UNITED
STATES




SECURITIES
AND EXCHANGE COMMISSION




WASHINGTON,
D.C. 20549




FORM
10-K


(Mark
One)




S
            
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
              For  the
      fiscal year ended May 31, 2008








£
            
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
              For
      the transition period from ___________
      to___________________________





Commission
file number: 333-118259





CHINA
      SUN GROUP HIGH-TECH CO.(Exact
      name of registrant as specified in its charter)





Delaware
            
            54-2142880(State
      or other jurisdiction ofincorporation
      or organization)
            
            (I.R.S.
      Employer identification No.)1
      Hutan Street, Zhongshan District
              Dalian, P.R.
      China
            
            N/A(Address
      of principal executive offices)
            
            (Zip
      Code)




Registrant’s
telephone number, including area code +86  (411)
8289-7752






Securities
registered under Section 12(b) of the Exchange Act:




Title
      of each class
            
            Name
      of each exchange on which registeredN/A
            
            N/A




Securities
registered pursuant to section 12(g) of the Act






Common Stock, par value
$0.001 per share






(Title of
Class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.£
Yes   SNo






1







Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.£
Yes    SNo





Note – Checking the box above
will not relieve any registrant required to file reports pursuant to Section 13
or 15(d) of the Exchange Act from their obligations under those
Sections.





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. S
Yes  £No





Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) 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.S





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.




Large
      accelerated filer £
            Accelerated filer
      £





Non-accelerated filer£(Do not check if a smaller reporting
company)       Smaller reporting companyS





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




£
Yes                                SNo







State 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.




Note – If a determination as
to whether a particular person or entity is an affiliate cannot be made without
involving unreasonable effort and expense, the aggregate market value of the
common stock held by non-affiliates may be calculated on the basis of
assumptions reasonable under the circumstances, provided that the assumptions
are set forth in this Form.




The
aggregate market value of the voting and non-voting common stock of the issuer
held by non-affiliates as of August 19, 2008 was approximately $28,453,720.13
based upon the closing price of the common stock as quoted by Nasdaq OTC
Bulletin Board on such date.




APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY




PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:






Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.  £Yes  £No




2


(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)
    Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.
  As of
August 19, 2008, there were 53,422,971 issued and outstanding shares of the
issuer’s common stock.






DOCUMENTS
INCORPORATED BY REFERENCE






List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (e.g. Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.  The listed documents should be
clearly described for identification purposes (e.g. annual report to security
holders for fiscal years ended December 24, 1980).






3




PART
I




Item
1.    Business


History






We were
incorporated in North Carolina on February 2, 2004 to engage in the business of
commercial finance brokerage and consulting. Prior to the Exchange, we were
engaged in the commercial finance brokerage and consulting
business.




Dalian
Xinyang High-Tech Development Co. Ltd (the “DLXY”) was registered as a limited
liability company in the People’s Republic of China on August 8, 2000 with its
principal place of business in Dalian City, Liaoning Province, the People’s
Republic of China. Its initial registered capital was Renminbi Yuan (“RMB”)
5,500,000 (equivalent to US$665,037), contributed by Sun Group High Technology
Development Co., Ltd, a limited liability company registered in Dalian City,
Liaoning Province, the People’s Republic of China, and Ms. Li Zhi, a citizen of
the People’s Republic of China. Prior to April 2006, DLXY’s principal activity
was acting as a research center to develop technologically feasible nanometers
to be used in lithium batteries and generated no revenue. It was considered as a
development stage company. In April 2006, DLXY began production and sales of
cobaltosic oxide which is used as the anode of high capacity lithium ion
rechargeable batteries. Sales are made primarily to battery manufacturers.
Currently, all of DLXY’s operations and customers are located in the People’s
Republic of China.




On July
6, 2005, $13,126,609 (RMB 100,500,000) in capital was contributed by its two
existing investors and one new investor, Ms. Wang Jiao, in the forms of cash and
property that included the production facilities located in Dalian City. On May
10, 2006, these three shareholders transferred all of their ownership interests
in DLXY to Ms Feng Guimei, Mr. Li Gang and Mr. Kan Yang who are all citizens of
the People’s Republic of China.




On
February 28, 2007, we completed the Exchange pursuant to the Plan of Exchange,
by and among us, DLXY, the DLXY Shareholders, and David Koran. Under the
Agreement, (1) Mr. Wang Bin received 9,500,000 shares of our common stock from
Mr. Koran for $600,000 in cash, paid for by DLXY and (2) the DLXY Shareholders
received (a) 30,000,000 shares of our newly issued common stock in exchange for
a 70% ownership interest in DLXY and (b) a two year non-transferable option to
purchase 10,000,000 shares of our common stock for an aggregate purchase price
of RMB 31,800,000. As a result, we under went a change in control, whereby the
DLXY Shareholders now own an aggregate of 39,500,000 shares, representing 93% of
our common stock issued and outstanding.




On August
24, 2007, DLXY was reincorporated from North Carolina to Delaware and changed
its name to China Sun Group High-Tech Co. The par value of common stock of China
Sun Group High-Tech Co. is $0.001 per share.




Business




DLXY is a
large producer of cobaltosic oxide and lithium cobalt oxide, both anode
materials for lithium ion batteries. According to the China Battery Industry
Association, which conducts research of and puts forth reports on the battery
industry, we have the second largest cobalt series production capacity in the
People’s Republic of China. This sizable production capacity will allow DLXY to
help meet the growing demand for anode materials as the demand for lithium
batteries increases. Lithium batteries are becoming widely used due to its power
capacity, long service life, and compatibility with carbon cathode materials,
necessary for battery circuitry. The expected growth of the lithium ion battery
industry affords DLXY a business opportunity for increasing revenue and growth
potential. In addition, DLXY’s current operations are solely in the People’s
Republic of China, which provides us with access to low-cost skilled labor, raw
materials, machinery and facilities and enables us to price our products
competitively in an increasingly price-sensitive market.






4




DLXY
provides a comprehensive selection of cobalt products such as battery cobalt
carbonate, nano-level cobaltosic oxide, and high-crystallinity ball lithium
cobalt oxide. DLXY also provides substitute products including lithium iron
phosphate (LiFePO4) developed
through our research and development efforts. DLXY’s two main products, however,
are cobaltosic oxide (Co3O4) and
lithium cobalt oxide (LiCoO2), which
are manufactured in its production facilities that span 24,000 square meters.
DLXY has 12 production lines, a research and development facility, and employee
housing. Currently, 8 of the 12 productions lines are dedicated to manufacture
of cobaltosic oxide, which aggregates to a production capacity of 1,500 tons per
year. The remaining 4 production lines are dedicated to manufacturing lithium
cobalt oxide, which aggregates to a capacity of 1000 tons per year.




Industry




The
lithium ion battery market is a green energy resource. Lithium ion batteries are
versatile, compact and light weight, and have high energy density and capacity,
high voltage, and excellent energy retention characteristics. These attributes
make lithium ion batteries suitable for use in portable devices in particular.
Commercially, lithium ion batteries are used in various gadgets, such as mobile
phones, PDAs, laptops, and digital cameras and other uses such as electric
automobiles and solar and wind energy storage units. It is also used by
governments, mainly for military use in submarines, underwater robots, unpiloted
airplanes, and space satellites. As the cost/power ratio of lithium-based
batteries continues to improve, it is expected that its usage will also extend
into other applications.




With the
development of other technologies, we foresee that lithium ion batteries will
also be widely used in electric bicycles and scooters. The progress in the
manufacturing technology of lithium ion batteries, in conjunction with the
constant demand for enhanced battery performance and the falling costs of
batteries cost will greatly accelerate the use of lithium ion batteries in
modern mobile communications, home appliances, electric automobiles, and various
government uses. According to the Battery Industry Association of China, the
lithium ion battery will become one of the most important sources of chemical
power in 21st century. Research and development on the lithium ion battery has
been added as a third objective to the People’s Republic of China’s 11th
five-year-development project.




The Battery Industry Association of
China forecasts that the growing demand for portable products like mobile phones
and laptops, will stimulate the lithium ion battery industry in the People’s
Republic of China, which is expected to grow at an annual rate of over 30% of
annual output, based on units(Source:www.any17.com/newscenter/new/dianchi/2006102405483822.html).  Lithium ion batteries
used in such portable products apply lithium cobalt oxide (LiCoO2) as an anode
material. The China Battery Industry Association also reports that the aggregate
global demand for lithium cobalt oxide is approximately 40,000 to 50,000 tons
(Source:www.any17.com/newscenter/new/dianchi/2006102405483822.html).Currently, the People’s Republic of
China’s lithium cobalt oxide demand is mainly supplied by overseas suppliers.
The China Battery Industry Association writes that from September 2004 to late
2005, the demand for lithium cobalt oxide in China exceeded 10,000 tons, which
led to a significant rise in the price of cobalt, a major component in the
manufacture of lithium cobalt oxide. As a result of high demand, it is reported
that the price of industrial lithium carbonate and battery lithium carbonate
also increased in tandem by approximately 50% from September 2004 to late
2005.




Cobalt
ore is for anode materials of lithium ion batteries is currently in short supply
in the People’s Republic of China
(.Source:http://www.xiangmu.com/project/109/1943.html).  In addition,
cobaltosic oxide and lithium cobalt oxide continue to develop their presence,
thus, presenting DLXY with noteworthy growth potential.




Products




DLXY’s
three main products, cobalt carbonate (CoCO3),
cobaltosic oxide (Co3O4) and
lithium cobalt oxide (LiCoO2) are
manufactured in its production facilities, which span 24,000 square meters. DLXY
has 12 production lines, a research and development facility, and employee
housing. 8 of the 12 productions lines are dedicated to manufacture of
cobaltosic oxide, which aggregates to a production capacity of 1,500 tons per
year. The remaining 4 production lines are dedicated to manufacturing lithium
cobalt oxide, which aggregates to a capacity of 1,000 tons per year. The core
technology of CoCO3is the
pressure leaching and high-efficiency extraction. The core technology of
nanometer Co3O4and
LiCoO2is mesh belt calcination.




5




According
to the Battery Industry Association of China, DLXY is the second largest
non-governmental manufacturer of hi-tech cobalt salt products in Asia based on
tons produced. DLXY’s products and processing capabilities include the
production of cobalt ore, cobalt carbonate, nanometer-sized cobaltosic oxide and
high-crystalline spherical lithium cobalt oxide which is used lithium batteries.
In addition, we specialize in:




•
            
            Hi-pressure
      leaching technology of raw
materials,





•
            
            Hi-performance
      extraction technology of soluble cobalt
salts,





•
            
            Chemical
      precipitation technology of soluble cobalt
  salts,





•
            
            Mesh-belt
      metallurgical powder calcinations,





•
            
            Multilevel
      selecting technology, and





•
            
            Stable
      sol and gel technology.




DLXY
provides a comprehensive selection of cobalt products such as battery anode
cobaltous (cobalt) carbonate, nano-level cobalto cobaltic (cobaltosic) oxide,
and high-crystallinity ball lithium cobalt oxide. DLXY also provides substitute
products, including ternary anode material (which is composed of lithium cobalt
oxide, lithium nickel oxide and lithium manganese oxide) developed through our
research and development efforts.




Our
series No. is 0/81626 products have awarded the “Top Ten Brand in National
Battery Material” by the China Enterprise Brand Development Committee in July,
2008. Additionally, our series No. icp31508-B2306 products were awarded the
title of “International Famous Brand” by the China International Quality
Assessment and Research Center and China Council for the Promotion of Joint
Development of Brand Enterprises in July, 2008.




Currently,
DLXY distributes its products directly to customers or through its sales
agents.




Customers




Our
target market includes lithium ion battery manufacturers, end product users, and
lithium series product manufacturers throughout the world. Our initial focus
however, is the development of a domestic market in the People’s Republic of
China. Once we have gained a sizable share of the Chinese market, we will focus
our attention on exporting our products internationally.




In the
People’s Republic of China, we have six main customers of our Co3O4, which
comprises the bulk of our sales for financial year 2008. These include Hunan
Shanshan Advanced Material, CITIC Guoan Mengguli Corporation, Hunan Reshine New
Material Co., Ltd., Changzhou PowerGenie Materials Co., Ltd., Xiamen Tungsten
Co., Ltd, Beijing Easpring Material Technology Co., Ltd, Shaanxi Applied
Physical Chemical Research Institute and ALT Cobalt and Nickel Products
(Dalian). Co. Ltd These companies are all the leading battery producers at the
lithium ion battery market in the People’s Republic of China. Their combined
total purchase capacity is 1000T/month. Our current production capacity is
50T/month. As Co3O4 has a seller’s market in the People’s Republic of China, we
believe that these customers will purchase more from us as soon as we increase
our production capacity. For the fiscal year ended May 31, 2008, one out of the
six main customers accounted for 39% of our total revenue. However, production
only began in April 2006. During 2007, we launched different marketing campaigns
based on various strategies. We have added several customers such as Zhejiang
Tianhong Energy Technology Co., Ltd., Zhejiang Wanma Battery Co., Ltd.,
Guangzhou Huaneng Battery Co., Ltd. and Shenzhen Sunristar Electronics Co., Ltd.
In the international market, we have approached potential customers such as
Panasonic, Sanyo, Maxell and Sumsung.




Potential
of International Market




The major
consuming countries in the global market are Japan and Korea. However, with the
improvement of the People’s Republic of China’s production and technology and
the market advantage, Japan’s Diacelltec, Sanyo, Sony and Panasonic have
successively relocated their production bases to the People’s Republic of China,
Korea’s LG, Samsung and SK have also established major procurement centers in
the People’s Republic of China.








6




Korea’s
Project Development & Consultation Co., Ltd. (PD&C) has entered into an
agentcy agreement with us. Under this agreement, PD&C will find customers in
South Korea to buy our products valued at or more than $8 million per year. The
term of the agreement is for 2 years.




The
potential customers we have approached and have showed strong interest in our
products in the international market include: Tanaka, Honjo, HLST, Sanyo, Sony,
Panasonic, Nihonkagakusangyo, Maxell, LG, Samsung, SK, Hanhua and Light &
Future.




