UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                -----------------

                                   FORM 10-KSB

[X]   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
      ACT OF 1934 For the fiscal year ended - DECEMBER 31, 2004 OR


[_]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(D)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934 For the transition period from

                         Commission file number 0-024828

                              SORL AUTO PARTS, INC.
                 (Name of Small Business Issuer in Its Charter)

           DELAWARE                                     30-0091294
(State or Other jurisdiction               (I.R.S. Employer Identification No.)
of Incorporation or Organization)


                              NO. 1169 YUMENG ROAD
                       RUIAN ECONOMIC DEVELOPMENT DISTRICT
                          RUIAN CITY, ZHEJIANG PROVINCE
                           PEOPLE'S REPUBLIC OF CHINA
         (Address of Principal Executive Offices, including zip code.)

                                 86-21-6440-1678
                (Issuer's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

    TITLE OF EACH CLASS             NAME OF EACH EXCHANGE ON WHICH REGISTERED
    NONE                            NONE

Securities registered pursuant to Section 12(g) of the Act:

    TITLE OF EACH CLASS             COMMON STOCK

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the  registrant  was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X]  No [_]

<PAGE>

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated  by  referenced  in Part III of this  Form
10-KSB or any amendment to this Form 10-KSB [X]

State  issuer's  revenues for its most fiscal year  DECEMBER  31,  2004:  $46.8
MILLION

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 sold, or the average bid and asked price of such common equity.  AS OF MARCH
18TH, 2005, THE VALUE WAS $13.2 MILLION.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of MARCH 18TH, 2005: 13,285,867


                                       2
<PAGE>

                                     PART I

ITEM 1.        DESCRIPTION OF BUSINESS.

ITEM 2.        DESCRIPTION OF PROPERTY.

ITEM 3.        LEGAL PROCEEDINGS.

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


                                     PART II

ITEM 5.        MARKET FOR  COMMON  EQUITY AND RELATED  STOCKHOLDERS  MATTERS AND
               SMALL  BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

ITEM 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OR FINANCIAL PLAN OF
               OPERATION.

ITEM 7.        FINANCIAL STATEMENTS.

ITEM 8.        CHANGES IN AND  DISAGREEMENTS WITH  ACCOUNTANTS ON ACCOUNTING AND
               FINANCIAL DISCLOSURE.

ITEM 8A.       CONTROLS AND PROCEDURES.

ITEM 8B.       OTHER INFORMATION.


                                    PART III

ITEM 9.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

ITEM 10.       EXECUTIVE COMPENSATION.

ITEM 11.       SECURITY OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT
               AND RELATED STOCKHOLDER MATTERS.

ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

ITEM 13.       EXHIBITS, LIST AND REPORTS ON FORM 8-K.

ITEM 14.       PRINCIPAL ACCOUNTANT FEES AND SERVICES.

SIGNATURES


<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

      SORL Auto Parts, Inc. (the "Registrant" or the "Company") was incorporated
in  Delaware  in March 1982 under the name The  Enchanted  Village,  Inc. As the
result of the May 10, 2004 Acquisition  (discussed  below) of Fairford  Holdings
Limited, a Hong Kong limited liability company  ("Fairford"),  the Registrant is
now in the  business of  manufacturing  and  distributing  automotive  air brake
valves and  hydraulic  brake valves  primarily in China to  automotive  original
equipment  manufacturers,  or OEMs, and related aftermarkets for use in vehicles
weighing over three tons, such as trucks, vans and buses.

COMPANY HISTORY

      GENERAL

      In April 2002, two  shareholders  commenced a civil action in the Delaware
Court of Chancery demanding an annual meeting of the stockholders.  In May 2002,
the Court of  Chancery,  acting in  accordance  with  Section 211 of the General
Company  Law  of  Delaware,  ordered  an  annual  meeting  of  the  Registrant's
stockholders.  The meeting was duly noticed in accordance  with the order of the
Court of Chancery  and held in  Wilmington  Delaware in June 2002.  The Court of
Chancery's order provided that  notwithstanding  the quorum  requirements of the
Registrant's  Bylaws,  the stockholders who attended the meeting in person would
constitute a quorum for the election of directors.  The only action taken at the
meeting was the election of three new directors who assumed  office  immediately
after the meeting.  A meeting of the newly elected board of directors was called
and held immediately after the completion of the stockholders'  meeting. At this
meeting,  the newly  elected board voted to revive the  Registrant's  charter in
accordance  with  Delaware  law and amend the  Bylaws to permit a single  member
board of directors.  Immediately  thereafter,  two members of the board resigned
and the sole remaining director  determined that it was in the best interests of
the Registrant and its shareholders  that it be recapitalized and that a plan be
developed and implemented to restructure the Company.

      In 2002, a  Certificate  of Revival and  Restoration  of the  Registrant's
Certificate of Incorporation  was filed with the Secretary of State of the State
of Delaware  resulting in the  Registrant  again being duly  organized,  validly
existing and in good standing under the laws of the State of Delaware.

      In November 2003,  the Registrant  agreed to sell 500,000 shares of common
stock to Keating Reverse Merger Fund LLC ("KRM"). Concurrently, the Registrant's
sole director,  together with other principal  shareholders,  converted  certain
debt owed to them to  equity.  Immediately  thereafter  these  individuals  sold
3,502,700 shares of the Registrant's common stock owned by them to KRM; the sole
officer of the Registrant resigned; and Kevin R. Keating was named President and
a director  nominee,  resulting in a change of control of the  Registrant.  As a
result of the foregoing,  KRM owned 4,002,700 shares or 90.3% of the then issued
and outstanding common stock of the Registrant.  For more information  regarding
the foregoing please refer to the Registrant's  Current Report on Form 8-K filed
with the Commission on November 24, 2003.

                                       4
<PAGE>

      ACQUISITION OF FAIRFORD

      In May 2004,  pursuant  to the terms of a Share  Exchange  Agreement  (the
"Exchange  Agreement")  dated as of April 4, 2004, by and among the  Registrant,
Keating Reverse Merger Fund, LLC (the "Shareholder"), Xiao Ping Zhang, Xiao Feng
Zhang and Shuping Chi (collectively,  the "Fairford Sellers"); and Fairford, the
Registrant  acquired from the Sellers (the  "Acquisition") all of the issued and
outstanding   equity   interests  of  Fairford  (the  "Fairford   Shares").   As
consideration for the Fairford Shares, the Registrant issued 1,000,000 shares of
its  Series A  Convertible  Preferred  Stock,  which  were  convertible  into an
aggregate of the 194,305,800  shares of common stock. The  consideration for the
Acquisition  was  determined  through  arms  length  negotiations   between  the
management  and the  Fairford  Sellers.  As a  result  of the  Acquisition,  the
Fairford Sellers held approximately 97.5% of our common stock on an as converted
basis.

      Upon  the  closing  of the  Acquisition,  Kevin  R.  Keating  resigned  as
President,   Secretary  Chief  Financial   Officer  and  sole  Director  of  the
Registrant.  Effective May 7, 2004, Xiao Ping Zhang,  Xiao Feng Zhang, and Guang
Kang Chang began  serving  their terms as members of the  Registrant's  Board of
Directors. The newly elected directors appointed Xiao Ping Zhang as the Chairman
and Chief Executive Officer,  Xiao Feng Zhang as the Chief Operating Officer and
Zong Yun Zhou as the Chief Financial Officer.

      All references in this report to "SORL," the  "Registrant," the "Company,"
"we,"  "our" and "us" mean,  unless the  context  indicates  otherwise,  (i) our
predecessor,  Fairford Holdings Limited,  for the periods prior to May 10, 2004,
the date the Acquisition was consummated, and (ii) the successor and registrant,
SORL Auto Parts,  Inc.  that now owns and  operates  the  automotive  components
manufacturing business of Fairford as a result of the Acquisition.  In addition,
when the  context so  requires,  we use the term  "predecessor"  to refer to the
historical   operations  of  our  predecessor   prior  to  the  Acquisition  and
"successor" to refer to our historical operations following the Acquisition, and
we use the  terms  "we,"  "our"  and "us" to refer  to the  predecessor  and the
successor  collectively.  The  historical  financial  statements for the periods
prior to the  Acquisition  and  summaries  thereof  appearing in this report are
those of our predecessor  and represent the financial  statements of Transferred
Business (defined below).

      CORPORATE GOVERNANCE

      In July 2004, the Registrant  changed its name from The Enchanted Village,
Inc. to SORL Auto Parts, Inc. The Registrant also effected a one (1) for fifteen
(15) reverse  stock split and the  Fairford  Sellers  converted  their shares of
Series A Convertible Preferred Stock into shares of common stock.

BUSINESS

      As a result of the  Acquisition,  through  Fairford's 90% ownership of the
Ruili Group Ruian Auto Parts Co., Ltd., a sino-foreign joint venture (the "Joint
Venture"),  established  pursuant to the laws of the People's  Republic of China
("PRC" or "China"),  the Registrant  manufactures and distributes automotive air
brake  valves  and  hydraulic  brake  valves  primarily  in China to  automotive
original equipment  manufacturers,  or OEMs, and related aftermarkets for use in
vehicles weighing over three tons, such as trucks, vans and buses.

                                       5
<PAGE>

      The Joint Venture  formed on January 17, 2004,  pursuant to the terms of a
Joint Venture Agreement (the "JV Agreement") by and between the Ruili Group Co.,
Ltd. (the "Ruili Group") and Fairford.  The Ruili Group was  incorporated in the
PRC in 1987 and specializes in the  development,  production and sale of various
kinds of automotive parts. The Joint Venture was established in the PRC on March
4, 2004 as a sino-foreign joint venture company, with limited liability,  by the
Ruili Group and Fairford.  Fairford and the Ruili Group contributed 90% and 10%,
respectively,  of the  paid-in  capital  of the  Joint  Venture,  which  totaled
$7,100,000.

      In connection  with its  formation,  effective  January 19, 2004 the Joint
Venture  acquired  the  business  segment  of the Ruili  Group  relating  to the
manufacture and sale of various kinds of valves for automotive brake systems and
related  operations (the "Transferred  Business").  This was accomplished by the
transfer from the Ruili Group to Fairford of the relevant assets and liabilities
of the Transferred Business including trade receivables,  inventories, plant and
machinery,  and the assumption of short and long term  borrowings for a purchase
price of  $6,390,000.  The  consideration  was based on a valuation  provided by
Ruian Ruiyang Assets  Valuation Co.,  Ltd., an independent  PRC valuation  firm.
Fairford then  transferred  these assets and liabilities to the Joint Venture as
consideration  for its 90% ownership  interest of the Joint  Venture.  The Ruili
Group transferred  inventory as its capital contribution for its 10% interest in
the Joint Venture.  The assets and liabilities  transferred to the Joint Venture
by Fairford and the Ruili Group  represented  all the assets and  liabilities of
the  Transferred  Business.  Certain  historical  information of the Transferred
Business is based on the operation of the Transferred Business when it was owned
by the Ruili Group.

      MANAGEMENT OF THE JOINT VENTURE AGREEMENT

      Pursuant to the terms of the JV  Agreement,  the Board of Directors of the
Joint Venture consists of three  directors;  Fairford has the right to designate
two  members  of the board and the Ruili  Group has the right to  designate  one
member and Fairford has the authority to appoint the Chairman of the Board.  The
majority of the Board has  decision-making  authority  with respect to operating
matters.  As a  result,  Fairford  maintains  operating  control  over the Joint
Venture. The term of the Joint Venture will expire on March 4, 2019.

      PRODUCTS

      Through the Joint Venture,  the Registrant  manufactures  and  distributes
automotive   air  brake  valves  and   hydraulic   brake  valves  in  China  and
internationally  for use primarily in vehicles weighing over three tons, such as
trucks, vans and buses. There are thirty-six categories of valves and over eight
hundred  different  specifications.  Management  believes that it is the largest
manufacturer of automotive brake valves in China.

      The Joint Venture obtained  ISO9001/QS9000/VDA6.1  System  Certificates in
2001 and in 2004 our  products  passed the  ISO/TS  16949  System  Certification
conducted by the TUV CERT  Certification Body of TUV Industrie Service GmbH. The
ISO/TS 16949 system was enacted by  International  Automotive Task Force and has
obtained the recognition of the world's main automobile makers.  Because we hold
the above certificates, we are qualified to sell our products worldwide. We also
warrant our products for 50,000 to 60,000  kilometers of use.  Warranty  expense
has historically been immaterial.

