Ltd.” and a 1-for-4.07 reverse stock split of its outstanding shares of
common stock. As a result, its ticker symbol was changed to
BFTI.OB.





Our corporate organizational chart is
set forth below.





4











Business
Strategy





Our objective is the establish the
Company as the leading manufacturer of wire and cable products in China and to
expand distribution of our products to overseas markets in 2012.





In order to achieve this objective, we
plan to





– focus on specialty cable
production;


– expand
production capacity by constructing Changxing Island Project Phase I
Construction and Changxing Island Project  Phase II
Construction;


– increase product offering to include
appliance switches.





Based on our sales generated from
specialty cable in the fourth quarter of fiscal year 2009, which was
approximately 85% of our total sales in that fiscal year, based on current
economic policy in China that encourages marine construction, mining,
petrochemical and nuclear industries, in fiscal year 2010, we plan to continue
to devote more resources into developing, marketing and selling of petrochemical
and marine cables as it is our long-term business strategy. We have completed
Changxing Island Project Phase I Construction (defined and described below under
“Recent Development”).





We plan to commence our Changxing
Island Project Phase II Construction (defined and described below under “Recent
Development”) when our Changxing Island Project Phase I Construction reaches
full capacity in approximately three years or when we target appropriate
strategic partner, whichever comes earlier. The main purpose of Changxing Island
Project Phase II Construction is to expand our production capacity for specialty
cable by introducing strategic alliances, integrating technology and industrial
resources so as to make us the most competitive specialty cable producer in
China and at the same time strive to enter the international cable markets.
Meanwhile, we will keep our sales of traditional cables at the current
production capacity.





We plan to enter the switch appliance
market in fiscal year of 2010 as we observed a number of our cable customers
have certain demand for switch products by setting up a joint venture 70% owned
by Dalian Befut (see Befut Zhong Xing under “Recent Development” below);
however, we anticipate only 5% of our total revenue to be generated from that
sector as that would not be our main business.





5





Recent
Development





As of the date of this report, we have
completed the first phase of the construction of a manufacturing facility in the
industrial zone on Changxing Island. The construction covers a land of 65,000
square meters with a total construction area of 45,477 square meters. We
commenced the construction in 2006. Changxing Island is 120 kilometers away from
Dalian. The construction includes production facility of 24,964 square meters,
warehouse of 5,326 square meters, office building of 8,264 square meters, and
other supporting facilities of 6,923 square meters (“Changxing Island Project
Phase I Construction”). We have reserved a land of 85,000 square meters for the
second phase of construction when funds become available (“Changxing Island
Project Phase II Construction”). After the completion of both phases, the
Changxing Island project will occupy a total land of 150,000 square meters, with
building construction of 87,000 square meters. The facility will be used mainly
for production of specialty cables which corresponds to our plan to focus on
specialty cables as our main business in the next five years.





On July 1, 2009, Dalian Befut, our
captive manufacturer, formed a joint venture under the laws of the PRC, Befut
Zhong Xing by investing approximately $100,000 (RMB700,000) for its 70%
equity interest in Befut Zhong Xing. The other party who holds 30% equity
interests is an individual. By setting up Befut Zhong Xing, we aim to enter into
switch appliance market as a number of our cable customers demonstrated certain
demand for switch products .





Our
Products





Our products are categorized into two
types: traditional cables and specialty cables. The following table provides
information about our principal products:





Products
                                                  
                                                  Features
                                                  
                                                  ApplicationsTraditional CablesMainly
      Electric Cable
                                                  
                                                  thermo-mechanical,
      electrical and anti-corrosion
                                                  
                                                  Used
      in telecommunication industry, auto industry, metal refining, electrical
      and petrochemical industry, transportation industry including electrified
      railway and urban rail transportation, and construction
      industrySpecialty CablesMarine
      Cable
                                                  
                                                  anti-erosion,
      anti-stretch and long- life
                                                  
                                                  Applicable
      to all the ship building standard categories such as construction of
      ships, on-water oil platform, coastal marine project, and also capable of
      meeting all needs on a ship including power transmission, signal
      transmission of lighting and information processing equipment, and control
      systemNuclear
      Cable
                                                  
                                                  high-temperature
      resistant, corrosion protection low-temperature resistant, hard-wear,
      rusty-resistant, acid-bases resistant, age-resistant,
      long-life
                                                  
                                                  Used
      in nuclear power plantsMine
      Specialty Cable
                                                  
                                                  temperature
      resistant, corrosion protection, soft, low-temperature
      resistant
                                                  
                                                  Used
      by mining corporationsPetrochemical
      Cable
                                                  
                                                  corrosion
      protection, long-life, high stretch resistance feature
                                                  
                                                  Applied
      on the petrochemical enterprise, and the offshore
  buildingOther
      Specialty Cable
                                                  
                                                  high-temperature
      resistant, low-temperature resistant, hard-wear, acid-bases resistant,
      age-resistant, long-life
                                                  
                                                  Applied
      in steelwork, ore
yard





6





We plan to develop marine cables such
as submerged cables used to transfer data and telecommunications and marine
cable used in shipbuilding. We anticipate that Changxing Island Project Phase I
Construction, including the initial phase of the marine cable project, will cost
a total of approximately $23.46 million. It includes the costs of purchasing
land use rights and importing state-of-the-art production lines from Finland and
Canada. We received a one-year loan of approximately $3 million at an annual
interest rate of 6.1065% from China Merchants Bank in May this year, the
proceeds of which were used for Changxing Island Project Phase I Construction.
We are negotiating for a long-term loan of approximately $14.5 million to cover
most of the remaining budget of the construction. There is no assurance,
however, that we may be able to secure such loan or we may be able to obtain
necessary funding for this project at all.





We believe that the specialty cable
sector is one of the most profitable sectors in wire and cable industry with
significantly higher gross margins of up to 60%. Specialty cables typically are
produced specifically for certain uses in harsh conditions unsuitable for other
typical cables.





The following table shows the sales of
our products as a percentage of total sales for the fiscal years ended June 30,
2009, 2008 and 2007:





Percentage of Total Sales for Fiscal Years Ended
      June 30,Products
                      
                      2009
                      
                      
                      2008
                      
                      
                      2007Traditional
      Cable
                      
                      
                      54.8
                      %
                      
                      
                      50.0
                      %
                      
                      
                      57.6
                      %Mine
      Specialty Cable
                      
                      
                      19.6
                      %
                      
                      
                      34.5
                      %
                      
                      
                      22.4
                      %Marine
      Cable
                      
                      
                      6.6
                      %
                      
                      
                      6.4
                      %
                      
                      
                      4.5
                      %Petrochemical
      Cable
                      
                      
                      7.3
                      %
                      
                      
                      4.5
                      %
                      
                      
                      10.3
                      %Nuclear
      Cable
                      
                      
                      10.5
                      %
                      
                      
                      4.5
                      %
                      
                      
                      —Other
      Cable
                      
                      
                      1.2
                      %
                      
                      
                      0.1
                      %
                      
                      
                      5.2
                      %Total
                      
                      100
                      %
                      
                      
                      100
                      %
                      
                      
                      100
                      %





The following images show the general
structure of our traditional cables and one of our specialty cables, marine
cables:





7




Traditional
Cable











Manufacturing
Process





The
following illustration shows the basic steps in the manufacturing process for
our cable products:








Raw
Materials and Suppliers





Our primary raw materials include
copper, insulation materials and protective materials. Our main suppliers for
copper wire are Kaiyuan Shenda Nonferrous Metal Co., Ltd., Kaiyuan Wanjin Copper
Co., Ltd. and Tianjin Huabei Wire & Cable Manufacturing.  Our main
suppliers for insulation and protective materials are Yingkou Genorio Industrial
Co., Ltd. and Tianjin Commercial Import & Export Co., Ltd.





Our principal raw materials are
generally available in the market and we have not experienced any raw material
shortages in the past. Because of the general availability of these raw
materials, we do not believe that we will experience any raw material shortages
in the future; however, changes in the prices of copper, which has an
established history of volatility, directly affect the prices of our products
and may influence the demand for our products.





The following is a list of our top
suppliers (in terms of purchases) in the fiscal year ended June 30,
2009:





8





Raw Materials
                        
                        Suppliers
                        
                        Percentage of Total
                          PurchasesCopper Wire
                        
                        Kaiyuan Shenda Nonferrous Metal Co., Ltd.
                        
                        
                        20.0
                        %Copper Wire
                        
                        Kaiyuan Wanjin Copper Co., Ltd.
                        
                        
                        12.8
                        %Copper Wire
                        
                        Tianjin Huabei Wire & Cable Manufacturing
                        
                        
                        12.4
                        %





Distribution,
Sales Network and Customers





We sell our products through
twenty-four full-time sales persons located in Dalian and sales branches in nine
cities, such as Beijing, Shenyang, Tianjin, Jilin, Harbin and Benxi to
facilitate the sales in those cities. These branches are staffed with a total of
twelve sales persons. In addition, we contracted three distributors. Normally,
the contracts with three distributors are for one year and non-exclusive. In
fiscal year 2009, most of our sales were generated by our full-time sales
persons.





We have a total of approximately 500
customers located in Northeastern China and other provinces in China. Most of
our clients are located in Dalian and its surrounding areas.





In fiscal year 2009, five customers
accounted for 45% of our total sales, among which, Huasheng Electric
Installation Corporation contributed to 19.9% of our total revenue. In fiscal
year 2008, four customers accounted for 26% of our total sales. There was no
single customer contributing to 10% or more of our total sales in fiscal year
2008.





Seasonality





Demand for our traditional cables
during December to March is generally lower than demand during spring and summer
months primarily due to the Chinese new year and spring festival which occur
during that period. Our specialty cable product sales have not experienced
seasonal trends. Our customers purchase specialty cable products throughout the
year. We believe that with the expansion on our production of specialty cable
products the impact of seasonality of the business will be somewhat
mitigated.





Research
and Development





For the fiscal year ended June 30, 2009
and 2008, we spent $89,179 and $6,903 on research and development, respectively.
We maintain an internal research and development department staffed with 40
staff including 31 full-time employees and 9 part-time employees.





Intellectual
Property





Trademark





Dalian Befut is the registered
trademark holder of the following trademark, which was registered with the
Trademark Office of the State Administration for Industry and Commerce in PRC in
China.








M∙Q∙E





The registered scope of use includes
wire products such as wire cable, electric wire, power materials (electric wire
and wire cable), and electric resister for copper wire. The registered term of
the trademark is from September 7, 2001 to September 6, 2011. Under the PRC
Trademark Law, which was adopted in 1982 and revised in 2001, registered
trademarks are granted for a term of ten years and are renewable for additional
terms. Each renewal is limited to ten year terms and the registrant must
continue to use the trademark and apply for a renewal within six months prior to
the expiration of the current term.





9





In 2008, the trademark above was
recognized as a Famous Trademark in China through a judicial procedure, one of
the two procedures in the PRC to grant a trademark such title (the other
procedure is through administrative procedure) pursuant to Rules on Famous
Trademark Recognition and Protection promulgated by the PRC National Industrial
and Commercial Bureau and implemented from June 1, 2003. A Famous Trademark in
China entitles an enterprise to a stronger protection as compared to a general
trademark in China. For example, it can prevent others from using the same or
similar trademark not only on the same or similar products but also on certain
products in other industries as long as the use of such trademark by others
would cause confusion or being misleading to a reasonable customer. In addition,
in a trademark dispute adjudication, being a Famous Trademark itself provides
self-evidence of influence on consumers. In Dalian, there have been
approximately ten Famous Trademarks granted.





Patent





Dalian Befut has six patents in China.
The following table provides information regarding each patent.





Name of Patent
                              
                              Type
                                of
                                Patent
                              
                              Patent No.
                              
                              Inventor’s
                                Name
                              
                              Date of
                                Application
                              
                              Date of
                                Publication
                                and TermIntelligent
      reactive power compensation for automatic screen
                              
                              Utility
      model
                              
                              ZL200720184912.4
                              
                              Dalian
      Befut Wire & Cable Manufacturing Co., Ltd
                              
                              12/14/2007
                              
                              10/15/2008;
      Term: 10 years from 10/15/2008 to 10/14/2018Automatic
      Protection Ni-mh Battery Screen
                              
                              Utility
      model
                              
                              ZL200720184913.9
                              
                              
                              12/14/2007
                              
                              01/07/2009
                                Term:
      10 years from 01/07/2009 to 01/06/2019New
      tide-proof power cable
                              
                              Utility
      model
                              
                              ZL200820015254.0
                              
                              Guoxiang
      Liu,
                                Hongming
      Wu,
                                Ying
      Zhao and Hongbo Cao
                              
                              08/29/2008
                              
                              06/10/2009
                                Term:
      10 years from 06/10/2009 to 06/09/2019Sonar
      watertight cable
                              
                              Utility
      model
                              
                              ZL200820015255.5
                              
                              
                              08/29/2008
                              
                              06/10/2009
                                Term:
      10 years from 06/10/2009 to 06/09/2019Environmentally
      friendly wire & cable of low-smoke, halogen-free, fire-retardant
      insulation
                              
                              Utility
      model
                              
                              ZL200820015256.X
                              
                              
                              08/29/2008
                              
                              06/10/2009
                                Term:
      10 years from 06/10/2009 to 06/09/2019Mine
      fire-retardant rubber branch of the pre-cable
                              
                              Utility
      model
                              
                              ZL200820015332.7
                              
                              
                              09/01/2008
                              
                              06/10/2009
                                Term:
      10 years from 06/10/2009 to
06/09/2019





10





Dalian Befut has submitted application
for the following five patents with the Patent Office of the National
Intellectual Property Office of the PRC:





Name of Patent
                        
                        Type of
                          Patent
                        
                        Patent No.
                        
                        Inventor’s
                          Name
                        
                        Date of
                          Application
                        
                        Date of
                          Acceptance
                          of the
                          Application
                          by the PRC
                          IP Office
                        
                        Status of
                          ApplicationNew
      tide-proof power cable
                        
                        Utility
      model
                        
                        200820015254.0
                        
                        Guoxiang
      Liu,
                          Hongming
      Wu and
                          Ying
      Zhao
                        
                        08/27/2008
                        
                        08/29/2008
                        
                        Patent
      PendingSonar
      watertight cable
                        
                        Utility
      model
                        
                        200820015255.5
                        
                        
                        08/27/2008
                        
                        08/29/2008
                        
                        Patent
      PendingEnvironmentally
      friendly wire & cable of low-smoke, halogen-free, fire-retardant
      insulation
                        
                        Utility
      model
                        
                        200820015256.X
                        
                        
                        08/27/2008
                        
                        08/29/2008
                        
                        Patent
      PendingHigh-temperature
      plastic extrusion die-tool
                        
                        Utility
      model
                        
                        200820015331.2
                        
                        
                        08/29/2008
                        
                        09/01/2008
                        
                        Patent
      PendingMine
      fire-retardant rubber branch of the pre-cable
                        
                        Utility
      model
                        
                        200820015332.7
                        
                        
                        08/29/2008
                        
                        09/01/2008
                        
                        Patent
      Pending





The PRC Patent Law was adopted by the
National People's Congress, the parliament in PRC, in 1984 and was subsequently
amended in 1992 and 2000. The Patent Law aims to protect and encourage
invention, foster applications of invention and promote the development of
science and technology. To be patentable, invention or unity models must meet
three conditions: novelty, inventiveness and practical applicability. The Patent
Office of the National Intellectual Property Office of the PRC under the State
Council is responsible for receiving, examining and approving patent
applications. A patent is valid for a term of twenty years in the case of an
invention and a term of ten years in the case of utility models and designs. Our
pending patents are all utility models and will subject to the ten years'
protection. Any use of patent without consent or a proper license from the
patent owner constitutes an infringement of patent rights. We cannot assure you
that any patent applications filed by us will be approved in the
future.





With respect to the intellectual
property rights such as trademarks and patents as described above and know-how
for the marketing and sale of the products manufactured by Dalian Befut, the
WFOE has entered into Intellectual Property Rights License Agreement, pursuant
to which, it is be permitted to use the trademark, patents and know-how for
nominal consideration.





Competition





Currently, there are approximately
7,000 manufacturers in China producing a variety of types of cables and wires,
most of which produce traditional electric cables and wires only. Among all of
those manufacturers, 2,000 manufacturers can undertake specialty cable
production, such as marine cables and mine cables. Furthermore, among the 7,000
manufacturers, only 40 are eligible for producing nuclear cables and 20 can
produce marine cables.