Competition




We
compete mainly with other manufacturers of battery anode materials located
locally in the People’s Republic of China, as well as from Japan and Korea.
Based on our own studies and market analysis, our key competitors are Hunan
Haina Advanced Material Co., Ltd., Gansu Jinchuan Group, Henan Guangkuotiandi
Cobalt Product Co., Ltd., and Nanjing Hanrui Cobalt Product Co.,
Ltd.




We
believe that we are able to leverage our low-cost advantage to compete favorably
with our competitors.  The technological advances made by our research
and development group have helped us reduce our costs and increase our
productivity. Compared to Korean and Japanese manufacturers, we believe that we
are able to source our needs for skilled labor and raw materials locally and
economically. We believe that our significant production capacity should
translate into greater purchasing power in the future, thereby helping us
negotiate lower purchase prices for our raw materials. Furthermore, our
proprietary technologies and use of a combination of manual labor and automation
at the key stages of the manufacturing process enable us to enhance our
production efficiency, resulting in further reduction in the cost, while
ensuring high-uniformity and high-quality standards.




Raw
Materials




We obtain
our raw materials from only a few suppliers. However, there are an abundance of
such suppliers available. For the fiscal year ended May 31, 2008, 41% of our raw
materials came from one supplier, Aote Gunie Zhi Pin Co., Ltd. To remedy this
situation, DLXY purchased interests in a cobalt ore mine in the Congo. For
additional details on the purchase of the interests in the cobalt mine in Congo,
see Item 7, Management’s
Discussion and Analysis or Plan of Operation. Purchase of these interests
will provide us with an additional supply of raw material and will also enable
us to sell these materials to other enterprises in this industry.




Currently,
the export of crude ore is prohibited in Africa. Therefore, building the primary
processing plant of cobalt ore in Africa can avoid the export limitation, save
freight and ensure a stable supply of raw material. We plan to build such a
processing plant of cobalt ore in Congo. Construction will begin in the second
quarter of the fiscal year 2009.  Once the processing plant is
complete, we will benefit from the reduced costs of raw materials and ensure a
stable supply of raw material, which will provide us with a competitive
advantage.




According
to an article published by the Information Center of the Ministry of Commerce of
PRC on May 13, 2007, the contribution of China-Africa trade to Africa’s economic
growth reached as high as 20%. In 2006, the amount of China-Africa trade reached
$55.5 billion. The People’s Republic of China is the third trading partner of
Africa. By the end of 2006, the People’s Republic of China’s investments in
Africa had amounted to $11.7 billion and for the first 6 months of 2007, the
People’s Republic of China's direct investment to Africa was $0.48 billion.
(Source: http://www.sdnews.com.cn/finance/2007/11/5/299763.html). The People’s
Republic of China’s key investment fields include agricultural development,
machining and manufacture, traffic, communication, water and electricity. In
2006, the People’s Republic of China’s government announced eight measures to
promote the development of a China-Africa new strategic partner relationship.
Africa has adopted Africa’s Plan to Develop New Partners as its whole
development strategy and the People’s Republic of China has signed the bilateral
agreement for the promotion and protection of investments with 26 African
countries and signed tax treaties to avoid dual taxation with 8 African
countries.




The
Democratic Republic of Congo has also signed the bilateral economic and trading
agreements with 44 countries in the world, including the People’s Republic of
China, joined 9 regional organizations including the Economic Community of
Central African States, and joined in 14 international and multilateral economic
and trading organizations including the International Tin Association and
African, Caribbean, & Pacific Countries (ACP). The Democratic Republic of
Congo entered into the General Agreement of Tariffs and Trade in 1971 and became
a member of WTO in 1995. In 2002, it created a body of investment law which
included a policy favorable toward foreign invested enterprise which stipulated
that such enterprises with over USD 20,000 in capital can be exempted from taxes
for 5 years and such enterprises with USD 1 million in capital are eligible for
certain favorable policy treatments. The investment law is currently in the
progress of revision.




7




Intellectual
Property




We have
filed for a patent on our process of manufacturing active lithium cobalt oxide
from the People’s Republic of China’s Patent Bureau and are currently in the
review stage of the patent-procurement process.




On August
20, 2004, DLXY applied for the patent of its method of processing active lithium
cobalt dioxide at the State Intellectual Property Office of the People’s
Republic of China. Upon the preliminary examination, the application conformed
to the patent law and the implementation rules.




On April
1, 2005, the State Intellectual Property Office announced this patent
application in the official journal of invention and patent according to the
patent law.




On
September 16, 2005, upon the applicant’s request for substantive examination,
the State Intellectual Property Office examined the application in accordance
with the patent rights. This patent application has been in the process of
substantive examination.




On July
20, 2008, we finally received notification of approval from the State
Intellectual Property Office for our patent application pursuant to term 54 of
the Patent Law and No. 75 Announcement of Patent Bureau. The patent number and
certificate will be formally granted to us on August 27, 2008.




Government
Regulation




The major
environmental regulations applicable to us include the PRC Environmental
Protection Law, the PRC Law on the Prevention and Control of Water Pollution and
its Implementation Rules, the PRC Law on the Prevention and Control of Air
Pollution and its Implementation Rules, the PRC Law on the Prevention and
Control of Solid Waste Pollution, and the PRC Law on the Prevention and Control
of Noise Pollution. As we conduct our manufacturing activities in the People’s
Republic of China, we are subject to the requirements of these environmental
laws and regulations on air emission, waste water discharge, solid wastes and
noise. We plan to comply with environmental laws and regulations. We are not
subject to any admonition, penalty, investigations or inquiries imposed by the
environmental regulators, nor are we subject to any claims or legal proceedings
to which we are named as defendant for violation of any environmental laws and
regulations. We do not have any reasonable basis to believe that there is any
threatened claim, action or legal proceedings against us that would have a
material adverse effect on our business, financial condition or results of
operations.




The
People’s Republic of China’s intellectual property protection regime is
consistent with those of other modern industrialized countries. The PRC has
domestic laws for the protection of copyright, patents, trademarks and trade
secrets. The PRC is also a signatory to most of the world’s major intellectual
property conventions, including:




•
            
            Convention
      establishing the World Intellectual Property Organization (WIPO
      Convention) (June 4, 1980);•
            
            Paris
      Convention for the Protection of Industrial Property (March 19,
      1985);•
            
            Patent
      Cooperation Treaty (January 1, 1991); and•
            
            The
      Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)
      (November 11, 2001).




Patents
in the PRC are governed by the China Patent Law and its Implementing
Regulations, each of which went into effect in 1985. Amended versions of the
China Patent Law and its Implementing Regulations came into effect in 2001 and
2003, respectively.








8




The PRC
is signatory to the Paris Convention for the Protection of Industrial Property,
in accordance with which any person who has duly filed an application for a
patent in one signatory country shall enjoy, for the purposes of filing in the
other countries, a right of priority during the period fixed in the convention
(12 months for inventions and utility models, and 6 months for industrial
designs).




The
Patent Law covers three kinds of patents, i.e., patents for inventions, utility
models and designs respectively. The Chinese patent system adopts the principle
of first to file. This means that, where more than one person has filed patent
applications for the same invention, a patent can only be granted to the person
who first filed the application. Consistent with international practice, the PRC
only allows the patenting of inventions or utility models that possess the
characteristics of novelty, inventiveness and practical applicability. For a
design to be patentable, it should not be identical with or similar to any
design which, before the date of filing, has been publicly disclosed in
publications in the country or abroad or has been publicly used in the country,
and should not be in conflict with any prior right of another.




PRC law
provides that anyone wishing to exploit the patent of another must conclude a
written licensing contract with the patent holder and pay the patent holder a
fee. One rather broad exception to this, however, is that, where a party
possesses the means to exploit a patent but cannot obtain a license from the
patent holder on reasonable terms and in reasonable period of time, the PRC
State Intellectual Property Office, or SIPO, is authorized to grant a compulsory
license. A compulsory license can also be granted where a national emergency or
any extraordinary state of affairs occurs or where the public interest so
requires. SIPO, however, has not granted any compulsory license up to now. The
patent holder may appeal such decision within three months from receiving
notification by filing a suit in a People’s Court.




PRC law
defines patent infringement as the exploitation of a patent without the
authorization of the patent holder. A patent holder who believes his patent is
being infringed may file a civil suit or file a complaint with a PRC local
Intellectual Property Administrative Authority, which may order the infringer to
stop the infringing acts. Preliminary injunction may be issued by the People’s
Court upon the patentee’s or the interested parties’ request before instituting
any legal proceedings or during the proceedings. Evidence preservation and
property preservation measures are also available both before and during the
litigation. Damages in the case of patent infringement is calculated as either
the loss suffered by the patent holder arising from the infringement or the
benefit gained by the infringer from the infringement. If it is difficult to
ascertain damages in this manner, damages may be reasonably determined in an
amount ranging from one to more times of the license fee under a contractual
license. The infringing party may be also fined by Administration of Patent
Management in an amount of up to three times the unlawful income earned by such
infringing party. If there is no unlawful income so earned, the infringing party
may be fined in an amount of up to RMB 500,000 or approximately
$62,500.




Research
and Development




We spent
$87,607 and $89,166 on research and development for the fiscal years ended May
31, 2008 and 2007. These research and development (R&D) costs were not added
to the purchase price of our products and thus, were not passed along to our
customers.




As
represented by the foregoing amounts, DLXY has already invested material funds
into research and development efforts. We have completed construction of a
R&D test and detection center, equipped with detection and test apparatus
and instruments. The center is being used to conduct quality controls reviews to
provide assurance regarding the quality of our products. In addition, the center
conducts research and development to keep abreast of technology and the changing
needs of our customers.






9




With the
efforts of our R&D group, we have successfully developed the following three
series of nanometer metal products:




1.
            
            Nanometer
      Simple Metal Substance: Cu, Fe, Ni, Ag, Al, Zn, Co. The sizes of these
      substances vary between 10-100nm. Being even, spherical,
      high-crystallization and high-dispersion, they are mainly applied to
      martial, chem-industrial, pharmaceutical, and electronic industries. They
      can be used as efficient catalyst, antiseptic, combustion-supporting agent
      and electrode materials.




2.
            
            Nanometer
      Compound Metal Substance: ZnO, TiO2,
      NiO, SnO, WO3. The
      sizes of these substances vary between 10-70nm; mainly applied to such
      industries as airplane manufacture and auto manufacture industries; have
      the function of sterilization, energy-saving and extend the durability of
      rubber.




3.
            
            Nanometer
      Metal Alloy: Fe-Ni, Sn-Ag, Ti-Al. Used in plastic and lubricant oil
      industries; have high tensile strength, high abrasion resistance, good
      sturdiness, good oil-resistance and
  chemical-resistance.





Our
R&D group has also made technological improvements to our production line by
increasing the lifetime and performance of mixing bowls used during anode
material production. We have developed a new material that enables the mixing
bowl to achieve uniform heat conduction and increase the stability of anode
materials. As a result of our new innovation, the life cycle of the bowl’s use
has been extended from 30 uses per bowl to 180 uses per bowl. At the same time,
the working temperature inside the bowl can be raised from 900 degrees C to 1280
degrees C, shortening the calcining time (thermal treatment process) from 6.5
hours to 5 hours.  As a result, we are able to increase production of
anode materials while significant lowering our costs.




In March
2008, we unveiled a new white steel, highly efficient, water magnetic iron
remover. The remover reduces iron pollution by eliminating large quantities of
broken metal bits produced during normal machine operations, hence producing
better quality finished end products. The remover is now operational in all our
equipment and exceeds environmental protection industry standards.




In April
2008, we announced that our R&D Group has developed a new white steel filter
that not only improves air quality in our production facilities by approximately
30%, but also limits the amount of cobalt oxide lost during production. Cobalt
oxalate is a raw material used in the formation of cobaltosic oxide. Under
normal manufacturing conditions, 3.15 tons of cobalt oxalate may be transformed
into approximately 1 ton of cobaltosic oxide. In the process of sintering,
impurities turn into new oxides when exposed to air and are released through the
exhaust system. Our new white steel filter is located at the bottom part of the
exhaust. This filter has a 600-meshwork and a water system. Once the newly
formed oxide meets the water meshwork, it drops into a white steel deposit
channel. The oxide can then be reclaimed and reused by heating it in a high
temperature furnace. This filter may generate approximately 35% more renewable
cobalt oxide from the production process.








New
Material Development




Our
R&D team led by the General Technical Supervisor Cheng Yijing has 14 members
in total. The team started the research of the new battery anode material (i.e.
ternary anode material) in October 2005. The laboratory test was conducted in
May 2006 to examine whether the ternary anode material conformed to industry
standards. The test has proved that various technical parameters conformed to
the industry standard. After about ten months, the commercial test on the
ternary anode material was completed. As a result, in terms of technology, the
conditions for mass production of the ternary anode material have
matured.  We are currently looking for customers for this
product.




The
ternary material is composed of lithium cobalt dioxide, lithium manganate and
lithium nickelate. This material has the following characteristics: high
specific capacity, high safety, superior performance of cycling and rate,
stability performance at low and high temperatures, charge and discharge
duration, high performance price ratio, etc. The material can be applied as the
main anodes of small-sized communication and power instruments, such as portable
power tool, electronic apparatus, laptop, video camera, and is replacing the
lithium cobalt oxide gradually. It also has a good prospect of application in
electric autos and electric bicycle.






10






In
April 2004, we established a strategic relationship with Northeastern
University, located in the People’s Republic of China. Northeastern University
is an institution which has research development capabilities that complement
ours. Through our collaborative efforts, we will conduct research and
development activities to improve on the currently available anode materials
which are components of lithium ion batteries. Currently, we are looking into
improvements on the latest lithium cobalt oxide technology and are conducting
trials of new ternary materials, which are combinations of source anode
materials as an alternative to the sole use of cobalt.