                                       6
<PAGE>

      CUSTOMERS

      The  Joint   Venture   sells  its  products  to  forty-two   (42)  vehicle
manufacturers,  including all of the truck manufacturers in China. As indicated,
the valves are also widely used in buses. Typically,  bus manufacturers purchase
chasses from truck  manufacturers,  which  already have the Joint  Venture's air
brake valves incorporated.  In general, customers are divided into three groups:
original equipment  manufacturers  ("OEM's") automobile  manufacturers in China,
aftermarket   distributors,   and   international   customers,   accounting  for
approximately  47%, 26% and 27%,  respectively,  of our annual sales.  The Joint
Venture has long-term relationships with most of its OEM customers. In 2004, our
three largest customers  represented 31.26% of our total sales, among them First
Auto  Group  (FAW) is among the top five  largest  automobile  manufacturers  in
China.  The following table sets forth  information  regarding our three largest
customers:

                             LIST OF MAJOR CUSTOMERS

      NAME OF CUSTOMER                    PERCENTAGE OF TOTAL REVENUE FOR 2004

 FAW Qingdao Automobile Works                         18.83%

 First Auto Group Purchase Dept.                       6.95%

Liuzhou Special Auto Manufacturing                     5.48%
            Co. Ltd

      SALES AND MARKETING

      The  in-house   sales  and  marketing   team  consists  of  nineteen  (19)
individuals,  fifteen (15) for domestic  (PRC) sales and four for  international
sales.  Products are sold under the "SORL"  trademark,  which the Joint  Venture
licenses on a royalty free basis,  from the Ruili Group.  The license expires in
2019. The Joint Venture has established long-term relationships with most of its
OEM  manufacturers.  Normally,  annual sales  contracts  with key  customers are
signed at the beginning of the calendar year and are revised as needed.

      The  Joint  Venture's  products  are  also  sold  in the  aftermarket  for
replacement  purposes.  Currently,  we have a long-term  relationship with those
sales centers,  established  historically  with Ruili Group.  These centers sell
only  the  Joint   Venture's  and  the  Ruili  Group's   products  to  over  800
distributors.  For the international market, the Joint Venture partners with the
Ruili Group through its  international  sales  centers  located in Australia and
Dubai on the same terms as would be applicable to unrelated  parties.  The Joint
Venture  also  actively  participates  in  international  trade  shows at Paris,
Frankfurt, Detroit and Las Vegas.

                                       7
<PAGE>

      DISTRIBUTION

      The Joint Venture ships finished  products  directly to OEM  manufacturers
and rents  warehouse  space from some of its key  customers  to provide  on-site
storage of finished products.  Generally, the space is large enough to store one
week's supply of finished goods. The products are distributed to the aftermarket
customers  through the network of  twenty-seven  (27) sales centers,  which also
function as the  distribution  centers for the  respective  region and center it
covers.

      TECHNOLOGY

      The Joint  Venture has access to the  technical  services  and results and
plans  resulting  from the  Ruili  Group's  Research  &  Development  center  in
Shanghai,  which is currently  under  construction.  The Joint  Venture also has
access to the technology resulting from the Ruili Group's three-year cooperation
arrangement with the Tongji University, which is one of the leading universities
in automotive  engineering  industry.  This  arrangement  provides  access to 92
technical  personnel on a negotiated  basis.  The Joint Venture owns one Chinese
patent which expires in 2012 covering an automotive  clutch empower device.  The
Joint Venture has access to the general  consulting  advice and  assistance on a
project-by-project  basis provided to the Ruili Group by Zhejiang University and
Northern Communications University pursuant to which the Joint Venture receives.

      RAW MATERIAL

      We  purchase  various   components  and  raw  materials  for  use  in  our
manufacturing  processes.  The  principal raw materials we purchase are aluminum
and steel. The price of steel has increased  significantly in the past year, and
management believes that it will continue to increase. The increases have had an
adverse impact on gross margins, since some of the increases cannot be passed on
to our  customers.  However,  we have  informal  arrangements  with  several OEM
manufacturers  whereby we bundle our orders  for steel  thereby  gaining  volume
discounts on the aggregate bundled purchase.

      Our three largest suppliers are Zhejiang Huaneng Aluminum Company Limited,
Shanghai  Longsheng Metal Material  Company  Limited and Shanghai  Zhonglu Metal
Material  Company  Limited,  which  in  the  aggregate  account  for  27% of all
components and raw materials purchased.  Normally,  the annual purchase plan for
raw material,  such as aluminum and steel, is determined at the beginning of the
calendar year  according to our OEM  customer's  orders and our own forecast for
the aftermarket and international  sales. Such purchase plans with key suppliers
can  be  revised  quarterly.  Our  actual  requirements  are  based  on  monthly
production  plans.  Management  believes  that this  arrangement  from  inventor
surplus when the orders from customers change.

      For raw materials other than steel and aluminum, we normally maintain from
one week up to one month of inventory at our warehouse.

      All components and raw materials are available from numerous  sources.  We
have not, in recent years, experienced any significant shortages of manufactured
components or raw materials and normally do not carry inventories of these items
in excess of what is  reasonably  required to meet our  production  and shipping
schedules.

                                       8
<PAGE>

      STRATEGIC PLAN

      The Joint Venture  strategic plan is to maintain its market share in China
through the following:

      o     FOCUS ON QUALITY  CONTROL AND COST  REDUCTION.  We believe  that our
            products offer higher quality and more competitive  pricing compared
            with  our   competitors  in  the  automotive  air  brake  valve  and
            automotive  hydraulic brake valve market in China. We have been able
            to grow at more than 30% per year in sales for the past three  years
            and to maintain what  management  believes is a leading  position in
            the industry.  To sustain this competitive advantage and at the same
            time  obtain  higher  profit  margin,  the  Joint  Venture  plans to
            continue focusing on quality control and cost reduction.

      o     INVEST IN THE NEXT GENERATION VALVE TECHNOLOGY. We plan to invest in
            the next generation valve technology such as anti-lock brake systems
            and  electric  brakes,  which  management  believes has great market
            potential in China.

      o     EXPAND  PRODUCTION  FACILITIES  TO MEET FURTHER  DEMAND.  Management
            plans to acquire new facilities and procure new equipment Management
            also plans to increase the Joint Venture's sales force.

      o     TARGET THE INTERNATIONAL MARKET.  During 2004,  approximately 27% of
            sales were generated from  customers  outside China.  We believe our
            products are competitive in the international market. We plan to set
            up  additional  sales  centers  internationally.  We  also  plan  to
            actively seek strategic partnerships with international distributors
            and manufacturers.

      o     EXPAND THROUGH STRATEGIC ALLIANCES AND ACQUISITION. We are exploring
            opportunities  to create long-term growth through new joint ventures
            or acquisitions of other  automotive  parts  manufacturers.  We will
            seek  acquisition  targets  that can be easily  integrated  into our
            product  manufacturing and corporate  management,  or companies that
            have  strong   joint-venture   partners   that  would  become  major
            customers.

      COMPETITION

      The automotive components industry in China is fragmented.  There are many
small  manufacturers who mainly target the aftermarket.  However,  there are not
many  companies  who  have   established   national  sales  networks  and  close
relationships  with the  leading  OEM  manufacturers.  We  believe  that the key
competitive   factors  in  the  automotive  valve  market  are   quality/pricing
competitiveness,  product  selection,  reliability,  timeliness  of delivery and
effectiveness of customer service.

                                       9
<PAGE>

      We have three major  competitors  in China,  KaFu,  WeiMing and Wapco.  Of
these three competitors, the sales volumes of KaFu and WeiMing are substantially
below those of the Joint Venture.  Pricing of the products  manufactured by KaFu
and WeiMing  are higher than the  products  manufactured  by the Joint  Venture.
WanAn is a private  company  with  similar cost  structure  and pricing  levels.
However,  their  current  sales  volume is still much  lower  than ours.  In the
international  market,  our  largest  competitor  is Wapco  and we  believe  our
advantage over Wapco is our pricing.

DOING BUSINESS IN CHINA

      CHINA'S ECONOMY

      Management  believes that the most important factor to  understanding  the
Chinese  automobile  industry is the country's rapid economic growth. The strong
demand in the auto sector has been, and will continue to be,  underpinned by the
desire of  residents  to  improve  their  living  standards,  given  significant
increase in income levels.  According to China's Statistics Bureau,  China's GDP
growth rate for 2003 and 2004 was 9.8% and 9.5% respectively.  At present, China
ranks as the world's sixth-largest  economy,  behind the US, Japan, Germany, the
United Kingdom and France.

      Looking forward,  the Chinese  government and the  International  Monetary
Fund  forecast  GDP  growth  in the  region of 8% in 2005.  Over the long  term,
China's  accession  to  the  World  Trade  Organization  (WTO)  is  expected  to
accelerate the capital flow to China from other developed countries.

      THE CHINESE LEGAL SYSTEM

      The practical effect of the People's Republic of China legal system on our
business  operations  in China can be viewed from two separate  but  intertwined
considerations.  First,  as a matter of  substantive  law, the Foreign  Invested
Enterprise laws provide significant protection from government interference.  In
addition,  these laws  guarantee the full enjoyment of the benefits of corporate
Articles and contracts to Foreign Invested Enterprise participants.  These laws,
however,  do impose  standards  concerning  corporate  formation and governance,
which are not qualitatively  different from the general  corporation laws of the
several  states.  Similarly,  the  People's  Republic of China  accounting  laws
mandate  accounting  practices,  which  are not  consistent  with  US  Generally
Accepted Accounting Principles. The China accounting laws require that an annual
"statutory  audit" be performed in accordance  with  People's  Republic of China
accounting  standards  and  that  the  books  of  account  of  Foreign  Invested
Enterprises are maintained in accordance with Chinese  accounting laws.  Article
14 of the  People's  Republic  of  China  Wholly  Foreign-Owned  Enterprise  Law
requires a Wholly  Foreign-Owned  Enterprise to submit certain  periodic  fiscal
reports and statements to designate  financial and tax authorities,  at the risk
of business license revocation.

      Second,  while the enforcement of substantive rights may appear less clear
than United  States  procedures,  the Foreign  Invested  Enterprises  and Wholly
Foreign- Owned Enterprises are Chinese registered companies which enjoy the same
status as other Chinese  registered  companies in  business-to-business  dispute
resolution.  Because the terms of the respective Articles of Association provide


                                       10
<PAGE>

that all business disputes pertaining to Foreign Invested  Enterprises are to be
resolved by the  Arbitration  Institute of the Stockholm  Chamber of Commerce in
Stockholm, Sweden applying Chinese substantive law, the Chinese minority partner
in our joint venture companies will not assume a privileged  position  regarding
such  disputes.  Any award  rendered  by this  arbitration  tribunal  is, by the
express  terms  of  the  respective  Articles  of  Association,  enforceable  in
accordance  with  the  "United   Nations   Convention  on  the  Recognition  and
Enforcement  of Foreign  Arbitral  Awards  (1958)."  Therefore,  as a  practical
matter,  although no assurances can be given, the Chinese legal  infrastructure,
while  different in operation  from its United  States  counterpart,  should not
present  any  significant  impediment  to  the  operation  of  Foreign  Invested
Enterprises.

      ECONOMIC REFORM ISSUES

      Although the Chinese  government owns the majority of productive assets in
China, in the past several years the government has implemented  economic reform
measures  that  emphasize   decentralization   and  encourage  private  economic
activity.  Because  these  economic  reform  measures  may  be  inconsistent  or
ineffectual, there are no assurances that:

-     We will be able to capitalize on economic reforms;

-     The Chinese  government  will  continue  its  pursuit of  economic  reform
      policies;

-     The economic policies, even if pursued, will be successful;

-     Economic policies will not be significantly altered from time to time; and

-     Business  operations  in China  will  not  become  subject  to the risk of
      nationalization.

Negative impact upon economic reform policies or nationalization could result in
a total investment loss in our common stock.

