---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: September 30, 2010

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

For the transition period from ____________ to _____________

Commission file number: 000-52482

JINHAO MOTOR COMPANY.(Exact Name of Registrant as Specified in Its Charter)

|Nevada                          | 20-2308107         
|------------------------------- | -------------------
|(State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization)  | Identification No.)

Dawang Industrial Park Hi-Tech Exploit Area Zhaoqing
City, Guangdong 526238 Peoples Republic of China(Address of
principal executive offices)

(86) 7583625628(Registrant's telephone number,
including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]         No [ 
 ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes [   ]            
No [   ]

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

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

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

Yes [   ]            
No [X]

The number of shares outstanding of each of the issuers
classes of common stock, as of September 30, 2010 is as follows:

Class of
      Securities
    
    Shares OutstandingOrdinary Shares, $0.001 par value
    
    48,000,436


---



|Quarterly Report on Form 10-Q                       
|----------------------------------------------------
|Three and
      Nine Months Ended September 30, 2010
|                                                    
|                                                    
|TABLE OF CONTENTS                                   

|PART I FINANCIAL
      INFORMATION
|----------------------------------
|                                  
|Item 1.                           
|Item 2.                           
|Item 3.                           
|Item 4.                           
|                                  
|PART II OTHER
      INFORMATION   
|                                  
|Item 1.                           
|Item 1A.                          
|Item 2.                           
|Item 3.                           
|Item 4.                           
|Item 5.                           
|Item 6.                           

---

PART IFINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

|JINHAO MOTOR COMPANY                                                 
|---------------------------------------------------------------------
|UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS  
|FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010
      AND 2009
|(IN THE THOUSANDS OF US DOLLARS)                                     

|                                                                    | Page(s)
|------------------------------------------------------------------- | -------
|Unaudited Interim Condensed Consolidated
      Financial Statements |        
|Balance Sheets                                                      | 3-4    
|Statements of Income and Comprehensive Income                       | 5      
|Statement of Stockholders Equity                                   | 6      
|Statements of Cash Flows                                            | 7      
|Notes to the Financial Statements                                   | 8 - 18 

2

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|JINHAO MOTOR COMPANY                                                      
|--------------------------------------------------------------------------
|UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
      SHEETS             
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)

|                                                                                                                                         | September 30, |             |  | December 31, |        
|---------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ----------- |  | ------------ | -------
|                                                                                                                                         |               | 2010        |  |              | 2009   
|                                                                                                                                         |               | (Unaudited) |  |              |        
|Assets                                                                                                                                   |               |             |  |              |        
|Current assets                                                                                                                           |               |             |  |              |        
|Cash                                                                                                                                     | $             | 34,227      |  | $            | 9,032  
|Short-term investments                                                                                                                   |               | -           |  |              | 1,465  
|Trade receivables, net of
      allowance for doubtful accounts of $Nil as
      at       September 30, 2010 and December
      31, 2009 |               | 23,160      |  |              | 5,780  
|Prepayments, deposits and other receivables
      (note 2)                                                                               |               | 1,781       |  |              | 322    
|Inventories (note 3)                                                                                                                     |               | 14,407      |  |              | 1,168  
|Due from related parties (note 7)                                                                                                        |               | 401         |  |              | 47     
|Deferred tax assets  current                                                                                                            |               | 17          |  |              | 17     
|                                                                                                                                         |               | 73,993      |  |              | 17,831 
|Prepayments, deposits and other
      receivables(note 2)                                                                                |               | 1,687       |  |              | 921    
|Plant and equipment, net(note4)                                                                                                          |               | 44,982      |  |              | 41,161 
|Construction in progress(note
      5)                                                                                                   |               | 46,738      |  |              | 53,280 
|Land use rights, net(note 6)                                                                                                             |               | 835         |  |              | 861    
|Deferred income tax assets                                                                                                               |               | 6,102       |  |              | 5,981  
|Total
      assets                                                                                                                       | $             | 174,337     |  | $            | 120,035
|Liabilities                                                                                                                              |               |             |  |              |        
|Current liabilities                                                                                                                      |               |             |  |              |        
|Bank loans (note 8)                                                                                                                      | $             | 7,470       |  | $            | 12,453 
|Trade payables                                                                                                                           |               | 4,098       |  |              | 4,743  
|Customer deposits                                                                                                                        |               | 291         |  |              | 387    
|Income taxes payable                                                                                                                     |               | 4,959       |  |              | 816    
|Other payables and accrued
      liabilities                                                                                             |               | 2,775       |  |              | 2,603  
|Preferred stock dividends payable                                                                                                        |               | 175         |  |              | -      
|Warranty liability                                                                                                                       |               | 54          |  |              | 17     
|Warrants liability (note 9)                                                                                                              |               | 10,155      |  |              | -      
|Deferred tax liabilities-current                                                                                                         |               | 55          |  |              | 54     
|                                                                                                                                         |               | 30,032      |  |              | 21,073 
|Bank loans long-term portion(note 8)                                                                                                     |               | 2,391       |  |              | 2,344  
|Total
      liabilities                                                                                                                  |               | 32,423      |  |              | 23,417 

Commitments and contingencies(note 12)

3

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|JINHAO MOTOR COMPANY                                                      
|--------------------------------------------------------------------------
|UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
      SHEETS             
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)

|                                                                                                                                                                                                                                                                                                                                        |   | September 30, |  |   | December 31, | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                                                                                                                                                                                                                                                                                        |   | 2010          |  |   | 2009         | 
|                                                                                                                                                                                                                                                                                                                                        |   | (Unaudited)   |  |   |              | 
|                                                                                                                                                                                                                                                                                                                                        |   |               |  |   |              | 
|Redeemable convertible preferred
      stock                                                                                                                                                                                                                                                                                            |   |               |  |   |              | 
|Series A cumulative redeemable convertible
      preferred shares,       $0.001 per share
      par value, 6,857,204 shares authorized and
      outstanding       as at September 30,
      2010 ( 2009 Nil), liquidation preference value of
      $30,550       $Nil as of September 30,
      2010 and 2009, respectively (note 9) | $ | 22,198        |  | $ | -            | 
|                                                                                                                                                                                                                                                                                                                                        |   |               |  |   |              | 
|Stockholders equity                                                                                                                                                                                                                                                                                                                    |   |               |  |   |              | 
|Common stock: $0.001 par
      value, 200,000,000 shares
      authorized       (2009  70,000,000),
      48,000,436 shares issued and
      outstanding       as at September 30,
      2010 and December 31, 2009;                                                                                                                   |   | 48            |  |   | 48           | 
|Additional paid in capital                                                                                                                                                                                                                                                                                                              |   | 56,618        |  |   | 56,328       | 
|Statutory reserves                                                                                                                                                                                                                                                                                                                      |   | 6,195         |  |   | 6,195        | 
|Retained earnings                                                                                                                                                                                                                                                                                                                       |   | 44,197        |  |   | 23,807       | 
|Accumulated other comprehensive income 
      foreign currency translation adjustment                                                                                                                                                                                                                                                  |   | 12,658        |  |   | 10,240       | 
|Total
      stockholders equity                                                                                                                                                                                                                                                                                                        |   | 119,716       |  |   | 96,618       | 
|Total liabilities and stockholders equity                                                                                                                                                                                                                                                                                              | $ | 174,337       |  | $ | 120,035      | 

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

4

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|JINHAO MOTOR COMPANY                                                                        
|--------------------------------------------------------------------------------------------
|UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
      INCOME AND COMPREHENSIVE INCOME
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)                  

|                                                                  |   | Three months ended
      September 30, |   |   | Nine months ended
      September 30, |  
|----------------------------------------------------------------- | - | -------------------------------------- | - | - | ------------------------------------- | -
|                                                                  |   | 2010                                   |   |   | 2009                                  |  
|                                                                  |   | (Unaudited)                            |   |   | (Unaudited)                           |  
|Revenue(note 10)                                                  | $ | 69,959                                 |   | $ | 56,583                                |  
|Cost of
      revenue                                             |   | 51,922                                 |   |   | 42,848                                |  
|Gross profit                                                      |   | 18,037                                 |   |   | 13,735                                |  
|Selling expenses                                                  |   | (3,308                                 | ) |   | (4,554                                | )
|Research and development expenses                                 |   | -                                      |   |   | (877                                  | )
|General and
      administrative expenses                         |   | (975                                   | ) |   | (312                                  | )
|Operating income                                                  |   | 13,754                                 |   |   | 7,992                                 |  
|Change in fair value of warrants                                  |   | 126                                    |   |   | -                                     |  
|Other income                                                      |   | 6                                      |   |   | -                                     |  
|Interest income                                                   |   | 7                                      |   |   | 1                                     |  
|Finance costs                                                     |   | (209                                   | ) |   | (217                                  | )
|Income before income tax                                          |   | 13,684                                 |   |   | 7,776                                 |  
|Income tax (expense) recovery                                     |   | (1,806                                 | ) |   | (765                                  | )
|Net income                                                        |   | 11,878                                 |   |   | 7,011                                 |  
|Redeemable convertible preferred
      stock:                     |   |                                        |   |   |                                       |  
|Deemed dividend
      from       beneficial conversion feature    |   | (6,031                                 | ) |   | -                                     |  
|Accretion expense on preferred
      shares                       |   | (800                                   | ) |   | -                                     |  
|Dividends on preferred shares                                     |   | (175                                   | ) |   | -                                     |  
|Net income attributable to common stock                           | $ | 4,872                                  |   | $ | 7,011                                 |  
|                                                                  |   |                                        |   |   |                                       |  
|                                                                  |   |                                        |   |   |                                       |  
|Other comprehensive income:                                       |   |                                        |   |   |                                       |  
|Foreign currency translation adjustment                           |   | 1,686                                  |   |   | 52                                    |  
|Comprehensive
      income                                        | $ | 13,564                                 |   | $ | 7,063                                 |  
|                                                                  |   |                                        |   |   |                                       |  
|Comprehensive
      income available to    **common
      stock** | $ | 6,558                                  |   | $ | 7,063                                 |  
|                                                                  |   |                                        |   |   |                                       |  
|Earnings per common share:                                        |   |                                        |   |   |                                       |  
|Basic and diluted                                                 | $ | 0.09                                   |   | $ | 0.13                                  |  

|Weighted average number of common shares outstanding: |  |            |  |  |            |  |  |            |  |  |            | 
|----------------------------------------------------- |  | ---------- |  |  | ---------- |  |  | ---------- |  |  | ---------- | 
|Basic and diluted                                     |  | 54,857,640 |  |  | 54,857,640 |  |  | 54,857,640 |  |  | 54,857,640 | 