DLXY
plans to continue to align itself with many industry experts and enter into
agreements with various research teams at institutes and
universities.




Employees




As
of May 31, 2008, we have 258 employees, comprising 90 full-time employees and
168 part-time employees. Our employees  include 41 people in
marketing, 27 in manufacturing, 13 in research and development and quality
control, 4 in financial and accounting, and 5 in general
management.




Item
1A.               Risk
Factors.




Not
Applicable.




Item
1B.               Unresolved
Staff Comments.




Not
Applicable.




Item
2.                  Properties.




All
land in the People’s Republic of China is owned by the State. Individuals and
companies are permitted to acquire rights to use land or land use rights for
specific purposes. In the case of land used for commercial purposes, the land
use rights are granted for a period of 50 years. This period may be renewed at
the expiration of the initial and any subsequent terms. Granted land use rights
are transferable and may be used as security for borrowings and other
obligations.




Corporate
Headquarters




Our
corporate headquarters are located on leased premises at 1 Hutan Street,
Zhongshan District, Dalian, the People’s Republic of China. These offices
encompass approximately 1,987 square meters. The lease term ends on 2046. The
land use agreement has a 50-year term which expires in May 2049. The annual
lease payment is 50,000 RMB/year.




Operating
Facility




All
of our operations are located on premises at Gan Jing Zi Hi-Tech Park, Dalian,
the People’s Republic of China. This facility consists of approximately 258,240
square feet. The land use agreement has a 50-year term which expires in May
2046. In return for the use of the premises, we pay an annual property tax of
$62,500. The operating facility is used as office space, manufacturing plants,
research and development, and as employees’ living quarters which can house up
to 320 individuals. There is also an eatery and hotel that is used by visitors
to the operating facility which has an occupancy rate of up to 50
people.




As
of August 19, 2008 and May 31, 2008, we did not incur any construction
costs.




Pursuant to a written agreement, DLXY
has acquired the prospecting and mining rights of a cobalt mine in Congo, and
plans to construct a processing plant in Congo. Construction will begin in the
second quarter of the fiscal year 2009.  We anticipate that the
construction of the plant will cost approximately $2,000,000 to
$3,000,000.  For additional details on the purchase of the interests
in the cobalt mine in Congo, see Item 7, Management’s Discussion and
Analysis or Plan of Operation.








11




We
believe that all our properties and equipment have been adequately maintained,
are generally in good condition, and are suitable and adequate for our
business.




Our
facilities are not covered by insurance.






Item
3.                  Legal
Proceedings.




Currently,
we are not a party to any ongoing or pending legal proceeding.






Item
4.                  Submission
of Matters to a Vote of Security Holders.




None.







12


PART
II






Item
5.                  Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities.






The
Market for Our Common Stock






Our
shares of common stock, par value $0.001 per share, are quoted on the Nasdaq OTC
Bulletin Board under the trading symbol “CSGH” where they have traded since
September 2006. The following table sets forth the high and low bid prices for
our common stock as reported on the OTC Bulletin Board. These prices reflect
inter-dealer prices, without retail mark-up, mark-down or commissions, and may
not necessarily represent actual transactions.




BidQuarter
      Ending
            
            High
            
            
            LowAugust
      31, 2007
            
            $
            1.09
            
            
            $
            0.26November
      30, 2007
            
            $
            2.50
            
            
            $
            0.26February
      29, 2008
            
            $
            0.99
            
            
            $
            0.51May
      31, 2008
            
            $
            1.36
            
            
            $
            0.30August
      31, 2006
            
            
            N/A
            
            
            
            N/ANovember
      30, 2006
            
            $
            2.25
            (1)
            
            $
            0.25
            (1)February
      29, 2007
            
            $
            0.75
            
            
            $
            0.19May
      31, 2007
            
            $
            1.34
            
            
            $
            0.53




(1)       
Information provided beginning September 7, 2006, the day we began trading on
the OTC Bulletin Board.




On
August 12, 2007, there were 575 shareholders of our common stock of record.
However, we believe that there are additional beneficial owners of our common
stock who own their shares in “street name.”




Dividend
Policy




We
have not paid any cash dividends since our inception and do not anticipate
paying any cash dividends on our common stock in the foreseeable future. We
expect to retain our earnings, if any, to provide funds for the expansion of our
business. Future dividend policy will be determined periodically by the Board of
Directors based upon conditions then existing, including our earnings and
financial condition, capital requirements, and other relevant
factors.




Equity
Compensation Plans




There
were no equity compensation plans effective as of May 31, 2008.




Item
6.                      Selected
Financial Data.




The
following tables summarize our consolidated financial data for the periods
presented. You should read the following financial information together with the
information under “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and our consolidated financial statements and the
related notes to these consolidated financial statements appearing elsewhere
herein. The selected consolidated statements of operations data for the three
financial years ended May 31, 2008; and the selected consolidated balance sheet
data as of May 31, 2008 are derived from our consolidated financial statements,
which are included elsewhere herein.








13







YEARS
      ENDED MAY 31,2008
            
            
            2007
            
            
            2006Statement
      of Income:Revenue,
      net
            
            $
            25,294,221
            
            
            $
            8,275,066
            
            
            $
            277,715Cost
      of revenue
            
            
            15,664,692
            
            
            
            4,875,078
            
            
            
            141,958Gross
      profit
            
            
            9,629,529
            
            
            
            3,399,988
            
            
            
            135,757





Total
      operating expenses
            
            
            426,384
            
            
            
            1,999,803
            
            
            
            479,707Income
      (loss) from operations
            
            
            9,203,145
            
            
            
            1,400,185
            
            
            
            (343,950
            )Other
      income
            
            
            27,800
            
            
            
            -
            
            
            
            -Income
      tax expense
            
            
            (2,490,819
            )
            
            
            (804,189
            )
            
            
            -Net
      income (loss)
            
            
            6,740,126
            
            
            
            595,996
            
            
            
            (343,950
            )Other
      comprehensive income:Foreign
      currency translation gain:
            
            
            2,362,380
            
            
            
            111,889
            
            
            
            113,164Comprehensive
      income (loss):
            
            
            9,102,506
            
            
            
            707,885
            
            
            
            (230,786
            )Basic
      earnings per share
            
            $
            0.13
            
            
            $
            0.01
            
            
            $
            (0.01
            )Shares
      used in thecalculation
      of basic earnings per share
            
            
            53,422,971
            
            
            
            49,478,020
            
            
            
            40,000,000Diluted
      earnings per share
            
            $
            0.13
            
            
            $
            0.01
            
            
            $
            (0.01
            )Shares
      used in thecalculation
      of diluted earnings per share
            
            
            53,422,971
            
            
            
            49,478,020
            
            
            
            40,000,000




Item
7.                      Management’s
Discussion and Analysis of Financial Condition and Results of
Operations




Cautionary
Notice Regarding Forward-Looking Statements




We make
certain forward-looking statements in this report. Statements concerning our
future operations, prospects, strategies, financial condition, future economic
performance (including growth and earnings), demand for our services, and other
statements of our plans, beliefs, or expectations, including the statements
contained under the captions “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” “Business,” as well as captions elsewhere
in this document, are forward-looking statements. In some cases these statements
are identifiable through the use of words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can”, “could,”
“may,” “should,” “will,” “would,” and similar expressions. We intend such
forward-looking statements to be covered by the safe harbor provisions contained
in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and
in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The
forward-looking statements we make are not guarantees of future performance and
are subject to various assumptions, risks, and other factors that could cause
actual results to differ materially from those suggested by these
forward-looking statements. Because such statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by the forward-looking statements. Indeed, it is likely that some of our
assumptions will prove to be incorrect. Our actual results and financial
position will vary from those projected or implied in the forward-looking
statements and the variances may be material. You are cautioned not to place
undue reliance on such forward-looking statements. These risks and
uncertainties, together with the other risks described from time to time in
reports and documents that we file with the SEC should be considered in
evaluating forward-looking statements.




14




The
nature of our business makes predicting the future trends of our revenues,
expenses, and net income difficult. Thus, our ability to predict results or the
actual effect of our future plans or strategies is inherently uncertain. The
risks and uncertainties involved in our business could affect the matters
referred to in any forward-looking statements and it is possible that our actual
results may differ materially from the anticipated results indicated in these
forward-looking statements. Important factors that could cause actual results to
differ from those in the forward-looking statements include, without limitation,
the factors discussed above in the section entitled “Risk Factors” and the
following:




•
            
            the
      effect of political, economic, and market conditions and geopolitical
      events;•
            
            legislative
      and regulatory changes that affect our business;•
            
            the
      availability of funds and working capital;•
            
            the
      actions and initiatives of current and potential
    competitors;•
            
            investor
      sentiment; and•
            
            our
      reputation.




We do not
undertake any responsibility to publicly release any revisions to these
forward-looking statements to take into account events or circumstances that
occur after the date of this report. Additionally, we do not undertake any
responsibility to update you on the occurrence of any unanticipated events which
may cause actual results to differ from those expressed or implied by any
forward-looking statements




The
following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes thereto as filed with
the SEC and other financial information contained elsewhere in this Form
10-K.




Overview




Currently,
our only operations are conducted through DLXY, which engages in the business of
manufacturing and selling cobaltosic oxide products. These products are
primarily manufactured, marketed, and sold in the People’s Republic of
China.




According
to the Battery Industry Association of China, DLXY is the second largest
non-governmental manufacturer of hi-tech cobalt salt products in Asia based on
tons produced. DLXY’s products and processing capabilities include the
production of cobalt ore, cobalt carbonate, nanometer-sized cobaltosic oxide and
high-crystalline spherical lithium cobalt oxide which is used lithium batteries.
In April 2006,  DLXY commenced production and quickly amassed sales of
over $1.5 million.








15






Results
of Operations




Comparison of
Year Ended May 31, 2008 to Year Ended May 31, 2007




Revenue




Revenue
for the year ended May 31, 2008 totaled $25,294,221 compared to $8,275,066 for
the year ended May 31, 2007, an increase of $17,019,155 or 206%. The increase
resulted from new sources of sales channels and sales to our new
customers.




Cost of Revenue – Third
Parties




Cost of
revenue – third parties for the year ended May 31, 2008 totaled $15,664,692
compared to $4,758,023 for the year ended May 31, 2007, an increase of
$10,906,669 or 229%.  The increase resulted directly from increased
production of our products which is in tandem with increased demand for
them.




Cost of Revenue – Related
Parties




Cost of
revenue – related parties for the year ended May 31, 2008 totaled $0 compared to
$117,055 for the year ended May 31, 2007, a decrease of $117,055 or 100%. The
decrease resulted from the change of vendors to independent
suppliers.




Gross
Profit




Gross profit for the year ended May 31,
2008 was $9,629,529, an increase of $6,229,541 or 183% from $3,399,988 for the
year ended May 31, 2007. The increase in gross profit was primarily due to
revenue generated by increased customer demand and production, and consequently
increased sales of our products.




General and Administrative
Expense




General
and administrative expense for the year ended May 31, 2008 totaled $875,680
compared to $917,057 for the year ended May 31, 2007, a decrease of $41,377 or
4.5%. The decrease resulted from the stricter expense control.





Allowance for doubtful
accounts




(Recovery
of) Allowance for doubtful accounts for the year ended May 31, 2008 totaled
($806,400) compared to $777,831 for the year ended May 31, 2007, a decrease of
$1,584,231 or 204%. The decrease resulted from recovery from the allowance for
doubtful accounts as the doubtful accounts aged over 1 year were subsequently
collected from a customer in July 2007.




Sales and
marketing




Sales and marketing expense for the
year ended May 31, 2008 totaled $33,400 compared to $2,645 for the year ended
May 31, 2007, an increase of $30,755 or 1163%. The increase resulted from
addition in sales channels.




Research and Development
Expense




Research
and development expense for the year ended May 31, 2008 totaled $87,607 compared
to $89,166 for the year ended May 31, 2007, a decrease of $1,559 or 1.7%. The
decrease resulted from the stricter control over our expenses.






16






Depreciation
Expense




Depreciation
expense for the year ended May 31, 2008 totaled $236,097 compared to $213,104
for the year ended May 31, 2007, an increase of $22,993 or 11%. The increase
resulted from the addition of plant and equipment that were purchased during the
year.




Income From
Operations




Income
from operations for the year ended May 31, 2008 totaled $9,203,145 compared to
income from operation of $1,400,185 for the year ended May 31, 2007, an increase
of $7,802,960 or 557%.  The increase resulted primarily from the
increased customer demand for our products and consequently, increased
sales.




Other
Income




Interest income for the year ended May
31, 2008 was $27,800. The Company had no interest income for the year ended
May 31, 2007. The increase resulted primarily from interest income derived from
cash in our bank accounts.




Income
Taxes




Provision for income tax expenses was
$2,490,819 for the year ended May 31, 2008, an increase of $1,686,630 or 210% as
compared to $804,189 for the year ended May 31, 2007.  The increase
resulted primarily from the increase in our revenue due to increased
sales.




Foreign Currency Translation
Gain




The foreign currency translation gain
for the year ended May 31, 2008 was $2,362,380, an increase of $2,250,491 or
2011% as compared to $111,889 for the year ended May 31, 2007.  The
increase resulted from the increase in value of the Renminbiagainst the U.S.
dollar.  This updated Renminbivaluation of DLXY’s
assets and liabilities resulted in this gain.




Net
Income




Net income for the year ended May 31,
2008 was $6,740,126, an increase of $6,144,130 or 1031% as compared to
$595,996 for the year ended May 31, 2007.




LIQUIDITY
AND CAPITAL RESOURCES




Cash and Cash
Equivalent





Our cash and cash equivalent were
$813,163 at the beginning of the year and increased to $3,879,114 by the end of
the year ended May 31, 2008, an increase of $3,065,951 or 377%. This net change
in cash and cash equivalents represented an increase of 406% or $2,459,716 from
$606,235 for the year ended May 31, 2007.