      Since 1979,  the Chinese  government  has reformed  its economic  systems.
Because many reforms are unprecedented or experimental,  they are expected to be
refined and improved.  Other  political,  economic and social  factors,  such as
political  changes,  changes in the rates of economic  growth,  unemployment  or
inflation,  or in the  disparities in per capita wealth  between  regions within
China, could lead to further readjustment of the reform measures.  This refining
and readjustment process may negatively affect our operations.

      Over the last few years,  China's  economy  has  registered  a high growth
rate.  Recently,  there  have been  indications  that  rates of  inflation  have
increased.  In response,  the Chinese government  recently has taken measures to
curb  this  excessively   expansive   economy.   These  measures  have  included
devaluations  of  the  Chinese  currency,  the  renminbi,  restrictions  on  the
availability of domestic credit,  reducing the purchasing  capability of certain
of its  customers,  and limited  re-centralization  of the approval  process for
purchases of some  foreign  products.  These  austerity  measures  alone may not
succeed in slowing down the economy's  excessive expansion or control inflation,
and may  result in severe  dislocations  in the  Chinese  economy.  The  Chinese
government may adopt additional measures to further combat inflation,  including
the establishment of freezes or restraints on certain projects or markets.

                                       11
<PAGE>

      To date reforms to China's economic system have not adversely impacted our
operations  and  are  not  expected  to  adversely  impact   operations  in  the
foreseeable  future;  however,  there can be no  assurance  that the  reforms to
China's economic system will continue or that we will not be adversely  affected
by changes in China's political,  economic, and social conditions and by changes
in policies of the Chinese government,  such as changes in laws and regulations,
measures  which may be introduced to control  inflation,  changes in the rate or
method of taxation, imposition of additional restrictions on currency conversion
and  remittance  abroad,  and  reduction in tariff  protection  and other import
restrictions.

EMPLOYEES AND EMPLOYMENT AGREEMENTS

      The Registrant  currently employs 872 persons:  23 for quality control, 32
technical  staff, 36 sales staff, 752 production  workers and 29  administrative
staff.  There  are  employment  agreements  with  all of the  employees  whereby
administrative  staff  workers  agree to five  years of  employment  and  hourly
workers  agree to three years.  These  agreements  bind the employee but not the
company and provide that when an employee  quits he forfeits one month's  salary
to the company.

      The Joint  Venture is subject to the  Sino-foreign  Equity  Joint  Venture
Enterprise Labour Management Regulations.  In compliance with those regulations,
the Joint Venture's  management may hire and discharge  employees and make other
determinations  with respect to wages,  welfare,  insurance  and  discipline  of
employees.  The Joint Venture will, as required by law,  establish special funds
for  enterprise  development,  employee  welfare  and  incentives,  as well as a
general  reserve.  In  addition,  the Joint  Venture is  required to provide its
employees with facilities  sufficient to enable the employees to carry out trade
union activities.

      The Joint Venture  currently has 872  employees,  all of whom are employed
full time.

JV DISTRIBUTION OF PROFITS

      After  provision for social  welfare funds for employees and provision for
taxation,  the  profits,  if any, of the Joint  Venture  will be  available  for
distribution  to  the  parties  in  proportion  to  their   respective   capital
contributions.  Any such distributions must be authorized by the Joint Venture's
Board of Directors.

JV ASSIGNMENT OF INTEREST

      Any assignment of an interest in the Joint Venture must be approved by the
Chinese  government.  The Chinese joint venture laws also provide for preemptive
rights  and the  consent  of the other  joint  venture  party  for any  proposed
assignments by one party to a third party.

JV LIQUIDATION

      Under the Chinese joint venture laws,  the Joint Venture may be liquidated
in certain limited  circumstances,  including expiration of the ten-year term or
any term of  extension,  the  inability  to  continue  operations  due to severe
losses,  force majeure, or the failure of a party to honor its obligations under
the joint venture  agreement or the Articles Of  Association in such a manner as
to impair the  operations of the joint  venture.  The Chinese joint venture laws
provide that,  upon  liquidation,  the net asset value (based on the  prevailing
market  value of the  assets) of a joint  venture  shall be  distributed  to the
parties  in  proportion  to their  respective  registered  capital  in the joint
venture.

                                       12
<PAGE>

JV RESOLUTION OF DISPUTES

      In the event of a dispute  between the parties,  attempts  will be made to
resolve the dispute through friendly  consultation or mediation.  In the absence
of a friendly resolution,  the parties have agreed that the matter will first be
referred to the  Shenzhen  Committee  of the  International  Economic  and Trade
Arbitration  Commission,  whose  decisions are final and  enforceable in Chinese
courts. The losing party will be liable for the arbitration fees.

JV EXPROPRIATION

      The Chinese joint venture laws provide that China will not  nationalize or
requisition  enterprises  in which  foreign funds have been  invested.  However,
under special  circumstances,  when public interest  requires,  enterprises with
foreign capital may be legally  requisitioned and appropriate  compensation will
be made.

ITEM 2. DESCRIPTION OF PROPERTY.

      Our  facilities  are  located in Ruian  District  of  Wenzhou  City in the
Zheijiang Province, which is the center of automotive parts production in China.
The facilities  include 25,443 square meters of product and warehouse,  which we
rent from the Ruili  Group  under a  fifteen  year  lease.  The  annual  rent is
approximately US $439,000, the terms of which are at least as favorable as those
that could have been  obtained  from an  unrelated  party.  We also share office
space of 1,000  square  meters  with the Ruili  Group  which we utilize  free of
charge.  At the production  facility,  the Registrant has production  equipment,
which is imported from the United States, Germany, Sweden, Taiwan and Japan.

      We  believe  that  these   facilities   have  the  capacity  to  meet  its
manufacturing and assembly needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS.

      We are not a party to any pending  litigation and none is  contemplated or
threatened.

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

      There were no matters  submitted to the stockholders in the fourth quarter
of 2004.

                                       13
<PAGE>

                                     PART II

ITEM 5.  MARKET  FOR  COMMON  EQUITY,  RELATED  STOCKHOLDERS  MATTERS  AND SMALL
BUSINESS ISSUERS PURCHASES OF EQUITY SECURITIES.

      Our shares are quoted on the Over-The-Counter  Bulletin Board. Our trading
symbol is  "SAUP."  The table  shows the high and low bid price of our stock for
2003 and 2004.  These  prices  represent  prices  between  dealers;  they do not
include retail markup, markdown or commission.  These are bid prices only and do
not represent actual transactions and are adjusted for dividends and splits.

     QUARTER ENDED               HIGH                LOW
     2003
     March 31                      --                  --
     June 30                     3.60                3.00
     September 30               12.00                1.20
     December 31                 9.00                6.00

     2004
     March 31                    6.00                3.00
     June 30                     4.80                3.75
     September 30               13.50                4.80
     December 31                 6.50                6.00

STOCKHOLDERS

      At March 18, 2005, we had  approximately  485 registered  stockholders  of
record  of our  common  stock.  This  number  does not  include  shares  held by
brokerage clearing houses, depositories or otherwise in unregistered form.

DIVIDENDS

      We have not declared any cash dividends, nor do we intend to do so. We are
not  subject to any legal  restrictions  respecting  the  payment of  dividends,
except that they may not be paid to render us insolvent.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

      We do not have any equity  compensation  plans and  accordingly we have no
securities authorized for issuance thereunder.

RECENT SALES OF UNREGISTERED SECURITIES

      None.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

      The  following  is   management's   discussion  and  analysis  of  certain
significant  factors that have  affected our  financial  position and  operating
results during the periods included in the accompanying  consolidated  financial
statements,  as  well  as  information  relating  to the  plans  of our  current


                                       14
<PAGE>

management.  This report includes  forward-looking  statements.  Generally,  the
words "believes,"  "anticipates,"  "may," "will," "should,"  "expect," "intend,"
"estimate,"  "continue,"  and similar  expressions  or the  negative  thereof or
comparable terminology are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties, including the matters
set  forth in this  report  or  other  reports  or  documents  we file  with the
Securities and Exchange  Commission from time to time,  which could cause actual
results or outcomes to differ  materially from those  projected.  Undue reliance
should not be place on these  forward-looking  statements  that speak only as of
the date  hereof.  We undertake no  obligation  to update these  forward-looking
statements.

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

OVERVIEW

      On May 10,  2004,  we acquired  all of the issued and  outstanding  equity
interests of Fairford Holdings Limited,  a Hong Kong limited liability  company.
Until we acquired  Fairford,  we had only  nominal  assets and  liabilities  and
limited  business   operations.   Although   Fairford  became  our  wholly-owned
subsidiary  following the  acquisition,  because the  acquisition  resulted in a
change of control,  the acquisition  was recorded as a "reverse  merger" whereby
Fairford is considered to be the  accounting  acquirer.  As such,  the following
results of operations are those of Fairford.

      Fairford  was  organized  in Hong Kong as a limited  liability  company on
November 3, 2003.  Fairford owns 90% of the equity interest of Ruili Group Ruian
Auto Parts Co.,  Ltd.,  a  sino-foreign  joint  venture  (the  "Joint  Venture")
established  pursuant to the laws of the  People's  Republic of China  ("PRC" or
"China").  The Joint Venture is a joint venture between Fairford and Ruili Group
Co., Ltd. (the "Ruili Group").

      The Ruili Group was  incorporated  in the PRC in 1987 to specialize in the
development,  production  and sale of various  kinds of  automotive  parts.  Its
headquarters  are  located in the Ruian  District  of Wenzhou  City,  one of the
leading automotive parts manufacturing centers of China with more than 1400 auto
parts  manufacturing  companies.  Its major product lines include valves for air
brake systems, auto metering products,  auto electric products,  anti-lock brake
systems  and   retarders.   Some  of  those  products  were  developed  and  are
manufactured  through  affiliated  companies of Ruili Group.  Due to its leading
position in the industry,  the Chairman of the Ruili Group, Mr. Xiao Ping Zhang,
has been elected as the Chairman of Wenzhou Auto Parts  Association,  one of the
leading auto parts trade  associations in China.  Mr. Zhang is also Chairman and
Chief Executive Officer of the Company. The Joint Venture was established in the
PRC on March 4,  2004 as a  sino-foreign  joint  venture  company  with  limited
liability by the Ruili Group and Fairford.  Fairford and Ruili Group contributed
90% and 10%,  respectively,  of the paid-in  capital in the aggregate  amount of
US$7,100,000.

      In connection  with its  formation,  effective  January 19, 2004 the Joint
Venture acquired the business of the Ruili Group relating to the manufacture and
sale of  various  kinds of valves  for  automotive  brake  systems  and  related


                                       15
<PAGE>

operations (the "Transferred  Business").  This was accomplished by the transfer
from the Ruili Group to Fairford of the relevant  assets and  liabilities of the
Transferred  Business  including  trade  receivables,   inventories,  plant  and
machinery,  and  the  assumption  of  short  and  long  term  borrowings,  at  a
consideration of US$6,390,000.  The consideration was based on a valuation by an
independent  PRC  valuation  firm.  Fairford  then  injected  these  assets  and
liabilities as a capital contribution for its 90% interest in the Joint Venture.
The Ruili Group also transferred  inventory as its capital  contribution for its
10% interest in the Joint Venture. The assets and liabilities transferred to the
Joint  Venture by Fairford  and the Ruili  Group  represented  all the  relevant
assets  and  liabilities  of  the  Transferred   Business.   Certain  historical
information  of the  Transferred  Business  is  based on the  operation  of such
Business when it was owned by the Ruili Group.

      Pursuant to the formation of the Joint  Venture,  on January 17, 2004, the
Ruili Group and  Fairford  signed a binding  Joint  Venture  agreement  (the "JV
Agreement").  Pursuant to the JV Agreement,  the Board of Directors  consists of
three  directors;  Fairford has the right to designate  two members of the board
and the Ruili Group has the right to designate  one member.  The majority of the
Board has decision  making  authority  with respect to operating  matters.  As a
result, Fairford maintains operating control over the Joint Venture.