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

5

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|JINHAO MOTOR COMPANY                                                             
|---------------------------------------------------------------------------------
|UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
      STOCKHOLDERS EQUITY
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR NUMBER OF
      SHARES)                  

AccumulatedAdditional
    
    
    **Statutory**
    
    
    
    
    
    Other
    
    
    TotalPaid in
    
    
    Reserves
    
    
    **Retained**
    
    
    **Comprehensive**
    
    
    StockholdersCommon stock
    
    
    Capital
    
    
    Fund
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityShares
    
    
    AmountBalance, December 31, 2009
    
    48,000,436
    
    $
    48
    
    $
    56,328
    
    $
    6,195
    
    $
    23,807
    
    $
    10,240
    
    $
    96,618Effect of reverse merger
    
    -
    
    
    -
    
    
    4
    
    
    -
    
    
    -
    
    
    -
    
    
    4Offering costs related to the private
      placement
    
    -
    
    
    -
    
    
    (4,066
    )
    
    -
    
    
    -
    
    
    -
    
    
    (4,066
    )Offering costs related to placement agent warrants
    
    
    
    
    -
    
    
    (1,679
    )
    
    -
    
    
    -
    
    
    -
    
    
    (1,679
    )Beneficial conversion feature of redeemable
      convertible preferred stock at inception
    
    -
    
    
    -
    
    
    6,031
    
    
    -
    
    
    -
    
    
    -
    
    
    6,031Deemed dividend from beneficial conversion feature of
      redeemable convertible preferred stock
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (6,031
    )
    
    -
    
    
    (6,031
    )Accretion of preferred shares to redemption
      value
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (800
    )
    
    -
    
    
    (800
    )Dividends on preferred shares
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (175
    )
    
    -
    
    
    (175
    )Net income
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    27,396
    
    
    -
    
    
    27,396Other
      comprehensive income  foreign currency translation adjustments
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    2,418
    
    
    2,418Balance,
      September 30, 2010
    
    48,000,436
    
    $
    48
    
    $
    56,618
    
    $
    6,195
    
    $
    44,197
    
    $
    12,658
    
    $
    119,716


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

6

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|JINHAO MOTOR COMPANY                                                      
|--------------------------------------------------------------------------
|UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
      CASH FLOWS   
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)

|                                                                   |   | Nine months ended
      September 30, |  
|------------------------------------------------------------------ | - | ------------------------------------- | -
|                                                                   |   | 2010                                  |  
|Cash flow from operating activities:                               |   |                                       |  
|Net income for the period                                          | $ | 27,396                                |  
|Items not affecting cash:                                          |   |                                       |  
|Depreciation and
      amortization                                |   | 4,598                                 |  
|Deferred tax provision                                             |   | -                                     |  
|Warranty cost                                                      |   | 35                                    |  
|Change in fair value of warrants                                   |   | (126                                  | )
|Changes in non-cash working capital items:                         |   |                                       |  
|Trade receivables                                                  |   | (17,022                               | )
|Prepayments, deposits, and other receivables                       |   | (2,167                                | )
|Inventories                                                        |   | (12,965                               | )
|Due from related parties                                           |   | (500                                  | )
|Income taxes payable                                               |   | 4,059                                 |  
|Trade payables                                                     |   | (721                                  | )
|Customer deposits                                                  |   | (101                                  | )
|Due to related parties                                             |   | 143                                   |  
|Other payables and accrued liabilities                             |   | 120                                   |  
|                                                                   |   | 2,749                                 |  
|Cash flow from investing activities:                               |   |                                       |  
|Purchase of plant and equipment and construction in
      progress |   | -                                     |  
|Cash acquired from reverse merger                                  |   | 5                                     |  
|Short-term
      investments                                       |   | 1,465                                 |  
|                                                                   |   | 1,470                                 |  
|Cash flow from financing activities:                               |   |                                       |  
|Proceeds from private placement, net                               |   | 25,934                                |  
|Proceeds from bank loans                                           |   | 6,595                                 |  
|Repayment of bank loans                                            |   | (11,757                               | )
|                                                                   |   | 20,772                                |  
|Increase in cash and cash
      equivalents                        |   | 24,991                                |  
|Effect of foreign
      currency translation                       |   | 204                                   |  
|Cash, beginning of period                                          |   | 9,032                                 |  
|Cash, end of
      period                                          | $ | 34,227                                |  

Supplemental Cash Flow Information

Interest paid during the nine month period ended September 30,
2010 was $655 (2009  $516). Total tax paid during the nine months period ended
September 30, 2010 was $Nil (September 30, 2009  $Nil). Non-cash investing
activities for the nine months ended September 30, 2010 included transfer of
$7,472 (2009 - $Nil) from construction in progress to plant and equipment.
Non-cash financing activities for the nine month period ended September 30, 2010
included the issuance to our placement agent of warrants valued at $1,679 (2009
-$ Nil).

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

7

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|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|1. | Organization and Basis of
      Presentation
|-- | --------------------------------------------

Jinhao Motor Company (the "Company") was incorporated under
the laws of the State of Nevada on January 19, 2005, under the name Georgia
International Mining Corporation.

On April 9, 2010, the Company changed its name to Jinhao
Motor Company. On August 11, 2010, the Company completed a share exchange
transaction with Jinhao Power Holdings Limited ("Jinhao Power"), pursuant to
which the Company acquired 100% of the issued and outstanding capital stock of
Jinhao Power in exchange for 45,600,418 shares of the Company's Common Stock par
value $0.001 (the "Share Exchange"), which constituted 95% of the Companys
issued and outstanding capital stock on a fully-diluted basis as of and
immediately after the consummation of the Share Exchange and after giving effect
to a cancellation of 2,479,523 shares of the Companys Common Stock by the
former sole director and officer of the Company on the same day pursuant to a
share purchase agreement. After the Share Exchange, the Company had 48,000,436
shares of common stock outstanding.

The Share Exchange has been accounted for as a reverse
acquisition and recapitalization of the Company whereby the Company (the legal
acquirer) is considered the accounting acquiree and Jinhao Power (the legal
acquiree) is considered the accounting acquirer. As a result of this
transaction, the Company is deemed to be a continuation of the business of
Jinhao Power. Accordingly, the accompanying interim condensed consolidated
financial statements are those of the accounting acquirer (Jinhao Power). The
historical stockholders equity of the accounting acquirer prior to the share
exchange has been retroactively restated as if the Share Exchange occurred as of
the beginning of the first period presented.

Jinhao Power was incorporated as a holding company on January
27, 2010, by its sole shareholder, Mr. Chak Shing Tsoi (the "Shareholder"). Its
registered office is located at 30 de Castro Street, Wickhams Cay 1, P.O. Box
4519, Road Town, Tortola, British Virgin Islands ("BVI"). Jinhao Power, through
its subsidiaries and variable interest entity ("VIE") for which Jinhao Power is
the primary beneficiary, is engaged in the manufacturing motorcycles and
electric cars in the People's Republic of China ("PRC"). Guangdong Jinhao
Motorcycle Co., Ltd ("Guangdong Jinhao") was incorporated on March 24, 2003 and
was 75% owned by the Shareholder through Jinhao Group (H.K.) Co., Ltd.
(formerly, Jinhao Motorcycle Company Limited) ("Jinhao HK"), which is 100% owned
by the Shareholder. Zhaoqing Haoyan Industrial Co., Ltd. ("Haoyan") is the legal
owner of the remaining 25% interest of Guangdong Jinhao and is controlled by the
Shareholder.

Jinhao New Energy (Zhaoqing) Development Co., Ltd. ("New
Energy") was incorporated by Jinhao HK, a holding company, on July 24, 2009 and
has been a subsidiary of Jinhao HK since inception.

Reorganization

On February 8, 2010, the Shareholder transferred all of his
shares in Jinhao HK into Jinhao Power for no consideration.

On July 19, 2010, to be in compliance with the regulations of
the Peoples Republic of China ("PRC"), the Shareholder and Jinhao HK entered
into a transfer agreement with Haoyan, whereby Jinhao HK transferred 26% of its
ownership interest in Guangdong Jinhao to Haoyan. After the share transfer,
Haoyans and Jinhao HKs ownership interests in Guangdong Jinhao were revised to
51% and 49%, respectively.