17




Net cash provided by
operating activities




During
the years ended May 31, 2008 and 2007, net cash provided by (used for) operating
activities was 5,151,693 and ($730,162), respectively, an increase of
$5,881,855.  This increase was due primarily to the growth in sales
revenue with the decrease in accounts receivable by $4,504,302, and the increase
in other payable and accrued liabilities by $19,734, the increase in income tax
payable by $86,788 and the increase in accounts payable by $75,948, partially
offset by the decrease in value-added tax payable by $661,467, the decrease in
customer deposits by $713,415, and the decrease in inventory by $4,448,436 for
the year ended May 31, 2008.





Net cash used in investing
activities





Net cash used for investing activities
was $2,471,927 and $72,764, for the years ended May 31, 2008 and 2007,
respectively, an increase of $2,399,163 or 3297%.The increase was primarily
attributable to the purchase of equipment.





Net cash used in financial
activities





Net cash received from financing
activities was $0 and $1,297,272, for the years ended May 31, 2008 and 2007,
respectively, a decrease of $1,297,272 or 100%. The decrease was primarily
attributable to t reduced advances from the related party for the year ended May
31, 2008.





Effect of exchanges rates
changes on cash and cash equivalent




Effect of exchanges rate changes on
cash and cash equivalentresulted in
$386,185 for the year ended May 31, 2008, an increase of $274,296 or 245%
compared to $111,889 for the year ended May 31, 2007.




Trends




Currently, many companies in the cobalt
product industry are looking to directly own cobalt producing mines which will
provide direct access and supply to cobalt ore, the primary raw material in the
cobalt product industry. In June 2007, we acquired certain rights to a cobalt
mine in Africa. This acquisition will help us avoid export limitations imposed
by the Congo, reduce freight expenses, and help ensure a stable supply of cobalt
ore.




We are not aware of any trends, events
or uncertainties that have or are reasonably likely to have a material impact on
our short-term or long-term liquidity.





Inflation




We believe that inflation has not had a
material or significant impact on our revenue or our results of
operations.




Material Commitments for
Capital Expenditures




Currently, we own the prospecting and
mining rights of a cobalt mine in Congo. We plan to start the construction of a
processing plant in Congo in the second quarter of the 2009 fiscal year. We
anticipate that the construction of the plant will cost approximately $2,000,000
to $3,000,000.




General




We believe that we currently have
sufficient income generated from our operations to meet our operating and/or
capital needs.




However, we will continue to evaluate
various sources of capital to meet our growth requirements. Such sources will
include debt financings, the issuance of equity securities, and entrance into
other financing arrangements. There can be no assurance, however, that any of
the contemplated financing arrangements described herein will be available and,
if available, can be obtained on terms favorable to us.




Contractual Obligations and
Commitments




We leased an office premise under a
non-cancelable operating lease agreement for a period of ten years, due July 25,
2010. The annual lease payment is $6,802.




On June 9, 2007, our subsidiary, DLXY
entered into an African Mining Project Contract of Cooperation (the “Purchase
Agreement”) with Shengbao Group and South African Shengbao Mining Enterprises
(“Shengbao”). Pursuant to the Purchase Agreement, DLXY is obliged to purchase
the prospecting and mining rights of a cobalt ore mine for a purchase price of
$2 million over a term of 15 years.  As of May 31, 2008, DLXY had the
capital commitment of $2 million in the purchase of the prospecting and mining
rights which was contracted for but not provided in the financial
statements.






18




Off
Balance Sheet Arrangements




None.





Critical
accounting policies and estimates





Revenue
recognition





Revenue
is recognized when products are delivered to customers. Provisions for discounts
and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded.
In instances where products are configured to customer requirements, revenue is
recorded upon the successful completion of the Company’s final test procedures
and the customer’s acceptance.





Our
subsidiary, DLXY is subject to valued-added tax (“VAT”) which is levied on the
majority of the products of DLXY at the rate of 17% on the invoiced value of
sales sold in the People’s Republic of China. Output VAT is borne by customers
in addition to the invoiced value of sales and input VAT is borne by the Company
in addition to the invoiced value of purchases to the extent not refunded for
export sales.





Account receivables and
allowance for doubtful accounts





Accounts
receivable are recorded at the invoiced amount and do not bear interest. We
extend unsecured credit to its customers in the ordinary course of business but
mitigates the associated risks by performing credit checks and actively pursuing
past due accounts. An allowance for doubtful accounts is established and
determined based on managements’ assessment of known requirements, aging of
receivables, payment history, the customers’ current credit worthiness and the
economic environment. We write off accounts receivable when they become
uncollectible, and payments subsequently received on such receivables are
credited to the allowance for doubtful accounts.




New
Financial Accounting Pronouncements




In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, "Fair Value
Measurements" ("SFAS No. 157"). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles ("GAAP"), and expands disclosures about fair value
measurements. This statement applies under other accounting pronouncements that
require or permit fair value measurement where the FASB has previously
determined that under those pronouncements fair value is the appropriate
measurement. This statement does not require any new fair value measurements but
may require companies to change current practice. This statement is effective
for those fiscal years beginning after November 15, 2007 and to the interim
periods within those fiscal years. We believe that SFAS No. 157 should not have
a material impact on the consolidated financial position or results of
operations.





In
September 2006, the FASB issued SFAS No. 158, ‘‘Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R)’’("SFAS No. 158"). This statement improves
financial reporting by requiring an employer to recognize the overfunded or
underfunded status of a defined benefit postretirement plan (other than a
multi-employer plan) as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in which the
changes occur through comprehensive income of a business entity or changes in
unrestricted net assets for a not-for-profit organization. This statement also
improves financial reporting by requiring an employer to measure the funded
status of a plan as of the date of its year-end statement of financial position,
with limited exceptions. We do not believe that this new pronouncement will have
a material impact on our consolidated financial statements.






19





In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159 permits
entities to choose to measure, on an item-by-item basis, specified financial
instruments and certain other items at fair value. Unrealized gains and losses
on items for which the fair value option has been elected are required to be
reported in earnings at each reporting date. SFAS No. 159 is effective for
fiscal years beginning after November 15, 2007, the provisions of which are
required to be applied prospectively. We believe that SFAS 159 should not have a
material impact on the consolidated financial position or results of
operations.





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007),"Business Combinations"("SFAS No. 141R"). SFAS No. 141R will change the accounting for business
combinations. Under SFAS No. 141R, an acquiring entity will be required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS No. 141R will
change the accounting treatment and disclosure for certain specific items in a
business combination. SFAS No. 141R applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008.
Accordingly, any business combinations the Company engages in will be recorded
and disclosed following existing GAAP until January 1, 2009. We expect SFAS No.
141R will have an impact on accounting for business combinations once adopted
but the effect is dependent upon acquisitions at that time. We are still
assessing the impact of this pronouncement.





In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No.
160" ("SFAS No. 160"). SFAS No. 160 establishes new accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years
beginning on or after December 15, 2008. We believe that SFAS No. 160 should not
have a material impact on the consolidated financial position or results of
operations.





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities"("SFAS No. 161"). SFAS No. 161
requires companies with derivative instruments to disclose information that
should enable financial-statement users to understand how and why a company uses
derivative instruments, how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" and how derivative instruments and related
hedged items affect a company's financial position, financial performance and
cash flows. SFAS No. 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The adoption of
this statement is not expected to have a material effect on the our future
financial position or results of operations.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” ("SFAS No. 162").
This statement identifies the sources of accounting principles and the framework
for selecting the principles to be used in the preparation of financial
statements in conformity with generally accepted accounting principles (GAAP) in
the United States. This statement is effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”. We do not
expect the adoption of SFAS No. 162 to have a material effect on our
financial condition or results of operations.







Item
7A.      Quantitative and Qualitative Disclosures
About Market Risk.





Foreign
Exchange Risk





While our
reporting currency is the US dollar, all of our consolidated revenue,
consolidated costs and expenses are denominated in RMB except for some overseas
related revenues and expenses. All of our assets are denominated in RMB except
for some cash and cash equivalents and accounts receivables. As a result, we are
exposed to foreign exchange risk as our revenue and results of operations may be
affected by fluctuations in the exchange rate between the US dollar and RMB. If
the RMB depreciates against the US dollar, the value of our RMB revenue,
earnings and assets as expressed in our US dollar financial statements will
decline. We have not entered into any hedging transactions in an effort to
reduce our exposure to foreign exchange risk.








20





Inflation





Inflationary
factors such as increases in the cost of our product and overhead costs may
adversely affect our operating results. Although we do not believe that
inflation has had a material impact on our financial position or results of
operations to date, a high rate of inflation in the future may have an adverse
effect on our ability to maintain current levels of gross margin and selling and
distribution, general and administrative expenses as a percentage of net revenue
if the selling prices of our products do not increase to cope with
these increased costs.




Item
8.         Financial Statements and
Supplementary Data.




Our
financial statements for the year ended May 31, 2008 are attached hereto,
beginning F-1 through F-20.





Item
9.         Changes in and
Disagreements With Accountants on Accounting and Financial
Disclosure.




None
of the principal accountant’s reports on the financial statements for either of
the past two years contains an adverse opinion or disclaimer of opinion, or was
modified as to uncertainty, audit scope or accounting principles. There were no
disagreements with Zhong Yi (Hong Kong) C.P.A. Company Ltd. on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.




Item
9A.      Controls and Procedures




(a)           Evaluation of disclosure controls and
procedures.




The term “disclosure controls and
procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other
procedures of a company that are designed to ensure that information required to
be disclosed by a company in the reports that it files under the Securities
Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and
reported within required time periods. The Company’s management, with the
participation of the Chief Executive Officer and the Chief Financial Officer,
has evaluated the effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by this annual report (the
“Evaluation Date”). Based on that evaluation, the Company’s Chief Executive
Officer and Chief Financial Officer have concluded that, as of the Evaluation
Date, such controls and procedures were effective.





(b)           Changes in internal
controls.





The term “internal control over
financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a
company that is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. The Company’s management, with the participation of the Chief
Executive Officer and Chief Financial Officer, has evaluated any changes in the
Company’s internal control over financial reporting that occurred during the
fourth quarter of the year covered by this annual report, and they have
concluded that there was no change to the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.









21






(c)           Management’s Report on Internal
Control over Financial Reporting.
 
 Our management, with the participation
of our Certifying Officers, is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Exchange Act Rule 13a-15(f). Internal control over financial reporting cannot
provide absolute assurance of achieving financial reporting objectives because
of its inherent limitations. Internal control over financial reporting is a
process that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control over
financial reporting also can be circumvented by collusion or improper management
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, the risk. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate. Under the supervision and with the participation of our management,
with the participation of our Certifying Officers, we have conducted an
evaluation of the effectiveness of our internal control over
financial reporting as of May 31, 2008, based upon the framework in Internal
Control―― Integrated Frameworkissued bythe Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, management
has concluded that our internal control over financial reporting was effective
as of May 31, 2008. This Annual Report on Form 10-K does not include an
attestation report of our registered public accounting firm regarding internal
control over financial reporting. Our management’s report was not subject to
attestation by our registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit us to provide only
management’s report in this Annual Report.




Item
9B.      Other Information.





None.








22








PART
III





Item
10.       Directors, Executive Officers and
Corporate Governance




(a)               Directors
and Executive Officers




Each
director is elected for a one year term until the next annual meeting of
shareholders and their successors are elected and qualified.




The
following is a list of the names and ages of our directors and executive
officers:




Name
            
            Age
            
            Position
            Date of IncumbencyMr.
      Wang, Bin
            
            
            43
            
            President,
      Chief Executive Officer, and Chairman of the Board
            September
      30, 2006Mr.
      Wang, Yu Long
            
            
            44
            
            Vice
      President
            October
      30, 2006Ms.
      Liu, Ming Fen
            
            
            56
            
            Chief
      Financial Officer
            September
      30, 2006Ms.
      Li, Zhi
            
            
            37
            
            Director
            September
      30, 2006Ms.
      Wang, Jiao
            
            
            24
            
            Director
            September
      30, 2006Mr.
      Sui, Fudong
            
            
            53
            
            Director
            August
      17, 2007Mr.
      Li, Gang
            
            
            29
            
            Director
            August
      17, 2007Ms.
      Liu, Yefei
            
            
            31
            
            Director
            August
      17, 2007Mr.
      Ren, Fuqiu
            
            
            43
            
            Director
            August
      17, 2007




Mr. Bin Wangserves as our
President, Chief Executive Officer, and the Chairman of the Board. Since 2000,
Mr. Wang has served as the President of DLXY. He received his Bachelor degree
from Harbin University of Science and Technology with a major in Business
Management. Mr. Wang is an economist with a strong background in business
management. He is the founder of Dalian Xinyang High-Tech Development Co., Ltd.,
our majority owned subsidiary, which is dedicated to industrial investment, high
technology, utilities, real estate, and education.




Mr. Yu-long Wang serves as our
Vice President. Since 1999, Mr. Wang has served in various capacities at DLXY.
In 2002, Mr. Wang began has serving as the Vice President where he was in charge
of production, Research and Development, and sales management. From 2000 to
2002, he acted as the assistant to the Chairman and from 1999 to 2000, he was
the director of marketing. He obtained his bachelors degree in Business
Administration from Heilongjiang University.




Ms. Ming Fen Liu serves as our
Chief Financial Officer. Since 2004, Ms. Liu has been the Chief Financial
Officer of DLXY. Prior to that, in 2003, Ms Liu was the financial manager of Sun
Group Investment Company. From 2001 and 2002, Ms. Liu served as the financial
supervisor for the Dalian Chemical Industry Group, a chemical fertilizer plant.
She is a Certified Public Accountant in China and earned her bachelors degree in
finance from Dongbei Finance & Economics University. Ms. Liu has experience
in financial regulations, company management, and raising capital.






23










Ms. Zhi Li serves as a
Director of our Board. Since 2000, Ms. Li has also been a Director of DLXY.
Prior to that, she worked in the accounting department of a state-owned company.
She is a Certified Public Accountant in China and graduated from the
Heilongjiang Commerce College, where she majored in Accounting.