      As a result of the foregoing, through Fairford's 90% interest in the Joint
Venture,  the Company  manufactures and distributes  automotive air brake valves
and  hydraulic  brake valves in China and  internationally  for use primarily in
vehicles  weighing over three tons,  such as trucks,  vans and buses.  There are
thirty-six   categories   of  valves   with   over   eight   hundred   different
specifications.  Management  believes  that it is the  largest  manufacturer  of
automotive brake valves in China.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

      Below is a description of accounting policies,  which we consider critical
to the preparation and understanding of our financial  statements.  In addition,
certain  amounts  included in or affecting our financial  statements and related
disclosure must be estimated, which requires us to make assumptions with respect
to values or  conditions  which  cannot be known with  certainty at the time the
financial  statements  are  prepared.  Actual  results  may  differ  from  these
estimates under different  assumptions or conditions.  The selection of critical
accounting  policies,  the  judgments  and  other  uncertainties  affecting  the
application of those policies and the sensitivity of reported results to changes
in conditions and  assumptions  are factors to be considered  when reviewing our
consolidated  financial  statements.  We  believe  that the  following  critical
accounting  policies set forth below involve the most significant  judgments and
estimates used in the preparation of our consolidated  financial statements.  We
evaluate these policies on an ongoing basis,  based upon historical  results and
experience,  consultation  with  experts,  trends and other  methods we consider
reasonable in the particular  circumstances,  as well as our forecasts as to how
these might change in the future.

                                       16
<PAGE>

ACCOUNTING METHOD

      The  Company  uses the  accrual  method  of  accounting  which  recognizes
revenues when earned and expenses when incurred.

TRADE RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

      The Company  presents  trade  receivables,  net of allowances for doubtful
accounts.  The allowances are calculated based on review of individual  customer
accounts.

INVENTORIES

      Inventories are stated at the lower of cost or net realizable  value. Cost
is  calculated on the  weighted-average  basis and includes all costs to acquire
and other costs incurred in bringing the  inventories to their present  location
and condition. The Company evaluates the net realizable value of its inventories
on a regular  basis and  records a  provision  for loss to reduce  the  computed
moving-average cost if it exceeds the net realizable value.

INCOME TAXES

      Taxes are  calculated in accordance  with  taxation  principles  currently
effective in the PRC. The Company  accounts for income taxes using the liability
method.  Deferred tax assets and  liabilities  are recognized for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized as income in the
period that includes the enactment  date. A valuation  allowance is provided for
the amount of deferred tax assets that,  based on  available  evidence,  are not
expected to be realized.

REVENUE RECOGNITION

      In accordance  with the provisions of Staff  Accounting  Bulletin No. 103,
revenue  is  recognized  when  merchandise  is shipped  and title  passes to the
customer and  collectibility  is  reasonably  assured.  Revenues  consist of the
invoice value of the sale of goods and services net of value added tax,  rebates
and  discounts.  The  Company is subject to the  following  surtaxes,  which are
recorded as deductions from gross sales: Education Tax.

      The  Company  does not  receive  revenue  for  shipping  and  handling  to
customers.  Shipping and handling expenses incurred by the Company for the years
ended  December  31,  2004 and 2003  respectively  are  included  in selling and
administrative expenses in the accompanying consolidated statements of income.

CONCENTRATION OF CREDIT RISK

      Financial  instruments that potentially subject the Company to significant
concentrations  of credit risk consist  primarily of trade accounts  receivable.
The Company  performs  ongoing credit  evaluations with respect to the financial
condition  of its  creditors,  but  does  not  require  collateral.  In order to
determine the value of the Company's accounts receivable,  the Company records a
provision for doubtful  accounts to cover  probable  credit  losses.  Management
reviews and adjusts this allowance  periodically based on historical  experience
and its evaluation of the collectibility of outstanding accounts receivable.

                                       17
<PAGE>

RESULTS OF OPERATIONS

      Year ended December 31, 2004 Compared To Year Ended December 31, 2003.

SALES

      Sales for the year ended December 31, 2004 increased by  US$13,694,037  or
41.4% to US$46,815,037  from US$33,121,000 for the year ended December 31, 2003,
primarily as a result of the increase in the volume of our products shipped. The
total number of units of valves we shipped  increased by 36.6%,  from  2,572,000
units to 3,513,000  units  between  these two periods.  The average price of our
products per unit increased modestly from US$9.88 per unit to US$10.23 per unit.

      Two factors  contribute  to the  increase  in the sales:  (1) There was an
increase in export sales by 105.1% from  US$6,143,016 to  US$12,601,492  between
the two years and (2) There was an increase in domestic  auto sales in China due
to the  increase  in demand from the repair  market and from OEM  manufacturers.
Total  sales from  domestic  market  increased  by 26.9% from  US$26,966,082  to
US$34,213,545 between these two years.

COST OF SALES

      Cost  of  sales  for  the  year  ended  December  31,  2004  increased  to
US$35,904,232  from  US$26,263,000  for the year ended  December 31,  2003.  The
increase in cost of sales was due to the increase in sales.  Material  costs for
the year ended December 31, 2004 was US$24,349,164 or 52.0% of sales compared to
US$18,406,876  or 55.6% of sales  for the year  ended  December  31,  2003.  The
increase in material  costs was due to the  increase in sales.  The  decrease in
material  costs as a percentage of sales occurred  because we have  successfully
implemented  several  measures to reduce cost,  such as  strengthening  internal
management,  optimizing the production  process and improving product structural
design.

GROSS PROFIT

      Gross profit for the year ended  December 31, 2004 increased by $4,052,805
or 59.1 % to  US$10,910,805  from  US$6,858,000  for the year ended December 31,
2003. This  improvement in gross profit was primarily due to the increase in the
sales both in the  domestic and  international  market.  Gross  margin  improved
slightly  from 20.7% for the year ended  December 31, 2003 to 23.3% for the year
ended  December 31,  2004.  The  improvement  in the gross  margin,  despite the
increase in the raw material pricing,  was due to modest increase in the selling
price, and better cost  management,  such as optimizing  production  process and
better structural design of our products.


                                       18
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling,  general and administrative  expenses for the year ended December
31, 2004 was  US$5,227,256 or 11.2% of sales compared to US$3,156,825 or 9.5% of
sales for the year ended December 31, 2003. The increase in selling, general and
administrative  expenses  as a  percentage  of sales  was due  primarily  to the
economies of scale resulting from the increase in sales.

DEPRECIATION AND AMORTIZATION

      Depreciation  and  amortization   expense  decreased  by  US$1,243,739  to
US$554,261  during the year ended  December  31, 2004 from  $1,798,000  for year
ended  December 31, 2003.  The decrease was primarily  attributable  to the fact
that during 2003, the Company incurred  depreciation  expense in connection with
the building  owned by the Company's  predecessor.  Starting in 2004,  SORL Auto
Parts, Inc. signed a rental agreement with Ruili Group to rent a total of 25,443
square  meters of factory  and  warehouse  from  Ruili  Group for 15 years at an
annual rental of US$439,000, resulting in rental expenses amounting to less than
the depreciation expense.

INTEREST EXPENSE

      Interest  expense  for the year  ended  December  31,  2004  decreased  by
US$4,742 to US$287,433 from US$292,175 for the year ended December 31, 2003. The
decrease in interest expense is due to the decrease in total debt.

OTHER INCOME

      There was no other income for the year ended  December  31, 2004.  For the
year  ended  December  31,  2003,  the other  income  was  US$435,000.  This was
primarily  due to the tax rebate and  interest  expense  subsidy  from the local
government  to SORL Auto  Parts,  Inc.  for its  investments  in  upgrading  its
technology.

INCOME TAX

      There was no income tax for the year ended December 31, 2004 compared with
income tax of  US$546,000  for the year ended  December 31, 2003. As a result of
the Joint Venture (i.e.  Ruili Group Auto Parts Co., Ltd.) obtaining its foreign
joint-venture status in 2004, it is exempted from PRC income tax.

MINORITY INTEREST

      Minority  Interest  represents  a  10%  non-controlling  interest  in  the
company.  Minority Interest in income amounted to US$534,105 and US$-0- for year
ended December 31, 2004 and 2003, respectively.

                                       19
<PAGE>

NET INCOME

      The net  income  for  the  year  ended  December  31,  2004  increased  by
US$4,191,049,  or 364.4% to a net  income of  US$5,341,049  from a net income of
US$1,150,000  for the year ended December 31, 2003 due to the factors  discussed
above.

LIQUIDITY AND CAPITAL RESOURCES

      Historically,  the Company has funded  capital  requirements  through cash
flow  from  operations.  As of  December  31,  2004  we  had a cash  balance  of
approximately   $729,875  and  a  working  capital   surplus  of   approximately
$6,092,799. Management believes that the Company's working capital is sufficient
to cover capital requirements during the next 12 months.

      In addition,  from time to time we may attempt to raise financing  through
some  combination of commercial bank borrowings or the private or public sale of
equity  or debt  securities,  in an  effort  to  ensure  that we have  access to
sufficient  funds to meet our needs.  However,  future equity or debt financings
may not be  available to us at all,  or, if  available,  may not be on favorable
terms.  We cannot assure you that these efforts,  together with items  described
above,  will be sufficient to fund our growth,  or that external funding will be
available  to us at  favorable  interest  rates or at all.  If we are  unable to
obtain  financing in the future,  we will  continue to develop our business on a
reduced scale based on our existing capital resources.


OFF BALACE SHEET ARRANGMENTS

      There are no Off-Balance Sheet Arrangements to report.

ITEM 7. FINANCIAL STATEMENTS.

INDEPENDENT AUDITOR'S REPORT                    F-1

FINANCIAL STATEMENTS

     Balance Sheets                             F-2

     Statements of Operations                   F-3

     Statement of Stockholders' Equity          F-4

     Statements of Cash Flows                   F-5

NOTES TO THE FINANCIAL STATEMENTS               F-6

<PAGE>


                              SORL AUTO PARTS, INC.
                          RUIAN CITY, ZHEJIANG PROVINCE
                            PEOPLES REPUBLIC OF CHINA

                          -----------------------------
                                FINANCIAL REPORTS
                                       AT
                                DECEMBER 31, 2004
                          -----------------------------


<PAGE>

SORL AUTO PARTS, INC.
RUIAN CITY, ZHEJIANG PROVINCE
PEOPLES REPUBLIC OF CHINA

TABLE OF CONTENTS
--------------------------------------------------------------------------------

Report of Independent Registered Public Accounting Firm                     1

Consolidated Balance Sheets at December 31, 2004 and 2003                  2-3

Consolidated Statements of Changes in Stockholders' Equity for the Years
  Ended December 31, 2004 and 2003.                                         4

Consolidated Statements of Income for the Years Ended
  December 31, 2004 and 2003                                                5

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 2004 and 2003                                                6

Notes to Consolidated Financial Statements                                 7-14

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
SORL Auto Parts, Inc.
Ruian City, Zhejiang Province
People's Republic of China



      We have audited the accompanying  consolidated  balance sheet of SORL Auto
Parts, Inc. as of December 31, 2004, and the related consolidated  statements of
income,  changes in stockholders'  equity and cash flows year then ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.  The  financial  statements  of SORL Auto Parts,  Inc were audited by
other auditors whose report dated April 1, 2004 expressed an unqualified opinion
on those statements.


      We conducted our audit in accordance  with The Public  Company  Accounting
Oversight Board Standards.  Those standards require that we plan and perform the
audit to obtain reasonable  assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.


      In our opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  consolidated  financial  position of SORL Auto
Parts,  Inc as of December  31, 2004 and the results of its  operations  and its
cash  flows for the year then  ended in  conformity  with  generally  accounting
principles accepted in the United States of America.


/s/ Rotenberg and Co. LLP

ROTENBERG AND COMPANY, LLP

Rochester, New York
March 16, 2005


                                      F-1
<PAGE>

SORL AUTO PARTS, INC.

(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

CONSOLIDATED BALANCE SHEETS

--------------------------------------------------------------------------------

December 31,                                            2004              2003
--------------------------------------------------------------------------------

ASSETS

CURRENT ASSETS
Cash and Cash Equivalents                          $   729,875       $        --
Trade Receivables, Net of Provisions                12,595,905         3,157,000
Notes Receivable                                       129,675                --
Inventory                                            1,875,300         1,837,000
Prepayments                                          1,404,710         2,602,000
Current Assets - Discontinued Operations                    --        42,807,000
Other Taxes                                            393,300                --
--------------------------------------------------------------------------------

TOTAL CURRENT ASSETS                                17,128,765        50,403,000

OTHER ASSETS
Intangible Assets                                       38,720            10,000

PROPERTY, PLANT AND EQUIPMENT, NET                   5,352,654         5,297,000

LONG TERM ASSETS - DISCONTINUED OPERATIONS                  --        36,848,000
--------------------------------------------------------------------------------

TOTAL ASSETS                                       $22,520,139       $92,558,000
================================================================================



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


                                      F-2
<PAGE>

SORL AUTO PARTS, INC.