Also on July 19, 2010, the Shareholder, Jinhao HK and New
Energy entered into a series of agreements (the Contractual Arrangements) with
Haoyan, whereby Jinhao HK and New Energy, as a group, obtained effective control
over Haoyans 51% equity interest in Guangdong Jinhao through its ability to
exercise all the voting rights of Haoyan, the rights to receive substantially
100% of the economic residual benefits and the obligation to absorb all of the
risk of losses of Guangdong Jinhao. Jinhao Power, through its 100% owned
subsidiaries Jinhao HK and New Energy, has been determined to be the primary
beneficiary of Haoyans 51% equity interest in Guangdong Jinhao because Jinhao
Power is fully and exclusively responsible for the management of Guangdong
Jinhao, assumes all of risk of losses of Guangdong Jinhao and has the exclusive
right to exercise all voting rights of Haoyan. In accordance with Accounting
Standards Codification (ASC) Topic Consolidation, Jinhao Power consolidates
100% of Guangdong Jinhaos operations, assets and liabilities.

8

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|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|1. | Organization and Basis of
      Presentation (continued)
|-- | --------------------------------------------------------

Since Jinhao HK, New Energy, Guangdong Jinhao and Haoyan are
all controlled by the Shareholder, in accordance with ASC Topic Transaction
Between Entities Under Common Control, the transaction was accounted in a
manner similar to the pooling-of-interests method. The consolidated financial
statements of the Company have been prepared applying the continuity of interest
method of accounting, despite the change in the legal structure. This results in
financial information of the Company being presented as if it had legally owned
100% of Guangdong Jinhao since March 24, 2003.

As at September 30, 2010 and December 31, 2009, the Company
consolidated the following entities:

Name
    Date of incorporation
    Place of incorporation
    Percentage of consolidation
    Principal activitiesJinhao Power
    January 27, 2010
    BVI
    100%
    Investment holdingJinhao HK
    September 4, 2007
    Hong
      Kong, PRC
    100%
    Investment holdingNew Energy
    July 24, 2009
    PRC
    100%
    Investment holdingGuangdong Jinhao
    March
      24, 2003
    PRC
    100%
    Operating Company


All inter-company balances and transactions have been
eliminated on consolidation. The accompanying unaudited interim condensed
consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America
(GAAP).

In the opinion of management, all adjustments (consisting of
normal recurring items) considered necessary in order to make the unaudited
interim condensed consolidated financial statements not misleading have been
included and all such adjustments are of a normal recurring nature. The results
of operations for any interim period are not necessarily indicative of results
for the full year.

The unaudited interim condensed consolidated financial
statements are based on accounting principles that are consistent in all
material respects with those applied in Jinhao Powers Annual Financial
Statements for the years ended December 31, 2009 and 2008 except as disclosed
below. They do not include certain footnote disclosures and financial
information normally included in annual consolidated financial statements
prepared in accordance with GAAP and, therefore, should be read in conjunction
with the audited consolidated financial statements and notes included in the
Jinhao Powers 2009 and 2008 Annual Financial Statements included in the
registration statement on form S-1filed with US Securities and Exchange
Commission ("SEC") on October 29, 2010 (File No. 333-170226).

(a)Fair value of Financial
instruments

The standard, Disclosures about Fair Value of Financial
Instruments, defines financial instruments and requires fair value disclosures
for those instruments. The standard, Fair Value Measurements, defines fair
value and establishes a three-level valuation hierarchy for disclosures of fair
value measurement and enhances disclosures requirements for fair value measures.
The Company utilizes market data or assumptions that the Company believes market
participants would use in pricing the asset or liability, including assumptions
about risk and the risks inherent in the inputs to the valuation technique.
These inputs can be readily observable, market corroborated or generally
unobservable.

The Company primarily applies the market approach for recurring
fair value measurements and endeavors to utilize the best available information.
Accordingly, the Company utilizes valuation techniques that maximize the use of
observable inputs and minimize the use of unobservable inputs. The Company is
able to classify fair value balances based on the observability of those inputs.

9

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|1. | Organization and Basis of Presentation (continued)
|-- | --------------------------------------------------

|(a) | Fair value of Financial instruments (continued)
|--- | -----------------------------------------------

The three levels of the fair value hierarchy defined by the
standard are as follows:

- Level 1: inputs to the valuation methodology are quoted prices
  (unadjusted) for identical assets or liabilities in active markets.
- Level 2: inputs to the valuation methodology include quoted prices for
  similar assets and liabilities in active markets, and inputs that are
  observable for the assets or liability, either directly or indirectly, for
  substantially the full term of the financial instruments.
- Level 3: inputs to the valuation methodology are unobservable and
  significant to the fair value.

The table below analyses financial instrument carried at fair
value as at September 30, 2010:

|Fair Value
      Measurements Using |   | Level
      1 |  |   | Level
      2 |  |   | Level
      3 |  |   | At
      Fair Value | 
|----------------------------------- | - | ------------- |  | - | ------------- |  | - | ------------- |  | - | ------------------- | 
|Warrants liability                  | $ | -             |  | $ | 10,155        |  | $ | -             |  | $ | 10,155              | 
|Total                               | $ | -             |  | $ | 10,155        |  | $ | -             |  | $ | 10,155              | 

The table below analyses financial instrument carried at fair
value as at December 31, 2009:

|Fair Value
      Measurements Using |   | Level
      1 |  |   | Level
      2 |  |   | Level
      3 |  |   | At
      Fair Value | 
|----------------------------------- | - | ------------- |  | - | ------------- |  | - | ------------- |  | - | ------------------- | 
|Short-term investments              | $ | 1,465         |  | $ | -             |  | $ | -             |  | $ | 1,465               | 
|Total                               | $ | 1,465         |  | $ | -             |  | $ | -             |  | $ | 1,465               | 

|(b) | Recently adopted accounting pronouncements
|--- | ------------------------------------------

In June 2009, the FASB issued FASB Accounting Standard Update,
Consolidations: Improvement to Financial Reporting by Enterprises Involved with
Variable Interest Entities. This standard eliminates certain scope exceptions
previously permitted, provides additional guidance for determining whether an
entity is a variable interest entity, and requires companies to more frequently
reassess whether they must consolidate variable interest entities. The changes
also replace the previously required quantitative approach to determining the
primary beneficiary of a variable interest entity with a requirement for an
enterprise to perform a qualitative analysis to determine whether the
enterprises variable interest or interests give it a controlling financial
interest in a variable interest entity. The standard is effective for interim
and annual reporting periods beginning after January 1, 2010. The adoption on
January 1, 2010 of this standard did not have a material effect on the Companys
interim condensed consolidated financial statements.

In January 2010, the FASB issued the guidance, Improving
Disclosures about Fair Value Measurements. This guidance amends existing
disclosure requirements about fair value measurement and clarifies and provides
additional disclosure requirements related to recurring and non-recurring fair
value measurements. This guidance became effective for the Company on January 1,
2010. The adoption of this ASU did not have a material impact on the Companys
interim condensed consolidated financial statements.

In March 2010, the FASB issued the standard, Scope Exception
Related to Embedded Credit Derivatives to provide clarification on the
bifurcation scope exception for embedded credit derivative features. The
standard became effective for the Company on July 1, 2010. The adoption of this
standard did not have a material impact on the Companys interim condensed
consolidated financial statements.

10

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|1.  | Organization and Basis of Presentation (continued)  
|--- | ----------------------------------------------------
|    |                                                     
|(c) | Recent accounting pronouncements to be
      adopted

In April 2010, the FASB issued the guidance Compensation-Stock
Compensation (Topic 718): Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the Underlying
Equity Security Trades. The guidance clarifies that share-based payment awards
with an exercise price denominated in the currency of a market in which a
substantial portion of the underlying equity security trades should not be
considered to meet the criteria requiring classification as a liability. The
guidance is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2010. Early adoption is permitted. The
Company does not expect the adoption of this standard will have a material
impact on its consolidated financial statements.

In July, 2010, the FASB issued the standard Disclosures about
the Credit Quality of Financing Receivables and the Allowance for Credit Losses
(ASU 2010-20) which expands the disclosure requirements concerning the credit
quality of an entitys financing receivables and its allowance for credit
losses. The standard is effective for interim and annual reporting periods
beginning on or after December 15, 2010. The Company does not expect the
adoption of this guidance will have a material impact on its consolidated
financial statements.

|Foreign exchange rates used:             |  | September 30, |  |  | December 31, |  |  | September 30, | 
|---------------------------------------- |  | ------------- |  |  | ------------ |  |  | ------------- | 
|                                         |  | 2010          |  |  | 2009         |  |  | 2009          | 
|                                         |  |               |  |  |              |  |  |               | 
|Period end RMB/U.S. Dollar exchange rate |  | 6.6905        |  |  | 6.8259       |  |  | 6.8262        | 
|Average RMB/U.S. Dollar exchange rate    |  | 6.7677        |  |  | 6.8307       |  |  | 6.8319        | 

|2. | Prepayments, Deposits and Other Receivable
|-- | ------------------------------------------

|                                                                       |   | September 30, |  |   | December 31 | 
|---------------------------------------------------------------------- | - | ------------- |  | - | ----------- | 
|                                                                       |   | 2010          |  |   | 2009        | 
|Other receivables (i)                                                  | $ | 1,200         |  | $ | -           | 
|Value Added Tax (VAT) receivable                                     |   | 523           |  |   | 322         | 
|Prepayments                                                            |   | 58            |  |   | -           | 
|                                                                       |   |               |  |   |             | 
|Prepayments, deposits and other receivables  short term
      portion | $ | 1,781         |  | $ | 322         | 
|                                                                       |   |               |  |   |             | 
|                                                                       |   |               |  |   |             | 
|Prepayments,
      deposits and other receivables  long term portion  | $ | 1,687         |  | $ | 921         | 

(i) The balance represents non- interest bearing short term
advances of $1,200 to two unrelated companies as at September 30, 2010 (2009
-$Nil). The balance is expected to be collected by the end of 2010.

|3. | Inventories
|-- | -----------

|               |   | September 30, |  |   | December 31 | 
|-------------- | - | ------------- |  | - | ----------- | 
|               |   | 2010          |  |   | 2009        | 
|Raw materials  | $ | 14,145        |  | $ | 908         | 
|Finished goods |   | 262           |  |   | 260         | 
|               |   |               |  |   |             | 
|               | $ | 14,407        |  | $ | 1,168       | 

During the period ended September 30, 2010, the Company
recorded no inventory write-downs and made no reversals of previous inventory
write-downs (2009 - $Nil). The production cycle is approximately two days. As at
September30, 2010, there was no work-in-progress (December 31, 2009 - $Nil).