Ms.
Li is married to Mr. Wang, our President, Chief Executive Officer, and Chairman
of the Board.




Ms. Jiao Wang serves as a
Director of our Board. Since 2003, Ms. Wang has also been a Director of DLXY.
Ms. Wang graduated from Dongbei Finance & Economics University, where she
majored in Administrative Management. Ms. Wang has a background in marketing
strategy and management.




Ms.
Wang is the daughter of Mr. Wang Bin and Ms Li Zhi.




Mr. Fudong Sui has served as a
Vice President at Dalian Household Things Co., Ltd. which since February 2006
produces consumer products such as detergent and air fresheners. From October
1998 to December 2005, he was the Administrative President at Liaoning North
Group, which participates in the chemical industry. Mr. Wang has received
undergraduate and graduate degrees in Management Administration from the
Heilongjiang University.




Mr. Gang Li has served as an
Investment Analyst at Heilongjiang Chenneng Investment Management Co., Ltd.,
specializing in the energy industry since August 2005. Mr. Li received a master
degree in finance from Liaoning University and attached Shanxi Finance and
Economy College for his undergraduate education.




Ms. Yefei Liu has served as an
Accounting Supervisor in the Dalian Branch of the Liaoning Decoration
Engineering Corporation since September 2006 and as a staff accountant from
January 2004 to September 2006. From August 2001 to November 2003 Ms. Liu served
as a treasurer at the Dalian Keyang Shoe Co., Ltd. Ms. Liu received Bachelor of
Accounting from the Shenyang Agricultural University. She is also a public
accountant certified in the People’s Republic of China.




Mr. Ren Fuqiu has served as a
Manager in the Overseas Investment Section of Shanghai Anhemeina Investment Co.,
Ltd. since September 2005, as a Manager in the Financial Department from April
1996 to June 2002, and as a Director in the Financial Department from August
1990 to March 1996. Mr. Ren received Bachelor in Finance from Dongbei University
of Finance and Economics, and Master in International Finance from Dongbei
University of Finance and Economics.




(b)               Audit Committee Financial
Expert




Our
Board of Directors has determined that Mr. Ren Fuqiu qualifies as an independent
financial expert serving on its audit committee. This qualification is based
upon his education and experience, more fully described above in his
biography.




(c)               Section 16 (a)
Compliance




Section
16 (a) of the Exchange Act requires our directors, executive officers and
holders of more than 10% of our common stock to file with the SEC initial
reports of ownership and reports of changes in ownership of our common stock and
other of our equity securities.




To
our knowledge, based solely on review of the Forms 3 and 4 furnished to us
during the year ended May 31, 2008, our acting officers, directors and holders
of more than 10% of its outstanding common stock complied with all Section 16(a)
filing requirements. We were not furnished any Forms 5 with respect to fiscal
2006.








24






(d)           Code of Ethics




We
have adopted a code of ethics that applies to our principal chief executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions (the “Code of Ethics”). The
Code of Ethics is designed to deter wrongdoing, and to promote the
following:




•
            
            Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships.•
            
            Full,
      fair, accurate, timely and understandable disclosure in reports and
      documents that a small business issuer files with, or submits to, the
      Commission and in other public communications made by the small business
      issuer.•
            
            Compliance
      with applicable governmental laws, rules and
  regulations.•
            
            The
      prompt internal reporting of violations of the code to an appropriate
      person or persons identified in the code.•
            
            Accountability
      for adherence to the code.





(e)               Nomination
Procedures





There were no material changes to the
procedures by which security holders may recommend nominees to our board of
directors since filing the proxy statement on Form 14A with the SEC on August 1,
2008.





Item
11.                                Executive
Compensation.





The following table sets forth all
compensation awarded to, earned by, or paid by China Sun High-Tech Co. and its
subsidiaries to Wang Bin , its Chief Executive Officer, and Ms. Ming Fen Liu,
its Chief Financial Officer for services rendered in all capacities to the
Company during the years ended December 31, 2008 and 2007.  There were no
other executive officers whose total salary and bonus for the fiscal year ended
May 31, 2008 exceeded $100,000.





Name
      and Principal Position
            Year
            
            Salary
              (cash
      or non-cash)
              ($)
            
            
            Bonus
      (cash or non-cash)
              ($)
            
            
            Stock-Awards
              ($)
            
            
            Option
      Awards
              ($)
            
            
            Non-Equity
      Incentive Plan Compensation
              ($)
            
            
            Non-Qualified
      Deferred Compensation Earnings
              ($)
            
            
            All
      Other Compensation
              ($)
            
            
            Total
              ($)Wang
      Bin
            2008
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --(Chief
              Executive  Officer)
            2007
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Ming
      Fen Liu
            2008
            
            
            24,600
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            24,600(Chief
      Financial Officer)
            2007
            
            
            23,000
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            23,000




Employment
Agreements




DLXY entered into
employment agreement with Ms. Ming Fin Liu on January 15, 2004. Pursuant to such
agreements, Ms. Liu was hired as Chief Financial Officer and Mr. Wang was hired
as Chief Executive Officer. The term of their employment is 5 years and
will expire on January 15, 2009. Their monthly compensation is RMB 15,000 each.
Mr. Bin Wang has no formal employment agreement with DLXY From February 2004,
inception, through May 31, 2008, we hae not issued any stock
options.




Compensation
Discussion and Analysis




Overview of Compensation
Program and Philosophy





The Company has three executive
officers, Wang Bin, Ming Fen Liu and Yu-long Wang. Fudong Sui, Gang Li, Yefei
Liu, and Fuqiu Ren serve as the Company’s compensation committee.






25







The Board of Director’s goal in
determining compensation levels is to adequately reward the efforts and
achievements of executive officers for the management of the Company. The
Company has no pension plan, stock option plan, non-equity incentive plan or
deferred compensation arrangement. The Company has not used a compensation
consultant in any capacity but believes that it executive officer compensation
package is comparable to similar businesses in its location of its
operations.





DLXY entered into Labor Contracts with
each of Ms. Ming Fen Liu and Mr. Yu-long Wang on January 15, 2004. Pursuant to
such agreements, Ms. Liu was hired as Chief Financial Officer and Mr. Wang was
hired as Vice President. The term of their employment is 5 years and will expire
on January 15, 2009. Their monthly compensation is RMB 15,000 each. Mr. Bin Wang
has no formal employment agreement with DLXY.





From February 2004, inception, through
May 31, 2008, we did  not issued any stock options.




Compensation of
Directors





Persons who are directors and employees
are not currently additionally compensated for their services as a director.
 Non-executive director compensation is currently set at $1,500 a year. Mr.
Bin Wang has received no compensation for his service as a director. Directors
do not receive other compensation for attending meetings.





No
written agreements were entered for the director compensation. The directors
orally agreed to be paid $1,500 a year for their services as directors. The term
of the oral agreements is one year and will be changed and approved each year at
the annual shareholder meeting.





Item
12.                      Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.







The
following table sets forth certain information regarding beneficial ownership of
our common stock as of August 15, 2008, by (i) each person who “beneficially”
owns more than 5% of all outstanding shares of common stock, (ii) each director
and the executive officer identified above in Item 10, and (iii) all directors
and the executive officers as a group. Unless otherwise indicated, the address
for each beneficial owner is c/o China Sun Group High-Tech Co., 1 Hutan Street,
Zhongshan District, Dalian, the People’s Republic of China.




Directors and Executive
      Officers:
            
            Amount
      and Nature
              of Beneficial Ownership(1)
            
            
            
            Percentage of Class(2)Bin
      Wang
            
            
            25,500,000
            (3)
            
            
            
            47.7
            %(3)Yu
      Long Wang
            
            
            260,000
            
            
            
            
            *Ming
      Fen Liu
            
            
            10,000
            
            
            
            
            *Zhi
      Li
            
            
            25,500,000
            (3)
            
            
            
            47.7
            %(3)Jiao
      Wang
            
            
            25,500,000
            (3)
            
            
            
            47.7
            %(3)Fudong
      Sui
            
            
            7,000
            
            
            
            
            *Gang
      Li
            
            
            7,000
            
            
            
            
            *Yefei
      Liu
            
            
            14,000
            
            
            
            
            *Fuqiu
      Ren
            
            
            -
            
            
            
            
            -Officers
      and directors as a group (5 persons)
            
            
            25,798,000
            
            
            
            
            48.3
            %*
      Represents
      less than 1%




(1)
            As
      used herein, a person is deemed to be the “beneficial owner” of a security
      if he or she has voting or investment power with respect to such security
      or has the right to acquire such ownership within sixty (60) days. As used
      herein, “voting power” includes the power to vote or to direct the voting
      of shares, and “investment power” includes the power to dispose or to
      direct the disposition of shares, irrespective of any economic interest
      therein.(2)
            Percentage
      ownership for a given individual or group is calculated on the basis of
      (i) the amount of outstanding shares owned as of August 15, 2008 plus,
      (ii) the number of shares that such individual or group has the right to
      acquire within sixty (60) days pursuant to options, warrants, conversion
      privileges or other rights, if applicable.(3)
            This
      includes 9,500,000 shares owned by Mr. Bin Wang, our President and Chief
      Executive Officer, 8,000,000 shares owned by Ms. Zhi Li, Mr. Bin Wang’s
      spouse, and 8,000,000 shares owned by Ms. Jiao Wang, Mr. Wang’s
      daughter.








26








Item
13.            Certain
Relationships and Related Transactions, and Director Independence.





There are
no related transactions during the reported period.








Independent Directors




Fudong Sui, Gang Li, Yefei Liu, and
Fuqiu Ren are independent directors as defined by the Nasdaq Marketplace Rules.
Wang Bin, Zhi Li, and Jiao Wang, who are not independent directors, are not
members of any Committees of our Board of Directors.







Item
14.            Principal
Accounting Fees and Services




For
the fiscal years ended May 31, 2008 and May 31, 2007, Zhong Yi (Hong Kong)
C.P.A. Company Ltd. has billed us the following fees for services rendered in
connection with the audit and other services in respect to these
years:




2008
            
            
            2007Audit
      Fees (1)
            
            $
            67,500
            
            
            $
            39,000Tax
      Fees
            
            
            -
            
            
            
            -All
      Other Fees
            
            
            -
            
            
            
            -Total
            
            $
            67,500
            
            
            $
            39,000








(1)
            Services
      rendered for the audit of our annual financial statements included in our
      report on Form 10-KSB / Form 10K and the reviews of the financial
      statements included in our reports on Form 10-QSB / Form 10-Q filed with
      the SEC.





The fees
incurred in 2007 were not approved by our Audit Committee. We had only
established an Audit Committee after the end of fiscal 2007, on August 17,
2007.




However
the fees incurred in 2008 were approved by our Audit Committee.  The
Audit Committee currently does not have any pre-approval policies.






27






PART
IV





Item
15.                                Exhibits,
Financial Statements Schedules





Exhibit
              Number
            
            Exhibit
      Description
            Footnote
      Reference3.1
            
            Articles
      of Incorporation of Capital Resource Funding, Inc. filed on February 6,
      2004
            (1)3.2
            
            Amendment
      to the Articles of Incorporation of Capital Resource Funding, Inc. filed
      March 21, 2005.
            (2)3.3
            
            Bylaws
      of Capital Resource Funding, Inc.
            (1)10.1
            
            Consulting
      Agreement between Capital Resource Funding, Inc. and Greentree Financial
      Group, Inc.
            (1)10.2
            
            Promissory
      Note with Greentree Financial Group, Inc.
            (1)10.3
            
            Letter
      of Intent between Capital Resource Funding, Inc. and HairMax
      International, Inc.
            (1)10.4
            
            Plan
      of Exchange dated September 6, 2006 by and among Capital Resource Funding,
      Inc., Dalian Xinyang High-Tech
      Development Co. Ltd., the shareholders of Sun Group, and David
      Koran.
            (4)10.5
            
            Escrow
      Agreement by and among Capital Resource Funding, Inc., David Koran, Dalian
      Xinyang High-Tech Development Co., Ltd., the Shareholders of Dalian
      Xinyang High-Tech Development
      Co., Ltd., and Greentree Financial Group,
    Inc.
            (3)10.6
            
            Lock-up
      Agreement with David Koran dated September 7, 2006.
            (3)10.7
            
            Lock-up
      Agreement with Laura Koran dated September 7, 2006.
            (3)10.8
            
            Lock-up
      Agreement with Richard Koran dated September 7, 2006.
            (3)10.9
            
            Labor Contract between Capital
      Resource Funding, Inc. and Ming Fen Liu dated January 15,
      2004
            (6)10.10
            
            Labor
      Contract between Capital Resource Funding, Inc, and Yu-long Wang dated
      January 15, 200414
            
            Code
      of Ethics
            (5)23.1
            
            Consent
      of Zhong Yi (Hong Kong) C.P.A. Company Ltd.
            *31.1
            
            Rule 13a 14a/15d 14(a)
      Certification.
            *31.2
            
            Rule 13a 14a/15d 14(a)
      Certification.
            *32
            
            Certification
      of principal executive officer and principal financial
officer
              pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.
            *





(1)
            
            Incorporated
      by reference from the Registration Statement on Form SB-2 of Capital
      Resource Funding, Inc. filed with the Securities and Exchange Commission
      on August 16, 2004. File no. 333-118259.(2)
            
            Incorporated
      by reference from the Amendment No. 4 to the Registration Statement on
      Form SB-2/A of Capital Resource Funding, Inc. filed with the Securities
      and Exchange Commission on March 15, 2005. File no.
      333-118259.(3)
            
            Incorporated
      by reference from the Current Report on Form 8-K of Capital Resource
      Funding, Inc. filed with the Securities and Exchange Commission on March
      6, 2007.(4)
            
            Incorporated
      by reference from the Current Report on Form 8-K of Capital Resource
      Funding, Inc. filed with the Securities and Exchange Commission on
      September 7, 2006.(5)
            
            Incorporated
      by reference from the Annual Report on Form 10-KSB of Capital Resource
      Funding, Inc. filed with the Securities and Exchange Commission on August
      4, 2006.(6)
            
            Incorporated
      by reference from the Annual Report on Form 10-KSB of China Sun High-Tech
      Co.  filed with the Securities and Exchange Commission
      on  September 6, 2007.