(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------------

December 31,                                                                 2004             2003
-----------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
<S>                                                                     <C>               <C>
Accounts Payable                                                        $ 4,717,655       $        --
Deposit Received from Customers                                             861,624                --
Bank Loans                                                                4,830,918         4,591,000
Accrued Expenses                                                            625,769                --
Other Current Liabilities - Discontinued Operations                              --        36,408,000
-----------------------------------------------------------------------------------------------------

TOTAL CURRENT LIABILITIES                                                11,035,966        40,999,000

LONG TERM LIABILITIES
Bank Loans                                                                       --         1,208,000
Other Long Term Liabilities - Discontinued Operations                            --        22,047,000
-----------------------------------------------------------------------------------------------------

TOTAL LIABILITIES                                                        11,035,966        64,254,000
-----------------------------------------------------------------------------------------------------

MINORITY INTEREST                                                         1,148,418                --
-----------------------------------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Convertible Preferred Stock - $1 Par Value; 5,000,000 Authorized,
                              0 Issued and Outstanding                           --                --
Common Stock - $.002 Par Value; 50,000,000 Authorized,
               13,282,253 and 328,533 Issued and Outstanding
               at December 31, 2004 and 2003, Respectively                   26,565               657
Additional Paid-in Capital                                                4,082,246        26,883,343
Retained Earnings                                                         6,226,944         1,420,000
-----------------------------------------------------------------------------------------------------

TOTAL SHAREHOLDERS' EQUITY                                               10,335,755        28,304,000
-----------------------------------------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                              $22,520,139       $92,558,000
=====================================================================================================

</TABLE>


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


                                      F-3
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------

                                 Number of                 Number of                 Additional
                                 Common       Common       Preferred    Preferred      Paid-In      Retained
                                 Shares       Stock         Shares        Stock        Capital      Earnings
--------------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>             <C>        <C>           <C>           <C>
BALANCE - JANUARY 1, 2003        328,533   $        657           --  $         --  $ 17,147,343  $    270,000

Capital Contributions                 --             --           --            --     9,736,000            --

Net Income                            --             --           --            --            --     1,150,000
--------------------------------------------------------------------------------------------------------------

BALANCE - DECEMBER 31, 2003      328,533            657           --            --    26,883,343     1,420,000

CORPORATE REORGANIZATION:
  Issuance of Preferred
   Stock                              --             --    1,000,000     1,000,000    (1,000,000)           --
  Distribution of
   Discontinued
    Operations                        --             --           --            --   (22,775,189)           --

Conversion of Preferred
  Stock                       12,953,720         25,908   (1,000,000)   (1,000,000)      974,092            --

Net Income                            --             --           --            --            --     4,806,944
------------------------------------------------------------------------------------------------------------------------------------

BALANCE - DECEMBER 31, 2004   13,282,253   $     26,565           --  $         --  $  4,082,246  $  6,226,944
====================================================================================================================================

--------------------------------------------------------------------------------

                                    Total
                                 Stockholder's    Minority
                                    Equity        Interest
--------------------------------------------------------------------------------

<CAPTION>

<S>                            <C>           <C>
BALANCE - JANUARY 1, 2003       $ 17,418,000  $         --

Capital Contributions              9,736,000            --

Net Income                         1,150,000            --
--------------------------------------------------------------------------------

BALANCE - DECEMBER 31, 2003       28,304,000            --

CORPORATE REORGANIZATION:
  Issuance of Preferred
   Stock                                  --            --
  Distribution of
   Discontinued
    Operations                   (22,775,189)      614,313

Conversion of Preferred
  Stock                       12          --            --

Net Income                         4,806,944       534,105
--------------------------------------------------------------------------------

BALANCE - DECEMBER 31, 2004   13$ 10,335,755  $  1,148,418
================================================================================

</TABLE>

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


                                      F-4
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------

December 31,                                               2004          2003
--------------------------------------------------------------------------------

SALES                                                 $ 46,815,037  $ 33,121,000

Cost of Sales                                           35,904,232    26,263,000
--------------------------------------------------------------------------------

GROSS PROFIT                                            10,910,805     6,858,000

Selling and Distribution Expenses                        2,737,652     1,609,980

General and Administrative Expenses                      2,489,604     1,546,845

Finance Costs                                              287,433       292,175
--------------------------------------------------------------------------------

INCOME FROM OPERATIONS                                   5,396,116     3,409,000

Other Income                                                    --       435,000

Other Expenses                                              55,067            --
--------------------------------------------------------------------------------

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES    5,341,049     3,844,000

Income Taxes - Current                                          --       546,000
--------------------------------------------------------------------------------

INCOME FROM CONTINUING OPERATIONS                        5,341,049     3,298,000

Loss from Discontinued Operations                               --     2,148,000
--------------------------------------------------------------------------------

NET INCOME BEFORE MINORITY INTEREST                      5,341,049     1,150,000

Minority Interest                                         (534,105)           --
--------------------------------------------------------------------------------

NET INCOME ATTRIBUTABLE TO SHAREHOLDERS               $  4,806,944  $  1,150,000
================================================================================

NET INCOME PER SHARE - BASIC                          $       0.76  $       3.50
================================================================================

NET INCOME PER SHARE - DILUTED                        $       0.76  $       3.50
================================================================================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC       6,309,896       328,533
================================================================================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED     6,309,896       328,533
================================================================================

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

                                      F-5
<PAGE>

<TABLE>
<CAPTION>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------------------

December 31,                                                        2004             2003
--------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

NET INCOME                                                     $  5,341,049    $  1,150,000

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
  PROVIDED BY OPERATING ACTIVITIES

  Depreciation and Amortization                                     554,261       1,798,000
  Bad Debts                                                          68,384          12,000
(INCREASE) DECREASE IN ASSETS:

  Inventory                                                         (38,300)        726,000
  Trade Receivables, Net of Provisions                           (9,507,289)     (1,782,000)
  Prepayments, Deposits, and Other Current Assets                 1,197,290      (2,602,000)
INCREASE (DECREASE) IN LIABILITIES:

  Trade Payables                                                  4,717,655         (12,000)
  Other Payables and Accrued Expenses                               625,769              --
  Deposit Received from Customers                                   861,624              --
  Taxes Payable                                                    (393,300)             --
  Net Working Capital from Discontinued Operations                 (960,876)    (11,630,000)
-------------------------------------------------------------------------------------------

Net Cash Provided By (Used in) Operating Activities               2,466,267     (12,340,000)
-------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of Property, Plant and Equipment                       (593,488)     (2,015,585)
Notes Receivable                                                   (129,675)             --
Intangible Assets                                                   (28,720)             --
Investing Activities - Discontinued Operations                      (16,427)    (14,924,415)
-------------------------------------------------------------------------------------------

NET CASH USED IN INVESTING ACTIVITIES                              (768,310)    (16,940,000)
-------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from (Repayment of) Bank Loans                            (968,082)      2,174,000
Financing Activities - Discontinued Operations                           --      17,370,000
Capital Contributions - Owners                                           --       9,736,000
-------------------------------------------------------------------------------------------

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                (968,082)     29,280,000
-------------------------------------------------------------------------------------------

Net Change in Cash and Cash Equivalents                             729,875              --

Cash and Cash Equivalents - Beginning of Year                            --              --
-------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS - END OF YEAR                        $    729,875    $         --
===========================================================================================

SUPPLEMENTARY CASH FLOWS DISCLOSURES

Interest Paid                                                  $    287,433    $  1,245,000
Taxes Paid                                                     $         --    $    435,000
===========================================================================================

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
  AND FINANCING ACTIVITIES

Common Stock Issued in Exchange for Preferred Stock            $     25,908    $         --
Distribution of Discontinued Operations                        $(22,160,876)   $         --
Minority Interest Distribution Via Discontinued Operations $        614,313    $         --
===========================================================================================

</TABLE>

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


                                      F-6
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1-ORGANIZATION / SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

SORL Auto Parts is principally  engaged in the manufacture  and  distribution of
automotive  air brake valves and  hydraulic  brake valves for vehicles  weighing
more than three tons, such as trucks, vans and buses,  through its 90% ownership
of Ruili  Group  Ruian  Auto  Parts  Company  Limited  (Ruian)  in the PRC.  The
subsidiary  distributes  products both in China and  internationally  under SORL
Auto Parts  trademarks.  The Company's  product range  includes 36 categories of
brake valves with over 800 different specifications. The Company is rated as one
of the top 100 auto component suppliers in China.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING  METHOD - The  Company  uses the  accrual  method of  accounting  for
financial statement and tax return purposes.

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements include the accounts of SORL Auto Parts,
Inc. and its majority owned subsidiaries.  All significant intercompany balances
and transactions have been eliminated in the consolidation.

USE OF ESTIMATES - The  preparation of financial  statements in conformity  with
U.S.  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period.  Management makes its best estimate of the ultimate
outcome  for these  items  based on  historical  trends  and  other  information
available when the financial  statements are prepared.  Changes in estimates are
recognized in accordance  with the accounting  rules for the estimate,  which is
typically in the period when new  information  becomes  available to management.
Actual results could differ from those estimates.

Fair value of financial  instruments  - For certain of the  Company's  financial
instruments,   including  cash  and  cash  equivalents,  trade  receivables  and
payables,  prepaid expenses,  deposits and other current assets, short-term bank
borrowings,  and other payables and accruals,  the carrying amounts  approximate
fair values due to their short maturities.

RELATED PARTY  TRANSACTIONS  - A related  party is generally  defined as (i) any
person that holds 10% or more of the Company's  securities  and their  immediate
families,  (ii)  the  Company's  management,  (iii)  someone  that  directly  or
indirectly  controls,  is  controlled  by or is under  common  control  with the
Company,  or (iv)  anyone who can  significantly  influence  the  financial  and
operating  decisions of the Company. A transaction is considered to be a related
party  transaction when there is a transfer of resources or obligations  between
related parties.

FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT - The Company is exposed to
the following risk factors:

(i) Credit  risks - The  Company  has  policies in place to ensure that sales of
products are made to customers with an appropriate  credit history.  The Company
had one customer that  accounted for more than 10% of its revenues  representing
approximately  16% of its  total  revenues  for  2004.  The  Company  also has a
concentration  of  credit  risk due to  geographic  sales as a  majority  of its
products are marketed and sold in the PRC.

(ii) Liquidity  risks - Prudent  liquidity risk management  implies  maintaining
sufficient  cash,  the  availability  of funding  through an adequate  amount of
committed credit facilities and ability to close out market positions.

                                                                   - continued -


                                      F-7
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1-ORGANIZATION / SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

(iii)  Interest  rate  risk - The  interest  rate  and  terms of  repayments  of
short-term and long-term bank  borrowings are  approximately  5% per annum.  The
Company's  income and cash  flows are  substantially  independent  of changes in
market interest rates. The Company has no significant  interest-bearing  assets.
The  Company's  policy  is to  maintain  all of its  borrowings  in  fixed  rate
instruments.

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid  instruments
purchased  with  an  original  maturity  of  three  months  or  less  to be cash
equivalents.

INVENTORIES  -  Inventories  are  stated at the lower of cost or net  realizable
value, with cost computed on a  weighted-average  basis. Cost includes all costs
of  purchase,  cost of  conversion  and other costs  incurred  in  bringing  the
inventories to their present location and condition. Net realizable value is the
estimated  selling  price in the ordinary  course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are stated at cost
less  accumulated  depreciation and impairment  losses.  The initial cost of the
asset  comprises  its  purchase  price and any  directly  attributable  costs of
bringing the asset to its working  condition  and location for its intended use.
Depreciation  is  provided  using  the  straight-line  method  over  the  assets
estimated  useful life for periods  ranging from five to ten years.  Significant
improvements  and  betterments  are  capitalized  where it is probable  that the
expenditure  resulted in an increase in the future economic benefits expected to
be obtained form the use of the asset beyond its originally assessed standard of
performance.  Routine repairs and maintenance are expensed when incurred.  Gains
and losses on disposal of fixed assets are  recognized  in the income  statement
based on the net disposal proceeds less the carrying amount of the assets.