Our competitors include manufacturers
having the ability to conduct comprehensive cable and wire production like us,
such as Far East Cable Co., Limited (“Far East”), Shangshang Cable and the
manufacturers which can produce specialty cable such as Yangzhou Marine Cable
Manufacturing Factory.





Far Eastin Jiangsu Province in China is
our largest competitor in the sector of traditional electric cable and wires. It
is a leader in terms of market share. We believe our competitive advantage to
Far East is in specialty cable production, in which we have more qualification
certificates and market share than that of Far East.





In terms of specialty cables such as
marine cables, Yangzhou Marine Cable Factory is our major competitor. It entered
into this market earlier than us and has strong competitive advantage on
qualifications and market share.  However, their market is mostly in
the adjacent provinces, such as Jiangsu and Zhejiang, which are not where we are
located.





Competitive
Advantages





We believe we have the following
competitive advantages:





11





We have a strong research and
development team, including highly skilled personnel such as the advanced
technology staff from Shenyang Electric Cable Factory. Shenyang Electric Cable
Factory used to be the largest state-owned cable company in Northeastern China
before its dissolution. Our team also includes the experts from Dalian Science
and Technology University.





We have obtained qualifications in
specialty cable production. We are nationally-designated enterprise for coal
mine and mechanical products and have passed National Confidential
Certification. We obtained Classification Society certifications from the PRC,
US, Germany, Italy, Japan and South Korea for our marine cables, first-grade
supply network certificate for China National Petroleum Corporation (CNPC), and
MIL-Spec Quality Management System certification.





We have entered into a contract to
expand our production facilities in the Industrial Zone by harbor on Changxing
Island in Dalian to develop our marine cable production. As of today, we have
completed phase one of the construction. We believe such expansion may provide
us dominant advantages in terms of production scale and capacity in Northeastern
China.





We sell our own products to our
customers with minimal use of distributors or outside sales personnel. This
avoids middle-man charges.





We have sales offices across the region
which constantly follow up with our customers for product quality and solicit
customer comments on our products.





We have an excellent quality control
program that monitors our product quality before it is delivered to
customers.





Environmental
Compliance





We are subject to environmental
regulations that are generally applicable to manufacturing companies in the PRC.
For example, we obtained necessary approval for its new manufacturing
facilities. We are also subject to periodic inspection by environmental
regulators and must follow specific procedures in some of our processes. We have
not violated environmental regulations or approved practices.





Employees





We currently have 206 employees in
total, of whom 111 are full-time and 95 are part-time.





Government
Regulation





We are subject to the recent PRC State
Administration of Foreign Exchange (“SAFE”) regulations regarding offshore
financing activities by PRC residents. SAFE issued a public notice in October
2005 requiring PRC domestic residents to register with the local SAFE branch
before establishing or controlling any company outside of China for the purpose
of capital financing with assets or equities of PRC companies, referred to in
the notice as an “offshore special purpose company.” All of our PRC resident
shareholders have complied with the registration procedure with local
SAFE.





Dalian Befut’s production facilities
maintain an ISO 9001 Quality Management System.





According to The Rule Regarding the
Administration on Compulsory Products Certification promulgated by General
Administration of Quality Supervision, Inspection and Quarantine of the PRC on
December 3, 2001 and effective from May 1, 2002, products that impact health and
safety of human beings, life and health of animals and plants and environmental
protection and public safety that are listed in the Index of the PRC Compulsory
Production Certification (the “Index”) are subject to the universally applicable
national standards, technical rules and implementation procedures. China
Compulsory Certification (“CCC”) is a mandatory requirement for the production,
distribution and exportation of any of the products that are listed in the
Index. Certain of our cable and wire products are subject to such certification
and we have maintained effective CCC status on those products
accordingly.





We received Classification Society
certifications for our marine cable products from classification societies such
as China Classification Society, American Bureau of Shipping, Germanischer
Lloyd, Italy, Nippon Kaiji Kyokai and Korean Register of Shipping. A
classification society is a non-governmental organization in the shipping
industry, often referred to as “Class”. It establishes and maintains standards
for the construction and classification of ships and offshore structures,
supervises that construction is according to these standards and carries out
regular surveys of ships in service to ensure these comply with these
standards.





In addition, we are a
nationally-designated enterprise for coal mine and mechanical products,
first-grade supply network certificate for China National Petroleum Corporation
(CNPC), and MIL-Spec Quality Management System certification.





12





We obtained a license for importing and
exporting products in 2006.





ITEM
1A.           RISK
FACTORS





This item is not required for smaller
reporting companies like us.





ITEM
1B.           UNRESOLVED STAFF
COMMENTS





None.





ITEM
2.              PROPERTIES





Under PRC
law, all land in the PRC is owned by either the state (“State Land”) or by rural
collectives (“Collective Land”), which grant a "land use right" to an individual
or entity after a purchase price for such "land use right" is paid to the
government. The "land use right" grants the holder the right to use the land for
a specified long-term period of time and other rights that are incidental to the
ownership of the land, except for the right to ownership. Land and buildings are
regarded as two separate properties in China. Land users may use the land and
own the buildings and improvements on it, but the sovereignty of the land is
retained by the State or rural collectives.





We lease a parcel of land in Dalian
City and three buildings on that land (namely, an office building of 170 square
meters, a boiler room of 450 square meters and an employee dormitory of 300
square meters) from Dalian Wanbao Industrial Co. Ltd. (the “Lessor”). Set forth
in the following table is certain information regarding the terms of such
lease:





Location
            
            Qipanzi County, Gezhenbao Town of Ganjingzi
      District, Dalian,Certificate
      of Land Use Right No.
            
            Ganjiyong
      (2001) Zi Di 0316004Registered
      Owner of Land
            
            Qipan
      Village (Rural Collective)Lessor
            
            Dalian
      Wanbao Industrial Co. Ltd.Usage
            
            Industrial
      UseSize
              (in
      Square Meters)
            
            14,040Term
      and Expiration Date
            
            For
      50 years, from Oct.1 2001 through Oct. 1, 2051Rent
            
            RMB2,500,000
      (approximately $365,540) for 50 yearsOther
            
            The
      right to transfer or grant a security interest on the land is subject to
      the Lessor’s consent.





We own
three factory buildings that are built upon the leased land referenced
immediately above. Set forth in the following table is the information of the
factory buildings:





Registered Owner
                            of Land Use Right
                          
                          Location
                          
                          Certificate of House
                            Ownership Number
                          
                          Size
                            (in Square Meters)
                          
                          Usage
                          
                          EncumbranceDalian
      Befut Wire & Cable Manufacturing Co., Ltd
                          
                          Qipanzi
      County, Gezhenbao Town of Ganjingzi District, Dalian
                          
                          Dagan
      Cun Fang Zi Di 205010073
                          
                          661.5Dagan
      Cun Fang Zi Di 205010074
                          
                          1531.05
                          
                          Industrial
      use, Factory
                          
                          NoneDagan
      Cun Fang Zi Di 205010075
                          
                          4014.72





In
addition, we completed construction of Changxing Island Phase I Construction
which includes factory facilities, located in Xingang County, Lingang Industrial
District of Changxing Island (“Changxing Island Property”). We are in the
process of getting the related title documents including: (i) the use right to
the land which Changxing Island Property covers; and (ii) the ownership of the
buildings and factories built upon Changxing Island Property. Changxing Island
Property has an area of 65,000 square meters, and the construction area totals
45,477 square meters, with 24,964 square meters of factory facility warehouse of
5,326 square meters, office building of 8,264 square meters, and other
supporting facilities of 6,923 square meters.





13





ITEM
3  LEGAL PROCEEDINGS





From time to time, we may become
involved in various lawsuits and legal proceedings which arise in the ordinary
course of business. 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. However, we are currently not aware of any such legal
proceedings or claims that we believe will have, individually or in the
aggregate, a material adverse affect on our business, financial condition or
operating results.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





There
were no matters that were submitted during the fourth quarter of 2009 to a vote
of security holders.





PART
II





ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES.





Our common stock was approved for
quotation on the OTC Bulletin Board on September 28, 2006 and initially traded
under the symbol FRZR.OB.  In connection with a 1-for-20 reverse stock
split, which became effective on February 26, 2008, our symbol on the OTC
Bulletin Board was changed to FREZ.OB. On June 18, 2009, in connection with a
company name change and a 1-for-4.07 reverse stock split effective the same day,
our symbol was changed to BFTI.OB.





The table below sets forth the reported
high and low bid prices for the periods indicated. The bid prices shown reflect
quotations between dealers, without adjustment for markups, markdowns or
commissions, and may not represent actual transactions in our securities. 
Shares of our common stock are very thinly traded, and the price if traded may
be highly volatile and may not reflect the value of the Company.





High Bid
                  
                  
                  Low BidFiscal
      Year Ended June 30, 200906/30/2009
                  
                  $
                  0.10
                  
                  
                  $
                  0.0003/31/2009
                  
                  $
                  0.10
                  
                  
                  $
                  0.0312/31/2008
                  
                  $
                  0.13
                  
                  
                  $
                  0.02509/30/2008
                  
                  $
                  0..20
                  
                  
                  $
                  0.10Fiscal
      Year Ended June 30, 200806/30/2008
                  
                  $
                  0.30
                  
                  
                  $
                  0.1503/31/2008
                  
                  $
                  0.10
                  
                  
                  $
                  0.0012/31/2007
                  
                  $
                  0.14
                  
                  
                  $
                  0.02509/28/2007
                  
                  $
                  0.15
                  
                  
                  $
                  0.04





*
Source: Quarterly Trade & Quote Summary Report ordered from http://www.otcbb.com/dynamic/tradeact.htm.





Common
and Preferred Stock





The Company is authorized by its
Articles of Incorporation, as amended, to issue an aggregate of 210,000,000
shares of capital stock, of which 200,000,000 are shares of common stock, par
value $0.001 per share (the "Common Stock") and 10,000,000 are shares of
preferred stock, par value $0.001 per share (the “Preferred
Stock”).





Common
Stock





All outstanding shares of Common Stock
are of the same class and have equal rights and attributes. The holders of
Common Stock are entitled to one vote per share on all matters submitted to a
vote of stockholders of the Company. All stockholders are entitled to share
equally in dividends, if any, as may be declared from time to time by the Board
of Directors out of funds legally available. In the event of liquidation, the
holders of Common Stock are entitled to share ratably in all assets remaining
after payment of all liabilities. The stockholders do not have cumulative or
preemptive rights.





14







Preferred
Stock





Our Articles of Incorporation, as
amended, authorize the issuance of up to 10,000,000 shares of Preferred Stock
with designations, rights and preferences determined from time to time by its
Board of Directors. Accordingly, our Board of Directors is empowered, without
stockholder approval, to issue Preferred Stock with dividend, liquidation,
conversion, voting, or other rights which could adversely affect the voting
power or other rights of the holders of the Common Stock. In the event of
issuance, the Preferred Stock could be utilized, under certain circumstances, as
a method of discouraging, delaying or preventing a change in control of the
Company. Although we have no present intention to issue any shares of our
authorized Preferred Stock, there can be no assurance that the Company will not
do so in the future.





The description of certain matters
relating to the securities of the Company is a summary and is qualified in its
entirety by the provisions of the Company's Articles of Incorporation and
By-Laws, copies of which have been filed or incorporated by reference as
exhibits to this report.





Holders





As of September 30, 2009, there were
approximately 575 shareholders of record of our common stock and an
indeterminate number of beneficial holders who held our Common Stock in street
name.





Transfer
Agent and Registrar




Our independent stock transfer agent is
Corporate Stock Transfer, Inc., located in Denver, Colorado. Their mailing
address is 3200 Cherry Creek Dr. South, Suite 430, Denver, CO 80209. Their phone
number is 303-282-4800 and fax number is 303-282-5800.




Dividends





Our board of directors has not declared
a dividend on our common stock during the last two fiscal years or the
subsequent interim period. It is the present intention of our board to utilize
all available funds for the development of the Company's business.





The payment of dividends, if any, is at
the discretion of the Board of Directors and is contingent on the Company's
revenues and earnings, capital requirements, financial conditions and the
ability of our subsidiary, WFOE, to obtain approval to send monies out of the
PRC. The PRC's national currency, the Yuan, is not a freely convertible
currency.





Penny
Stock Regulations





Our securities are subject to the SEC's
“penny stock” rules. The penny stock rules may affect the ability of owners of
our shares to sell them. There may be a limited market for penny stocks due to
the regulatory burdens on broker-dealers. The market among dealers may not be
active. Investors in penny stocks often are unable to sell stock back to the
dealer that sold them the stock. The mark-ups or commissions charged by the
broker-dealers might be greater than any profit an investor may make. Because of
large spreads that market makers quote, investors may be unable to sell the
stock immediately back to the dealer at the same price the dealer sold the stock
to the investor.





Our securities are also subject to the
SEC’s rule that imposes special sales practice requirements upon broker-dealers
that sell such securities to other than established customers or accredited
investors. For purposes of the rule, the phrase “accredited investor” means, in
general terms, institutions with assets exceeding $5,000,000 or individuals
having net worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, combined with a spouse’s income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser’s written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of purchasers of our securities to buy or sell in any
market.





Recent
Sales of Unregistered Securities





In connection with the 1-for-4.07
reverse stock split (the “Reverse Split”) of our common stock effective June 18,
2009, we issued an aggregate of 58,815 shares of common stock. Any shareholder
owning at least 100 shares but less than 407 shares of our common stock on June
17, 2009 received at least 100 shares after giving effect to the Reverse
Split.





The issuance of 58,815 shares of common
stock of was exempt from registration pursuant to Section 4(2) of the Securities
Act.




15




ITEM
      6.
            SELECTED
      FINANCIAL DATA





This item
is not required for smaller reporting companies like us.





ITEM
      7.
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.





The following discussion of our
financial condition and results of operations (the “MD&A”) should be read in
conjunction with our consolidated financial statements and the notes to those
financial statements appearing elsewhere in this report.





Certain statements in this report
constitute "forward-looking statements". Such forward-looking statements include
statements, which involve risks and uncertainties, regarding, among other
things, (a) our projected sales, profitability, and cash flows, (b) our growth
strategies, (c) anticipated trends in our industries, (d) our future financing
plans, and (e) our anticipated needs for, and use of, working capital. They are
generally identifiable by use of the words “may,” “will,” “should,”
“anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,”
“ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the
negative of these words or other variations on these words or comparable
terminology. Actual events or results may differ materially from those discussed
in forward-looking statements as a result of various factors, including, without
limitation, the risks and matters described in this report generally. In light
of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this filing will in fact occur. You
should not place undue reliance on these forward-looking
statements.





The forward-looking statements speak
only as of the date on which they are made, and, except to the extent required
by federal securities laws, we undertake no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of unanticipated
events.





Unless the context indicates otherwise,
as used in the following discussion, the words "Company”, "we,” "us,” and "our,”
each refer to (i) Befut International Co., Ltd. (f/k/a Frezer, Inc.) (the
“Public Company”), a corporation incorporated in the State of Nevada; (ii) BEFUT
Corporation, a corporation incorporated in the State of Nevada (“Befut Nevada”);
(ii) Hongkong BEFUT Co., Ltd. (“Befut Hongkong”), a wholly-owned subsidiary of
Befut Nevada incorporated under the laws of Hong Kong; (iii) Befut Electric
(Dalian) Co., Ltd. (“WFOE”), a corporation organized under the laws of the
People’s Republic of China (the “PRC”), a wholly-owned subsidiary of Befut
Hongkong; (vi) Dalian Befut Wire and Cable Manufactuing Co., Ltd. (“Dalian
Befut”), a corporation incorporated under the laws of the PRC, which is
controlled by Dalian Befut through a series of agreements; (vii) Dalian Marine
Cable Co., Ltd., a corporation that is 86.6% owned by Dalian Befut. (“Befut
Marine”) and (viii) Befut Zhong Xing Switch Co., Ltd., a corporation that is 70%
owned by Dalian Befut (“Befut Zhong Xing”).





Unless the context otherwise requires,
all references to (i)  “PRC” and “China” are to the People’s
Republic of China or mainland China; (ii) “U.S. dollar,” “$” and “US$” are to
United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency
of PRC or China.