*
            
            Filed
      herewith.






28











CHINA
      SUN GROUP HIGH-TECH CO.
              
              Consolidated
      Financial Statements
              For
      The Years Ended May 31, 2008 And 2007
              
              (With
      Report of Independent Registered Public Accounting Firm
      Thereon)



























































ZHONG
YI (HONG KONG) C.P.A. COMPANY LIMITED





Certified
Public Accountants




























CHINA
SUN GROUP HIGH-TECH CO.





INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS








PageReport
      of Independent Registered Public Accounting Firm
            
            F-2Consolidated
      Balance Sheets
            
            F-3Consolidated
      Statements of Operations And Comprehensive Income
            
            F-4Consolidated
      Statements of Cash Flows
            
            F-5Consolidated
      Statements of Stockholders’ Equity
            
            F-6Notes
      to Consolidated Financial Statement
            
            F-7
      to F-20











F-1
















REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





The
Board of Directors and Stockholders of


China
Sun Group High-Tech Co.





We have
audited the accompanying consolidated balance sheets of China Sun Group
High-Tech Co. and its subsidiaries (“the Company”) as of May 31, 2008 and 2007
and the related consolidated statements of operations and comprehensive income,
cash flows and stockholders’ equity for the years ended May 31, 2008 and 2007.
The 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 audits 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 audits include 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 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 consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of May 31,
2008 and 2007 and the results of operations and cash flows for the years ended
May 31, 2008 and 2007 and in conformity with accounting principles generally
accepted in the United States of America.








/s/ Zhong Yi (Hong Kong)
C.P.A. Company Limited


Zhong Yi
(Hong Kong) C.P.A. Company Limited


Certified
Public Accountants








Hong
Kong, China


August
20, 2008






F-2






CHINA
SUN GROUP HIGH-TECH CO.


CONSOLIDATED
BALANCE SHEETS


AS
OF MAY 31, 2008 AND 2007


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)





As
      of May 31,2008
            
            
            2007ASSETSCurrent
      assets:Cash
      and cash equivalents
            
            $
            3,879,114
            
            
            $
            813,163Accounts
      receivable, net
            
            
            1,302,176
            
            
            
            4,754,929Inventories
            
            
            4,705,189
            
            
            
            1,932Value-added
      tax receivable
            
            
            447,346
            
            
            
            -Prepayments
      and other receivables
            
            
            73,235
            
            
            
            -Total
      current assets
            
            
            10,407,060
            
            
            
            5,570,024Property,
      plant and equipment, net
            
            
            14,598,684
            
            
            
            10,774,216TOTAL
      ASSETS
            
            $
            25,005,744
            
            
            $
            16,344,240LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable, trade
            
            $
            733,490
            
            
            $
            595,941Customer
      deposits
            
            
            338
            
            
            
            688,448Value-added
      tax payable
            
            
            -
            
            
            
            229,897Income
      tax payable
            
            
            980,027
            
            
            
            810,413Other
      payables and accrued liabilities
            
            
            448,556
            
            
            
            278,714Total
      liabilities
            
            
            2,162,411
            
            
            
            2,603,413Commitment
      and contingenciesStockholders’
      equity:Convertible
      preferred stock; par value $0.001; 2,000,000 shares authorized; none of
      shares issued and outstanding as of May 31, 2008 and 2007
            
            
            -
            
            
            
            -Common
      stock, $0.001 par value; 100,000,000 shares authorized; 53,422,971 shares
      and 53,422,971 shares issued and outstanding as of May 31, 2008 and
      2007
            
            
            53,423
            
            
            
            53,423Additional
      paid-in capital
            
            
            9,585,204
            
            
            
            9,585,204Accumulated
      other comprehensive income
            
            
            2,588,188
            
            
            
            225,808Statutory
      reserve
            
            
            899,819
            
            
            
            -Retained
      earnings
            
            
            9,716,699
            
            
            
            3,876,392Total
      stockholders’ equity
            
            
            22,843,333
            
            
            
            13,740,827TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            25,005,744
            
            
            $
            16,344,240














See
accompanying notes to consolidated financial statements.






F-3






CHINA
SUN GROUP HIGH-TECH CO.


CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME


FOR
THE YEARS ENDED MAY 31, 2008 AND 2007


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)





Years
      ended May 31,2008
            
            
            2007REVENUES,
      NET
            
            $
            25,294,221
            
            
            $
            8,275,066Cost
      of revenue – third parties
            
            
            15,664,692
            
            
            
            4,758,023Cost
      of revenue – a related party
            
            
            -
            
            
            
            117,055Total cost of revenue(inclusive of depreciation totaled as $187,684 and
      $152,242)
            
            
            15,664,692
            
            
            
            4,875,078GROSS
      PROFIT
            
            
            9,629,529
            
            
            
            3,399,988Operating
      expenses:Sales
      and marketing
            
            
            33,400
            
            
            
            2,645Research
      and development
            
            
            87,607
            
            
            
            89,166Depreciation
            
            
            236,097
            
            
            
            213,104(Recovery
      of) allowance for doubtful accounts
            
            
            (806,400
            )
            
            
            777,831General
      and administrative
            
            
            875,680
            
            
            
            917,057Total
      operating expenses
            
            
            426,384
            
            
            
            1,999,803INCOME
      FROM OPERATIONS
            
            
            9,203,145
            
            
            
            1,400,185Other
      income:Interest
      income
            
            
            27,800
            
            
            
            -INCOME
      BEFORE INCOME TAXES
            
            
            9,230,945
            
            
            
            1,400,185Income
      tax expenses
            
            
            (2,490,819
            )
            
            
            (804,189
            )NET
      INCOME
            
            $
            6,740,126
            
            
            $
            595,996Other
      comprehensive income:-
      Foreign currency translation gain
            
            
            2,362,380
            
            
            
            111,889COMPREHENSIVE
      INCOME
            
            $
            9,102,506
            
            
            $
            707,885Net
      income per share – Basic and diluted
            
            $
            0.13
            
            
            $
            0.01Weighted
      average number of shares outstanding during the year – Basic and
      diluted
            
            
            53,422,971
            
            
            
            49,478,020













See
accompanying notes to consolidated financial statements.






F-4






CHINA
SUN GROUP HIGH-TECH CO.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE YEARS ENDED MAY 31, 2008 AND 2007


(Currency
expressed in United States Dollars (“US$”))





Years
      ended May 31,2008
            
            
            2007Cash
      flows from operating activities:Net
      income
            
            $
            6,740,126
            
            
            $
            595,996Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Depreciation
            
            
            423,781
            
            
            
            365,346Stock-based
      compensation
            
            
            -
            
            
            
            450,000(Recovery
      of) allowance for doubtful accounts
            
            
            (806,400
            )
            
            
            777,831Change
      in operating assets and liabilities:Accounts
      receivable, trade
            
            
            4,504,302
            
            
            
            (5,196,931
            )Inventories
            
            
            (4,448,436
            )
            
            
            145,211Prepayments
      and other receivables
            
            
            (69,268
            )
            
            
            12,337Accounts
      payable, trade
            
            
            75,948
            
            
            
            336,928Customer
      deposits
            
            
            (713,415
            )
            
            
            688,448Value-added
      tax payable
            
            
            (661,467
            )
            
            
            188,246Income
      tax payable
            
            
            86,788
            
            
            
            810,413Other
      payables and accrued liabilities
            
            
            19,734
            
            
            
            96,013Net
      cash provided by (used in) operating activities
            
            
            5,151,693
            
            
            
            (730,162
            )Cash
      flows from investing activities:Purchase
      of plant and equipment
            
            
            (2,471,927
            )
            
            
            (72,764
            )Net
      cash used in investing activities
            
            
            (2,471,927
            )
            
            
            (72,764
            )Cash
      flows from financing activities:Proceeds
      from amount due from a related party
            
            
            -
            
            
            
            1,297,272Net
      cash provided by financing activities
            
            
            -
            
            
            
            1,297,272Effect
      of exchange rate changes on cash and cash equivalents
            
            
            386,185
            
            
            
            111,889NET
      CHANGE IN CASH AND CASH EQUIVALENTS
            
            
            3,065,951
            
            
            
            606,235CASH
      AND CASH EQUIVALENTS, BEGINNING OF YEAR
            
            
            813,163
            
            
            
            206,928CASH
      AND CASH EQUIVALENTS, END OF YEAR
            
            $
            3,879,114
            
            
            $
            813,163SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid for income taxes
            
            $
            2,390,636
            
            
            $
            23,470Cash
      paid for interest expenses
            
            $
            -
            
            
            $
            -











See
accompanying notes to consolidated financial statements.




F-5






CHINA
SUN GROUP HIGH-TECH CO.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY


FOR
THE YEARS ENDED MAY 31, 2008 AND 2007


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)









Convertible
              preferred
      stock
            
            
            Common
      stock
            
            
            Additional
            
            
            Accumulated
              other
              comprehensive
            
            
            Statutory
            
            
            Retained
            
            
            Total
      stockholders’No.
      of share
            
            
            Amount
            
            
            No.
      of share
            
            
            Amount
            
            
            paid-in
      capital
            
            
            income
            
            
            reserve
            
            
            earnings
            
            
            equityBalance
      as of June 1, 2006
            
            
            -
            
            
            $
            -
            
            
            
            40,000,000
            
            
            $
            40,000
            
            
            $
            9,148,627
            
            
            $
            113,919
            
            
            $
            -
            
            
            $
            3,280,396
            
            
            $
            12,582,942Shares
      issued to complete reverse acquisition
            
            
            -
            
            
            
            -
            
            
            
            12,422,971
            
            
            
            12,423
            
            
            
            (12,423
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Issuance
      of common stock for services
            
            
            -
            
            
            
            -
            
            
            
            1,000,000
            
            
            
            1,000
            
            
            
            449,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            450,000Net
      income for the year
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            595,996
            
            
            
            595,996Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            111,889
            
            
            
            -
            
            
            
            -
            
            
            
            111,889Balance
      as of May 31, 2007
            
            
            -
            
            
            $
            -
            
            
            
            53,422,971
            
            
            $
            53,423
            
            
            $
            9,585,204
            
            
            $
            225,808
            
            
            $
            -
            
            
            $
            3,876,392
            
            
            $
            13,740,827Net
      income for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            6,740,126
            
            
            
            6,740,126Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,362,380
            
            
            
            -
            
            
            
            -
            
            
            
            2,362,380Transfer
      of retained earnings to statutory reserve
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            899,819
            
            
            
            (899,819
            )
            
            
            -Balance
      as of May 31, 2008
            
            
            -
            
            
            $
            -
            
            
            
            53,422,971
            
            
            $
            53,423
            
            
            $
            9,585,204
            
            
            $
            2,588,188
            
            
            $
            899,819
            
            
            $
            9,716,699
            
            
            $
            22,843,333








See
accompanying notes to consolidated financial statements.






F-6






CHINA
SUN GROUP HIGH-TECH CO.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED MAY 31, 2008 AND 2007


(Currency
expressed in United States Dollars (“US$”))








1.
            ORGANIZATION
      AND BUSINESS BACKGROUND





China Sun
Group High-Tech Co. (the “Company” or “CSGH”) was organized under the laws of
the State of North Carolina on February 2, 2004 as a subchapter S-Corporation.
On August 24, 2007, the Company was reincorporated in the State of Delaware and
changed its name from “Capital Resource Funding, Inc.” to “China Sun Group
High-Tech Co.”





The
Company, through its operating subsidiaries in the PRC, mainly engages in the
production and sales of cobaltosic oxide and lithium cobalt oxide, both anode
materials used in lithium ion rechargeable batteries in the PRC. The operation
activity was commenced from April 2006.





On
September 6, 2006, CSGH entered a stock exchange transaction with Dalian Xinyang
High-Tech Development Co., Ltd (“DLXY”), whereby 30,000,000 new shares of common
stock of CSGH pursuant to Regulation S under the Securities Act of 1933, as
amended, were issued to the owners of DLXY in exchange for 70% equity interest
in DLXY. The stock exchange transaction was effectively completed on February
28, 2007. DLXY was incorporated as a limited liability company in the
People’s Republic of China (“PRC”) on August 8, 2000 with its principal place of
business in Da Lian City, Liaoning Province, the PRC.





Also in
connection with this stock exchange transaction, CSGH and DLXY agreed that the
Company would grant to DLXY’s 30%-controlling owners with a two (2) years option
for the subscription and purchase of the additional 10,000,000 new shares of
common stock of the Company in exchange for RMB 38,100,000, equivalent to 30% of
the registered capital of DLXY.





Following
the stock exchange transaction, DLXY became an operating subsidiary of CSGH with
70% ownership interest and the former owners of DLXY then owned 93% of the
issued and outstanding shares of the Company.





On May
30, 2008, the board of directors of the Company approved the exercise of the
option under the 2006 stock exchange transaction. The Company issued 10,000,000
shares of its common stock in exchange for the remaining 30% equity interest in.
Upon the completion of this option exercise transaction, DLXY became a
wholly-owned subsidiary of the Company.





The above
two consecutive stock exchange transactions have been accounted for as a reverse
acquisition and recapitalization of the Company whereby DLXY is deemed to be the
accounting acquirer (legal acquiree) and the Company to be the accounting
acquiree (legal acquirer). The accompanying consolidated financial statements
are in substance those of DLXY, with the assets and liabilities, and revenues
and expenses, of the Company being included effective from the date of stock
exchange transaction. The Company is deemed to be a continuation of the business
of DLXY.





On August
24, 2007, the Company was authorized to change the par value of its preferred
and common stock from $0.00000005 per share to $0.001 per share. In connection
with the change in par value of preferred and common stock described above, all
prior transactions involving common stock with a par value of $0.00000005 have
been restated to reflect the new par value of $0.001 in the accompanying
financial statements.