11

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|4. | Plant and Equipment
|-- | -------------------

Plant and equipment, which are stated at cost less
depreciation, were composed of the following:

|                               |   | September 30, |   |   | December 31 |  
|------------------------------ | - | ------------- | - | - | ----------- | -
|                               |   | 2010          |   |   | 2009        |  
|                               |   |               |   |   |             |  
|Buildings                      | $ | 18,365        |   | $ | 10,532      |  
|Equipment                      |   | 46,513        |   |   | 45,590      |  
|Office equipment               |   | 103           |   |   | 101         |  
|Vehicles                       |   | 268           |   |   | 263         |  
|Total                          |   | 65,249        |   |   | 56,486      |  
|Accumulated
      depreciation |   | (20,267       | ) |   | (15,325     | )
|Plant and equipment, net       | $ | 44,982        |   | $ | 41,161      |  

Depreciation expense is included in cost of revenue and general
and administrative expense. The depreciation expense for the three and nine
months ended September 30, 2010 is $1,577 (2009 - $901) and $4,556 (2009 
$2,703), respectively. Certain of the Companys buildings and its land use right
are pledged to secure one of the bank loans (note 8).During the nine
months ended September 30, 2010, $7,534 of buildings and plants under
construction were transferred to buildings (2009 -$Nil).

|5. | Construction in Progress
|-- | ------------------------

|                                        |   | September 30, |  |   | December 31 | 
|--------------------------------------- | - | ------------- |  | - | ----------- | 
|                                        |   | 2010          |  |   | 2009        | 
|Buildings and plants under construction | $ | 12,785        |  | $ | 20,001      | 
|Equipment and machinery to be installed |   | 17,124        |  |   | 16,784      | 
|Electric car moulds                     |   | 16,829        |  |   | 16,495      | 
|Total                                   | $ | 46,738        |  | $ | 53,280      | 

The Companys construction in progress is comprised of
buildings and plants under construction and machinery and equipment for the
electric car installation process. During the nine months ended September 30,
2010, $7,534 of buildings and plants under-construction were transferred to
buildings (2009 -$Nil).

|6. | Land Use Rights
|-- | ---------------

Land use rights consist of the following as at September 30,
2010 and December 31, 2009:

|                               |   | September 30, |   |   | December 31 |  
|------------------------------ | - | ------------- | - | - | ----------- | -
|                               |   | 2010          |   |   | 2009        |  
|Land use rights  at cost      | $ | 1,133         |   | $ | 1,110       |  
|Accumulated
      amortization |   | (298          | ) |   | (249        | )
|Total                          | $ | 835           |   | $ | 861         |  

As of September 30, 2010, the Company had land use rights from
the PRC government with a term of 48 years. The Company is amortizing this
amount over 20 years because the Companys operating license is 20 years. The
remaining amortization period is 15 years. Amortization expense is included in
general and administrative expenses. The amortization expense for the three and
nine months ended September 30, 2010 is $14 (2009 - $13) and $42 (2009 - $40),
respectively. Under the PRC law, land use rights can be revoked and the tenants
can be forced to vacate at any time when re-development of the land is in the
public interest. The Companys land use rights and certain buildings are pledged
to secure one of the bank loans (note 8).

12

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|7. | Related Party Transactions
      and Balances
|-- | ---------------------------------------------

A summary of balances and transactions with related parties is
as follows:

|                                        |   | September 30, |  |   | December 31, | 
|--------------------------------------- | - | ------------- |  | - | ------------ | 
|                                        |   | 2010          |  |   | 2009         | 
|With the shareholder or
      director: |   |               |  |   |              | 
|Due from the
      shareholder/director | $ | 401           |  | $ | 47           | 

Transactions with entities under common control

U-Harbour Co., Ltd (U-Harbour), Haoyan and Jinhao Power are
under common control. There are no transactions between the Company and
U-Harbour and Haoyan for the nine months ended September 30, 2010 and 2009. The
Company does not have any outstanding balances with U-Harbour and Haoyan as of
September 30, 2010 (December 31, 2009 - $Nil).

Due from the shareholder/director:

The balance due from the shareholder and director represents
money advanced to the shareholder and director. It is non-interest bearing and
has no fixed terms of repayment.

|8. | Bank Loans
|-- | ----------

|                                          |   | September 30, |  |   | December 31, | 
|----------------------------------------- | - | ------------- |  | - | ------------ | 
|                                          |   | 2010          |  |   | 2009         | 
|China Merchandise Bank (a)                | $ | 2,989         |  | $ | 4,395        | 
|Shenzhen Development Bank (b)             |   | 4,481         |  |   | 4,395        | 
|Bank of Communications (c)                |   | -             |  |   | 3,663        | 
|Dawang Rural
      Credit Cooperative (d) |   | 2,391         |  |   | 2,344        | 
|Total bank loans                          |   | 9,861         |  |   | 14,797       | 
|Less:
      Current-portion of bank loans |   | 7,470         |  |   | 12,453       | 
|Long-term portion of bank loans           | $ | 2,391         |  | $ | 2,344        | 

|                                         |   | September 30, |  |   | December 31, | 
|---------------------------------------- | - | ------------- |  | - | ------------ | 
|                                         |   | 2010          |  |   | 2009         | 
|                                         |   |               |  |   |              | 
|The bank loans are repayable as follows: |   |               |  |   |              | 
|Within 1 year or on demand               | $ | 7,470         |  | $ | 12,453       | 
|After 1 year but within 2 years          | $ | 2,391         |  | $ | 2,344        | 

The long-term loan is secured by some of the Companys
buildings (note 4) and land use rights (note 6). The carrying
values of secured assets are as follows:

|                          |   | September 30, |  |   | December 31, | 
|------------------------- | - | ------------- |  | - | ------------ | 
|                          |   | 2010          |  |   | 2009         | 
|Buildings (e)             | $ | 7,902         |  | $ | 8,125        | 
|Land use rights
      (e) |   | 835           |  |   | 861          | 
|                          | $ | 8,737         |  | $ | 8,986        | 

(a) The Company has an operating line of credit from China
Merchandise Bank with a maximum available credit of approximately $4,932. The
amount withdrawn from the line is due in six months from the date of withdrawal.
The line bears interest at 110% of the People's Bank of China (PBOC) prime
rate. The interest rate was 5.94% at September 30, 2010 (December 31, 2009 
5.94%). The line will expire on March 24, 2011 and is guaranteed by Haoyan and
the Chairman of the Company.

13

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|8. | Bank Loans (continued)
|-- | ----------------------

(b) The Company has operating lines of credit from Shenzhen
Development Bank with total available credit to a maximum of approximately
$4,484. The amounts withdrawn from the lines are due in December, 2010 and bear
interest at 130% of the PBOC prime rate (2009  113% of the PBOC prime rate).
The interest rate was approximately 7.02% at September 30, 2010 (December 31,
2009  6.30%). The lines of credit are available until December 31, 2010.

(c) The Company had three bank loans from Bank of
Communications for a total of $3,663 as at December 31, 2009. The loans are due
on various dates in July 2010 and were repaid in July 2010.

(d) The Company has an operating line of credit from Dawang
Rural Credit Cooperative with total available credit to a maximum of
approximately $2,690. The loan bears interest at a fixed rate of 6.975%. The
loan is secured by the land use rights and certain buildings. Both the due date
of the loan and the expiry date of the line are April 1, 2012.

(e) The secured buildings and land use rights cannot be
re-pledged without permission from the existing debtholder. There are no
financial covenants on bank loans as at September 30, 2010 and December 31,
2009. Due to the market nature of interest being charged, the carrying values of
bank loans are the same as their respective fair values.

|9. | Private Placement of
      Redeemable Convertible Preferred Stock
|-- | -----------------------------------------------------------------

On September 2, 2010 (the Closing Date), the Company
completed a securities purchase agreement (the Purchase Agreement) with its
major shareholder and certain accredited investors (Investors), pursuant to
which the Company sold to the Investors 6,857,204 units (the Unit) for
$4.37496 per Unit (the 2010 Private Placement) with gross proceeds of $30,000.
Each Unit consists of one share of the Companys Series A Redeemable Convertible
Preferred Stock, with a par value of $0.001 per share (Series A Preferred
Stock) and one warrant to purchase 0.5 shares of the Companys common stock.
The Warrants (Investors Warrants) are immediately exercisable at a per share
price of $6.56244 (Investors Warrants Exercise Price) and have a term of 3
years. The Investors are entitled to receive dividends at an annual rate of 7%.
In addition, the placement agent received 514,290 warrants (Placement Agent
Warrants) with an exercise price of $4.50 per share. The Placement Agent
Warrants will expire at the latest of (i) 5 years following the closing of
issuance of the Series A Preferred Stock; (ii) 5 years following the date when
the Company becomes a publicly traded entity and (iii) the expiration date of
Warrants issued to Investors in connection with the 2010 Private Placement. The
2010 Private Placement resulted in proceeds of $25,934, net of issuance costs of
$4,066.