IMPAIRMENT OF LONG-LIVED ASSETS - Long-lived assets, such as property, plant and
equipment  and  other  non-current  assets,  including  intangible  assets,  are
reviewed for impairment  whenever  events or changes in  circumstances  indicate
that the carrying value of an asset may not be  recoverable.  An impairment loss
is recognized  when the estimated  undiscounted  cash flows  associated with the
asset or group of  assets is less  than  their  carrying  value.  If  impairment
exists,  an adjustment is made to write the asset down to its fair value,  and a
loss is recorded as the  difference  between the carrying  value and fair value.
Fair values are determined based on quoted market values,  discounted cash flows
or internal and external appraisals, as applicable. Assets to be disposed of are
carried at the lower of carrying value or estimated net realizable value.

INTANGIBLE ASSETS - Intangible assets represent technology know-how.  Intangible
assets are measured initially at cost. Intangible assets are recognized if it is
probable that the future  economic  benefits that are  attributable to the asset
will flow to the enterprise and the cost of the asset can be measured  reliably.
After  initial  recognition,  intangible  assets are  measured  at cost less any
impairment losses. Intangible assets with definite useful lives are amortized on
a straight-line  basis over their useful lives. The gross carrying amount of the
intangible  assets  was  approximately  $43,174,   accumulated  amortization  at
December 31, 2004 was $4,454  (2003:  $-0-),  and  amortization  expense for the
periods presented was $4,454 and $-0-, respectively. Future amortization expense
is as follows:

             2005       2006       2007       2008        2009
--------------------------------------------------------------------------------
            $7,120     $5,076     $3,617     $3,617     $3 ,617
================================================================================
                                                                   - continued -


                                      F-8
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------


NOTE 1-ORGANIZATION / SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

TRADE  RECEIVABLES AND ALLOWANCE FOR BAD DEBTS - The Company presents trade, net
of allowances for doubtful accounts and returns,  to ensure accounts  receivable
are not overstated due to  uncollectibility.  Trade  receivables  generated from
credit  sales have  general  credit terms of 45 to 60days.  The  allowances  are
calculated  based on detailed review of certain  individual  customer  accounts,
historical rates and an estimation of the overall economic conditions  affecting
the Company's  customer  base. The Company  reviews a customer's  credit history
before  extending  credit.  If the financial  condition of its customers were to
deteriorate,  resulting  in an  impairment  of their  ability to make  payments,
additional allowances may be required.

REVENUE  RECOGNITION - Revenues  from the sale of goods is  recognized  when the
risks and  rewards  of  ownership  of the goods have  transferred  to the buyer.
Revenues  consist of the invoice value for the sale of goods and services net of
value-added  tax ("VAT"),  rebates and discounts.  The Company is subject to the
following surtaxes, which are recorded as deductions from gross sales: Education
Supplementary Tax (levied at 4% of net VAT payable).

SHIPPING  AND  HANDLING  FEES - Shipping and  handling  fees are  classified  as
selling  expenses  and amounted to  approximately  $638,041 and $470,373 for the
years ended December 31, 2004 and 2003, respectively.

RESEARCH  AND  DEVELOPMENT   EXPENSES  -  Research  and  development  costs  are
classified as general and administrative  expenses and are expensed as incurred.
They amounted to approximately  $79,962 and $55,784 for the years ended December
31, 2004 and 2003, respectively.

ADVERTISING  COSTS  -  Advertising  costs  are  expensed  as  incurred  and  are
classified as selling  expenses.  Advertising  costs  amounted to  approximately
$1,661 and $8,069 for the years ended December 31, 2004 and 2003, respectively.

WARRANTY  CLAIMS - The Company offers product  warranties for certain  products.
The specific  terms and  conditions  of such  warranties  vary  depending on the
product  or  customer  contract   requirements.   Warranty  claims  amounted  to
approximately  $205,314 and  $112,063 for the years ended  December 31, 2004 and
2003,  respectively.  The Company does not accrue the costs of unsettled product
warranty claims because, historically, the amounts have been immaterial to total
revenues.

IPO COSTS - IPO Costs are classified as general and administrative  expenses and
are a  non-recurring  expense.  IPO costs  amounted to $745,459 and $-0- for the
years ended December 31, 2004 and 2003, respectively.

INCOME  TAXES - The Company  accounts  for income  taxes under the  provision of
Statement of Financial  Accounting  Standards ("SFAS" No. 109),  "Accounting for
Income Taxes,"  whereby  deferred income tax assets and liabilities are computed
for  differences  between the financial  statements  and tax bases of assets and
liabilities  that will  result in taxable or  deductible  amounts in the future,
based on  enacted  tax laws and rates  applicable  to the  periods  in which the
differences  are expected to affect  taxable  income.  Valuation  allowances are
established  when necessary;  to reduce deferred income tax assets to the amount
expected to be realized.

FOREIGN  CURRENCY  TRANSLATION - The  reporting  currency of the Company is U.S.
dollars and the financial  records are maintained  and the financial  statements
are  prepared  in  Renminbi  ("RMB").   Transactions  in  other  currencies  are
translated  into the reporting  currencies at exchange  rates  prevailing at the
time of the transactions.  Monetary assets and liabilities  denominated in other
currencies  at the  balance  sheet  date are  re-translated  at  exchange  rates
prevailing at that date. Non-monetary assets and liabilities in other currencies
are translated at historical rates.  Exchanges differences are recognized in the
income statement in the period in which they arise.

                                                                   - continued -


                                      F-9
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------


NOTE 1-ORGANIZATION / SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

RECENTLY ISSUED ACCOUNTING STANDARDS

Interpretation  No.  46  "Consolidation  of  Variable  Interest   Entities,   an
Interpretation  of ARB No.  51"  (FIN  46).  FIN 46  requires  certain  variable
interest entities to be consolidated by the primary beneficiary of the entity if
the  equity  investors  in the  entity  do not  have  the  characteristics  of a
controlling  financial interest or do not have sufficient equity at risk for the
entity to finance  its  activities  without  additional  subordinated  financial
support from other  parties.  FIN 46 is effective for all new variable  interest
entities  created or acquired  after  January 31, 2003.  For  variable  interest
entities created or acquired prior to February 1, 2003, the provisions of FIN 46
must be applied for the first interim or annual period  beginning after June 15,
2003.  FIN 46 does not have any impact on the  financial  position or results of
operations of the Company.

In April  2003,  the FASB  issued SFAS No. 149,  "Accounting  for  Amendment  of
statement 133 on Derivative  Instruments and Hedging  Activities,"  which amends
and clarifies  financial  accounting and reporting for  derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities  under FASB  Statement No. 133,  accounting  for  Derivative
Instruments and Hedging  Activities.  This Statement is generally  effective for
contracts  entered  into or modified  after June 30,  2003,  and all  provisions
should be applied prospectively. This statement does not affect the Company.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments  with   Characteristics  of  both  Liabilities  and  Equity,"  which
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances).  This Statement is effective
for  financial  instruments  entered into or modified  after May 31,  2003,  and
otherwise is effective at the  beginning of the first interim  period  beginning
after June 15, 2003. It is to be implemented by reporting the cumulative  effect
of a change in an accounting principle for financial  instruments created before
the issuance date of the  Statement  and still  existing at the beginning of the
interim period of adoption.  Restatement  is not permitted.  This statement does
not affect the Company.

In November  2004, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard ("SFAS") No. 151 "Inventory Costs -
an amendment of ARB No. 43, Chapter 4" ("SFAS 151").  This statement  amends the
guidance  in ARB  No.  43,  Chapter  4,  "Inventory  Pricing,"  to  clarify  the
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs,  and wasted  material  (spoilage).  SFAS 151 requires that those items be
recognized as current-period  charges. In addition, this Statement requires that
allocation  of fixed  production  overheads to costs of conversion be based upon
the normal capacity of the production facilities. The provisions of SFAS 151 are
effective for fiscal years  beginning  after June 15, 2005. As such, the Company
is required to adopt these  provisions at the beginning of the fiscal year ended
December 31, 2006. The Company is currently evaluating the impact of SFAS 151 on
its consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123R,  "Share-Based  Payment"  ("SFAS
123R").  SFAS 123R revises FASB Statement No. 123  "Accounting  for  Stock-Based
Compensation"  and supersedes APB Opinion No. 25 "Accounting for Stock Issued to
Employees".  SFAS 123R requires all public and  non-public  companies to measure
and recognize  compensation  expense for all  stock-based  payments for services
received at the grant-date fair value, with the cost recognized over the vesting
period (or the  requisite  service  period).  SFAS 123R is  effective  for small
business  issuers for all interim periods  beginning after December 15, 2005. As
such, the Company is required to adopt these  provisions at the beginning of the
fiscal  quarter  ended  September  30,  2005.  Retroactive  application  of  the
provisions  of SFAS 123R to the  beginning of the fiscal year that  includes the
effective  date is  permitted,  but  not  required.  The  Company  is  currently
evaluating the impact of SFAS 123R on its consolidated financial statements.


                                      F-10
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

<TABLE>
<CAPTION>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

-----------------------------------------------------------------------------------------------------------------



NOTE 2 - RELATED PARTY TRANSACTIONS

The  following  related  party  transactions  occurred  during  the years  ended
December 31, 2004 and 2003:

-----------------------------------------------------------------------------------------------------------------
December                                                                                    2004         2003
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>          <C>
PURCHASES

Ruili Group Co., Ltd                                                                  $ 6,566,232  $       --
Ruian Ruili Haizhiguan Auto Part Co., Ltd                                                 555,927          --
-----------------------------------------------------------------------------------------------------------------

Total Purchases                                                                       $ 7,122,159  $       --
=================================================================================================================


=================================================================================================================
December 31,                                                                                2004         2003
-----------------------------------------------------------------------------------------------------------------

ACCOUNTS PAYABLE AND OTHER PAYABLES

Ruili Group Co., Ltd                                                                  $ 2,239,054  $       --
Ruian Ruili Haizhiguan Auto Part Co., Ltd                                                  11,862          --
Xiaofeng, Zhang - Board of Director                                                       265,701          --
-----------------------------------------------------------------------------------------------------------------

Total Related Parties Included in Accounts Payable                                    $ 2,516,617  $       --
=================================================================================================================

NOTE 3 - ACCOUNTS RECEIVABLE
The Company's  accounts  receivable at December 31, 2004 and 2003 are summarized
as follows:

====================================================================================================================================
December 31,                                                                                2004         2003
------------------------------------------------------------------------------------------------------------------------------------

Accounts Receivable                                                                   $12,664,289  $3,157,000
Less:  Allowance for Doubtful Accounts                                                     68,384          --
------------------------------------------------------------------------------------------------------------------------------------

Net Accounts Receivable                                                               $12,595,905  $3,157,000
====================================================================================================================================

The change in the allowance for doubtful  accounts at December 31, 2004 and 2003
are summarized as follows:

====================================================================================================================================
December 31,                                                                                2004         2003
------------------------------------------------------------------------------------------------------------------------------------

Balance - Beginning of Year                                                           $        --  $       --
Add:  Current Year Provision                                                               68,384          --
Less:  Accounts Written Off                                                                    --          --
------------------------------------------------------------------------------------------------------------------------------------

Balance - End of Year                                                                 $    68,384  $       --
====================================================================================================================================

</TABLE>


                                      F-11
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

<TABLE>
<CAPTION>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

------------------------------------------------------------------------------------------------------------------------------------


NOTE 4 - INVENTORIES Inventories consist of the following:

------------------------------------------------------------------------------------------------------------------------------------
December 31,                                                                                2004         2003
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>             <C>
Raw Materials                                                                         $  222,800      $  503,000
Work in Process                                                                          966,170         607,000
Finished Goods                                                                           686,330         727,000
------------------------------------------------------------------------------------------------------------------------------------

Total Inventories                                                                     $1,875,300      $1,837,000
====================================================================================================================================

NOTE 5 - PROPERTY,  PLANT AND EQUIPMENT Property,  plant and equipment consisted
of the following:

====================================================================================================================================
December 31,                                                                                2004         2003
------------------------------------------------------------------------------------------------------------------------------------