Overview





As we reported in the Current Report on
Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on March
19, 2009, we entered into and consummated a series of transactions on March 13,
2009, whereby (a) The Public Company acquired 100% of the outstanding shares of
common stock of Befut Nevada, from Befut International Co. Limited, a British
Virgin Islands company (“Befut BVI”) in exchange for the issuance to Befut BVI
of a net number of 117,768,300 shares of the Company’s common stock and the
cancellation of an aggregate of 2,176,170 shares of the Company’s common stock
(the “Reverse Merger”) and (b) the Company raised $500,000 in gross proceeds
from the sale to four investors of convertible promissory notes of the Company
in the principal amount of $500,000 and warrants to purchase an aggregate of
720,076 shares of the Company’s common stock (the “Private Placement”). Befut
BVI owns all the shares of Befut Hongkong and Befut Hongkong is the sole
shareholder of WFOE, which controls its captive manufacturing company, Dalian
Befut, through a series of agreements. Dalian Befut owns 86.6% of the
outstanding equity of Befut Marine. In addition, Dalian Befut owns 70% of the
outstanding equity of Befut Zhong Xing since July 1, 2009.





As a result of the Reverse Merger, we,
through WFOE, Dalian Befut and Befut Marine, are engaged in the production of
traditional cables, including metallurgy, electric power system cables and
specialty cables, including marine cable, mine specialty cable, nuclear cable,
and petrochemical cable.





Effective June 18, 2009, the Company
changed its name from “Frezer, Inc.” to “BEFUT International Co., Ltd.” It also
effectuated a 1-for-4.07 reverse stock split of its outstanding common stock. As
a result of the corporate name change and the reverse stock split, the Company’s
ticker symbol changed to BFTI.OB.




16


Our
Business





We are one of the largest developers,
manufacturers and distributors of cable and wire in northeastern China,
headquartered in the city of Dalian. We are engaged in the production of
traditional cables, including metallurgy, electric power system cables and
specialty cables, including marine cable, mine specialty cable, nuclear cable,
and petrochemical cable. We also have the technical capability for the
production of large-scale marine cable, a segment with significantly higher
profit margins. During the past decade, Dalian has become a center for ship
manufacturing plant construction.  Therefore, we are positioning the
Company from being a traditional cable manufacturer to a specialty cable
supplier.





In 2006, we commenced the construction
of a manufactory plant in the industrial zone on Changxing Island which is 120
kilometers away from Dalian for the main purpose of specialty cable production.
As of the date of this report, we have completed the first phase of the
construction which covers a land of 65,000 square meters with a total
construction area of 45,477 square meters. The construction includes production
facility of 24,964 square meters, warehouse of 5,326 square meters, office
building of 8,264 square meters, and other supporting facilities of 6,923 square
meters. We have reserved a land of 85,000 square meters for the second phase of
construction when funds become available. The main purpose of our second phase
construction is to expand our production capacity for specialty cable by
introducing strategic alliances, integrating technology and industrial resources
so as to make Dalian Befut the most competitive specialty cable producer in
China and at the same time strive to enter the international cable market. After
the completion of both phases, the Changxing Island project is anticipated to
occupy a total of 150,000 square meters, with building construction of 87,000
square meters. The facility mainly will be used for production of specialty
cables which corresponds to our plan to refocus on specialty cables such as
marine cable as our main business in the next five years.





In the first half of the fiscal year
ended June 30, 2009, as a direct impact of the global financial crisis, orders
from ship manufacturers and steel refining companies decreased dramatically. In
the second half of the fiscal year, we adjusted our marketing strategy to
temporarily refocus on traditional coal cable until the economic environment is
recovered. In the month of June 2009, sales for specialty cable increased
dramatically. As a result, for the fiscal year ended June 30, 2009, sales for
specialty cables were approximately 46.4% of our total sales. We will continue
to devote more resources into developing, marketing and selling of petrochemical
and marine cables as our long-term business strategy.





We sell our products through a network
of twenty-four salespeople located in Dalian and sales branches in nine cities,
such as Beijing, Shenyang, Tianjin, Jilin, Harbin and Benxi, to facilitate the
sales in those cities. These branches are staffed with a total of twelve
salespeople. In addition, we contracted with three distributors for the sale of
our products. Normally, the contracts with distributors are for one year. In
fiscal year 2009, most of our sales were generated by our full-time
salespeople.





Global
Economic Environment





Our business is dependent on consumer
demand for our products. We believe that significant uncertainty in the global
economy and a slowdown in ship manufacturing and steel refining have had a
significant impact on Company revenue and increased our clients’ sensitivity to
the cost of our products. If the global economic environment continues to be
weak, these worsening economic conditions could have a negative impact on our
sales growth and operating margin in 2010.





Despite the downturn in the ship
manufacturing and steel refining industries in the first three quarters of
fiscal 2009, mining and telecommunication construction in China progressed. As
such, demand for the related specialty cables increased, especially demand for
mining specialty cable which has a historical gross profit margin in a range of
35% to 45%.





Recent
Developments





We completed the first phase of the
construction of a manufacturing plant on Changxing Island which covers a land of
65,000 square meters with a total construction area of 45,477 square meters, and
which includes production facility of 24,964 square meters, warehouse of 5,326
square meters, office building of 8,264 square meters, and other supporting
facilities of 6,923 square meters (“Changxing Island Project Phase I
Construction”).  We expect that production at the new facility will
commence towards the end of December 2009. Once in production, the estimated
full capacity will be approximately over $200 million. We have reserved a land
of 85,000 square meters for the second phase of construction when funds become
available (“Changxing Island Project Phase II Construction”). We plan to start
Changxing Island Project Phase II Construction  when Changxing Island
Project Phase I Construction production reaches full capacity in approximately
three years or when we target appropriate strategic partner, whichever comes
earlier.





On July 1, 2009, Dalian Befut, our
captive manufacturer, formed a new company under the laws of the PRC, Befut
Zhong Xing by investing approximately $100,000 (RMB700,000) for its 70% equity
interest in Befut Zhong Xing. The other party who holds 30% equity interests is
an individual. By setting up Befut Zhong Xing, we aim to enter into the switch
appliance market as a number of our cable customers demonstrated certain demand
for switch products.


17


Results
of Operations





Results
of Operations for the Fiscal Years ended June 30, 2009 and 2008





For the Fiscal Years EndedJune 30,
                      2009
                    
                    
                    June 30,
                      2008Sales
                    
                    $
                    19,308,939
                    
                    
                    $
                    20,012,975Cost
      of sales
                    
                    
                    14,101,545
                    
                    
                    
                    15,141,308Total
      operating expenses
                    
                    
                    1,379,372
                    
                    
                    
                    939,793Other
      income/(expense)
                    
                    
                    (693,208
                    )
                    
                    
                    364,762Income
      taxes
                    
                    
                    887,696
                    
                    
                    
                    71,058Net
      income
                    
                    
                    2,259,413
                    
                    
                    
                    4,229,988Foreign
      currency translation adjustment
                    
                    
                    142,037
                    
                    
                    
                    1,303,694Comprehensive income
                    
                    $
                    2,401,450
                    
                    
                    $
                    5,533,682





Sales





Our sales for the fiscal year ended
June 30, 2009 were $19,308,939, a decrease of $704,036 or 3.5%, as compared to
the fiscal year ended June 30, 2008. The decrease was primarily attributable to
a general decrease in copper prices. The selling price of our products is
significantly correlated with the market price of copper price. When copper
prices decrease, we typically lower our selling price in order to remain
competitive with other wire and cable manufacturers. During the period from
March 2008 to December 2008, copper prices dropped by approximately 68%. This
had a direct negative impact on our sales.





For the fiscal year ended June 30,
2009, our sales for traditional cable and specialty cable accounted for
approximately 53.8% and 46.2% of our total sales, respectively. We achieved an
increase in our total sales volume to 1,926.94 metric tons in the fiscal year
ended June 30, 2009, as compared to total sales volume of 1,727.25 metric tons
in the fiscal year ended June 30, 2008, an increase of 198.69 metric
tons.





Cost of
Goods Sold





Cost of goods sold is primarily
comprised of the cost of our raw materials and direct labor, manufacturing
overhead expenses. Our cost of goods sold for the fiscal year ended June 30,
2009 was $14,101,545, a decrease of $1,039,763 or 6.9%, as compared to the
fiscal year ended June 30, 2008. This was primarily due to the decrease in
copper prices. The average unit price of copper decreased by approximately 28.0%
in fiscal year 2009 as compared to fiscal year 2008.





Gross
Profit





Our gross profit is the difference
between net sales and cost of goods sold. Our gross profit for the fiscal year
ended June 30, 2009 was $5,207,394, an increase of $335,727 or 6.9%, as compared
to the fiscal year ended June 30, 2008. Gross profit as a percentage of net
sales was 27.0% for the fiscal year of 2009, as compared to 24.3% for the fiscal
year of 2008.





The decrease in our net sales was
offset by the slightly larger decrease in cost of goods sold in the fiscal year
of 2009. The downward trend of the prices of our raw materials, mainly
consisting of copper, contributed to the decrease in cost of goods sold. As a
result, our gross profit in fiscal 2009 was marginally higher than that in
fiscal 2008.





Selling,
General and Administrative Expenses





Our selling, general and administrative
expenses consist primarily of salaries and bonus of sales personnel, advertising
and promotion expenses, freight charges, related compensation and professional
fees. Selling expenses were $121,393 in the fiscal year ended June 30, 2009 as
compared to $77,074 in the fiscal year ended June 30, 2008, an increase of
$44,319. The increase was primarily attributable to increase in delivery related
fuel expenses. General and administrative expenses were $1,257,979 for the
fiscal year ended June 30, 2009, an increase of $395,260 or 45.8%, as compared
to the fiscal year ended June 30, 2008. Such increase was primarily due to the
amortization expense related to the acquired intangible assets as described
under Intangible Assets under Liquidity and Capital Resources in this
Item.




18


Income
from Operations





Our operating income was $3,828,022 for
the fiscal year ended June 30, 2009, a decrease of $103,852 or 2.6%, primarily a
result of the decrease in sales and increase in selling, general and
administrative, partially offset by decrease in cost of goods sold.





Government
Subsidy





We received a subsidy from Chinese
local government for the fiscal year of 2009 in the amount of $159,979, as
compared to a subsidy of $492,294 for the fiscal year of 2008.





The local government has a favorable
policy to encourage new investments in Changxing Island where our new facilities
are located.  However, such subsidy is determined on a yearly basis
and no assurances can be given that we will continue to receive any such
subsidies.





Income
Taxes





Our business operations were solely
conducted by our subsidiaries incorporated in the PRC and we were governed by
the PRC Enterprise Income Tax Laws. China enterprise income tax is calculated
based on taxable income determined under Chinese GAAP. In accordance with the
PRC Income Tax Laws, a Chinese domestic company is subject to the following
taxes, including but not limited to: (i) enterprise income tax rate has
decreased from 33% to 25% effective from January 1, 2008, when the new PRC
Enterprise Tax Law became effective; and (ii) value added tax at the rate of 17%
for most of the goods sold.





Provision for income taxes was $887,696
for the fiscal year ended June 30, 2009, an increase of $816,638, compared to
the fiscal year ended June 30, 2008. Such increase was due to the expiration of
special tax deduction for which we qualified due to its efforts in recruiting of
physically challenged employees. We are in the process of renewing our status
with the local government. Once our status is renewed, we expect that a tax
deduction will be granted retroactively, although there can be no
assurance.





Net
Income





Net income for the fiscal year ended
June 30, 2009 was $2,259,413, a decrease of $1,970,575 or 46.6%, compared to net
income of $4,229,988 for the fiscal year ended June 30, 2008. The decrease was
mainly attributable to an increase in general and administrative expenses of
$395,260, a decrease of $332,315 in government subsidy income, an increase in
provision for income taxes of $816,638 and costs of $491,281 in the fiscal year
ended June 30, 2009 related to our reverse merger consummated in March
2009.





Liquidity
and Capital Resources





Selected
Measures of Liquidity and Capital Resources





The
following table sets forth certain relevant measures of our liquidity and
capital resources:





For the Fiscal Year Ended(dollars, except ratios and per common share
      data)
                      
                      June 30,
                        2009
                      
                      
                      June 30,
                        2008Cash
      and cash equivalents and restricted cash
                      
                      $
                      796,301
                      
                      
                      $
                      353,049Working
      capital
                      
                      $
                      10,033,815
                      
                      
                      $
                      5,920,566Ratio
      of current assets to current liabilities
                      
                      1.8:1
                      
                      
                      2.3:1





The increase in working capital as of
June 30, 2009 as compared to June 30, 2008 was primarily due to the increase in
accounts receivable, short-term loans to unrelated parties, and advance payments
related to Research and Development, partially offset by increase in short-term
bank loans, trade notes payable and decrease in other assets. The increase in
accounts receivable was attributable to the dramatic increase in sales in the
month of June 2009.





Cash
Flows





During the fiscal years ended June 30,
2009 and 2008, we had a net change in cash and cash equivalents and restricted
cash of $443,252 and $21,431, respectively.  The following table
summarizes such changes:


19




For the Fiscal Years EndedJune 30,
                        2009
                      
                      
                      June 30,
                        2008Net
      cash provided by operating activities
                      
                      $
                      2,544,636
                      
                      
                      $
                      2,494,630Net
      cash used in investing activities
                      
                      
                      (13,668,727
                      )
                      
                      
                      (743,733
                      )Net
      cash provided by/(used in) financing activities
                      
                      
                      11,494,228
                      
                      
                      
                      (1,764,928
                      )Effect
      of exchange rate change on cash and cash equivalents
      securities
                      
                      
                      73,115
                      
                      
                      
                      35,462Net increase in cash and cash
      equivalents
                      
                      $
                      443,252
                      
                      
                      $
                      21,431




We have historically financed our
operations and capital expenditures principally through cash provided by
operations and bank loans. Our management believes that the Company has
sufficient cash, along with projected cash to be generated by the business of
the Company to support its current operations for the next twelve months. We
project the cost of purchasing new production lines from Finland and Canada
would total approximately $6.5 million and the remaining unpaid balance of our
Changxing Island Phase I construction costs of approximately of $1.5 million is
expected to be financed by a long-term bank loan that we are in negotiation with
a bank in China. There can be no assurance that such bank loan or any additional
financing will be available on acceptable terms, if at all.





Operating
Activities





During the fiscal year ended June 30,
2009, we generated $50,006 more cash from operating activities as compared to
the fiscal year ended June 30, 2008. We had an increase in trade notes payable
of $1,585,070, income tax payable of $777,494, other current liabilities of
$939,981 and decrease in inventory of $678,500, advance payments of $725,577 and
other current assets of $1,291,070, partially offset by less cash generated from
net income of $1,970,575 and increase in accounts receivable of $3,012,145.
Other current liabilities are the short-term loans the Company received from
other companies in China. They are short-term in nature, non-collaterized,
non-interest bearing and payable upon demand.





Investing
Activities





During the fiscal year ended June 30,
2009, we used $12,924,994 more cash for investing activities as compared to the
fiscal year ended June 30, 2008, which principally reflects increased spending
of approximately $3,272,219 for the construction of new factory building on
Changxing Island, increases loans to unrelated parties of $5,971,233 and an
increased advance payments for research and development of
$2,956,370.





Financing
Activities





During the fiscal year ended June 30,
2009, we generated $13,259,156 more cash for financing activities as compared to
the fiscal year ended June 30, 2008, which principally reflects net proceeds
from short-term bank loans of $5,860,000, additional paid-in capital contributed
from existing shareholders of $5,301,971 and the issuance of convertible notes
payable of $500,000 to four investors in March 2009.





During the fiscal year ended June 30,
2009, we received proceeds from short-term loans of a total of $8,057,500 from
various Chinese local banks, and we repaid $2,197,500 for certain short-term
bank loans.