The Series A Preferred Stock has a liquidation preference,
senior to the Common stock, equal to the sum of (a) 100% of the original issue
price ($30,000), (b) interest accrued daily on the original issue price at the
rate of 15% per annum compounded annually from the date of issuance plus (c)
accrued and declared and undistributed dividends and other distributions. After
distribution in full of the amount distributable on the Series A Preferred
Stock, any remaining assets of the Company available for distribution to its
shareholders shall be distributed ratably among the holders of outstanding
common stock and the holders of Series A Preferred Stock on an as-converted
basis. As at September 30, 2010, the liquidation preference was $30,550.

At the option of the holder, the Series A Preferred Stock can
be converted into one share of the Companys Common Stock at a conversion price
of $4.37496 per share (Conversion Price). Both the Conversion Price and
Investors Warrants Exercise Price are subject to an anti-dilution adjustment
clause, including adjustment if the Company enters into any variable rate
transactions. Upon the occurrence of certain events or any time on or after the
first anniversary of the closing date of the Purchase Agreement, Investors have
an option to require the Company to redeem all or a portion of the Series A
Preferred Stock, at a redemption price calculated based on the terms of Purchase
Agreement.

At the option of the Company, upon the occurrence of certain
events, the Company has the right to request mandatory conversion of Series A
Preferred Stock into common stock at a conversion price in accordance with the
agreement.

The Company was required to file a registration statement
within 59 days of the Closing Date and cause such registration statement to
become effective within 150 days of the Closing Date (which period would be
extended by 30 additional days in the event such registration statement shall be
subject to a full review). The required registration statement was filed on
October 29, 2010, but has not yet become effective (note 13). The Company
is required to pay each Investor compensation equal to 1% of such Investors
investment amount for each month of delay in the effectiveness of the
registration statement up to the greater of (i) 8% of such Investors investment
amount, and (ii) the amount of damages that such Investor incurs as a
result of such delay. As at September 30, 2010, the Company has not accrued any
such payments.

14

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|9. | Private Placement of
      Redeemable Convertible Preferred Stock (continued)
|-- | -----------------------------------------------------------------------------

Among other conditions included in the covenants of the
Purchase Agreement, the Company agrees to compensate the Investors in cash, if
its after tax net profit for the years ending December 31, 2010, 2011 and 2012
is below $35,000, $48,000 and $68,000, respectively. The Company is also
prohibited from effecting or entering into certain subsequent equity issuance
agreements and certain other transactions without Investors approval. In
addition, the Company is committed to acquire a particular car manufacturing
company and obtain certain permits and approvals related to its operations
within 6 months after the Closing Date (note 13(b)).

Since the Series A Preferred Stock holders participate with the
common stock holders in distributions on liquidation on an as-if converted
basis, the Series A Preferred Stock encompasses a residual interest in the
Company. In accordance with ASC 815-15-25-16, the Company considers the Series A
Preferred Stock to be an equity instrument and the embedded conversion option
does not meet the criteria requiring bifurcation of the instrument.

Both the Investors Warrants and Placement Agent Warrants have
standard anti-dilution adjustments for stock splits and similar events but also
include anti-dilution adjustments if the Company enters into any variable rate
transactions. Because the exercise price is not fixed, the Company recorded
those warrants as a derivative liability and they will be periodically
marked-to-market. The fair value of the warrants was determined to be $10,281
and $10,155 as at September 2, 2010 and September 30, 2010, respectively, using
the Cox-Ross-Rubinstein Binomial Lattice Model (the CRR Model) with the
following assumptions:

|                        |  | September 2, |  |  | September 30,   | 
|----------------------- |  | ------------ |  |  | --------------- | 
|                        |  | 2010         |  |  | 2010            | 
|Expected life           |  | 3-5 years    |  |  | 2.92-4.93 years | 
|Expected volatility     |  | 120%         |  |  | 120%            | 
|Risk free interest rate |  | 0.76-1.43%   |  |  | 0.62-1.25%      | 
|Dividend rate           |  | Nil          |  |  | Nil             | 

Included in the warrants liability, the fair value of Placement
Warrants was determined to be $1,679 at the time Series A Preferred Stock was
issued on September 2, 2010 and was charged to additional paid in capital.

The fair value of the beneficial conversion feature of the
Series A Preferred Stock at the date of issuance was determined to be $6,031,
based on the effective conversion price. The beneficial conversion feature was
immediately charged to income as a deemed dividend to the Series A Preferred
stockholders as the Series A Preferred Stock are immediately convertible by the
holders.

After allocating the gross proceeds of $30,000 from the 2010
Private Placement to the fair value of the Investors Warrants which was $8,602
as at September 2, 2010, the remaining proceeds were allocated as the initial
carrying value of the Series A Preferred Stock. At September 2, 2010, the
issuance date, the Company recorded the Series A Preferred Stock at $21,398 in
mezzanine equity in accordance with ASC 480-10-S99 as it has conditions for
redemption that are outside the control of the Company. The initial carrying
value of the Series A Preferred Stock is being accreted to its stated redemption
value over the one year period to the date the holders may request redemption.
During the three and nine months ended September 30, 2010, the Company recorded
an $800 accretion charge on the Series A Preferred Stock. As of September 30,
2010, the carrying value of the Series A Preferred Stock amounted to $22,198.

|10. | Segment Information
|--- | -------------------

Segment information is presented in respect of the Companys
business segments based on the Companys management and internal reporting
structure. The Company is organized into two reporting segments: motorcycle and
electric car. The two segments are managed separately according to the nature of
the products provided, with each segment representing a strategic business unit
that offers different products and serves different markets. There are no
intersegment transactions.

15

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|10. | Segment Information
      (continued)
|--- | -------------------------------------

|                             |   | Three Months Ended September 30, 2010 | 
|---------------------------- | - | ------------------------------------- | 
|                             |   | Motorcycles                           | 
|Sales to external customers  | $ | 58,760                                | 
|                             |   |                                       | 
|Segment profit or (loss) (i) | $ | 11,428                                | 
|Change in fair value of      |   |                                       | 
|warrants                     |   |                                       | 
|Interest income              |   |                                       | 
|Finance costs                |   |                                       | 
|Income tax expense           |   |                                       | 
|Net income for the period    |   |                                       | 

|                             |   | Three Months Ended September 30, 2009 | 
|---------------------------- | - | ------------------------------------- | 
|                             |   | Motorcycles                           | 
|Sales to external customers  | $ | 56,583                                | 
|                             |   |                                       | 
|Segment profit or (loss) (i) | $ | 9,181                                 | 
|Interest income              |   |                                       | 
|Finance costs                |   |                                       | 
|Income tax expense           |   |                                       | 
|Net income for the period    |   |                                       | 

|                             |   | Nine Months Ended September 30, 2010 | 
|---------------------------- | - | ------------------------------------ | 
|                             |   | Motorcycles                          | 
|Sales to external customers  | $ | 149,769                              | 
|                             |   |                                      | 
|Segment profit or (loss) (i) | $ | 27,504                               | 
|Change in fair value of      |   |                                      | 
|warrants                     |   |                                      | 
|Interest income              |   |                                      | 
|Finance costs                |   |                                      | 
|Income tax expense           |   |                                      | 
|Net income for the period    |   |                                      | 

|                             |   | Nine Months Ended September 30, 2009 | 
|---------------------------- | - | ------------------------------------ | 
|                             |   | Motorcycles                          | 
|Sales to external customers  | $ | 135,576                              | 
|                             |   |                                      | 
|Segment profit or (loss) (i) | $ | 20,726                               | 
|Interest income              |   |                                      | 
|Finance costs                |   |                                      | 
|Income tax
      recovery    |   |                                      | 
|Net income for the period    |   |                                      | 

(i) Unallocated expenses include corporate management and
administration overhead expense.