F-7







CSGH and
its subsidiaries are hereinafter referred to as (the “Company”).








2.
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





l
            Basis
      of presentation





These
accompanying consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the United States of
America.





l
            Use
      of estimates





In
preparing these consolidated financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenues and expenses during the period reported. Actual
results may differ from these estimates.





l
            Basis
      of consolidation





The
consolidated financial statements include the financial statements of the
Company and its subsidiaries.





All
significant inter-company balances and transactions within the Company have been
eliminated upon consolidation.





l
            Cash
      and cash equivalents





Cash and
cash equivalents are carried at cost and represent cash on hand, demand deposits
placed with banks or other financial institutions and all highly liquid
investments with an original maturity of three months or less as of the purchase
date of such investments.





l
            Accounts
      receivable





Accounts
receivable are recorded at the invoiced amount and do not bear interest. The
Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated risks by performing credit checks and
actively pursuing past due accounts. An allowance for doubtful accounts is
established and determined based on managements’ assessment of known
requirements, aging of receivables, payment history, the customers’ current
credit worthiness and the economic environment. The Company writes off accounts
receivable when they become uncollectible, and payments subsequently received on
such receivables are credited to the allowancefordoubtfulaccounts. As of May
31, 2008 and 2007, an allowance for doubtful accounts of $0 and $777,831 was
provided.





l
            Inventories





Inventories are
stated at the lower of cost or market (net realizable value), cost being
determined on a weighted average method. Costs include material, labor and
manufacturing overhead costs. The Company quarterly reviews historical sales
activity to determine excess, slow moving items and potentially obsolete items
and also evaluates the impact of any anticipated changes in future demand. The
Company provides inventory allowances based on excess and obsolete inventories
determined principally by customer demand. As of May 31, 2008 and 2007, the
Company did not record an allowance for obsolete inventories, nor have there
been any write-offs.






F-8







l
            Property,
      plant and equipment, net





Property,
plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Depreciation is calculated on the
straight-line basis over the following expected useful lives from the date on
which they become fully operational and after taking into account their
estimated residual values:





Depreciable
      life
            
            Residual
      valueBuilding
            40
      years
            
            
            5%Plant
      and machinery
            5-40
      years
            
            
            5%Office
      equipment
            5
      years
            
            
            5%Motor
      vehicle
            5
      years
            
            
            5%





Expenditure
for repairs and maintenance is expensed as incurred. When assets have retired or
sold, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recognized in the results of
operations.





l
            Impairment
      of long-lived assets





Long-lived
assets primarily include property, plant and equipment. In accordance with
Statement of Financial Accounting Standards (“SFAS”) SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, all long-lived assets such as plant and
equipment held and used by the Company are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is
evaluated by a comparison of the carrying amount of assets to estimated
discounted net cash flows expected to be generated by the assets. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amounts of the assets exceed the fair value of
the assets. There has been no impairment as of May 31, 2008 and
2007.





l
            Revenue
      recognition





Revenue
is recognized when products are delivered to customers. Provisions for discounts
and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded.
In instances where products are configured to customer requirements, revenue is
recorded upon the successful completion of the Company’s final test procedures
and the customer’s acceptance.





The
Company is subject to valued-added tax (“VAT”) which is levied on the majority
of the products of DLXY at the rate of 17% on the invoiced value of sales.
Output VAT is borne by customers in addition to the invoiced value of sales and
input VAT is borne by the Company in addition to the invoiced value of purchases
to the extent not refunded for export sales.





Starting
April 1, 2006, the Company commenced the production and sales of cobaltosic
oxide in the PRC.





l
            Cost
      of revenue





Cost of
revenue primarily includes the purchase of raw materials, direct labor,
depreciation and manufacturing overhead.






F-9





l  Shipping
and handling costs





Shipping
and handling costs, associated with the distribution of products to customers,
are recorded in costs of revenue and are recognized when the related product is
shipped to the customer. The Company incurred $1,224 and $7,857 for the years
ended May 31, 2008 and 2007, respectively.





l  Research
and development costs





Research
and development costs mainly related to labor cost incurred in the development
of new products and manufacturing methods and are charged to expense as
incurred. The Company incurred $87,607 and $89,166 for the years ended May 31,
2008 and 2007, respectively.





l  Advertising
cost





The
Company expenses advertising costs as incurred in accordance with SOP 93-7 “Reporting for Advertising
Costs”. Advertising expenses of $114 and $720 were incurred for the years
ended May 31, 2008 and 2007, respectively.





l
            Comprehensive
      income





SFAS
No. 130, “Reporting Comprehensive
Income”, establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income as
defined includes all changes in equity during a period from non-owner sources.
Accumulated comprehensive income consists of changes in unrealized gains and
losses on foreign currency translation. This comprehensive income is not
included in the computation of income tax expense or benefit.





l
            Income
      taxes





The
Company also accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”,
which requires the asset and liability approach for financial accounting and
reporting for income taxes. Under this approach, deferred income taxes are
provided for the estimated future tax effects attributable to temporary
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases, and for the expected future tax
benefits from loss carry-forwards and provisions, if any. Deferred tax
assets and liabilities are measured using the enacted tax rates expected in the
years of recovery or reversal and the effect from a change in tax rates is
recognized in the consolidated statement of operations and comprehensive income
in the period of enactment. A valuation allowance is provided to reduce the
amount of deferred tax assets if it is considered more likely than not that some
portion of, or all of the deferred tax assets will not be realized.





The
Company also adopts the provisions of the Financial Accounting Standards
Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes”(“FIN
48”). FIN 48 prescribes a
recognition threshold and measurement process for recording in the financial
statements uncertain tax positions taken or expected to be taken in a tax
return. FIN 48 also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosures and
transitions. The adoption of FIN 48 did not have a significant impact on the
Company’s consolidated financial statements.








F-10





The
Company conducts major businesses in the PRC and is subject to tax in this
jurisdiction. As a result of its business activities, the Company files tax
returns that are subject to examination by the local and foreign tax
authority.





l
            Net
      income per share





The
Company calculates net income per share in accordance with SFAS No. 128,“Earnings per
Share”.  Basic income per share is computed by dividing the net
income by the weighted-average number of common shares outstanding during the
year. Diluted income per share is computed similar to basic income per share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common stock
equivalents had been issued and if the additional common shares were
dilutive.





l
            Foreign
      currencies translation





Transactions
denominated in currencies other than the functional currency are translated into
the functional currency at the exchange rates prevailing at the dates of the
transaction. Monetary assets and liabilities denominated in currencies other
than the functional currency are translated into the functional currency using
the applicable exchange rates at the balance sheet dates. The resulting exchange
differences are recorded in the consolidated statement of
operations.





The
reporting currency of the Company is the United States dollars ("US$"). The
Company's subsidiaries in the PRC maintain their books and records in its local
currency, the Renminbi Yuan ("RMB"), which is functional currency as being the
primary currency of the economic environment in which these entities
operate.





In
general, for consolidation purposes, assets and liabilities of its
subsidiaries whose functional currency is not US$ are translated into US$, in
accordance with SFAS No. 52, “Foreign Currency
Translation”, using the exchange rate on the balance sheet date. Revenues
and expenses are translated at average rates prevailing during the period. The
gains and losses resulting from translation of financial statements of foreign
subsidiaries are recorded as a separate component of accumulated other
comprehensive income within the statement of stockholders’ equity.





Translation
of amounts from RMB into US$ has been made at the following exchange rates for
the respective year:


2008
            
            
            2007Year-end
      RMB:US$ exchange rate
            
            
            6.953
            
            
            
            7.621Average
      yearly RMB:US$ exchange rate
            
            
            7.351
            
            
            
            9.851







l
            Stock-based
      compensation





The
Company adopts SFAS No. 123 (revised 2004), “Share-BasedPayment”, using the fair
value method on January 1, 2006, which requires the measurement and recognition
of compensation expense for all share-based awards made to employees and
directors, including employee stock options and shares issued through its
employee stock purchase plan, based on estimated fair values.






F-11







l
            Retirement
      plan costs





Contributions
to retirement schemes (which are defined contribution plans) are charged to
general and administrative expenses in the consolidated statements of operation
and comprehensive income as and when the related employee service is
provided.





l
            Related
      parties





Parties,
which can be a corporation or individual, are considered to be related if the
Company has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and
operating decisions. Companies are also considered to be related if they are
subject to common control or common significant influence.





l
            Segment
      reporting





SFAS No.
131 “Disclosures about
Segments of an Enterprise and Related Information” establishes standards
for reporting information about operating segments on a basis consistent with
the Company’s internal organization structure as well as information about
geographical areas, business segments and major customers in the financial
statements. The Company operates in one reportable segment in the
PRC.





l
            Fair
      value of financial instruments





The
Company values its financial instruments as required by SFAS No. 107, “Disclosures about Fair Value of
Financial Instruments”. The estimated fair value
amounts have been determined by the Company, using available market information
and appropriate valuation methodologies. The estimates presented herein are not
necessarily indicative of amounts that the Company could realize in a current
market exchange.





The
Company’s financial instruments primarily consist of cash and cash equivalents,
accounts receivable, value-added tax receivable, prepayments and other
receivables, accounts payable, customer deposits, income tax payable,
value-added tax payable, income tax payable, other payables and accrued
liabilities.





As of the
balance sheet dates, the estimated fair values of the financial instruments were
not materially different from their carrying values as presented due to the
short term maturities of these instruments and that the interest rates on the
borrowings approximate those that would have been available for loans of similar
remaining maturity and risk profile at respective year ends.





l
            Recently
      issued accounting pronouncements





The
Company has reviewed all recently issued, but not yet effective, accounting
pronouncements and do not believe the future adoption of any such pronouncements
may be expected to cause a material impact on its financial condition or the
results of its operations.





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, "Fair Value
Measurements"("SFAS No. 157"). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles ("GAAP"), and expands disclosures about fair value
measurements. This statement applies under other accounting pronouncements that
require or permit fair value measurement where the FASB has previously
determined that under those pronouncements fair value is the appropriate
measurement. This statement does not require any new fair value measurements but
may require companies to change current practice. This statement is effective
for those fiscal years beginning after November 15, 2007 and to the interim
periods within those fiscal years. The Company believes that SFAS No. 157 should
not have a material impact on the consolidated financial position or results of
operations





In
September 2006, the FASB issued SFAS No. 158, ‘‘Employers’Accounting for Defined Benefit
Pension and Other Postretirement Plans–an amendment of FASB Statements No.
87, 88, 106, and 132(R)’’ ("SFAS No. 158"). This statement improves
financial reporting by requiring an employer to recognize the overfunded or
underfunded status of a defined benefit postretirement plan (other than a
multi-employer plan) as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity or
changes in unrestricted net assets for a not-for-profit organization. This
statement also improves financial reporting by requiring an employer to measure
the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. The Company does not believe that
this new pronouncement will have a material impact on its consolidated financial
statements.






F-12







In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities"("SFAS No. 159"). SFAS No. 159 permits
entities to choose to measure, on an item-by-item basis, specified financial instruments and certain other items at fair value. Unrealized
gains and losses on items for which the fair value option has been elected are
required to be reported in earnings at each reporting date. SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007, the provisions of
which are required to be applied prospectively. The Company believes that SFAS
159 should not have a material impact on the consolidated financial position or
results of operations.





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations"("SFAS No. 141R"). SFAS
No. 141R will change the accounting for business combinations. Under SFAS No.
141R, an acquiring entity will be required to recognize all the assets acquired
and liabilities assumed in a transaction at the acquisition-date fair value with
limited exceptions. SFAS No. 141R will change the accounting treatment and
disclosure for certain specific items in a business combination. SFAS No. 141R
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on
or after December 15, 2008. Accordingly, any business combinations the Company
engages in will be recorded and disclosed following existing GAAP until January
1, 2009. The Company expects SFAS No. 141R will have an impact on accounting for
business combinations once adopted but the effect is dependent upon acquisitions
at that time. The Company is still assessing the impact of this
pronouncement.





In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements--An Amendment of ARB No. 51, or SFAS No.
160"("SFAS
No. 160"). SFAS No. 160 establishes new accounting and reporting standards for
the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after
December 15, 2008. The Company believes that SFAS No. 160 should not have a
material impact on the consolidated financial position or results of
operations.





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities"("SFAS No. 161"). SFAS No. 161
requires companies with derivative instruments to disclose information that
should enable financial-statement users to understand how and why a company uses
derivative instruments, how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" and how derivative instruments and
related hedged items affect a company's financial position, financial
performance and cash flows. SFAS No. 161 is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008.
The adoption of this statement is not expected to have a material effect on the
Company's future financial position or results of operations.








F-13





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” ("SFAS No. 162"). This statement identifies
the sources of accounting principles and the framework for selecting the
principles to be used in the preparation of financial statements in conformity
with generally accepted accounting principles (GAAP) in the United States. This
statement is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”. The Company
does not expect the adoption of SFAS No. 162 to have a material effect on
the financial condition or results of operations of the Company.








3.
            ACCOUNTS
      RECEIVABLE, NET





The
majority of the Company’s sales are on credit terms and in accordance with terms
specified in the contracts governing the relevant transactions.  The
Company evaluates the need of an allowance for doubtful accounts based on
specifically identified amounts that management believes to be uncollectible. If
actual collections experience changes, revisions to the allowance may be
required. Based upon the aforementioned criteria, the Company has determined
that no allowance for doubtful accounts is provided for the year ended May 31,
2008.





As
      of May 31,2008
            
            
            2007Accounts
      receivable, gross
            
            $
            1,302,176
            
            
            $
            5,532,760Less:
      allowance for doubtful accounts
            
            
            -
            
            
            
            (777,831
            )Accounts
      receivable, net
            
            $
            1,302,176
            
            
            $
            4,754,929





During
the year ended May 31, 2008, the Company has made a recovery from the allowance
for doubtful accounts of $777,831, relating to approximately $1,492,242
(equivalent to RMB11,300,000) which was aged over 1 year, included in the
balance as of May 31, 2007 and subsequently collected from a customer in July
2007.