Financial
Obligation





As of
June 30, 2009, our outstanding loans were as follows:





Creditors
                                
                                Loan
                                  Amount
                                
                                
                                Interest Rate
                                
                                Term
                                
                                Maturity DateGuangdong
      Development Bank
                                
                                
                                586,000
                                
                                
                                
                                9.98
                                %
                                1
      year
                                
                                07/31/09Agricultural
      Bank of China
                                
                                
                                219,750
                                
                                
                                
                                10.
      0485
                                %
                                9 months
                                
                                08/20/09Bank
      of Dalian
                                
                                
                                2,856,750
                                
                                
                                
                                10.458
                                %
                                1
      year
                                
                                08/27/09Shanghai
      Pudong Development Bank
                                
                                
                                1,465,000
                                
                                
                                
                                6.138
                                %
                                1
      year
                                
                                12/28/09China
      Merchants Bank
                                
                                
                                2,930,000
                                
                                
                                
                                5.841
                                %
                                1
      year
                                
                                05/05/10Construction
      Bank of China
                                
                                
                                5,470,310
                                
                                
                                To
      be adjustedevery
      12 months
                                
                                5
      year
                                
                                
                                11/2011Total
                                
                                $
                                13,527,810




20


Accounts
Receivable





We had $8,560,592 accounts receivable,
net of allowance for doubtful accounts of $20,222 as of June 30, 2009, compared
to $5,902,124, net of allowance for doubtful account of $25,263 as of June 30,
2008, an increase of $2,658,468, mainly due to dramatic increase in sales in the
month of June 2009 as a result of unexpected customer orders.  Another
contributing factor is that certain state-owned companies as our clients
beginning to require retaining from 5% to 10% of the revenues we generated from
them as product quality guarantee deposit for a term of one year. Such quality
guarantee deposit can be released to us if there are no quality issues of our
products at the expiration of such one-year term.





Inventories





Inventories consisted of the following
as of June 30, 2009 and 2008, respectively:





(dollars)
                      
                      June 30,
                        2009
                      
                      
                      June 30,
                        2008Raw
      materials
                      
                      $
                      400,343
                      
                      
                      $
                      194,273Work-in-process
                      
                      
                      60,703
                      
                      
                      
                      111,756Finished
      goods
                      
                      
                      892,486
                      
                      
                      
                      1,337,914Total inventories
                      
                      $
                      1,353,532
                      
                      
                      $
                      1,643,943





We had total inventory of $1,353,532 as
of June 30, 2009, a decrease of $290,411 or 18.0%. The decrease is primarily due
to the decrease in copper price and the unexpected dramatic increase in sales in
the month of June in 2009. In June 2009, sales from our specialty cable
increased approximately 44.5% comparing to its average sales in the previous
eleven months in fiscal year 2009.





Intangible
Assets





In the third quarter of 2009, we
recorded a patent named Intelligent Reactive Power Compensation for Automatic
Screen at a value of $6,255,528. This utility model adopts non-contact
controlling from reactive controller to capacitor switching and therefore it
prolongs the useful life of equipment. We started amortizing this intangible
asset over its estimated useful life of ten years using straight-line method
from April 2009.





In the fourth fiscal quarter of 2009,
we recorded another patent named Automatic Environmental Protection MH-Ni DC
Battery Panel at a value of $5,282,878. This utility model has two chargers
running side by side extending current, strengthening the safety of charge power
supply. We started amortizing this intangible asset over its estimated useful
life of ten years using straight-line method from May 2009.





Both patents referenced above were
originally owned by three parties including Dalian Befut. Dalian Befut purchased
the portion owned by the other two parties.  To one of the other two
parties, Dalian Befut paid cash of $155,356 plus 51% ownership of Dalian Befut
at a market value of $11,383,050 based on an independent
appraisal.  The other party assigned his portion to Dalian Befut for
no consideration. Subsequent to the acquisition, the CEO Mr. Hong Bo Cao and
another shareholder Mr. Ting Ming Li purchased the 51% ownership back personally
from this third party.





We also recorded a well-known
trademark, the one we described under Item 1 Business/Intellectual
Property/Trademark section of this report, at a value of $83,505, the amount of
money we spent in registering with a governmental agency.





Total amortization expenses for the
intangible assets for the fiscal year ended June 30, 2009 was
$291,520.





Loan to
Third Parties





Between 2009 and 2008, we entered into
four separate loan agreements with our important business alliances, which
permitted them to borrow principal up to RMB51 million (approximately $7.5
million) at an annual interest rate of 50% more than the current rate of banks
in China. These loans are secured by borrowers’ accounts receivables, fixed
assets and under the term ranged from one to four years. As of June 30, 2009 and
June 30, 2008, we had outstanding loans to third parties of $6,955,623 and
$505,375, respectively.




21


Off-Balance
Sheet Arrangements





At June 30, 2009, We did not have any
off-balance sheet arrangements.





Critical
Accounting Policies





Revenue
Recognition





Sales revenue, is recognized at the
date of shipment to customers, at which time title passes to customer provided
that there are no uncertainties regarding customer acceptance, persuasive
evidence of formal arrangement exists, the sales price is fixed and
determinable, the delivery is completed, no other significant obligations of the
Company exist and collectability is deemed probable. Payments received before
all of the relevant criteria for revenue recognition are satisfied are recorded
as unearned revenue.





Use of
Estimates and Assumption





In presenting our financial statements
in conformity with generally accepted accounting principles, we are required to
make estimates and assumptions that affect the amounts reported therein. Several
of the estimates and assumptions we are required to make relate to matters that
are inherently uncertain as they pertain to future events.  However,
events that are outside of our control cannot be predicted and, as such, they
cannot be contemplated in evaluating such estimates and
assumptions.  If there is a significant unfavorable change to current
conditions, it could result in a material adverse impact to our consolidated
results of operations, financial position and liquidity.  We believe
that the estimates and assumptions we used when preparing our financial
statements were the most appropriate at that time. See Note 2 to our
consolidated financial statements, “Basis of Presentation and Summary of
Significant Accounting Policies.” While there have been no material changes to
our critical accounting policies as to the methodologies or assumptions we apply
under them, we continue to monitor such methodologies and
assumptions.





Cash and
Cash Equivalents





For statement of cash flows purposes,
the Company considers all cash on hand and in banks, certificates of deposit and
other highly-liquid investments with maturities of three months or less, when
purchased, to be cash and cash equivalents.





Accounts
Receivable





Accounts receivable are stated at the
amount management expects to collect from balances outstanding at the end of the
period. Based on its assessment of the credit history with customers having
outstanding balances and current relationships with them, management makes
conclusions whether any realization of losses on balances outstanding at the end
of the period will be deemed uncollectible based on the age of the receivables.
The Company reserves 3% of accounts receivable balances that have been
outstanding less than one year, 5% of accounts receivable balances that have
been outstanding between one year and two years, and 100% of receivable balances
that have been outstanding more than two years.




ITEM
      7A.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS
 
 This item
is not required for smaller reporting companies like us.
 
 ITEM
      8.
              FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
 
 Balance
sheets, as of June 30, 2009 and 2008, and statements of operations,
stockholders’ equity and cash flows for each of the two years in the period
ended June 30, 2009 and 2008, together with the related notes and the reports of
independent registered public accounting firms, are set forth on the “F” pages
of this report.
  22
  ITEM
      9.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
 
 None.
 
 ITEM
      9A (T).
              CONTROLS
      AND PROCEDURES




Disclosure
Controls and Procedures





The
Company's Chief Executive Officer and Chief Financial Officer have reviewed and
evaluated the effectiveness of our disclosure controls and procedures, which
included inquiries made to certain other of the Company's employees. Based on
their evaluation, the Company's Chief Executive Officer and Chief Financial
Officer have each concluded that, as of June 30, 2009, the Company's disclosure
controls and procedures were effective and sufficient to ensure that we record,
process, summarize and report information required to be disclosed by the
Company in its periodic reports filed under the Securities and Exchange
Commission's rules and forms.





Management
Report on Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting to provide reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial
statement for external purposes in accordance with U.S. generally accepted
accounting principles. Internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with U.S. generally accepted accounting principles, and
that receipts and expenditures of the Company are being made only in accordance
with authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company’s assets that
could have a material effect on the financial statements.





Any
system of internal control, no matter how well designed, has inherent
limitations, including the possibility that a control can be circumvented or
overridden and misstatements due to error or fraud may occur and not be detected
in a timely manner. Also, because of changes in conditions, internal control
effectiveness may vary over time. Accordingly, even an effective system of
internal control will provide only reasonable assurance with respect to
financial statement preparation. In addition, the design of any system of
controls is based in part on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions or deterioration in the
degree of compliance with policies or procedures. Therefore, any current
evaluation of controls can not and should not be projected to future
periods.





Management
assessed our internal control over financial reporting as of June 30, 2009, the
end of our fiscal year of 2009. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in "Internal Control-Integrated Framework." The COSO framework
summarizes each of the components of a company’s internal control system,
including (i) the control environment, (ii) risk assessment, (iii) control
activities, (iv) information and communication, and (v) monitoring.





Based on
management's assessment using the COSO criteria, management has concluded that
the Company's internal control over financial reporting was effective as of June
30, 2009 to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external reporting
purposes in accordance with U.S. generally accepted accounting
principles.


23


Changes
in Internal Control





There
were no changes in the Company’s internal control over financial reporting that
occurred during our fourth fiscal quarter of 2009 that has materially affected
or is reasonably likely to materially affect our internal control over financial
reporting.





Auditor
Attestation





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the SEC that permit us to provide
only management's report in this annual report.





ITEM
      9B.
            OTHER
      INFORMATION





None.





PART
III





ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE





Listed below are our executive officers
and directors. Except for Mr. Yining Xia, each of our current executive officers
and each of our directors is a resident of the PRC. As a result, it may be
difficult for investors to effect service of process within the United States
upon them or to enforce court judgments obtained against them in the United
States courts.





Name
                      
                      Age
                      
                      TitleHongbo
      Cao
                      
                      42
                      
                      Chairman
      of the Board, Chief Executive Officer and PresidentMei
      Yu
                      
                      38
                      
                      Director,
      Chief Financial and Accounting Officer, TreasurerYining
      Xia
                      
                      47
                      
                      DirectorHaiyang
      Lu
                      
                      30
                      
                      Secretary





All of our directors hold offices until
the next annual meeting of the shareholders of the Company, and until their
successors have been qualified after being elected or appointed. Officers serve
at the discretion of the board of directors.





The following sets forth biographical
information regarding the above officers and directors.





Mr. Hongbo Cao, Chairman of the
Board, Chief Executive Officer and President.Mr. Cao has served as
Chairman of Dalian Befut since December 2006. Prior to that, he was the CEO of
Dalian Befut from June 2002. He was formerly the CEO of Dalian Xincheng Power
Equipment Co., Ltd. from 1985 to 2002. Mr. Cao is also a director of Befut
Nevada and is the sole director of Befut BVI.  Mr. Cao is a licensed
senior economist in China. He received a Master’s Degree in Political Economics
from Liaoning Normal University in China in 2000 and a Bachelor’s Degree in Law
from Dongbei University of Finance and Economics in China in 1998.





Ms. Mei Yu, Director and Chief
Financial Officer.Ms. Yu has served as Director of Finance of
Dalian Befut in China since 1997.  Ms.Yuisa graduate of Dongbei
University of Finance and Economics in Financial Management in 1991. She has
over 17 years of experience in accounting and finance in China.





Mr. Yining Xia,
Director.  Mr. Xia previously served as Director (from 2001 to
2007) and Associate Director (from 2000 to 2001) of TIAA-CREF, one of the
largest financial services companies in the United States. Prior to that, he was
Assistant Vice President of Citi Group from 1999 to 2000. Mr. Xia is currently
President of Allport America, Inc., a consulting firm he founded. Mr. Xia is
also a director of Befut Nevada. Mr. Xia obtained a PhD in Mathematics from the
Ohio State University in 1990 and a Master’s Degree in Mathematics from Jilin
University in China in 1986.





Mr. Haiyang Lu, Secretary.Mr.
Lu has been the head of Strategic Development Department of Dalian Befut and CEO
Assistant of Dalian Befut from 2006. Prior to that, he was Manager of Planning
for Dalian Yuandian Advertisement Co., Ltd. in 2003 and Manager of Business
Planning for Dalian Tianwei Medicine Co., Ltd. from 2004 to 2006. Mr. Lu
received a Bachelor’s Degree in Marketing and Sales from Bohai University in
China.




24


There are
no family relationships among our directors or executive officers. To our
knowledge, none of our directors and executive officers (including the directors
and executive officers of our subsidiaries) has been involved in any of the
following proceeding during the past five years:





1.
            any
      bankruptcy petition filed by or against any business of which such person
      was a general partner or executive officer either at the time of the
      bankruptcy or within two years prior to that
  time;


2.
            any
      conviction in a criminal proceeding or being subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offenses);


3.
            being
      subject to any order, judgment, or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or


4.
            being
      found by a court of competent jurisdiction (in a civil action), the SEC or
      the Commodity Futures Trading Commission to have violated a federal or
      state securities or commodities law, and the judgment has not been
      reversed, suspended or vacated.





Section 16(a)
Beneficial Ownership Reporting Compliance





Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires the Company’s directors, executive
officers and persons who own more than 10% of the Company’s Common Stock to file
reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC.
Directors, executive officers and greater than 10% stockholders are required by
SEC rules to furnish the Company with copies of Section 16(a) forms they file.
Based upon a review of the filings made on their behalf during the fiscal year
ended June 30, 2009, as well as an examination of the SEC’s EDGAR system Form 3,
4, and 5 filings and the Company’s records, the following table sets forth
exceptions to timely filings:




Name
                
                Reporting EventBEFUT
      International Co. Limited
                
                Form
      4 reporting the disposition (transfer) of 2,048,144 shares of common stock
      (prior to the 1-for-4.07-reverse split) to one of its shareholders and the
      Company’s director, Yining Xia on March 25, 2009. Such Form 4 has not been
      filed.Yining
      Xia, Director
                
                Form
      4 reporting the acquisition of 2,048,144 shares of common stock (prior to
      the 1-for-4.07-reverse split) from his indirect ownership through Befut
      BVI to his direct ownership on March 25, 2009. Form 4 was filed on April
      13, 2009 which was later than the due date, March 27,
  2009.Form
      4 reporting the disposition of 75,000 shares (post the 1-for-4.07-reverse
      split) to 4 individuals on August 7, 2009. Such Form 4 has not been
      filed.




Code
of Ethics





We have not yet adopted a Code of
Ethics for our executive officers. We intend to adopt a Code of Ethics applying
to such persons during the fiscal year ending June 30, 2010.





Audit
Committee Financial Expert





Mr. Yining Xia qualifies as an “audit
committee financial expert” as defined in Item Item 407(d)(5)(ii) of Regulation
S-K and is “independent” as the term is used in Section 803-A-(1) of the Company
Guide of NYSE Amex Company Guide.





Audit
Committee





We have not yet appointed an audit
committee. Our board of directors currently acts as our audit committee. At the
present time, we believe that the members of board of directors are collectively
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.





ITEM
      11.
            EXECUTIVE
      COMPENSATION





The following is a summary of the
compensation we paid to our former executive officers for the years ended June
30, 2009 and 2008. None of our former executive officers received compensation
in excess of $100,000 for any of those two years.


25




Compensation
Table


(a)
                                      
                                      (b)
                                      
                                      (c)
                                      
                                      
                                      (d)
                                      
                                      
                                      (e)
                                      
                                      
                                      (f)
                                      
                                      
                                      (g)
                                      
                                      
                                      (h)
                                      
                                      
                                      (i)
                                      
                                      
                                      (j)Name
      and Principal
                                        Position
                                      
                                      Year
                                      
                                      Salary
      ($)
                                      
                                      
                                      Bonus
                                        ($)
                                      
                                      
                                      Stock
                                        Awards
                                        ($)
                                      
                                      
                                      Option
                                        Awards
                                        ($)
                                      
                                      
                                      Non-equity
                                        Incentive
                                        Plan
                                        Compen-
                                        sation
                                        ($)
                                      
                                      
                                      Non-qualified
                                        Deferred
                                        Compen-
                                        sation
                                        Earnings
                                        ($)
                                      
                                      
                                      All
      Other
                                        Compen-
                                        sation
                                        ($)
                                      
                                      
                                      Total
                                        Compen-
                                        sation
                                        ($)2009
                                      
                                      $
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0Kevin
      R. Keating  (1)
                                      
                                      2008
                                      
                                      $
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      0




(1)
            Kevin
      R. Keating served as President, Secretary, Treasurer, Chief Executive
      Officer, Chief Financial Officer and sole director of the Company from
      February 22, 2007 to March 13,
2009.





In addition, at the closing on the
purchase of controlling interests in the Company on March 13, 2009, Vero
Management, LLC (“Vero”) received $7,500 in consulting fees for services
rendered to the Company.  At that time Mr. Keating owned and
controlled Vero.