16

---

|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|11. | Earnings Per Share
|--- | ------------------

The basic and diluted earnings per common share reflects the
impact of participating securities. The Series A Preferred Stock holders are
entitled to receive any dividends paid on the common stock, on an as-if
converted basis. As a result, the Series A Preferred Stock is a participating
security. The reconciliation of shares outstanding for the basic and diluted
earnings per share calculation is as follows:

|                                                 |   | 3
      months |  |   | 3
      months |  |   | 9
      months |  |   | 9
      months | 
|------------------------------------------------ | - | -------------- |  | - | -------------- |  | - | -------------- |  | - | -------------- | 
|                                                 |   | September 30,  |  |   | September 30,  |  |   | September 30,  |  |   | September 30,  | 
|Numerator                                        |   | 2010           |  |   | 2009           |  |   | 2010           |  |   | 2009           | 
|Net income attributable to Common Stock - basic  | $ | 4,872          |  | $ | 7,011          |  | $ | 20,390         |  | $ | 6,388          | 
|Effect of dilutive securities                    |   |                |  |   |                |  |   |                |  |   |                | 
|Warrants (i)                                     |   | -              |  |   | -              |  |   | -              |  |   | -              | 
|Accretion on
    convertible preferred stock     |   | -              |  |   | -              |  |   | -              |  |   | -              | 
|Net income attributable to common stock-diluted  | $ | 4,872          |  | $ | 7,011          |  | $ | 20,390         |  | $ | 6,388          | 
|Denominator                                      |   |                |  |   |                |  |   |                |  |   |                | 
|Weighted average shares outstanding - basic (ii) |   | 54,857,640     |  |   | 54,857,640     |  |   | 54,857,640     |  |   | 54,857,640     | 
|Effect of dilutive securities                    |   |                |  |   |                |  |   |                |  |   |                | 
|Warrants (i)                                     |   | -              |  |   | -              |  |   | -              |  |   | -              | 
|Series A
      Preferred Stock (iii)             |   | -              |  |   | -              |  |   | -              |  |   | -              | 
|Weighted average shares outstanding - diluted    |   | 54,857,640     |  |   | 54,857,640     |  |   | 54,857,640     |  |   | 54,857,640     | 
|Earnings per common share                        |   |                |  |   |                |  |   |                |  |   |                | 
|Basic earnings per common share-                 | $ | 0.09           |  | $ | 0.13           |  | $ | 0.37           |  | $ | 0.12           | 
|Diluted earnings per common share                | $ | 0.09           |  | $ | 0.13           |  | $ | 0.37           |  | $ | 0.12           | 

|(i)   | The Companys outstanding warrants, including Placement Agent Warrants
      and Investor Warrants, were anti-dilutive for the three months and nine
      months periods ended September 30, 2010 and are not included in the
      weighted average shares outstanding for the calculation of diluted
      earnings per common share.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                         
|(ii)  | The basic weighted average common shares outstanding for the three and
      nine months period ended September 30, 2010 included 6,857,204 of common
      shares converted from Series A Preferred Stock because Series A Preferred
      Stock was treated as participating securities.                                              
|      |                                                                                                                                                                                                                                                                                                                                         
|(iii) | The Series A Preferred Stock is anti-dilutive for the three months and
      nine month periods ended September 30, 2010 for the purpose of calculating
      diluted earnings per common shares.                                                                                                                                       

|12. | Commitments and
      Contingencies
|--- | -----------------------------------

Commitments

|(i)   | The Company has entered into a contract with a vendor to construct a
      manufacturing plant and an office building with estimated future costs of
      $558 as of September 30, 2010. The project is expected to be completed by
      2011.                
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                 
|(ii)  | The Company contracted a supplier to install and test certain electric
      car equipment in 2010 with an estimated cost of $1,091 as at September 30,
      2010.                                                                                             
|      |                                                                                                                                                                                                                                                                 
|(iii) | The Company contracted two suppliers to manufacture certain electric
      car moulds in 2009. As at September 30, 2010, production of these electric
      car moulds was still in progress. The remaining cost for completion is
      estimated to be $3,084.

Contingencies

|(a) | The Company has disputes with two companies arising in the ordinary
      course of business. There is no current litigation outstanding. It is the
      opinion of management that it has meritorious defenses against any related
      future claims if applicable, which the Company will vigorously pursue. No
      provision has been made for pending claims as the outcome of disputes
      cannot be reasonably estimated.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

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|JINHAO MOTOR COMPANY                                                        
|----------------------------------------------------------------------------
|NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS
|(IN THOUSANDS OF US DOLLARS, EXCEPT FOR SHARE AND PER
      SHARE AMOUNTS)  

|(b) | The Company is required to file a registration statement within 59
      days of the Closing Date and cause such registration statement to become
      effective within 150 days of the Closing Date (which period shall be
      extended by 30 additional days in the event such registration statement
      shall be subject to a full review). The required registration statement
      was filed on October 29, 2010, but has not yet become effective (note
      13). The Company is required to pay each Investor compensation equal
      to 1% of such Investors investment amount for each month of delay in the
      effectiveness of the registration statement up to the greater of (i) 8% of
      such Investors investment amount, and (ii) the amount of damages that
      such Investor incurs as a result of such delay (notes 9 and 13).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Subsequent Events
|--- | -----------------

| | On November 11, 2010, Guangdong Jinhao, the variable interest entity of the Company entered into an equity transfer agreement (the "Equity Transfer Agreement") with the shareholders of Zhangjiagang Chunzhou Station Wagon Co., Ltd. ("Station Wagon"),
a company based in the PRC, for the purchase of a 60% equity interest in Station Wagon for an aggregate purchase price of approximately $27,000 (RMB 180,000) (the "Purchase Price"). Station Wagon designs, produces and distributes various models
of gasoline commercial vans and buses. The acquisition is intended to enhance our brand recognition, increase our production capacity, provide us an entry into the on-road vehicles segment for the retail consumers and increase the possibility of the
Company being listed in the “National Vehicle Manufacturers and Product Announcement.
Guangdong Jinhao is obligated to pay the Purchase Price in 3 tranches of, approximately $4,500, $7,500 and $15,000 (RMB30,000 RMB50,000 and RMB100,000) respectively. As at November 11, 2010, Guangdong Jinhao paid the first tranche of
approximately $4,500 (RMB30,000). The legal representative on Station Wagon’s business license was changed to Mr. Chak Shing Tsoi
on November 4, 2010. The Agreement will be effective upon approval by the board
of the Company as well as subject to certain other usual conditions.
The consummation of the transactions under the Equity Transfer Agreement is subject to the payments of the remaining unpaid Purchase Price and other regulatory approvals.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

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|ITEM 2 | MANAGEMENTS DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------ | -------------------------------------------------------------------------------------------

Special Note Regarding Forward Looking Statements

Statements contained herein include forward-looking
statements within the meaning of such term in Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements. These risks and
uncertainties include, but are not limited to, the factors described in the
section captioned Risk Factors below. In some cases, you can identify
forward-looking statements by terms such as anticipate, believe, could,
estimate, expect, intend, may, plan, potential, predict,
project, should, will, would and similar expressions intended to
identify forward-looking statements. Forward-looking statements reflect our
current views with respect to future events and are based on assumptions and
subject to risks and uncertainties. Given these uncertainties, you should not
place undue reliance on these forward-looking statements. These forward-looking
statements include, among other things, statements relating to:

- our anticipated growth strategies and our ability to manage the expansion
  of our business operations effectively;
- our dependence on the growth of our target market in the areas in which we
  do business; and
- our ability to maintain or increase our market share in the competitive
  markets in which we do business.

Also, forward-looking statements represent our estimates and
assumptions only as of the date hereof. Except as required by law, we assume no
obligation to update any forward-looking statements publicly, or to update the
reasons actual results could differ materially from those anticipated in any
forward-looking statements, even if new information becomes available in the
future.

You should read this discussion in conjunction with the
consolidated financial statements, accompanying notes and managements
discussion and analysis of financial condition and results of operations
included in our Annual Report on Form 10-K for the year ended December 31, 2009.

Use of Certain Defined Terms

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

- the Company, we, us, and our refer to the combined business of
  Jinhao Motor Company, a Nevada corporation (formerly, Georgia International
  Mining Corp.), and its subsidiaries, Jinhao Power Holdings Limited, a BVI
  limited company, or Jinhao Power, Jinhao Group (H.K.) Co., Limited (changed
  from Jinhao Motorcycle Company Limited effective as of August 20, 2010), or
  Jinhao Group, a Hong Kong company, Jinhao New Energy (Zhaoqing) Development
  Co., Ltd., or New Energy, a PRC company, and New Energys 49% minority-owned
  subsidiary and variable interest entity, Guangdong Jinhao Group Co, Ltd., or
  Guangdong Jinhao, a PRC limited company, through its contractual
  arrangements with Zhaoqing Haoyan Industrial Co., Ltd., or Haoyan, the
  holder of 51% of the equity interest in Guangdong Jinhao, as the case may be;
- BVI refers to the British Virgin Islands;
- Control Agreements refer to the agreements between certain subsidiaries
  of the Company and their variable interest enterprise in PRC;
- Exchange Act refers the Securities Exchange Act of 1934, as amended;
- Hong Kong refers to the Hong Kong Special Administrative Region of the
  People's Republic of China;
- PRC, China, or Chinese, refers to the People's Republic of China;
- Renminbi or RMB refers to the legal currency of China;
- SEC refers to the Securities and Exchange Commission;

19

---

- Securities Act refers to the Securities Act of 1933, as amended; and
- U.S. dollars, dollars, USD or $ refers to the legal currency of
  the United States.

Overview of our Business

We are mainly engaged in the production and distribution of
motorcycles and small engines in China and to overseas markets. The market for
our products in China accounted for approximately 23.74% of our sales in 2009,
with the overseas market, primarily Afghanistan, Pakistan, Bangladesh, Lebanon,
Egypt, Libya, Angola, Kenya, Venezuela, and Republic of Dominica, making up the
remaining 76.26% of our sales.

We intend to expand into the electric vehicle segment and we
have launched our electric vehicle production line and delivered our first order
in October 2009. We invested approximately $26 million in the research and
development of electric vehicles, and have entered into exclusive patent license
agreements for 2 patents to be used in our planned large scale production such
vehicles. In addition, we have signed a sales agency agreement with six
distributors across China, and overseas and have signed sales contracts with
buyers from Spain, Finland, Italy, Chile and Thailand. We are also focused on
developing distribution channels in the European Union and the United States.