4.
            INVENTORIES





Inventories
consisted of the following:


As
      of May 31,2008
            
            
            2007Raw
      materials
            
            $
            4,705,189
            
            
            $
            1,286Packaging
      material
            
            
            -
            
            
            
            646Inventories
            
            $
            4,705,189
            
            
            $
            1,932





For the
years ended May 31, 2008 and 2007, no allowance for obsolete inventories was
recorded by the Company.








F-14








5.
            PROPERTY,
      PLANT AND EQUIPMENT, NET





Property,
plant and equipment, net consisted of:


As
      of May 31,2008
            
            
            2007Building
            
            $
            6,308,373
            
            
            $
            6,308,373Plant
      and machinery
            
            
            7,358,776
            
            
            
            4,708,822Office
      equipment
            
            
            159,109
            
            
            
            155,215Motor
      vehicle
            
            
            34,816
            
            
            
            34,816Foreign
      translation difference
            
            
            1,873,731
            
            
            
            181,92215,734,805
            
            
            
            11,389,148Less:
      accumulated depreciation
            
            
            (1,029,552
            )
            
            
            (605,771
            )Less:
      foreign translation difference
            
            
            (106,569
            )
            
            
            (9,161
            )Property,
      plant and equipment, net
            
            $
            14,598,684
            
            
            $
            10,774,216





Depreciation
expense for the years ended May 31, 2008 and 2007 was $423,781 and $365,346,
respectively.








6.
            OTHER
      PAYABLES AND ACCRUED LIABILITIES





Other
payables and accrued liabilities consisted of the followings:


As
      of May 31,2008
            
            
            2007Welfare
      payable
            
            $
            216,527
            
            
            $
            136,954Government
      levy payable
            
            
            -
            
            
            
            15,071Other
      payables
            
            
            174,500
            
            
            
            80,763Rental
      payable
            
            
            57,529
            
            
            
            45,926Other
      payables and accrued liabilities
            
            $
            448,556
            
            
            $
            278,714








7.
            INCOME
      TAXES





The
Company is registered in the United States of America and its local operation
has incurred net operating losses for income tax purposes. The Company generated
substantially its net income from its foreign operation through its subsidiaries
in the PRC and has recorded income tax expense for the years ended May 31, 2008
and 2007.








F-15





The
components of income before income taxes and current taxes between the local and
foreign operations are as follows:





Years
      ended May 31,2008
            
            
            2007Local
            
            $
            (180,403
            )
            
            $
            (530,913
            )Foreign
            
            
            9,411,348
            
            
            
            1,931,098Income
      before income taxes
            
            $
            9,230,945
            
            
            $
            1,400,185Local
            
            $
            -
            
            
            
            -Foreign
            
            
            2,490,819
            
            
            
            804,189Current
      tax
            
            $
            2,490,819
            
            
            $
            804,189





United
States of America





The
Company is registered in the State of Nevada and is subjected to United States
of America tax law.





As of May
31, 2008, its local operation incurred $180,403 of net operating losses
available for federal tax purposes, which are available to offset future taxable
income. The net operating loss carry forwards begin to expire in 2029. The
Company has provided for a full valuation allowance for any future tax benefits
from the net operating loss carryforwards as the management believes it is more
likely than not that these assets will not be realized in the
future.





The
PRC





The
Company’s PRC subsidiaries are subject to the Enterprise Income Tax governed by
the Income Tax Law of the People’s Republic of China, at a statutory rate of
33%, which is comprised of a 30% national income tax and 3% local income
tax.





On March
16, 2007, the National People’s Congress approved the Corporate Income Tax Law
of the People’s Republic of China (the “New CIT Law”). The new CIT Law, among
other things, imposes a unified income tax rate of 25% for both domestic and
foreign invested enterprises with effect from January 1, 2008. The Company will
be entitled to the tax rate reduction from 33% to 25% that may impact the
carrying value of deferred tax assets as a result of new tax rate.





The
reconciliation of income tax rate to the effective income tax rate based on
income before income taxes from foreign operation for the years ended May 31,
2008 and 2007 are as follows:





Years
      ended May 31,2008
            
            
            2007Income
      before income taxes
            
            $
            9,411,348
            
            
            $
            1,931,098Income
      tax rate
            
            
            25
            %
            
            
            33
            %2,352,837
            
            
            
            637,262Add:
      items not deductible to taxes-
      (Recovery from) allowance for doubtful accounts
            
            
            (239,232
            )
            
            
            256,684-
      Effect of tax rate differential
            
            
            439,196
            
            
            
            --
      Provision for employees’ benefits
            
            
            18,375
            
            
            
            --
      Pre-operating expenses
            
            
            (80,357
            )
            
            
            (89,757
            )Income
      tax expenses
            
            $
            2,490,819
            
            
            $
            804,189








F-16





The
following table sets forth the significant components of the aggregate net
deferred tax assets of the Company as of May 31, 2008 and 2007:





As
      of May 31,2008
            
            2007Deferred
      tax assets:-
      Net operating loss carryforwards
            
            $
            211,024
            
            
            $
            175,201Less:
      valuation allowance
            
            
            (211,024
            )
            
            
            (175,201
            )Deferred
      tax assets
            
            $
            -
            
            
            $
            -





As of May
31, 2008 and 2007, valuation allowance of $211,024 and $175,201 was provided to
the deferred tax assets due to the uncertainty surrounding their
realization.




9.
            NET
      INCOME PER SHARE





Basic net
income per share is computed using the weighted average number of the ordinary
shares outstanding during the year. Diluted net income per share is computed
using the weighted average number of ordinary shares and ordinary share
equivalents outstanding during the year. Pursuant to stock exchange transactions
on February 28, 2007 and May 30, 2008, the weighted average number of common
shares issued and outstanding was adjusted to account for the effects of the
stock exchange transaction as a reverse acquisition as more fully described in
Note 1.





The
following table sets forth the computation of basic and diluted net income per
share for the years ended May 31, 2008 and 2007:





Years
      ended May 31,2008
            
            
            2007Basis
      and diluted net income per share calculationNumerator:-
      Net income in computing basic net income per share
            
            $
            6,740,126
            
            
            $
            595,996Denominator:-
      Weighted average ordinary shares outstanding
            
            
            53,422,971
            
            
            
            49,478,020Basic
      and diluted net income per share
            
            $
            0.13
            
            
            $
            0.01









F-17







10.
            CAPITAL
      TRANSACTIONS





On
February 28, 2007, the Company completed a stock exchange transaction with the
equity owners of the Company. 30,000,000 shares of common stock were issued in
exchange for 70% interest of the Company and 9,500,000 shares of common stock
were transferred from the former shareholders to the Company’s owner,
representing 93% of the Company’s outstanding common stock.





On August
24, 2007, the Company was authorized to change the par value of its preferred
and common stock from $0.00000005 per share to $0.001 per share. In connection
with the changeinparvalue of preferred and common stock described above,
all prior transactions involving common stock with a par value of $0.00000005
have been restated to reflect the new par value of $0.001 in the accompanying
financial statements.





On May
30, 2008, the Company issued 10,000,000 shares of common stock, $0.001 par value
in exchange for the 30% remaining shareholding in DLXY, pursuant to 2006 stock
exchange transaction.





As of May
31, 2008, the number of outstanding shares of the Company’s common stock was
53,422,971.








11.
            STOCK-BASED
      COMPENSATION





On
January 31, 2007, the Company issued 1,000,000 restricted shares of common stock
for business advisory services to Greentree Financial Group, Inc. The fair value
of this restricted stock issuance was determined using the fair value of the
Company’s common stock, at a market quoted price of $0.45 per share at the date
of grant. The Company recognized a stock-based compensation of $450,000 for the
year ended May 31, 2007. No such stock-based compensation was recognized for the
year ended May 31, 2008.








12.
            CHINA
      CONTRIBUTION PLAN





Under the
PRC Law, full-time employees of the subsidiaries in the PRC are entitled to
staff welfare benefits including medical care, welfare subsidies, unemployment
insurance and pension benefits through a China government-mandated
multi-employer defined contribution plan. The Company’s subsidiary in the PRC is
required to accrue for these benefits based on certain percentages of the
employees’ salaries. The total contributions made for such employee benefits
were $91,890 and $90,696 for the years ended May 31, 2008 and 2007,
respectively.








13.
            STATUTORY
      RESERVES





Under the
PRC Law the Company’s subsidiaries are required to make appropriations to the
statutory reserve based on after-tax net earnings and determined in accordance
with generally accepted accounting principles of the People’s Republic of China
(the “PRC GAAP”). Appropriation to the statutory reserve should be at least 10%
of the after-tax net income until the reserve is equal to 50% of the registered
capital. The statutory reserve is established for the purpose of providing
employee facilities and other collective benefits to the employees and is
non-distributable other than in liquidation.








F-18





For the
years ended May 31, 2008 and 2007, the Company’s PRC subsidiaries contributed
$899,819 and $0 to statutory reserve, respectively. The Company generated an
operating loss for the year ended May 31, 2007, therefore no appropriation was
required.








14.
            CONCENTRATION
      AND RISK





100% of
the Company’s assets were located in the PRC and 100% of the Company’s revenues
were generated from customers located in the PRC.





(a)         Major
customers





For the
year ended May 31, 2008, the customers who account for 10% or more of
revenue of the Company are presented as follows:





Year
      ended May 31, 2008Revenues
            
            Percentage
              of
      revenues
            
            Trade
      accounts
              ReceivableCustomer
      A
            
            $
            9,882,800
            
            39%
            
            $
            1,100,824Customer
      B
            
            
            3,596,383
            
            14%
            
            
            -Customer
      C
            
            
            3,233,339
            
            13%
            
            
            129,441Customer
      D
            
            
            2,861,287
            
            12%
            
            
            71,911Customer
      E
            
            
            2,588,322
            
            10%
            
            
            -Total:
            
            $
            22,162,131
            
            88%
            
            $
            1,302,176





For the
year ended May 31, 2007, one customer represented more than 10% of the Company’s
revenue and accounts receivable, respectively. As of May 31, 2007, this customer
accounted for 76% of revenue amounting to $6,291,923 and $4,948,670 of accounts
receivable, respectively.





(b)         Major
vendors





For the
year ended May 31, 2008, the vendors who account for 10% or more of purchases of
the Company are presented as follows:





Year
      ended May 31, 2008Purchases
            
            
            Percentage
              of
      purchases
            
            
            Accounts
              PayableVendor
      A
            
            $
            7,980,980
            
            
            
            41%
            
            
            $
            733,490Vendor
      B
            
            
            6,129,853
            
            
            
            31%
            
            
            
            -Vendor
      C
            
            
            5,560,048
            
            
            
            28%
            
            
            
            -Total:
            
            $
            19,670,881
            
            
            
            100%
            
            
            $
            733,490





For the
year ended May 31, 2007, one vendor represented more than 10% of the Company’s
purchases and accounts payable, respectively. As of May 31, 2007, this customer
accounted for 66% of purchases amounting to $3,101,816 and $0 of accounts
payable, respectively.








F-19





(c)         Credit
risk





Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts receivable. The
Company performs ongoing credit evaluations of its customers' financial
condition, but does not require collateral to support such
receivables.





(d)         Exchange
rate risk





The
reporting currency of the Company is US$, to date the majority of the revenues
and costs are denominated in RMB and a significant portion of the assets and
liabilities are denominated in RMB. As a result, the Company is exposed to
foreign exchange risk as its revenues and results of operations may be affected
by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates
against US$, the value of RMB revenues and assets as expressed in US$ financial
statements will decline. The Company does not hold any derivative or other
financial instruments that expose to substantial market risk.




15.
            COMMITMENT
      AND CONTINGENCIES





(a)         Operating
lease commitment





The
Company leases an office premise under a non-cancelable operating lease for a
term of 10 years, due July 25, 2010. Costs incurred under this operating lease
are recorded as rental expense and totaled approximately $6,802 and $6,369 for
the years ended May 31, 2008 and 2007.





Future
minimum rental payments due under a non-cancelable operating lease are as
follows:





Years
      ending May 31:202009
            
            $
            7,191202010
            
            
            7,191Total:
            
            $
            14,382





(b)         Capital
commitment





On June
9, 2007, the Company’s subsidiary, DLXY entered into an African Mining Project
Contract of Cooperation (the “Purchase Agreement”) with Shengbao Group and South
African Shengbao Mining Enterprises (“Shengbao”). Pursuant to the Purchase
Agreement, DLXY is obliged to purchase the prospecting and mining rights of a
cobalt ore mine for a purchase price of $2 million over a term of 15 years. As
of May 31, 2008, the Company had the capital commitment of $2 million in the
purchase of the prospecting and mining rights which was contracted for but not
provided in the financial statements.





F-20







Signatures






In
accordance with 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.




China
      Sun Group High-Tech Co.Dated:
      August 22, 2008
            By: /s/ Bin WangName:
      Bin WangTitle:
        Chief Executive Officer(Principal Executive
  Officer)




Pursuant to the requirements of the Securities Exchange Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.




/s/ Bin
      Wang
            
            Chief
      Executive Officer and Chairman of the Board
            August
      22, 2008Bin
      Wang
            
            (Principal
      Executive Officer)/s/ Ming
      Fen Liu
            
            Chief
      Financial Officer
            August
      22, 2008Ming
      Fen Liu
            
            (Principal
      Financial and Accounting Officer)August
      22, 2008/s/ Zhi
      Li
            
            DirectorZhi
      Li/s/ Jiao
      Wang
            
            Director
            August
      22, 2008Jiao
      Wang/s/ Fudong
      Sui
            
            Director
            August
      22, 2008Fudong
      Sui/s/ Gang
      Li
            
            Director
            August
      22, 2008Gang
      Li/s/ Yefei
      Liu
            
            Director
            August
      22, 2008Yefei
      Liu/s/ Fuqiu
      Ren
            
            Director
            August
      22, 2008Fuqiu
      Ren