The following is a summary of the
compensation paid for the fiscal years indicated, by Dalian Befut to each person
serving as our principal executive officer and principal financial officer,
during the fiscal years ended June 30, 2009 and 2008, respectively. No executive
officer of Dalian Befut received compensation in excess of $100,000 during
either of those two years.





Name
      and
                                          Principal
      Position
                                        
                                        Fiscal
                                          Year
                                        
                                        Salary
                                          ($)(1)
                                        
                                        
                                        Bonus
                                          ($)
                                        
                                        
                                        Stock
                                          Awards
                                          ($)
                                        
                                        
                                        Option
                                          Awards
                                          ($)
                                        
                                        
                                        Non-equity
                                          Incentive
                                          Plan
                                          Compensation
                                          ($)
                                        
                                        
                                        Change
      in
                                          Pension
      Value
                                          and
                                          Nonqualified
                                          Deferred
                                          Compensation
                                          Earnings
                                          ($)
                                        
                                        
                                        All
      Other
                                          Compensation
                                          ($)
                                        
                                        
                                        Total
                                          ($)Hongbo
      Cao(President
      and Chief
                                        
                                        2009
                                        
                                        $
                                        35,136.00
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        $
                                        35,016.00Executive
      Officer )
                                        
                                        2008
                                        
                                        $
                                        31,512.00
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        $
                                        31,512.00Mei
      Yu(Chief
      Financial Officer and
                                        
                                        2009
                                        
                                        $
                                        11,712
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        $
                                        11,712Chief
      Accounting Officer )
                                        
                                        2008
                                        
                                        $
                                        11,672
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        
                                        -0-
                                        
                                        
                                        $
                                        11,672




Mr. Cao’s salary from Dalian Befut for
the fiscal years ended June 30, 2009 and 2008 was RMB240,000. Ms. Yu’s salary
from Dalian Befut for the fiscal years ended June 30, 2009 and 2008 was
RMB80,000. The difference in U.S. dollars in the table above is due to the
difference in foreign currency rates as of the two respective
dates.





Exchange Rate as of June 30, 2009:
1RMB=0.1464USD


Exchange Rate as of June 30, 2008:
1RMB=0.1459USD





Compensation
Discussion and Analysis





We strive to provide our named
executive officers (as defined in Item 402 of Regulation S-K) with a competitive
base salary that is in line with their roles and responsibilities when compared
to peer companies of comparable size in similar locations.





It is not uncommon for PRC private
companies in northeastern China to have base salaries as the sole form of
compensation. The base salary level is established and reviewed based on the
level of responsibilities, the experience and tenure of the individual and the
current and potential contributions of the individual. The base salary is
compared to the list of similar positions within comparable peer companies and
consideration is given to the executive’s relative experience in his or her
position.  Base salaries are reviewed periodically and at the time of
promotion or other changes in responsibilities.





26


We plan to implement a more
comprehensive compensation program, which takes into account other elements of
compensation, including, without limitation, short and long term compensation,
cash and non-cash, and other equity-based compensation such as stock options. We
expect that this compensation program will be comparable to the programs of our
peer companies and aimed to retain and attract talented
individuals.





Compensation
of Directors





The following is a summary of the
compensation we paid to our former sole director, Kevin Keating, during the
fiscal year ended June 30, 2009.




Name andPrincipal Position
                                
                                Fiscal
                                  Year
                                
                                Salary
                                  ($)
                                
                                
                                Bonus
                                  ($)
                                
                                
                                Stock
                                  Awards
                                  ($)
                                
                                
                                Option
                                  Awards
                                  ($)
                                
                                
                                Non-equity
                                  Incentive Plan
                                  Compensation
                                  ($)
                                
                                
                                Change
      in
                                  Pension
      Value
                                  and
                                  Nonqualified
                                  Deferred
                                  Compensation
                                  Earnings
                                  ($)
                                
                                
                                All
      Other
                                  Compensation
                                  ($)
                                
                                
                                Total
                                  ($)Kevin
      Keating (1)
                                
                                2009
                                
                                
                                -0-
                                
                                
                                
                                -0-
                                
                                
                                
                                -0-
                                
                                
                                
                                -0-
                                
                                
                                
                                -0-
                                
                                
                                
                                -0-
                                
                                
                                
                                -0-
                                
                                
                                
                                -0-




(1)
            Kevin
      Keating was appointed Director of the Company on February 22, 2007. He
      resigned effective March 13, 2009 upon the consummation of the reverse
      merger.He
      did not receive any compensation in his capacity as a director of the
      Company in the fiscal year of 2009.




As of the date of this report, we have
no formal or informal arrangements or agreements to compensate our directors for
services they provide as directors.





ITEM 12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
      RELATED  STOCKHOLDERS
MATTERS





The following table sets forth as of
September 30, 2009, the number of shares of our common stock beneficially owned
by (i) each person who is known by us to be the beneficial owner of more than
five percent of the common stock, (ii) each director, (iii) each executive
officer and (iv) all directors and executive officers as a group. Unless
otherwise indicated, the stockholders listed in the table have sole voting and
investment power with respect to the shares indicated.





Name and Address
                
                Amount and Nature of
                  Beneficial Ownership
                
                
                Percentage of Class (1)BEFUT
      International Co. Limited (2)
                  c/o
      Hongbo Cao, Chief Executive Officer
                  No.
      90-1 Hongji Street Xigang District Dalian, 116011, P.R.
    China
                
                
                27,929,242
                
                
                
                94.6
                %Hongbo
      Cao (3)
                  No.
      90-1 Hongji Street Xigang District Dalian, 116011, P.R.
    China
                
                
                27,929,242
                
                
                
                94.6
                %Tingmin
      Li (4)
                  No.
      90-1 Hongji Street Xigang District Dalian, 116011, P.R.
    China
                
                
                12,580,739
                
                
                
                42.6
                %Yining
      Xia (5)
                  104
      Briarwood Dr., W. Warren, NJ 07059
                
                
                1,253,160
                
                
                
                4.2
                %Mei
      Yu (6)
                  No.
      90-1 Hongji Street Xigang District Dalian, 116011, P.R.
    China
                
                
                0
                
                
                
                0.0
                %Haiyang
      Lu (7)
                  No.
      90-1 Hongji Street Xigang District Dalian, 116011, P.R.
    China
                
                
                0
                
                
                
                0.0
                %All
      Directors and Officers as a Group (8)
                  (4
      individuals)
                
                
                29,182,402
                
                
                
                96.1
                %




27





(1)
            When
      calculating the percentage of shares for all the persons listed except for
      the calculation of the percentage of shares for Mr. Yining Xia and all
      directors and officers as a group, the denominator is the number of shares
      of our common stock outstanding as of September 30, 2009, namely,
      29,510,971 shares of common stock. For Mr. Yining Xia and all directors
      and officers as a group, the denominator is 29,832,671 as discussed in
      notes (5) and (8).





(2)
            BEFUT
      International Co. Limited (“Befut BVI”) directly owns 27,929,242 shares of
      our Common stock. Mr. Hongbo Cao, as the sole director of Befut BVI, has
      sole voting and investment control over the shares of common stock owned
      by Befut BVI.





(3)
            Mr.
      Hongbo Cao is President, Chief Executive Officer, Chairman of the Board of
      Directors of the Company. Mr. Hongbo Cao, as the sole director of Befut
      BVI, has sole voting and investment control over the shares of Common
      Stock owned by Befut BVI and, as a result, may be deemed to be the
      beneficial owner of the 27,929,242 shares of Common Stock owned by Befut
      BVI. In addition, Mr. Hongbo Cao is the indirect owner of 12,580,739
      shares of our common stock through his 45.05% ownership interest in Befut
      BVI.





(4)
            Mr.
      Tingmin Li is the indirect owner of 12,580,739 shares of the Company’s
      Common Stock through his 45.05% ownership interest in Befut
      BVI.





(5)
            Mr.
      Yining Xia is a Director of the Company. Mr. Yining Xia is the direct
      owner of 428,230 shares of the Company’s Common Stock. He is the indirect
      owner of 503,230 shares of the Company’s Common Stock through his 1.80%
      ownership interest in Befut BVI. In addition, Mr. Yining Xia, as one of
      the four investors in the private placement closed on March 13, 2009,
      purchased the Company’s convertible note and warrant for $170,000.
      Therefore, there are 261,546 shares of Common Stock underlying the
      convertible note and 60,154 shares of Common Stock underlying the warrant
      Mr. Xia holds, both of which can be converted or exercised, at Mr. Xia’s
      option, within 60 days from the date of this report. Pursuant to Rule
      13d-3 under the Exchange Act, Mr. Xia may be deemed to be the beneficial
      owner of the Common Stock underlying the note and warrant. When
      calculating the percentage of shares, the denominator is 29,510,971 (the
      actual outstanding shares) plus 60,154 (underlying the warrant Mr. Xia
      holds) and 261,546 (underlying the convertible note Mr. Xia holds), which
      is 29,832,671.





(6)
            Ms.
      Mei Yu is Chief Financial Officer, Treasurer and a Director of the
      Company.





(7)
            Mr.
      Haiyang Lu is Secretary of the
Company.





(8)
            Mr.
      Hongbo Cao, as the sole director of Befut BVI, has sole voting and
      investment control over the shares of Common Stock owned by Befut BVI and,
      as a result, may be deemed to be the beneficial owner of the 27,929,242
      shares of Common Stock owned by Befut BVI. Also includes (i) shares of the
      Company’s Common Stock owned indirectly by Mr. Hongbo Cao and Mr. Yining
      Xia through their respective ownership interests in Befut BVI, which were
      included in 27,929,242 shares, and (ii) 428,230 shares of the Company’s
      Common Stock held directly by Mr. Yining Xia and the shares Mr. Yining Xia
      may have from the conversion of the note (261,546 underlying shares of
      common stock) and/or exercise of the warrant (60,154 underlying shares of
      common stock) he holds within 60 days from the date of this report. When
      calculating the percentage of shares, the denominator is 29,510,971 (the
      actual outstanding shares) plus 261,546 (underlying the convertible note
      Mr. Xia holds) and 60,154 (underlying the warrant Mr. Xia holds), which is
      29,832,671.





Securities
Authorized for Issuance Under Equity Compensation Plans





None.




28


Changes
in Control




Not Applicable.




ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE





Effective February 27, 2007, the
Company entered into a management agreement (the “Management Agreement”) with
Vero Management, LLC (“Vero”), pursuant to which Vero agreed to provide a broad
range of managerial and administrative services to the Company including, but
not limited to, assistance in the preparation and maintenance of the Company’s
financial books and records, the filing of various reports with the appropriate
regulatory agencies as are required by State and Federal rules and regulations,
the administration of matters relating to the Company’s shareholders including
responding to various information requests from shareholders as well as the
preparation and distribution to shareholders of relevant Company materials, and
to provide office space, corporate identity, telephone and fax services,
mailing, postage and courier services.  In exchange for Vero’s
services to the Company, the Company agreed to pay Vero a monthly fee equal to
$2,000. Effective July 1, 2007, the Management Agreement was amended by the
parties to reduce the monthly fee to $1,000 per month. On August 15, 2008, the
Management Agreement was terminated by the Company, effective July 1, 2008.
Kevin R. Keating owns and controls Vero and is also the sole officer and a
director of the Company.  The terms of the Management Agreement were
determined based on terms which the Company believes would be available to it
from third parties on an arms’ length basis.





Kevin R. Keating, the Company’s former
sole officer and director, is the father of Timothy J. Keating, the principal
member of Keating Investments. Keating Investments is the managing member of KI
Equity Partners IV, LLC (“KI Equity”), the Company’s controlling stockholder
prior to March 13, 2009. Timothy J. Keating is the manager of KI Equity. KI
Equity dissolved on March 20, 2009 and the shares it held prior to its
dissolution were distributed to its members.





On February 22, 2007, the Company
issued 3,195,000 shares of Common Stock to KI Equity for aggregate proceeds
equal to $639,000. Effective as of February 22, 2007, the then existing officers
and directors of the Company resigned, and Kevin R. Keating was appointed as the
President, Secretary, Treasurer, Chief Executive Officer, Chief Financial
Officer and sole director of the Company. On February 27, 2007, the Company also
issued 85,000 shares of Common Stock to Kevin R. Keating, our then sole officer
and director, for services rendered to the Company valued at
$17,000.  In connection with the issuances of common stock to KI
Equity and Kevin R. Keating, as described above, the Company granted to the
holders of these shares certain demand and piggyback registration rights. On
March 12, 2009, the Company terminated the demand registration rights granted to
KI Equity and Kevin R. Keating and revised the piggyback registration
rights.





On April 23, 2008, the Company borrowed
$20,000 from Vero under an unsecured promissory note payable upon
demand.  On January 9, 2009, the Company borrowed an additional $8,750
from Vero under an unsecured promissory note payable upon
demand.  Each of these notes bears interest at a rate of 5% per annum,
with the accrued interest being payable upon demand.  The proceeds of
the notes were used for working capital purposes. Vero is owned and controlled
by Kevin R. Keating, the Company’s then sole officer and director.  On
March 13, 2008, the Company paid off the principal of the notes and the
interests accrued as of the date of the payment.





On January 9, 2009, the Company
borrowed $8,750 from Keating Investments under an unsecured promissory note
payable upon demand. The proceeds of the note were used for working capital
purposes. The note bears interest at a rate of 5% per annum, with the accrued
interest being payable upon demand. Keating Investments is the managing member
of KI Equity, the Company’s then controlling stockholder prior to the Closing of
the Share Purchase.  Timothy J. Keating is the principal member of
Keating Investments and was the manager of KI Equity. On March 13, 2008, the
Company paid off the principal of the notes and the interests accrued as of the
date of the payment.





On March 13, 2009, Vero received $7,500
in consulting fees for services rendered to the Company. Kevin R. Keating owns
and controls Vero and was also the sole officer and a director of the Company
prior to March 13, 2009.





In the share exchange consummated on
March 13, 2009, Befut BVI, as the sole shareholder of Befut Nevada, exchanged
all of the shares it owned in Befut BVI for the issuance of 120,899,170 shares
of the Company. Mr. Hongbo Cao, our new Chairman, President and Chief Executive
Officer, Mr. Tingmin Li, a shareholder having more than 10% shares, Mr. Yining
Xia, our director, are also shareholders of Befut BVI. Mr. Cao, the sole
director of Befut BVI, is deemed to have the sole voting and investment control
over the shares of our Common Stock owned by Befut BVI.





Mr. Yining Xia, a director of the
Company, purchased convertible notes and warrants in the private placement for
$170,000 on March 13, 2009. The terms of the purchase offered to Mr. Xia is the
same as those to the other three investors in the private
placement.


29


Other than the above transactions or as
otherwise set forth in this report or in any reports filed by the Company with
the SEC, there have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item 404 of
Regulation S-K. The Company is currently not a subsidiary of any
company.





The Company’s Board conducts an
appropriate review of and oversees all related party transactions on a
continuing basis and reviews potential conflict of interest situations where
appropriate. The Board has not adopted formal standards to apply when it
reviews, approves or ratifies any related party transaction. However, the Board
believes that the related party transactions are fair and reasonable to the
Company and on terms comparable to those reasonably expected to be agreed to
with independent third parties for the same goods and/or services at the time
they are authorized by the Board.





ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES





The
Company paid or accrued the following fees in each of the prior two fiscal years
to its principal accountants:





1.
PATRIZIO & ZHAO, LLC (1)




Fiscal Year
                    Ended
                  
                  
                  Fiscal Year
                    EndedJune 30, 2009
                  
                  
                  June 30, 2008Audit
      Fees
                  
                  $
                  80,000
                  
                  
                  $
                  75,000Audit
      Related Fees
                  
                  
                  -
                  
                  
                  
                  -Tax
      Fees
                  
                  
                  -
                  
                  
                  
                  -All
      Other Fees
                  
                  
                  -
                  
                  
                  
                  -Total
                  
                  $
                  80,000
                  
                  
                  $
                  75,000





2. Chang
G. Park, CPA (2)




Fiscal Year
                      Ended
                    
                    
                    Fiscal Year
                      EndedJune 30, 2009
                    
                    
                    June 30, 2008Audit
      Fees
                    
                    $
                    15,000
                    
                    
                    $
                    12,000Audit
      Related Fees
                    
                    $
                    
                    
                    
                    $
                    -Tax
      Fees
                    
                    
                    -
                    
                    
                    
                    -All
      Other Fees
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    $
                    15,000
                    
                    
                    $
                    12,000





(1)
            PATRIZIO
      & ZHAO, LLC has been the Company’s auditor since April 30, 2009 and
      the auditor of the Company’s subsidiaries for the most recent two fiscal
      years.