Our corporate headquarters and our manufacturing facilities are
located in Zhaoqing, Guangdong Province, PRC. Our manufacturing facilities are
well established with good access to ground, air and water transportation.

Third Quarter Financial Performance Highlights

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

- Revenue: Revenue was $69.96
  million for the three months ended September 30, 2010, an increase of $13.38
  million, or 23.6%, from $56.58 for the same period last year.
- Gross Profit and Margin: Gross
  profit was $18.04 million for the three months ended September 30, 2010, an
  increase of $4.30 million, or 31.3%, from $13.74 million for the same period
  last year. Gross margin was 25.8% for the three months ended September 30,
  2010 as compared to 24.3% for the same period last year, a 1.5% increase
  mainly due to increase in sales from the electric vehicle division, which has
  an average gross margin of 30%, compared to the motorcycles average gross
  margin of 25%.
- Net income: Net income was $11.88
  million for the three months ended September 30, 2010, an increase of $4.87
  million, or approximately 69.4%, from $7.01 million for the same period of
  last year.
- Fully diluted net income per share: Basic and fully diluted
  net income per share was approximately $0.09 for the three months ended
  September 30, 2010, based on basic and diluted 54,857,640 common shares
  outstanding, as compared to approximately $0.37 for the same period last year.

Results of Operations

Comparison of Three Months Ended September 30, 2010 and
September 30, 2009

The following table shows key components of our results of
operations during the three months ended September 30, 2010and 2009, in both
dollars and as a percentage of our total sales.

20

---

(All amounts in thousands of U.S. Dollars)

|        |   | Three Months Ended |  |  | Three Months Ended | 
|------- | - | ------------------ |  |  | ------------------ | 
|        |   | September 30, 2010 |  |  | September 30, 2009 | 
|        |   |                    |  |  | % of Sales         | 
|        |   | Amount             |  |  | Revenue            | 
|Revenue | $ | 69,959             |  |  | 100.0%             | 

|Cost of revenue                                          |   | (51,922 | ) |  | (74.2% | ) |   | (42,848 | ) |  | (75.7% | )
|-------------------------------------------------------- | - | ------- | - |  | ------ | - | - | ------- | - |  | ------ | -
|Gross profit                                             |   | 18,037  |   |  | 25.8%  |   |   | 13,735  |   |  | 24.3%  |  
|Operating expenses                                       |   |         |   |  |        |   |   |         |   |  |        |  
|Selling expenses                                         |   | (3,308  | ) |  | (4.7%  | ) |   | (4,554  | ) |  | (8.0%  | )
|Administrative expenses                                  |   | (975    | ) |  | (1.4%  | ) |   | (312    | ) |  | (0.6%  | )
|Research and
      development expenses                  |   | -       |   |  | -      |   |   | (877    | ) |  | (1.5%  | )
|Total operating expenses                                 |   | (4,283  | ) |  | (6.1%  | ) |   | (5,743  | ) |  | (10.1% | )
|Income from operations                                   |   | 13,754  |   |  | 19.7%  |   |   | 7,992   |   |  | 14.1%  |  
|                                                         |   |         |   |  |        |   |   |         |   |  |        |  
|Change in fair value of warrants                         |   | 126     |   |  | 0.2%   |   |   | -       |   |  | -      |  
|Other income                                             |   | 6       |   |  | -      |   |   | -       |   |  | -      |  
|Interest
      income                                    |   | 7       |   |  | -      |   |   | 1       |   |  | -      |  
|Finance costs                                            |   | (209    | ) |  | (0.3%  | ) |   | (217    | ) |  | (0.4%  | )
|Income before income tax                                 |   | 13,684  |   |  | 19.6%  |   |   | 7,776   |   |  | 13.8%  |  
|                                                         |   |         |   |  |        |   |   |         |   |  |        |  
|Income tax                                               |   | (1,806  | ) |  | (2.6%  | ) |   | (765    | ) |  | (1.4%  | )
|                                                         |   |         |   |  |        |   |   |         |   |  |        |  
|Net income                                               | $ | 11,878  |   |  | 17.0%  |   | $ | 7,011   |   |  | 12.4%  |  
|                                                         |   |         |   |  |        |   |   |         |   |  |        |  
|Deemed
      dividend from beneficial conversion feature |   | (6,031  | ) |  | (10.0% | ) |   | -       |   |  | -      |  
|Accretion expense on preferred shares                    |   | (800    | ) |  | (1.1%  | ) |   | -       |   |  | -      |  
|Dividends on preferred
      shares                      |   | (175    | ) |  | (0.3%  | ) |   | -       |   |  | -      |  
|Net income attributable to common stock                  |   | 4,872   |   |  | 7%     |   |   | 7,011   |   |  | 12.4%  |  
|Foreign currency
      translation adjustment            |   | 1,686   |   |  | 2.4%   |   |   | 52      |   |  | 0.1%   |  
|                                                         |   |         |   |  |        |   |   |         |   |  |        |  
|Comprehensive income                                     | $ | 13,564  |   |  | 19.4%  |   | $ | 7,063   |   |  | 12.5%  |  
|Comprehensive income available to
    common stock       | $ | 6,558   |   |  | 9.4%   |   | $ | 7,063   |   |  | 12.5%  |  

Revenue:

Cost of Revenue:Cost of revenue increased $9.07 million, or 21.18%, to $51.92 million in
the three months ended September 30, 2010, from $42.85 million in the same
period in 2009. As a percentage of revenue, cost of revenue decreased by 1.5% to
74.2% for the three months ended September 30, 2010, compared to 75.74% in the
same period 2009. This decrease as a percentage of sales was mainly due to
changes in the mix of our product sold during the 2010 period to include more
electric vehicles which have a higher gross margin than motorcycles.

Gross Profit and Gross Margin:Gross
profit increased $4.30 million, or 31.32%, to $18.04 million in the three months
ended September 30, 2010, from $13.74 million in the same period in 2009. Gross
profit as a percentage of net revenue was 25.8% and 24.3% for the three months
ended September 30, 2010 and 2009, respectively. The increase in the gross
margin was primarily driven by the increase in sales from the electric vehicle
division, which has an average gross margin of 30%, compared to the motorcycles
average gross margin of 25%.

21

---

Selling Expenses:

Administrative Expenses: Administrative expenses
increased $0.66 million, or 212%, to $0.98 million in the three months ended
September 30, 2010, from $0.31 million in the same period in 2009. This increase
was mainly due to increases in audit and other professional fee expenses related
to our reverse acquisition transaction and the private placement.

Research and Development Expenses:
Research and development expenses were $nil in the three months ended September
30, 2010, as compared to $0.88 million in the same period last year. There was
no research and development expense incurred in our electric car division during
the three months ended September 30, 2010 as we commenced production and sales
of our electric cars during the 2009 fourth quarter.

Change in Fair Value of Warrants:The
$0.13 million change in fair value of warrants was related to the warrants
issued in conjunction with the private placement in September 2010.

Finance Costs:Interest expenses
remained stable at $0.21 million in the three months ended September 30, 2010,
compared to $0.22 million in the same period prior year.

Income Before Income Tax: Income before income tax
increased by $5.91 million, or 75.98%, to $13.68 million in the three months
ended September 30, 2010 from $7.78 million in the same period in 2009, mainly
due to the increase in our sales and gross margin noted above.

Income Taxes: Income tax expenses increased
$1.04million, or 135%, to $1.81 million in the three months ended September 30,
2010, from $0.77 million in the same period in 2009. The increase was due to
increased taxable income as a result of the increased sales and income tax
recovery in the three months ended September 30, 2009 derived from research and
development cost expensed for accounting purposes but deferred for tax purposes.

Net Income: In the three months ended September 30,
2010, we generated a net income of $11.88 million, an increase of $4.87million,
or 69.42%, from $7.01 million in the same period in 2009. This increase was
primarily attributable to the increase in our sales and gross margin noted
above.

Comparison of Nine Months Ended September 30, 2010 and
September 30, 2009

The following table shows key components of our results of
operations during the nine months ended September 30, 2010 and 2009, in both
dollars and as a percentage of our total sales.