Machinery                                                                             $6,361,447      $5,863,946
Mould                                                                                  1,015,016       1,012,045
Office Equipment                                                                          42,755              --
Vehicle                                                                                   98,578          50,531
------------------------------------------------------------------------------------------------------------------------------------
                                                                                      $7,517,796      $6,926,522
Less:  Accumulated Depreciation                                                        2,165,142       1,629,522
------------------------------------------------------------------------------------------------------------------------------------

Net Property and Equipment                                                            $5,352,654      $5,297,000
====================================================================================================================================

Depreciation  expense  charged to operations was $535,620 and $1,798,000 for the
years ended December 31, 2004 and 2003, respectively

NOTE 6 - ACCRUED EXPENSES
Accrued expenses consisted of the following:

====================================================================================================================================
December 31,                                                                                2004         2003
------------------------------------------------------------------------------------------------------------------------------------

Accrued Payroll                                                                       $  206,595      $       --
Accrued Rent                                                                             365,841              --
Accrued Legal                                                                             43,524              --
Other Accrued Expenses                                                                     9,809              --
------------------------------------------------------------------------------------------------------------------------------------

Total Accrued Expenses                                                                $  625,769      $       --
====================================================================================================================================

</TABLE>


                                      F-12
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 7 - BANK BORROWINGS

Bank borrowings represent the following at December 31:

<TABLE>
<CAPTION>

====================================================================================================================================
December 31,                                                                                2004            2003
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>               <C>
Secured                                                                               $        --       $        --
Unsecured                                                                               4,830,918         5,799,000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                      $ 4,830,918       $ 5,799,000
Less Current Portion                                                                    4,830,918         4,591,000
------------------------------------------------------------------------------------------------------------------------------------

Non-Current Portion                                                                   $        --       $ 1,208,000
====================================================================================================================================

The  loans  were  borrowed  from the  banks and are  guaranteed  by Ruili  Group
Corporation  China, a related party.  These bank  borrowings were from the local
banks or financial  institutions and were for financing general working capital
Interest was charged at approximately 5% per annum

NOTE 8 - OTHER TAXES
Other taxes consisted of the following:

====================================================================================================================================
December 31,                                                                                2004            2003
------------------------------------------------------------------------------------------------------------------------------------

VAT Receivable                                                                        $   430,283       $        --
Individual Income Tax Payable                                                              (3,311)               --
Education Surtax Payable                                                                   (1,332)               --
Property Tax Payable                                                                      (22,829)               --
Sales Tax Payable                                                                          (9,511)               --
------------------------------------------------------------------------------------------------------------------------------------

Total Other Taxes                                                                     $   393,300       $        --
====================================================================================================================================

</TABLE>

NOTE 9 - INCOME TAXES

The Company  registered  in the PRC is subject to state and local  income  taxes
within the PRC at the  applicable  tax rate on the taxable income as reported in
their PRC statutory financial  statements in accordance with relevant income tax
laws.  According to  applicable  tax laws  regarding  Sino-Foreign  Equity Joint
Venture Manufacturers,  the Company is exempted from income taxes in the PRC for
the years ended December 31, 2004 and 2005. Thereafter,  the Company is entitled
to a tax  concession of 50% of the  applicable  income tax rate of 26.4% for the
following three years ending in 2008.


                                      F-13
<PAGE>

SORL AUTO PARTS, INC.
(FORMERLY KNOWN AS THE ENCHANTED VILLAGE, INC.)
RUIAN CITY, ZHEJIANG PROVINCE,
PEOPLE'S REPUBLIC OF CHINA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - LEASES

The Company has a lease  agreement  with the Ruili  Group Co.,  Ltd.,  a related
party, for the rental of a manufacturing  plant. The lease is for an eleven year
term ending in February 2014. Rent expense for the years ended December 31, 2004
and 2003 was $439,009 and $365,840, respectively.

Future minimum rental payments as of December 31, 2004 are as follows:

     2005        2006      2007       2008       2009     Thereafter     Total
--------------------------------------------------------------------------------
  $ 439,009  $ 439,009  $ 439,009  $ 439,009  $ 439,009  $ 1,829,204 $ 4,024,249
================================================================================

NOTE 11 - OTHER MATTERS

In January 2004, the Company underwent a corporate reorganization to restructure
its business (the "Reorganization").

Pursuant  to the  Reorganization,  the  Company and  Fairford  Holdings  Limited
("Fairford"),  a company  incorporated  on November  3, 2003,  in Hong Kong with
limited liability, with identical shareholders as the Company, established Ruili
Group Ruian Auto Parts Co.,  Ltd.,  in the PRC as a  sino-foreign  equity  joint
venture company with limited liability (the "JV Company") on March 4, 2004.

As part of the  Reorganization,  the Company  transferred  to the JV Company the
business  of  manufacture  and sale of various  kinds of  automobile  valves and
related  operations  together  with the  relevant  assets and  liabilities  (the
"Transferred  Business")  effective from January 19, 2004. This was accomplished
by firstly  transferring  the relevant assets and liabilities of the Transferred
Business including trade receivables,  inventories,  plant and machineries,  and
short and long-term  borrowings  from the Company to Fairford at a consideration
of $6,406,780.  Fairford then injected these relevant  assets and liabilities as
capital  contribution  for 90%  interest of the JV Company.  The  remaining  10%
capital  contribution  resulted from the Company's additional  inventories.  The
assets and liabilities  injected into the JV Company by the Company and Fairford
represented all the relevant assets and liabilities of the Transferred Business.
The Company retained ownership of certain assets and liabilities  including land
use rights, buildings,  prepayment and deposits of real estate investments, bank
balances,  borrowings,  claims  and  contingent  liabilities  (collectively  the
"Non-transferred  Business").  The net assets of  discontinued  operations  were
transferred to stockholders at $22,160,876.

                                      F-14
<PAGE>

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

      Effective June 23, 2004,  the  Registrant  dismissed Hein & Associates LLP
("Hein") as the  Registrant's  independent  registered  public  accounting firm.
Effective  August  5,  2004,  the  Registrant   engaged   Rotenberg  &  Co.  LLP
(Rotenberg") as the Registrant's new independent  registered  public  accounting
firm. The dismissal of Hein and the engagement of Rotenberg were approved by the
Registrant's Board of Directors.

      Prior to Rotenberg  becoming the independent  registered public accounting
firm for the  Registrant,  neither  the  Registrant,  nor anyone on its  behalf,
consulted  with  Rotenberg   regarding  either  the  application  of  accounting
principles to a specific,  completed or contemplated transaction, or the type of
audit opinion that might be rendered on the Registrant's  financial  statements;
or any matter that was the subject of a disagreement or event as defined at Item
304 (a)(1)(iv) of Regulation S-B.

                                       24
<PAGE>

      Hein audited the  Registrant's  financial  statements  for the fiscal year
ended January 31, 2004. Hein's report for this period did not contain an adverse
opinion or a disclaimer of opinion, nor was it modified as to uncertainty, audit
scope or  accounting  principles,  except  that the  report  indicated  that the
Registrant's  losses from operations raised  substantial doubt about its ability
to operate as a going concern.

      During the fiscal year ended January 31, 2004 and the interim  period from
February 1, 2004 through June 23, 2004, there were no disagreements with Hein on
any  matter  of  accounting   principles  or  practices,   financial   statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the  satisfaction  of Hein,  would have caused such firm to make reference to
the subject  matter of the  disagreements  in connection  with its report on the
Registrant's  financial  statements.  In addition,  there were no such events as
described under Item  304(a)(1)(IV)(B)  of Regulation S-B during the fiscal year
ended January 1, 2004 and the interim  period from February 1, 2004 through June
23, 2004.

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

      As of December 31, 2004, the end of the period covered by this report, our
Chief Executive  Officer and our Chief Financial  Officer reviewed and evaluated
the  effectiveness of the our disclosure  controls and procedures (as defined in
Exchange Act Rule  13a-15(e) and  15d-15(e)),  which are designed to ensure that
material information we must disclose in our report filed or submitted under the
Securities  Exchange Act of 1934, as amended (the  "Exchange  Act") is recorded,
processed, summarized, and reported on a timely basis, and have concluded, based
on that evaluation, that as of such date, our disclosure controls and procedures
were  effective  to ensure that  information  required to be  disclosed by us in
reports  that we file or  submit  under  the  Exchange  Act is  accumulated  and
communicated  to our Chief  Executive  Officer  and Chief  Financial  Officer as
appropriate to allow timely decisions regarding required disclosure.


CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

      There was no change in our internal control over financial  reporting that
occurred  during the fourth  fiscal  quarter of the fiscal year  covered by this
Annual  Report on Form 10-KSB that has  materially  affected,  or is  reasonably
likely to materially affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION.

                                       25
<PAGE>

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

      The name,  age and position  held by each of the directors and officers of
our company are as follows:

      NAME                                POSITION

      Xiao Ping Zhang                     Chief Executive Officer and Chairman

      Xiao Feng Zhang                     Chief Operating Officer and Director

      Zong Yun Zhou                       Chief Financial Officer

      Guang Kang Chang                    Director

      All directors  have a term of office  expiring at the next annual  general
meeting, unless re-elected or earlier vacated in accordance with the Bylaws. All
officers have a term of office lasting until their removal or replacement by the
Board of Directors.

BACKGROUND OF OFFICERS AND DIRECTORS

      XIAO PING ZHANG - CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO

      From  January  1990 until March 2004,  Mr. Zhang served as the Chairman of
Ruili Group  Corporation,  Ltd.  Since March 2004, he has served as Chairman and
Chief Executive Officer of Fairford.

      XIAO FENG ZHANG - CHIEF OPERATING OFFICER AND DIRECTOR

      From  January 1990 until March 2004,  Mr.  Zhang served Vice  President of
Sales of Ruili Group  Corporation,  Ltd.  Since March 2004, he has served as the
Chief Operating Officer of Fairford.

      ZONG YUN ZHOU - CHIEF FINANCIAL OFFICER

      From  January  1996 until April  2002,  Ms. Zhou served as the Head of the
Auditing  Department of Anhui Province,  P.R. China. From April 2002 until March
2004  she  was  the  Chief  Financial  Officer  of  Shanghai  Huhao  Auto  parts
Manufacturing   Company  Limited,  a  joint  venture  between  the  Ruili  Group
Corporation,  Ltd. And the Shanghai Auto Group.  Since March 2004 she has served
as the Chief Financial Officer of Fairford.

      GUANG KANG CHANG - DIRECTOR

      From  January  1998 to the  present,  Mr.  Chang has served as the General
Manager of Tanwan Taipei JieXiangHao Enterprise Company Limited Committees.  The
Registrant has no standing audit,  nominating or  compensation  committee of the
Board.

FAMILY RELATIONSHIPS

      Mr. Xiao Ping Zhang and Mr. Xiao Feng Zhang are brothers.

                                       26
<PAGE>

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

      To our knowledge,  during the past five years, our officers and directors:
have not  filed a  petition  under  the  federal  bankruptcy  laws or any  state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed by
a court for the  business  or present of such a person,  or any  partnership  in
which he was a general  partner at or within  two years  before the time of such
filing, or any corporation or business  association of which he was an executive
officer within two years before the time of such filing; were not convicted in a
criminal proceeding or named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses); were not the subject of any order,
judgment or decree,  not  subsequently  reversed,  suspended or vacated,  of any
court of competent  jurisdiction,  permanently or temporarily enjoining him from
or otherwise limiting their respective activities.

COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT

      Based  solely  upon a  review  of  Forms  3 and 4 and  amendments  thereto
furnished to us pursuant to Rule 16a-3(e) under the  Securities  Exchange Act of
1934  during our most  recent  fiscal  year and Forms 5 and  amendments  thereto
furnished  to us with  respect to our most recent  fiscal  year,  all  officers,
directors  and owners of 10% or more of our  outstanding  shares  have filed all
Forms 3, 4 an 5 required by Section 16(a) of the Securities Exchange Act of 1934
with the exception of Mr. Xiao Ping Zhang, Xiao Feng, Mr. Zhou, Ms. Zhao and Mr.
Chang who each failed to timely file Form 3.