(2)
            Chang
      G. Park, CPA was the Company’s auditor prior to April 30,
      2009.





In the
event that we should require substantial non-audit services, the Board of
Directors would approve such services and the fees therefore.





PART IV





Item
      15.
            Exhibits
      and Financial Statement Schedules





(a)      
The following documents are filed as part of this report:





Financial Statements





The
following financial statements of BEFUT International Co., Ltd. and Reports of
Independent Registered Public Accounting Firms are presented in the “F” pages of
this report:


30





Reports
      of Independent Registered Public Accounting Firms
                
                
                F-1Consolidated
      Balance Sheets - as of June 30, 2009 and 2008
                
                
                F-2Consolidated
      Statements of Income and Other Comprehensive Income - for the
      Years ended June 30, 2009 and 2008
                
                
                F-3Consolidated
      Statements of Shareholders’ Equity - for the Years ended June 30, 2009 and
      2008
                
                
                F-4Consolidated
      Statements of Cash Flows - for the Years ended June 30, 2009 and
      2008
                
                
                F-5Notes
      to Consolidated Financial Statements
                
                
                F-6
      - F-16





(b)     
Exhibits





See the
Exhibit Index following the signature page of this report, which Index is
incorporated herein by reference.




31




SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) 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.




BEFUT
      International Co., Ltd.Date: October
      9, 2009
              By:
              /s/ Hongbao CaoHongbo
      Cao, President and CEO(principal
      executive officer)/s/ Mei YuMei
      Yu, Chief Financial Officer(principal
      financial officer and principal
                accounting
      officer)





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.





October
      9, 2009
              
              /s/ Hongbo CaoHongbo
      Cao, Chairman of the Board of DirectorsOctober
      9, 2009
              
              /s/ Mei YuMei
      Yu, DirectorOctober
      9, 2009
              
              /s/ Yining XiaYining
      Xia, Director


32




BEFUT
International Co., Ltd.


Exhibit
Index to Annual Report on Form 10-K


For
the Year Ended June 30, 2009





3.1
                Amended
      and Restated Articles of Incorporation of the Company
  (1)3.2
                Bylaws
      (2)4.1
                Form
      of Convertible Note (3)4.2
                Form
      of Warrant (3)4.3
                First
      Amendment to the Registration Rights Agreement dated March 12, 2009 by and
      between the Company and KI Equity Partners IV, LLC (3)4.4
                First
      Amendment to the Registration Rights Agreement dated March 12, 2009, by
      and between the Company and Garisch Financial, Inc. (3)4.5
                First
      Amendment to the Registration Rights Agreement dated March 12, 2009, by
      and between the Company and Kevin R. Keating (3)10.1
                Share
      Exchange Agreement, dated March 13, 2009 by and between the Company, Befut
      Nevada and Befut BVI (3)10.2
                Securities
      Purchase Agreement, dated as of March 13, 2009 by and among the Company
      and the Investors (3)10.3
                Original
      Equipment Manufacturer Agreement dated February 16, 2009 by and between
      WFOE and Dalian Befut (3)10.4
                Intellectual
      Property License Agreement dated February 16, 2009 by and between WFOE and
      Dalian Befut (3)10.5
                Non-competition
      Agreement dated February 16, 2009 by and between WFOE and Dalian Befut
      (3)10.6
                Lease
      between Dalian Befut and Dalian Wanbao Industrial Co.
  Ltd.21.1
                List
      of Subsidiaries.31.1
                Certification
      of the principal executive officer pursuant to Exchange Act Rules
      13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
                Certification
      of the principal financial officer and the principal accounting officer
      pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.32.1
                Certification
      of the principal executive officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
                Certification
      of the principal financial officer and the principal accounting officer
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of
2002.




(1)
            Filed
      as an exhibit to the Company's Current Report on Form 8-K, as filed with
      the SEC on June 18, 2009, and incorporated herein by this
      reference.


(2)
            Filed
      as an exhibit to the Company's Registration Statement on Form 10-SB, as
      filed with the SEC on June 1, 2005, and incorporated herein by this
      reference.


(3)
            Filed
      as an exhibit to the Company's Current Report on Form 8-K, as filed with
      the SEC on March 19, 2009, and incorporated herein by this
      reference.


33


BEFUT
INTERNATIONAL CO., LTD.
 (FORMERLY
FREZER, INC)
 
 CONSOLIDATED
FINANCIAL STATEMENTS
 
 JUNE
30, 2009 AND 2008
  
  BEFUT
INTERNATIONAL CO., LTD.
 (FORMERLY
FREZER, INC)
 Consolidated
Financial Statements
 June
30, 2009 And 2008
 
 Table
of Contents
 
 PageCONSOLIDATED
      FINANCIAL STATEMENTSReport
      of Independent Registered Public Accounting Firm
                  F-1Consolidated
      Balance Sheets
                  F-2Consolidated
      Statements of Operations and Comprehensive Income
                  F-3Consolidated
      Statements of Stockholders’ Equity
                  F-4Consolidated
      Statements of Cash Flows
                  F-5Notes
      to Consolidated Financial Statements
                  F-6
  
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors and Stockholders
 BEFUT
International Co., Ltd.
 (Formerly
Frezer, Inc.)
 
 We have audited the accompanying
consolidated balance sheets of BEFUT International Co., Ltd. and subsidiaries
(the “Company”) as of June 30, 2009 and 2008, and the related consolidated
statements of operations and comprehensive income, stockholders’ equity, and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform an audit of its internal control over financial reporting. Our audit
includes consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of BEFUT International
Co., Ltd. and subsidiaries as of June 30, 2009 and 2008, and the consolidated
results of their operations and their consolidated cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
   
  Parsippany,
New Jersey
 September
24, 2009
  F-1




BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Consolidated
Balance Sheets


June 30, 2009
                
                
                June 30, 2008AssetsCurrent
      assets:Cash
      and cash equivalents
                
                $
                210,301
                
                
                $
                353,049Restricted
      cash
                
                
                586,000
                
                
                
                -Accounts
      receivable, net of allowance for doubtful accounts of $20,222 and $25,263
      at June 30, 2009 and 2008, respectively
                
                
                8,560,592
                
                
                
                5,902,124Inventory
                
                
                1,353,532
                
                
                
                1,643,943Loans
      to unrelated parties
                
                
                6,955,623
                
                
                
                505,375Bank
      loan security deposits
                
                
                733,233
                
                
                
                630,288Advance
      payments
                
                
                866,868
                
                
                
                529,602Advance
      payments – R & D
                
                
                2,956,370
                
                
                
                -Other
      current assets
                
                
                273,391
                
                
                
                904,050Total
      current assets
                
                
                22,495,910
                
                
                
                10,468,431Property
      and equipment, net
                
                
                18,646,274
                
                
                
                15,306,859Other
      assets:Intangibles,
      net
                
                
                11,335,978
                
                
                
                5,631Long-term
      investment
                
                
                2,930
                
                
                
                2,918Total
      other assets
                
                
                11,338,908
                
                
                
                8,549Total
      assets
                
                $
                52,481,092
                
                
                $
                25,783,839LiabilitiesCurrent
      liabilities:Short-term
      bank loans
                
                $
                8,057,500
                
                
                $
                2,188,500Convertible
      notes payable
                
                
                500,000
                
                
                
                -Accounts
      payable and accrued expenses
                
                
                659,142
                
                
                
                1,515,630Trade
      notes payable
                
                
                1,172,000
                
                
                
                -Loan
      from unrelated party
                
                
                249,050
                
                
                
                -Advances
      from customers
                
                
                372,417
                
                
                
                353,442Income
      tax payable
                
                
                777,497
                
                
                
                -Other
      taxes payable
                
                
                37,975
                
                
                
                46,956Other
      current liabilities
                
                
                636,514
                
                
                
                443,337Total
      current liabilities
                
                
                12,462,095
                
                
                
                4,547,865Long-term
      bank loan
                
                
                5,470,310
                
                
                
                5,763,050Total
      liabilities
                
                
                17,932,405
                
                
                
                10,310,915EquityStockholders’
      equity:Preferred
      stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or
      outstanding
                
                
                -
                
                
                
                -Common
      stock, $0.001 par value, 200,000,000 shares authorized, 29,488,341 and
      117,768,300 shares issued and outstanding at Jun 30, 2009 and 2008,
      respectively
                
                
                29,488
                
                
                
                117,768Additional
      paid-in capital
                
                
                21,708,275
                
                
                
                4,934,974Statutory
      reserves
                
                
                729,135
                
                
                
                653,287Retained
      earnings
                
                
                9,750,035
                
                
                
                7,566,470Accumulated
      other comprehensive income
                
                
                1,956,623
                
                
                
                1,814,586Total
      stockholders’ equity
                
                
                34,173,556
                
                
                
                15,087,085`Noncontrolling
      interest
                
                
                375,131
                
                
                
                385,839Total
      equity
                
                
                34,548,687
                
                
                
                15,472,924Total
      liabilities and equity
                
                $
                52,481,092
                
                
                $
                25,783,839





The
accompanying notes are an integral part of these consolidated financial
statements.




F-2





BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Consolidated
Statements of Operations and Other Comprehensive Income





For the Years Ended June 30,2009
                
                
                2008Sales
                
                $
                19,308,939
                
                
                $
                20,012,975Cost
      of sales
                
                
                14,101,545
                
                
                
                15,141,308Gross
      profit
                
                
                5,207,394
                
                
                
                4,871,667Operating
      expensesSelling
      expenses
                
                
                121,393
                
                
                
                77,074General
      and administrative expenses
                
                
                1,257,979
                
                
                
                862,719Total
      operating expenses
                
                
                1,379,372
                
                
                
                939,793Income
      from operations
                
                
                3,828,022
                
                
                
                3,931,874Other
      income (expenses):Other
      income
                
                
                192,282
                
                
                
                215,155Government
      subsidy income
                
                
                159,979
                
                
                
                492,294Costs
      related to reverse merger
                
                
                (491,281
                )
                
                
                -Interest
      expense, net
                
                
                (420,618
                )
                
                
                (327,346
                )Other
      expenses
                
                
                (133,570
                )
                
                
                (15,341
                )Total
      other income (expenses)
                
                
                (693,208
                )
                
                
                364,762Income
      before provision for income tax
                
                
                3,134,814
                
                
                
                4,296,636Provision
      for income tax
                
                
                887,696
                
                
                
                71,058Net
      income before minority interest
                
                
                2,247,118
                
                
                
                4,225,578Minority
      interest
                
                
                (12,295
                )
                
                
                (4,410
                )Net
      income
                
                
                2,259,413
                
                
                
                4,229,988Other
      comprehensive incomeForeign
      currency translation adjustment
                
                
                142,037
                
                
                
                1,303,694Comprehensive
      income
                
                $
                2,401,450
                
                
                $
                5,533,682Basic
      earnings per share
                
                $
                0.08
                
                
                $
                0.14Diluted
      earnings per share
                
                $
                0.07
                
                
                $
                0.14Weighted
      average number of common shares outstanding:Basic
                
                
                29,488,341
                
                
                
                29,488,341Diluted
                
                
                30,431,891
                
                
                
                29,488,341





The
accompanying notes are an integral part of these consolidated financial
statements.




F-3




BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Consolidated
Statements of Stockholders’ Equity




AccumulatedAdditional
                          
                          
                          
                          
                          
                          
                          
                          
                          other
                          
                          
                          TotalPreferred Stock
                          
                          
                          Common
      Stock
                          
                          
                          Paid-in
                          
                          
                          Statutory
                          
                          
                          Retained
                          
                          
                          Comprehensive
                          
                          
                          Stockholders’Shares
                          
                          
                          Amount
                          
                          
                          Shares
                          
                          
                          Amount
                          
                          
                          Capital
                          
                          
                          Reserve
                          
                          
                          Earnings
                          
                          
                          Income
                          
                          
                          EquityBalance
      at June 30, 2007
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          
                          117,768,300
                          
                          
                          $
                          117,768
                          
                          
                          $
                          4,913,716
                          
                          
                          $
                          274,126
                          
                          
                          $
                          3,715,643
                          
                          
                          $
                          510,892
                          
                          
                          $
                          9,532,145Additional
      paid-in capital
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          21,258
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          21,258Net
      income
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          4,229,988
                          
                          
                          
                          -
                          
                          
                          
                          4,229,988Statutory
      reserve
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          379,161
                          
                          
                          
                          (379,161
                          )
                          
                          
                          -
                          
                          
                          
                          -Other
      comprehensive income
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,303,694
                          
                          
                          
                          1,303,694Balance
      at June 30, 2008
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          
                          117,768,300
                          
                          
                          $
                          117,768
                          
                          
                          $
                          4,934,974
                          
                          
                          $
                          653,287
                          
                          
                          $
                          7,566,470
                          
                          
                          $
                          1,814,586
                          
                          
                          $
                          15,087,085Recapitalization
      upon reverse merger
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          2,090,830
                          
                          
                          
                          2,091
                          
                          
                          
                          (2,091
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Effect
      of reverse stock split
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (90,370,789
                          )
                          
                          
                          (90,371
                          )
                          
                          
                          90,371
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Additional
      paid-in capital
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          16,685,021
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          16,685,021Net
      income
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          2,259,413
                          
                          
                          
                          -
                          
                          
                          
                          2,259,413Statutory
      reserve
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          75,848
                          
                          
                          
                          (75,848
                          )
                          
                          
                          -
                          
                          
                          
                          -Other
      comprehensive income
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          142,037
                          
                          
                          
                          142,037Balance
      at June 30, 2009
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          
                          29,488,341
                          
                          
                          $
                          29,488
                          
                          
                          $
                          21,708,275
                          
                          
                          $
                          729,135
                          
                          
                          $
                          9,750,035
                          
                          
                          $
                          1,956,623
                          
                          
                          $
                          34,173,556




The
accompanying notes are an integral part of these consolidated financial
statements.




F-4





BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Consolidated
Statements of Cash Flows





For the Years Ended June 30,2009
                
                
                2008Cash
      flows from operating activities:Net
      Income
                
                $
                2,259,413
                
                
                $
                4,229,988Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                
                
                553,064
                
                
                
                231,899Minority
      interest
                
                
                (12,295
                )
                
                
                (4,410
                )Donated
      intangible assets received
                
                
                (155,290
                )
                
                
                -Changes
      in current assets and current liabilities:Accounts
      receivable
                
                
                (2,634,196
                )
                
                
                377,949Inventory
                
                
                297,172
                
                
                
                (381,328
                )Advance
      payments
                
                
                307,584
                
                
                
                (417,993
                )Other
      current assets
                
                
                634,375
                
                
                
                (656,695
                )Accounts
      payable and accrued expenses
                
                
                (854,391
                )
                
                
                560,904Trade
      notes payable
                
                
                1,172,000
                
                
                
                (413,070
                )Advances
      from customers
                
                
                17,522
                
                
                
                (264,501
                )Income
      tax payable
                
                
                777,497
                
                
                
                -Other
      taxes payable
                
                
                (9,173
                )
                
                
                (19,486
                )Other
      current liabilities
                
                
                191,354
                
                
                
                (748,627
                )Total
      adjustments
                
                
                285,223
                
                
                
                (1,735,358
                )Net
      cash provided by operating activities
                
                
                2,544,636
                
                
                
                2,494,630Cash
      flows from investing activities:Additions
      to property and equipment
                
                
                (142,478
                )
                
                
                (143,483
                )Additions
      to construction in progress
                
                
                (3,395,532
                )
                
                
                (123,313
                )Additions
      to intangibles
                
                
                (83,505
                )
                
                
                -Advance
      payments for property and equipment
                
                
                (642,672
                )
                
                
                -Advance
      payments for R & D
                
                
                (2,956,370
                )
                
                
                -Loans
      to unrelated parties
                
                
                (6,448,170
                )
                
                
                (476,937
                )Net
      cash used in investing activities
                
                
                (13,668,727
                )
                
                
                (743,733
                )Cash
      flows from financing activities:Loan
      from unrelated party
                
                
                249,050
                
                
                
                -Convertible
      notes payable
                
                
                500,000
                
                
                
                -Additional
      paid-in capital
                
                
                5,301,971
                
                
                
                20,912Bank
      loan security deposits
                
                
                (100,353
                )
                
                
                (594,821
                )Proceeds
      (repayment) of short-term bank loans
                
                
                5,860,000
                
                
                
                (1,122,174
                )Repayment
      of long-term bank loan
                
                
                (316,440
                )
                
                
                (68,845
                )Net
      cash provided by (used in) financing activities
                
                
                11,494,228
                
                
                
                (1,764,928
                )Effect
      of foreign currency translation on cash
                
                
                73,115
                
                
                
                35,462Net
      increase in cash and cash equivalents
                
                
                443,252
                
                
                
                21,431Cash
      and cash equivalents  and restricted cash at beginning of
      year
                
                
                353,049
                
                
                
                331,618Cash
      and cash equivalents and restricted cash at end of year
                
                $
                796,301
                
                
                $
                353,049Supplemental
      schedule of non cash activities:Intangible
      assets received in exchange for ownership
                
                $
                11,383,050
                
                
                $
                -





The
accompanying notes are an integral part of these consolidated financial
statements.




F-5


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
1 – Organization and Nature of Business





BEFUT International Co.,
Ltd. (formerly Frezer, Inc.), a former public shell company asdefined in
Rule 12b-2 of the SecuritiesExchange
Actof 1934,
established under the laws of Nevada on May 2, 2005.The
accompanying consolidated financial statements include the financial statements
of BEFUT
International Co., Ltd. and its subsidiaries(the
“Company”).The Company’s primary business
is to design and
manufacture industrial wires and cables.





On March 13, 2009, Frezer
entered into and consummated a series of transactions whereby(a) Frezeracquired
100% of the outstandingshares of
common stock of Befut Corporation, which
was incorporated in the Nevada on January 14, 2009 (“Befut Nevada”), constituting
all of the capital stock of Befut Nevada, from Befut International Co. Limited,
a British Virgin Islandscompany
(“Befut BVI”) in exchange for the issuance to Befut BVI of a net number of
117,768,300 sharesof Frezer’s common
stock and the cancellationof an
aggregate of 2,176,170 shares of the Frezer’s common
stock and (b) Frezer raised
$500,000 in gross proceeds from the sale to four investors ofconvertible
promissory notes of Frezer in the
principal amount of $500,000 and warrants to purchase an aggregate of 720,076
shares of Frezer’scommon
stock.The
acquisition has been accounted for as a reverse acquisition under the purchase
method for business combinations. On June 18, 2009, the Company effectuated a
name change from its original name “Frezer, Inc.” to “BEFUT International Co.,
Ltd.”.





Hong Kong
BEFUTE Co., Ltd. (“Befut Hong Kong”)was incorporated on
September 10, 2008 under the laws of Hong Kong. As ofMarch 13, 2009, Befut Nevada
owned100% of
the shares of Befut Hong Kong.On February
13, 2009, Befut Hong Kong invested 100% in Befut Electric (Dalian) Co., Ltd.
(“WFOE”) in the city of
Dalian, the People’s Republic of
China (the “PRC”).





On
February 16, 2009, WFOE entered into a series of agreements, the purpose of
which was to restructure Dalian BefutWire & Cable
Manufacturing Co., Ltd. (“Dalian Befut”) in accordance with PRC law such
that itcould seek
capital and grow its business (the “Restructuring”). Dalian Befutwas
incorporated on June 13, 2002 under the laws of the PRC. First, WFOE entered
into an Original Manufacturer Agreement (the “OEM Agreement”) withDalian Befut
with the following material provisions: (i) Dalian Befut may not manufacture
products for any person or entity other than WFOE without itswritten
consent; (ii) WFOE is to provide all raw materials and advance related costs to
Dalian Befut, as well as provide design requirements for products to bemanufactured;
(iii) WFOE is responsible for marketing and distributing the products
manufactured by Dalian Befut and it keeps all related profits andrevenues; and
(iv) WFOE has an exclusive right to purchase whole or part of the assets and/or
equity of Dalian Befut to the extent permitted by the PRC law atthe sole
discretion of WFOE and at the mutually agreed price.In addition,
on February 16, 2009, WFOE entered into two ancillary agreements with Dalian
Befut: (i) Intellectual Property Rights License Agreement, pursuantto which WFOE
shall be permitted to use the intellectual property rights such as trademarks,
patents and know-how for the marketing and sale of the productsmanufactured
by Dalian Befut; and (ii) Non-competition Agreement, pursuant to which Dalian
Befut shall not compete against WFOE.





On April
14, 2006, Dalian Marine Cable Co., Ltd. was incorporated by Dalian Befut. Its
current shareholders are Dalian Befut (having 86.6% of the equity interest) and
three individual shareholders. The three
individuals are also shareholders of Dalian Befut. Dalian Marine Co.is intended to
conduct marketing and production of marine cablesfor Dalian
Befut.





Note
2 – Summary of Significant Accounting Policies





Basis
of Presentation





The
accompanying consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United Stated
of America. The consolidated financial statements include
the accounts of Befut international Co., Ltd. and its wholly-owned subsidiaries.
All inter-company transactions and balances have been eliminated in
consolidation.


F-6


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
2 – Summary of Significant Accounting Policies (continued)





Use
of Estimates





The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant estimates include valuation reserves
for accounts receivable, inventory and income taxes. Actual results
could differ from those estimates.





Cash
and Cash Equivalents





In
accordance with Statement of Financial Accounting Standards No. 95, "Statement
of Cash Flows," the Company considers all highly liquid instruments with
original maturities of three months or less to be cash equivalents.





Accounts
Receivable





Accounts receivable
are stated at the amount management expects to collect from balances outstanding
at the end of period.  Periodically management assesses customer credit
history and relationships as well as performs accounts receivable aging
analysis. Based on the results, management determines whether certain balances
are deemed uncollectible at the end of period. Using its past collection
experience, the Company establishes allowance for doubtful accounts using the
following formula:0.3% of
accounts receivable balances outstanding at the end of period. At June 30,
2009 and 2008, the balances for the allowance for doubtful
accountswere$20,222 and $25,263, respectively.





Inventory





Inventory
is stated at the lower of cost or market.Cost is
determined using the
weighted-average cost method. Provisions are made for excess, slow moving and
obsolete inventory as well as inventory whose carrying value is in excess of net
realizable value. Managementcontinually evaluates the recoverability based on assumptions about
customer demand and market conditions. If actual market conditions are less
favorable than those projected by management, additional inventory reserves or
write-downs may be required that could negatively impact our gross margin and
operating results.





Property
and Equipment





Property
and equipment are stated at cost. Depreciation is calculated based
on the
straight-line method over the
estimated useful lives of the assets as
follows:





Vehicles
                  5
      to 10 yearsFurniture,
      machinery and equipment
                  5
      to 10 yearsBuildings
      and improvements
                  20
      years





Construction
in progress primarily represents the renovation costsof plant,
machineryand
equipment. Costs incurred are capitalized and transferred to property and
equipment upon completion, at which time depreciation commences.





Cost of
repairs and maintenance is expensed as incurred. Gain or loss on
disposal of property and equipment, if any, is recognized in the consolidated
statements of operations.




F-7


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
2 – Summary of Significant Accounting Policies (continued)





Long-Lived
Assets





In
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets,” the Company reviews the recoverability of its long-lived
assets on a periodic basis in order to identify business conditions, which may
indicate a possible impairment. The assessment for potential impairment is based
primarily on the Company’s ability to recover the carrying value of its
long-lived assets from expected future undiscounted cash flows. If the total of
the expected future undiscounted cash flows is less than the total carrying
value of the assets, a loss is recognized for the difference between the fair
value (computed based upon the expected future discounted cash flows) and the
carrying value of the assets.





Intangible
Assets





Intangible
assets are stated at cost. Intangible assets with finite life are amortized over
their estimated useful life using straight-line method whereas intangible assets
with infinite life are not subjectto
amortization.  Impairment test is performed at a minimum once a year
to determine possible impairment loss. Estimated useful life of intangible
assets is as follows:





Software
              5
      yearsHigh-tech
      patents
              10yearsWell-known
      trademark
              Infinite





Revenue
Recognition





The
Company derives its revenues primarily from design and manufacture of
industrial wires and cables. In accordance with the provisions of Staff
Accounting Bulletin (“SAB”) 104, revenue is recognized when products are
shipped, title and risk of lossis passed to the customers
and collection is reasonably assured. Payments received before the above
criteria are satisfied are recorded as advance from customers.





Research
and Development





Research
and development costs are expensed when incurred. Research and development costs
for the years ended June 30, 2009 and 2008were
insignificant.





Advertising
Costs





The
Company expenses the cost of advertising as incurred. Advertising costs for the
years ended June
30, 2009 and 2008 were
insignificant.





Impairment
of Intangible Assets





The
Company applies the provisions of Financial Accounting StatementNo. 142
“Goodwill and Other Intangible Assets (SFAS 142)” which addresses how goodwill
and other acquired intangible assetsshould be
accounted for in financial statements.In this regard, the
Companytests these intangible assets for impairment annually or
morefrequently if
indicators of potential impairment are present. Such circumstances could
include, but are not limited to: (1) a significant decrease in the market value
of an asset, (2) a significant adverse change in the extent or manner in which
an asset is used, or (3) an accumulation
of costs significantly in excess of the amount originally expected for the
acquisition of an asset. The Company measures the carrying amountof
the asset against the estimated discounted future cash flows associated with
itat a risk-free
rate of interest.  Should the present value of
the expected future net cash flows be less than the carrying value of the asset
being evaluated, an impairment loss would be recognized. The impairment loss
would be calculated as the amount by which the carrying value of the asset
exceeds its fair
value.


F-8


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
2 – Summary of Significant Accounting Policies (continued)





Impairment
of Intangible Assets (continued)





The fair
value is measured based on quoted market prices, if available. If quoted market
prices are not available, the estimate of fair value is based on various
valuation techniques, including the discounted value of estimated future cash
flows. The evaluation of asset impairment requires the Company to make
assumptions about future cash flows over the life of theasset being
evaluated. These assumptions require significant judgment and actual results may
differ from assumed and estimated amounts.





Income
Taxes





Income
taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases, and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date.





A
valuation allowance is provided to reduce the carrying amount of deferred tax
assets if it is considered more likely than not that some portion, or all, of
the deferred tax assets will not be realized. No differences were noted between
the book and tax bases of the Company’s assets and liabilities, respectively.
Therefore, there are no deferred tax assets or liabilities for the years ended
June 30, 2009
and 2008.The standard corporate
income tax ratehasdecreased from
33% to 25% beginning
on January 1, 2008, when the new Chinese tax law became
effective.





Fair
Value of Financial Instruments





The
carrying amounts of the Company’s financial instruments, which include cash and
cash equivalents, investment securities, accounts receivable, accounts payable,
accrued expenses and other obligations, approximate their fair value due to the
short-term maturities of the related instruments.





Foreign
Currency Translation and Transactions





The
financial position and results of operations of the Company is determined using
local currency (Chinese Yuan) as the functional currency. Assets and liabilities
are translated at the prevailing exchange rate in effect at each year end.
Contributed capital accounts are translated using the historical rate of
exchange when capital is contributed. Income statement accounts are translated
at the average rate of exchange during the year. Currency translation
adjustments arising from the use of different exchange rates are included in
accumulated other comprehensive income in shareholders' equity. Gains and losses
resulting from foreign currency transactions are included in the consolidated
statements of operations.





Comprehensive
Income





The
Company has adopted SFAS No. 130, Reporting Comprehensive Income, which establishes
rules for the
reporting and display of comprehensive income, its components and accumulated
balances. SFAS No. 130 defines comprehensive income to include all changes in
equity, including adjustments to minimum pension liabilities, accumulated
foreign currency translation, and unrealized gains or losses on
available-for-sale marketable securities, except those resulting from
investments by owners and distributions to owners.





F-9


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
2 – Summary of Significant Accounting Policies (continued)





Earnings
Per Share





In
accordance with SFAS No. 128, “Computation of Earnings Per Share” (“SFAS No.
128”) and EITF No. 03-6, “Participating Securities and the Two-Class Method
under FASB Statement No. 128” (“EITF No. 03-6”),basic earnings per share is
computed by dividing net income attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year.The Company’s
Series A redeemable convertible preferred shares are participating securities.
Diluted earnings per share is calculated by dividing net income attributable to
ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent
shares, if any, by the weighted average number of ordinary and dilutive ordinary
equivalent shares outstanding during the year. Ordinary equivalent shares
consist of the ordinary shares issuable upon the conversion of the convertible
preferred shares (using the if-converted method) and ordinary shares issuable
upon the exercise of outstanding share options (using the treasury stock
method).





Recent
Accounting Pronouncements





In April
2009, FASB Staff Position (FSP) No. FSP 107-1 and APB
28-1 was issued to amend SFAS No. 107, Disclosures about Fair Value of Financial
Instruments, to require disclosures about fair value of financial instruments
for interim reporting periods as well as for annual financial statements. This
FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those
disclosures in summarized financial information at interim reporting periods.
FSP 107-1 and
APB 28-1are
effective for interim reporting periods ending after June 15, 2009. Adoption of
this guidance is not expected to have a material impact on our consolidated
financial statements.





In April
2009, FSP
157-4, Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly, was issued to provide additional guidance for estimating
fair value in accordance with SFAS No. 157, Fair Value Measurements, when
the volume and level of activity for the asset or liability have significantly
decreased.


This FSP
also provides guidance on identifying circumstances which indicate that a
transaction is not orderly. FSP 157-4 is
effective for interim and annual reporting periods ending after June 15, 2009,
and shall be applied prospectively. Adoption of this guidance is not expected to
have a material impact on our consolidated financial statements.





In
October 2008, the FASB issued FSP 157-3, Determining Fair Value of a Financial
Asset in a Market That Is NotActive (“FSP
157-3”). FSP 157-3 clarifies the application of Statement of Financial
Accounting Standards No. 157,Fair Value
Measurements, in an inactive market. It demonstrates how the fair value of a
financial asset isdetermined
when the market for that financial asset is inactive. FSP 157-3 was effective
upon issuance, includingprior periods
for which financial statements had not been issued. The Company’s implementation
of this standarddid not
impact its consolidated results of operations or financial
condition.





In
September 2008, the FASB issued FSP FAS 133-1 and FIN 45-4, Disclosures about
Credit Derivatives andCertain
Guarantees, an Amendment of FASB Statement No. 133 and FASB Interpretation No.
45; and Clarificationof the
Effective Date of FASB Statement No. 161 (“FSP FAS 133-1 and FIN 45-4”). FSP
FAS133-1 and FIN 45-4amends
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and HedgingActivities
(“SFAS 133”), to require disclosures by sellers of credit derivatives, including
credit derivativesembedded in
hybrid instruments. FSP FAS 133-1 and FIN 45-4 also amend FASB Interpretation
No. 45,Guarantor’s
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees ofIndebtedness
to Others (“FIN 45”), to require additional disclosure about the current status
of thepayment/performance
risk of a guarantee. The provisions of the FSP that amend SFAS 133 and FIN 45
are effectivefor reporting
periods ending after November 15, 2008. FSP FAS 133-1 and FIN 45-4 also
clarifies the effective datein Statement
of Financial Accounting Standards No. 161, Disclosures about Derivative
Instruments and HedgingActivities
(“SFAS 161”). Disclosures required by SFAS 161 are effective for financial
statements issued for fiscalyears and
interim periods beginning after November 15, 2008. The Company’s adoption of FSP
FAS 133-1 and FIN45-4 on
January 1, 2009, will not impact its consolidated results of operations or
financial condition.


F-10


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
2 – Summary of Significant Accounting Policies (continued)





Recent
Accounting Pronouncements(continued)





In June
2008, the FASB issued EITF 07-5 “Determining whether an Instrument (or Embedded
Feature) is indexed to an Entity’s Own Stock”. This Issue is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. Early application is not
permitted. Paragraph 11(a) of SFAS No 133 “Accounting for Derivatives and
Hedging Activities” (“SFAS 133”) specifies that a contract that would otherwise
meet the definition of a derivative but is both (a) indexed to the
Company’s own stock and (b) classified in stockholders’ equity in the
statement of financial position would not be considered a derivative financial
instrument. EITF 07-5 provides a new two-step model to be applied in determining
whether a financial instrument or an embedded feature is indexed to an issuer’s
own stock and thus able to qualify for the SFAS 133 paragraph 11(a) scope
exception.This
standard triggers liability accounting on all options and warrants exercisable
at strike prices denominated in any currency other than the functional currency
of the operating entity in China (Renminbi). EITF 07-5 is effective for
fiscal years beginning after December 15, 2008. The Company is currently
evaluating the impact of adoption of EITF 07-5 on the Company’s consolidated
financial statements.