AUDIT COMMITTEE AND CHARTER

      We  have an  audit  committee  and  audit  committee  charter.  Our  audit
committee is comprised of all of our officers and  directors.  None of directors
are deemed independent.  All directors also hold positions as our officers.  Our
audit  committee  is  responsible  for:  (1)  selection  and  oversight  of  our
independent accountant;  (2) establishing procedures for the receipt,  retention
and treatment of complaints regarding accounting, internal controls and auditing
matters; (3) establishing procedures for the confidential,  anonymous submission
by our employees of concerns  regarding  accounting  and auditing  matters;  (4)
engaging  outside  advisors;  and, (5) funding for the outside  auditory and any
outside advisors engagement by the audit committee.

AUDIT COMMITTEE FINANCIAL EXPERT

      We have no financial expert.

CODE OF ETHICS

      We have adopted a corporate code of ethics.  We believe our code of ethics
is  reasonably  designed  to deter  wrongdoing  and  promote  honest and ethical
conduct; provide full, fair, accurate,  timely and understandable  disclosure in
public reports; comply with applicable laws; ensure prompt internal reporting of
code violations; and provide accountability for adherence to the code.

                                       27
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

      The following  table sets forth  information  with respect to compensation
paid by us to the chief executive officer since the Exchange. No other executive
officer  received  compensation  in excess of $100,000 for the fiscal year ended
December 31, 2004.

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                                                                        LONG TERM COMPENSATION

                                        ANNUAL COMPENSATION                     AWARDS                         PAYOUTS
       (A)                (B)        (C)           (D)      (E)           (F)            (G)              (H)             (I)
                                                           OTHER
                                                           ANNUAL      RESTRICTED     SECURITIES
                                                           COMPEN        STOCK        UNDERLYING          LTIP         ALL OTHER
NAME AND PRINCIPAL                  SALARY        BONUS     ATION       AWARD(S)       OPTIONS/          PAYOUTS        COMPENS
    POSITION              YEAR        ($)          ($)       ($)          ($)          SARS (#)            ($)          ATION($)
<S>                      <C>       <C>           <C>      <C>         <C>            <C>                <C>           <C>
Xiao Ping Zhang,          2004      50,000          --        --          --             --                --              --
CEO
Xiao Feng Zhang,          2004      30,000          --
COO

Zong Yun Zhou,            2004      20,000          --
CFO
N/A                       2003      N/A             N/A       --          --             --                --              --

N/A                       2002      N/A             N/A       --          --             --                --              --

</TABLE>

      There are no stock option,  retirement,  pension,  or profit sharing plans
for the benefit of our officers and directors.

OPTION/SAR GRANTS

      No individual grants of stock options, whether or not in tandem with stock
appreciation  rights  ("SARs")  and  freestanding  SARs  have  been  made to any
executive  officer or any director  since our inception,  accordingly,  no stock
options have been exercised by any of the officers or directors in fiscal 2004.

LONG-TERM INCENTIVE PLAN AWARDS

      We do not have any  long-term  incentive  plans that provide  compensation
intended to serve as incentive  for  performance  to occur over a period  longer
than one fiscal year,  whether such  performance is measured by reference to our
financial performance, our stock price, or any other measure.

COMPENSATION OF DIRECTORS

      The  directors  did not  receive  any other  compensation  for  serving as
members of the board of directors. The Board has not implemented a plan to award
options.  There are no contractual  arrangements with any member of the board of
directors.

                                       28
<PAGE>

                  We do not expect to pay any  salaries  to any of our  officers
until  such  time  as we  generate  sufficient  revenues  to do  so.  We do  not
anticipate  paying any  salaries to our officers  until  fiscal 2005.  We do not
intend  to pay any  additional  compensation  to our  directors.  As of the date
hereof,  we have not entered into employment  contracts with any of our officers
and we do not intend to enter into any employment  contracts  until such time as
it profitable to do so.

INDEMNIFICATION

      Under Section 145 of the Delaware General Corporation law, the Company has
broad powers to indemnify its directors and officers  against  liabilities  they
may incur in such capacities,  including liabilities under the Securities Act of
1933, as amended (the "Securities  Act").  The Registrant's  Bylaws also provide
that  the  Registrant  has the  power  to  indemnify  its  directors,  officers,
employees and other agents to the maximum extent permitted by Delaware law.

      The Registrant's Certificate of Incorporation provides for the elimination
of liability for monetary damages for breach of the directors' fiduciary duty of
care to the  Registrant and its  stockholders.  The provision does not eliminate
the  directors'  duty of  care  and,  in  appropriate  circumstances,  equitable
remedies such as injunctive  or other forms of  non-monetary  relief will remain
available  under  Delaware  law. In addition,  each director will continue to be
subject  to  liability  for  breach of the  director's  duty of  loyalty  to the
Registrant,  for acts or omissions  not in good faith or  involving  intentional
misconduct,  for knowing  violations of law, for any transaction  from which the
director derived an improper personal  benefit,  and for payment of dividends or
approval of stock  repurchases or  redemptions  that are unlawful under Delaware
law. The provision does not affect director's  responsibilities  under any other
laws,  such as the  federal  securities  laws or state or federal  environmental
laws.

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS.

      The  following  table sets forth,  as of March 18,  2005,  the  beneficial
shareholdings  of persons or entities holding five percent or more of our common
stock, each director  individually,  each named executive officer and all of our
directors  and officers as a group.  Each person has sole voting and  investment
power with respect to the shares of common stock shown,  and all ownership is of
record and beneficial.  Unless otherwise  disclosed,  the address of each person
set forth below is that of the Registrant.

<TABLE>
<CAPTION>

                                       29
<PAGE>

                                                    AMOUNT AND
NAME OF BENEFICIAL                                    NATURE                                                      PERCENT
OWNER                                             BENEFICIAL OWNER               POSITION                         OF CLASS
<S>                                              <C>                <C>                                           <C>
Xiao Ping Zhang                                      9,087,533       Chief Executive Officer and Chairman          68.4%

Xiao Feng Zhang                                      1,135,942       Chief Operating Officer and Director           8.55%

Zong Yun Zhou                                               --       Chief Financial Officer                         *

Guang Kang Chang                                            --       Director                                        *

Officers and Directors as a Group (4 persons)       10,233,475                                                     74.95%


PRINCIPAL SHAREHOLDERS


Shuping Chi                                          1,135,942                                                      8.55%

</TABLE>

-------------------
*Less than 1%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      See Note 2 to the audited Financial Statements for a discussion of Related
Party Transactions.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.

(A) REPORTS ON FORM 8-K

      There were no Reports filed on Form 8-K during the fourth quarter of 2004.

(B) EXHIBITS

  EXHIBIT NO.                    DOCUMENT DESCRIPTION

      3.1   Articles of Incorporation (1)

      3.2   Bylaws (1)

      10.1  Share Exchange Agreement and Plan of Reorganization (2)

      31.1  Certification of Principal Executive Officer pursuant to Rule 13a-14
            and Rule  15d-14(a),  promulgated  under the Securities and Exchange
            Act of 1934, as amended. (3)

      31.2  Certification of Principal Financial Officer pursuant to Rule 13a-14
            and Rule  15d-14(a),  promulgated  under the Securities and Exchange
            Act of 1934, as amended. (3)

      32.1  Certification  pursuant  to  18  U.S.C.  Section  1350,  as  adopted
            pursuant  to Section  906 of the  Sarbanes-Oxley  Act of 2002 (Chief
            Executive Officer). (3)

      32.2  Certification  pursuant  to  18  U.S.C.  Section  1350,  as  adopted
            pursuant  to Section  906 of the  Sarbanes-Oxley  Act of 2002 (Chief
            Financial Officer). (3)

-----------------

(1)  Incorporated  herein by reference from the  Registrant's  Form 10-QSB filed
with the Securities and Exchange Commission, File No. 000-11991 on May 28, 2003.

(2)  Incorporated  herein by reference  from the  Registrant's  Form 8-K Current
Report  and  amendment  thereto  as  filed  with  the  Securities  and  Exchange
Commission, on May 24, 2004.

(3) Filed herewith.

                                       30
<PAGE>


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

      Rotenberg & Co. LLP,  Certified Public  Accountants,  was the Registrant's
independent  registered  public accounting firm engaged to examine the financial
statements of the Registrant for the fiscal year ending  December 31, 2004. Hein
& Associates LLP, was the Registrant's  independent registered public accounting
firm  engaged to examine the  financial  statements  of the  Registrant  for the
fiscal year ended January 31, 2003. The  Registrant  changed its fiscal year end
from  January 31 to December 31 on May 19, 2004.  Rotenberg & Co. LLP  performed
the following services and has been paid the following fees.

FISCAL YEAR ENDED DECEMBER 31, 2004

      AUDIT FEES

      Rotenberg & Co. LLP was paid aggregate fees of approximately  $140,000 for
the fiscal  year ended  December  31,  2004 and 2003 for  professional  services
rendered for the audit of the Registrant's  annual financial  statements and for
the reviews of the financial  statements included in the Registrant's  quarterly
reports on Form 10-QSB for the periods  ended June 30, 2004 and 2003, as well as
September 30, 2004 and 2003.

      AUDIT-RELATED FEES

      Rotenberg  & Co.  LLP was not paid  additional  fees for the  fiscal  year
December 31, 2004 for assurance and related services  reasonably  related to the
performance of the audit or review of the Registrant's financial statements.

      TAX FEES

      Rotenberg  & Co.  LLP was not  paid any fees  for the  fiscal  year  ended
December 31, 2004 for  professional  services  rendered for tax compliance,  tax
advice and tax planning. This service was not provided.

      ALL OTHER FEES

      Rotenberg  & Co.  LLP was paid no other  fees  for  professional  services
during the fiscal year ended December 31, 2004.

FISCAL YEAR ENDED JANUARY 31, 2003

Hein & Associates  LLP performed  the  following  services and has been paid the
following fees.

      Hein & Associates LLP, were the Registrant's independent registered public
accounting engaged to examine the financial statements of the Registrant for the
fiscal year ending January 31, 2003.

                                       31
<PAGE>

      AUDIT FEES

      Hein & Associates  LLP, was paid aggregate fees of  approximately  $44,000
for the fiscal year ended January 31, 2003 for  professional  services  rendered
for the  audit  of the  Registrant's  annual  financial  statements  and for the
reviews of the  financial  statements  included  in the  Registrant's  quarterly
reports on Form 10-QSB during the fiscal year and for the  quarterly  reports on
Form 10-QSB for the first quarter of 2004.

      AUDIT-RELATED FEES

      Hein &  Associates  LLP was not paid  additional  fees for the fiscal year
ended December 31, 2003 for assurance and related services reasonably related to
the performance of the audit or review of the Registrant's financial statements.

      TAX FEES

      Hein &  Associates  LLP,  was not paid any fees for the fiscal  year ended
December 31, 2003 for  professional  services  rendered for tax compliance,  tax
advice and tax planning. This service was not provided.

ALL OTHER FEES

      Hein & Associates  LLP, was paid no other fees for  professional  services
during the fiscal years December 31, 2004.

      AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

      Our Audit  Committee's  policy is to pre-approve all audit and permissible
non-audit  services  provided by our  independent  auditors.  These services may
include audit services, audit-related services, tax services and other services.
Pre-approval  is generally  provided for up to one year and any  pre-approval is
detailed as to the particular  service or category of services.  The independent
auditor  and  management  are  required  to  periodically  report  to the  Audit
Committee  regarding the extent of services provided by the independent  auditor
in accordance with this pre-approval.



                                       32
<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned,  thereunto duly  authorized,  on this 30th day of
March 2005.

                                      SORL AUTO PARTS, INC.




                                      By: /s/ Xiao Ping Zhang
                                          ------------------------------------
                                          Xiao Ping Zhang
                                          Chief Executive Officer and Chairman

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities.

<TABLE>
<CAPTION>

SIGNATURES                            TITLE                                     DATE
<S>                                  <C>                                       <C>
/s/ Xiao Ping Zhang                   Chief Executive Officer and Chairman      March 30, 2005
----------------------------
Xiao Ping Zhang

/s/ Xiao Feng Zhang                   Chief Operating Officer and Director      March 30, 2005
----------------------------
Xiao Feng Zhang

/s/ Zong Yun Zhou                     Chief Financial Officer                   March 30, 2005
----------------------------
Zong Yun Zhou

/s/Guang Kang Chang                   Director                                  March 30, 2005
----------------------------
Guang Kang Chang

</TABLE>

                                       33