Reclassification





Certain
amounts as of June 30, 2008 were reclassified for comparative presentation
purposes.





Note
3– Restricted Cash





As of June 30, 2009 and2008, the Company
had $586,000 and$-0- restricted
cash,respectively. These restricted
cash balancesarereserved for settlement
of tradenotes payablein connection withinventory purchases.The cash held in
custody by bankissuing thetrade notes payable, is restricted as to withdrawal or use, and is
currentlyearning
interest.





Note
4– Inventory





Inventory
at June 30, 2009 and 2008 consists of the following:




June 30, 2009
                  
                  
                  June 30,2008Raw
      materials
                  
                  $
                  400,343
                  
                  
                  $
                  194,273Work
      in process
                  
                  
                  60,703
                  
                  
                  
                  111,756Finished
      goods
                  
                  
                  892,486
                  
                  
                  
                  1,337,914Total
                  
                  $
                  1,353,532
                  
                  
                  $
                  1,643,943





Note
5– Loans to Unrelated Parties





As ofJune 30,
2009 and
2008, the Company
had outstandingloans to unrelated partiesof $6,955,623 and
$505,375, respectively. These loans representadvancestounrelated
partiesat an annual
interest rate of50% above the
applicable bank interest rate. Interest payments are
made semi-annually with no principal paymentsrequireduntil on or before
the due date, as per the terms of the loan agreement.





Note
6– Advance Payments





As a
common practice in Chinese business environment, the Company is often required
to make advances to certain vendors for inventory, equipment, and
construction-in-progress. The balances outstanding for advances on purchase of
inventory amounted to $224,196 and $529,602 as of June 30, 2009 and 2008,
respectively. Additionally, the Company made advances on equipment purchases
amounting to $642,672 and $-0- as of June 30, 2009 and 2008,
respectively.





F-11


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
7– Property and Equipment


`


Property
and equipment at June 30, 2009 and 2008 consists of the following:





June 30, 2009
                  
                  
                  June 30, 2008Buildings
                  
                  $
                  1,019,457
                  
                  
                  $
                  1,019,457Machinery
      and equipment
                  
                  
                  1,663,732
                  
                  
                  
                  1,587,174Office
      equipment and furniture
                  
                  
                  57,770
                  
                  
                  
                  52,550Vehicles
                  
                  
                  272,327
                  
                  
                  
                  199,869Subtotal
                  
                  
                  3,013,286
                  
                  
                  
                  2,859,050Less:
      Accumulated depreciation
                  
                  
                  1,082,271
                  
                  
                  
                  817,3661,931,015
                  
                  
                  
                  2,041,684Add:
      Construction in progress
                  
                  
                  16,715,259
                  
                  
                  
                  13,265,175Total
                  
                  $
                  18,646,274
                  
                  
                  $
                  15,306,859





Depreciation
expense for the years ended June 30, 2009 and 2008 was $261,544 and $229,021,
respectively.





Note
8 – Intangible Assets





Intangible
assets at June 30, 2009 and 2008 consist of the following:





June 30, 2009
                  
                  
                  June 30, 2008Software
                  
                  $
                  16,049
                  
                  
                  $
                  16,049Well-known
      trademark
                  
                  
                  83,505
                  
                  
                  
                  -High-tech
      patent
                  
                  
                  11,538,406
                  
                  
                  
                  -Subtotal
                  
                  
                  11,637,960
                  
                  
                  
                  16,049Less:
      Accumulated amortization
                  
                  
                  301,982
                  
                  
                  
                  10,418Total
                  
                  $
                  11,335,978
                  
                  
                  $
                  5,631





Amortization
expense for the years ended June 30, 2009 and 2008 was $291,520 and $2,878,
respectively.





Note
9 – Accounts Payable and Accrued Expenses





Accounts
payable and accrued expenses at June 30, 2009 and 2008 consist of the
following:





June 30, 2009
                  
                  
                  June 30, 2008Accounts
      payable
                  
                  $
                  527,142
                  
                  
                  $
                  1,435,630Accrued
      expenses
                  
                  
                  132,000
                  
                  
                  
                  80,000Total
                  
                  $
                  659,142
                  
                  
                  $
                  1,515,630





The
carrying value of accounts payable and accrued expenses approximates fair value
due to the short-term nature of these obligations.




F-12


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
10 – Short-Term Bank Loans





Short-term
bank loans consist of the following:


June 30, 2009
                                                                                  
                                                                                  
                                                                                  June 30, 2008On
      August 2, 2007, the Company obtained a loan from Agricultural Bank
      ofChina,
      of which the principal was to be paid in full by July 12, 2008.
      Theinterest
      was calculated using an annual fixed interest rate of 9.576%
      andpaid
      monthly. The loan was secured by a third party.
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  291,800On
      December 24, 2007, the Company obtained a loan from Shanghai
      PudongDevelopment
      Bank, of which the principal was to be paid in full by
      December24,
      2008. The interest was calculated using an annual fixed interest rate
      of8.019%
      and paid monthly. The loan was secured by the Company’s
      propertyand
      equipment and a third party.
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  1,459,000On
      April 24, 2008, the Company obtained a loan from Bank of
      Dalian,of
      which the principal was paid in full by April 24, 2009. The
      interestwas
      calculated using an annual fixed interest rate of 9.711% and
      paidmonthly.
      The loan was secured by a third party.
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  437,700On
      July 31, 2008, the Company obtained a loan from GuangdongDevelopment
      Bank, of which the principal is to be paid in full by July 30,
      2009.The
      interest is to be calculated using an annual fixed interest rate of
      9.98%and
      paid monthly. The loan is secured by a third party.
                                                                                  
                                                                                  $
                                                                                  586,000
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -On
      August 27, 2008, the Company obtained a loan from Bank of
      Dalian,of
      which the principal is to be paid in full by August 27, 2009. The
      interestis
      to be calculated using an annual fixed interest rate of 10.458% and
      paidmonthly.
      The loan is secured by the Company’s property and
    equipment,Inventory
      and a third party.
                                                                                  
                                                                                  $
                                                                                  2,856,750
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -On
      November 21, 2008, the Company obtained a loan from Agricultural
      Bankof
      China of which the principal is to be paid in full by August 20, 2009.
      Theinterest
      is to be calculated using an annual fixed interest rate of 10.0485%
      andpaid
      monthly. The loan is secured by property and equipment and a third
      party.
                                                                                  
                                                                                  $
                                                                                  219,750
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -On
      December 24, 2008, the Company obtained a loan from Shanghai
      PudongDevelopment
      Bank of which the principal is to be paid in full by December
      24,2009.
      The  interest is to be calculated using a quarter fixed interest
      rate of6.138%
      and paid monthly. The loan is secured by a third party.
                                                                                  
                                                                                  $
                                                                                  1,465,000
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -On
      May 6, 2009, the Company obtained a loan from China Merchants
      Bank,of
      which the principal is to be paid in full by May 5, 2010. The
      interestis
      to be calculated using an annual fixed interest rate of 5.841% and
      paidmonthly.
      The loan is secured by the Company’s property and
    equipment.
                                                                                  
                                                                                  $
                                                                                  2,930,000
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -Total
                                                                                  
                                                                                  $
                                                                                  8,057,500
                                                                                  
                                                                                  
                                                                                  $
                                                                                  2,188,500




F-13


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
11 – Long-Term Bank Loan





In
November 2006, the Company obtained a loan from Construction Bank of China for
the purchase of property. As per the terms of the loan agreement, the loan will
mature in November 2011. The interest rate is to be adjusted every twelve
months. As ofJune 30,
2009and
2008, theoutstanding loanbalance
was$5,470,310 and $5,763,050,
respectively. The annual interest ratefor the first and the second yearwasfixed at
8.6879% and 7.50312%, respectively.
The adjustable current rate is 15.7895%.





Note
12 –Trade Notes Payable





Trade notes payable
consist of non-interest bearing promissory notes
issued in connection with the acquisition of certain inventory. Balances outstanding atJune 30, 2009and2008were $1,172,000 and
$-0-, respectively.





Note
13 –Earnings Per Share





The
Company presents earnings per share on a basic and diluted basis. Basic earnings
per share are computed by dividing income available to common shareholders by
the weighted average number of common shares outstanding. Diluted earnings per
share are computed by dividing income available to common shareholders by the
weighted average number of shares outstanding plus the dilutive effect of
potential securities. All shares and per share data have been adjusted
retroactively to reflect the recapitalization of
the Company pursuant to the Securities Exchange Agreement withBefut
Nevada.On
June 18, 2009, the Company effectuated a 1 for 4.07 reverse stock splits of the
Company’s common stock, previously reported share and earnings per share amounts
have been recalculated accordingly.





For the Years Ended June 30,2009
                              
                              
                              2008Net
      income
                              
                              $
                              2,259,413
                              
                              
                              $
                              4,229,988Weighted
      average common shares
                                (denominator
      for basic income per share)
                              
                              
                              29,488,341
                              
                              
                              
                              29,488,341Effect
      of dilutive securities:Convertible
      notes
                              
                              
                              943,550
                              
                              
                              
                              -Weighted
      average common shares
                                (denominator
      for diluted income per share)
                              
                              
                              30,431,891
                              
                              
                              
                              29,488,341Basic
      earnings per share
                              
                              $
                              0.08
                              
                              
                              $
                              0.14Diluted
      earnings per share
                              
                              $
                              0.07
                              
                              
                              $
                              0.14





Note
14– Stockholders’ Equity And Related Financing Agreements





On March
13, 2009, as part of the reverse merger transaction, Frezer acquired, from Befut
BVI, 100% of the outstanding shares of common stock of Befut Nevada. In
exchange, Befut BVI were issued 117,768,300 shares of Frezer’s Common Stock,
under a Share Exchange Agreement (“SEA”) pursuant to a claim of exemption under
Section 4(2) of the Securities Act of 1933, as amended, for issuances not
involving a public offering. As a result of the transaction, Befut Nevada became
a wholly-owned subsidiary of Frezer.




F-14


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
14– Stockholders’ Equity And Related Financing Agreements
(continued)





On March
13, 2009, the Company completed a private financing totaling $500,000, for which
convertible promissory notes were issued, with four accredited investors (the
“March 2009 Financing”). Consummation of the financing was a condition to the
completion of the share exchange transaction with Befut BVI and the Befut BVI
Stockholders under the Share Exchange Agreement. The securities offered in the
financing were sold pursuant to a Securities Purchase Agreement (the “Purchase
Agreement”) by and among Frezer and the investors named in the Purchase
Agreement (collectively, the “Investors”).





In
accordance with the Purchase Agreement, the Company issued a total securities
consisting of: (i) 3,130,869 shares of Frezer’s common stock $0.001 par value
per share in connection with the private financing; (ii) Five (5) year warrants
to purchase 720,076 shares of Frezer common stock at an initial exercise price
of $0.1916 per share.





On June
18, 2009, the Company effectuated a 1 for 4.07 reverse stock split of its
outstanding common stock (the “Reverse Split”).  The Reverse Split did
not alter the number of shares of the common stock the Company is authorized to
issue, but rather simply reduced the number of shares of its common stock issued
and outstanding. Any fractional shares issued as a result of the Reserve Split
was rounded up. In addition, any shareholder owning at least 100 shares but less
than 407 shares of the Company’s common stock on June 17,2009,
would own at least 100 shares after giving effect to the Reverse
Split.





Note
15– Income Taxes





The
Company is a Nevada corporation and conducts all of its business through its
Chinese subsidiaries. All business is conducted in PRC. As the U.S. holding
company has not recorded any income for the year ended June 30, 2009 and 2008,
there was no provision or benefit for U.S. income tax purpose.





The
Company is governed by the Income Tax Law of the PRC concerning the private-run
enterprises, which are generally subject to tax at a new statutory rate of 25%
and were, until January 2008, subject to tax at a statutory rate of 33% (30%
state income tax plus 3% local income tax) on income reported in the statutory
statements after appropriate tax adjustments.





On March
16, 2007, the National People’s Congress of China approved the Corporate Income
Tax Law of the PRC (the New CIT Law), which is effective from January 1, 2008.
Under the new law, the corporate income tax rate applicable to all Companies,
including both domestic and foreign-invested companies, is 25%, replacing the
previous applicable tax rate of 33%. For the years ended June 30, 2009 and 2008,
the income tax provision for the Company was $887,696 and $71,058,
respectively.





In July
2006, the FASB issued FASB Interpretation No.48, Accounting for Uncertainty in
Income Taxes (FIN48). FIN 48
clarifies the accounting for income taxes by prescribing a minimum probability
threshold that a tax position must meet before a financial statement benefit is
recognized. The minimum threshold is defined in FIN48 as a tax
position that is more likely than not to be sustained upon examination by the
applicable taxing authority, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. The Company
does not recognize any benefits in the financial statements for
the years ended June 30, 2009 and 2008.





Note
16 – Employee
Welfare Plan





The
Company has established an employee welfare plan in accordance with Chinese laws
and regulations. Full-time employees of the Group in the PRC participate in a
government-mandated multi-employer defined contribution plan pursuant to which
certain pension benefits, medical care, unemployment insuranceand other
welfare benefits are provided to employees. PRC labor regulations require the
Group to accrue for these benefits based on a certain percentage of the
employees’ salaries.


F-15


BEFUT
INTERNATIONAL CO., LTD.


(FORMERLY
FREZER, INC)





Notes
to Consolidated Financial Statements


June
30, 2009 and 2008





Note
17 – Statutory Reserve





Under PRC
law, the Company’s subsidiaries in PRC are required to set aside 10% of its net
income each year to fund a designated statutory reserve fund until such funds
reach 50% of registered share capital. These reserves are not distributable as
cash dividends. At June 30, 2009 and 2008, the balances for statutory reserve
were $729,135 and $653,287, respectively.





Note
18 – Risk Factors





For the
years ended June 30, 2009, five vendors accounted for approximately 62% of the
Company’s raw materials, while for the fiscal year ended June 30, 2008, three
vendors accounted for approximately 57% of the Company’s raw materials.
Purchases from these vendors were $10,041,851 and $10,028,932 for the years
ended June 30, 2009 and 2008, respectively.





For the
fiscal year ended June 30, 2009, five customers accounted for approximately 46%
of the Company’s total sales. Sales to these customers amounted to $8,815,511.
For the fiscal year ended June 30, 2008, four customers accounted for
approximately 26% of the Company’s total sales. Sales to these customers
amounted to $5,268,594.





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 environments in the PRC as well as by the general
state of the PRC’s economy. The Company's business may also be influenced 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.





Note
19 - Concentrations of Credit Risk





Financial
instruments which potentially subject the Company to credit risk consist
principally of cash on deposit with financial institutions. Management believes
that the financial institutions that hold the Company’s cash and cash
equivalents are financially sound and minimal credit risk exists with respect to
these investments.





Note
20 – Supplemental Cash Flow Disclosures





The
following is supplemental information relating to the consolidated statements of
cash flows:





For the Years Ended June 30,2009
                    
                    
                    2008Cash
      paid for interest
                    
                    $
                    893,865
                    
                    
                    $
                    787,081Cash
      paid for income taxes
                    
                    $
                    110,199
                    
                    
                    $
                    71,058





Note
21 – Supplemental Schedule Of Non Cash Activities





In
connection with the acquisition of high-tech patents, as part of the acquisition
cost, Dalian Befut transferred 51% ownership to the patent holder. Subsequent to
the transaction, Cao Hongbo, the Company’s CEO and another shareholder,
repurchased the 51% ownership from the former patent holder. The 51% ownership
of Dalian Befut was worth approximately $11,383,050 based on an independent
appraisal.





Note
22 - Subsequent Events





On July
1, 2009, Dalian Befut formed a joint venture Befut Zhong Xing Switch Co., Ltd.
with a third party individual. Dalian Befut contributed approximately $100,000
and accordingly has a 70% ownership.




F-16