|                                        |   | Nine Months Ended  |   |  | Nine Months Ended  |  
|--------------------------------------- | - | ------------------ | - |  | ------------------ | -
|                                        |   | September 30, 2010 |   |  | September 30, 2009 |  
|                                        |   |                    |   |  | % of Sales         |  
|                                        |   | Amount             |   |  | Revenue            |  
|Revenue                                 | $ | 173,334            |   |  | 100.0%             |  
|                                        |   |                    |   |  |                    |  
|Cost of revenue                         |   | (131,230           | ) |  | (75.7%             | )
|                                        |   |                    |   |  |                    |  
|Gross profit                            |   | 42,104             |   |  | 24.3%              |  
|                                        |   |                    |   |  |                    |  
|Operating expenses                      |   |                    |   |  |                    |  
|Selling expenses                        |   | (8,490             | ) |  | (4.9%              | )
|Administrative expenses                 |   | (1,649             | ) |  | (0.9%              | )
|Research
      and development expenses |   | -                  |   |  | -                  |  
|Total
      operating expenses          |   | (10,139            | ) |  | (5.8%              | )
|                                        |   |                    |   |  |                    |  
|Income from operations                  |   | 31,965             |   |  | 18.5%              |  
|                                        |   |                    |   |  |                    |  
|Change in fair value of warrants        |   | 126                |   |  | 0.1%               |  
|Other income                            |   | 6                  |   |  | -                  |  
|Interest income                         |   | 13                 |   |  | -                  |  
|Finance costs                           |   | (655               | ) |  | (0.4%              | )

|Income before income tax                                 |   | 31,455 |   |  | 18.2% |   |   | 5,432 |   |  | 4.0%  |  
|-------------------------------------------------------- | - | ------ | - |  | ----- | - | - | ----- | - |  | ----- | -
|Income tax (expense) recovery                            |   | (4,059 | ) |  | (2.3% | ) |   | 956   |   |  | 0.7%  |  
|Net income                                               | $ | 27,396 |   |  | 15.9% |   | $ | 6,388 |   |  | 4.7%  |  
|Deemed dividend from beneficial
      conversion feature |   | (6,031 | ) |  | (3.5% | ) |   | -     |   |  | -     |  
|Accretion expense on preferred shares                    |   | (800   | ) |  | (0.5% | ) |   | -     |   |  | -     |  
|Dividends on preferred
      shares                      |   | (175   | ) |  | (0.1% | ) |   | -     |   |  | -     |  
|Net income attributable to common stock                  |   | 20,390 |   |  | 11.9% |   |   | 6,388 |   |  | 4.7%  |  
|Foreign Currency translation gain (loss)                 |   | 2,418  |   |  | 1.4%  |   |   | (38   | ) |  | (0.0% | )
|Comprehensive income                                     | $ | 29,814 |   |  | 17.3% |   | $ | 6,350 |   |  | 4.7%  |  
|Comprehensive income attributable to common stock        | $ | 22,808 |   |  | 13.2% |   | $ | 6,350 |   |  | 4.7%  |  

22

---

Revenue: Revenue increased $37.76 million, or 27.85%,
to $173.33 million for the nine months ended September 30, 2010, from $135.58
million for the same period in 2009. The increase in revenue consists of $23.57
million increase of revenue from our electric vehicle division, compared to $nil
revenue in the same period prior year, attributable to launch of our production
of electric cars during the 2009 fourth quarter. The revenue generated from our
motorcycle division increased $14.19 million to $149.77 million for the nine
months ended September 30, 2010, compared to $135.58 million in the same period
in the prior year. The increase is mainly due to increased exports to the Middle
East, Africa region and South East Asia. Exports of motorcycles increased by
approximately 12% for the nine months ended September 30, 2010, compared to that
in the same period 2009.

Cost of Revenue:Cost of revenue increased $24.11 million, or 22.51%, to $131.23 million
in the nine months ended September 30, 2010, from $107.12 million in the same
period in 2009. As a percentage of revenue, cost of revenue decreased by 3.3% to
75.7% for the nine months ended September 30, 2010, compared to 79.00% in the
same period 2009. This decrease as a percentage of sales was mainly due to
changes in our product mix to include more electric vehicles which have a higher
gross margin than motorcycles. In addition, an increase of export sales also
contributed to the decrease as export sales have a higher margin than domestic
sales.

Gross Profit and Gross Margin:Gross
profit increased $13.64 million, or 47.94%, to $42.10 million in the nine months
ended September 30, 2010, from $28.46 million in the same period in 2009. Gross
profit as a percentage of net revenue was 24.30% and 21.00% for the nine months
ended September 30, 2010 and 2009, respectively. The increase in the gross
margin was primarily driven by the increase in sales from the electric vehicle
division, which has an average gross margin of 26%, compared to the motorcycles
average gross margin of 23%. In addition, an increase in export sales also
contributed to the higher gross margin as export sales have a higher gross
margin than domestic sales.

Selling Expenses:Selling expenses
increased $0.76 million, or 9.78%, to $8.49 million in the nine months ended
September 30, 2010, from $7.73 million in the same period in 2009. The increase
was primarily a result of the increase in selling activities relating to the
newly launched electric vehicle production incurred in the 2009 fourth quarter.

Administrative Expenses: Administrative expenses
increased $0.96 million, or 140%, to $1.65 million in the nine months ended
September 30, 2010, from $0.69 million in the same period in 2009. This increase
was mainly due to increases in audit and other professional fee expenses related
to our reverse acquisition transaction and the private placement.

Research and Development Expenses:
Research and development expenses were $nil in the nine months ended September
30, 2010, as compared to $14.10 million in the same period last year. There was
no research and development expense incurred in our electric car division during
the nine months ended September 30, 2010 as we commenced production and sale of
our electric cars in the 2009 fourth quarter.

Change in Fair Value of Warrants:The
$0.13 million change in fair value of warrants was related to the warrants
issued in conjunction with the private placement in September 2010.

Finance Costs:Interest expenses were
totaled $0.66 million in the nine months ended September 30, 2010, compared to
$0.52 million in the same period prior year.

23

---

Income Before Income Tax. Income before income
tax increased by $26.02 million, or 479%, to $31.46 million in the nine months
ended September 30, 2010 from $5.43 million in the same period in 2009. The
reason for such increase was mainly due to the increase in our sales and gross
margin and large research and development expenses incurred in prior year as
noted above.

Income Taxes: Income tax expenses increased $5.02
million to $4.06 million in the nine months ended September 30, 2010 from a
recovery of $0.96 million in the same period in 2009. The increase was due to
increased taxable income as a result of the increased sales and income tax
recovery in the nine months ended September 30, 2009 which was derived from
research and development cost expensed for accounting purposes but deferred for
tax purposes.

Net Income: In the nine months ended September
30, 2010, we generated a net income of $27.40 million, an increase of $21.01
million from $6.39 million in the same period in 2009. This increase was
primarily attributable to the increase in our sales and gross margin and
significant research and development expenses incurred in 2009 noted above.

Liquidity and Capital Resources

As of September 30, 2010, we had cash balance of $34.23
million, primarily consisting of cash on hand. The following table provides
detailed information about our net cash flow for all financial statement periods
presented in this report.

To date, we have financed our operations primarily through
cash flows from operations, augmented by short-term bank borrowings and equity
contributions by our stockholders. On September 2, 2010, we completed a
securities purchase agreement with our major shareholder and certain accredited
investors, pursuant to which we sold to the investors 6,857,204 units for
$4.37496 per Unit with gross proceeds of $30 million. The private placement
resulted in proceeds of $25.9 million, net of issuance costs of $4.06 million.

|U.S. Dollars                                              |   | Nine Months Ended September 30, | 
|--------------------------------------------------------- | - | ------------------------------- | 
|                                                          |   | 2010                            | 
|Net cash provided by (used in) operating
      activities | $ | 2,749                           | 
|Net cash provided by (used in) investing activities       |   | 1,470                           | 
|Net cash provided by (used in) financing
      activities |   | 20,772                          | 
|Effects of currency translation                           |   | 204                             | 
|Net increase in cash                                      |   | 24,991                          | 
|Cash at beginning of the period                           |   | 9.032                           | 
|Cash at end of the period                                 | $ | 34,227                          | 

Operating activities

Net cash provided by operating activities was $2.75 million
for the nine months ended September 30, 2010, as compared to $43.71 million
provided by operating activities for the same period in 2009. The decrease in
net cash provided in operating activities was primarily due to increases in
trade receivables and inventory. As of September 30, 2010, the total inventories
amounted to $14.41 million, compared to $1.17 million as at December 31, 2009
and the total trade receivables amounted to $23.16 million, as compared to $5.78
million as at December 31, 2009. For the nine months ended September 30, 2009,
the accounts receivable and inventory balances decreased by approximately $30.62
million. The reason for significant trade receivables increase in the nine
months ended September 30, 2010 was because most companies were generally slower
in their payments over the course of the year and waited until the year end. The
increased inventory is mainly due to the phase out of PRC National II Standards
for the production of motorcycles commencing June 30, 2010. Motorcycle
manufacturers including Jinhao have been permitted a 6-month transition period
during which we are permitted to produce motorcycles under the more
cost-efficient National II, instead of the National III Standards. As a result
during the first half of fiscal 2010, the Company stored extra materials for
production under the National II Standards for the transition period.

Investing activities

Net cash provided by investing activities for the nine months
ended September 30, 2010 was $1.47 million, as compared to $49.54 million net
cash used in investing activities for the same period of 2009. The Company
converted $1.47 million short-term investment to cash after its maturity during
the nine months ended September 30, 2010. No other investing activities occurred
in the nine months ended September 30, 2010. However, in the same period last
year, the Company spent $49.54 million on, plant and equipment and construction
in progress.

24

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Financing activities

Net cash provided by financing activities for the nine months
ended September 30, 2010 was $20.77 million, as compared to $7.17 million
provided by financing activities for the same period of 2009. The increased in
cash provided by financing activities in the nine months ended September 30,
2010 is mainly due to the net proceeds of $25.93 from the private placement in
September 2010. Company also repaid $11.76 million bank loans and borrowed $6.60
million short-term bank loans during the period.

Loan Commitments

As of September 30, 2010, the amount, maturity date and term of
each of our bank loans were as follows:

(all amounts in thousands of U.S. dollars)

|Bank                             |   | Amount |  |  | Interest Rate |  |  | Maturity Date |  |  | Duration  | 
|-------------------------------- | - | ------ |  |  | ------------- |  |  | ------------- |  |  | --------- | 
|                                 |   |        |  |  |               |  |  |               |  |  |           | 
|China Merchandise Bank           | $ | 2,989  |  |  | 5.940%        |  |  | March 2011    |  |  | 6 months  | 
|Shenzhen Development Bank        | $ | 4,481  |  |  | 7.02%         |  |  | December 2010 |  |  | 3 months  | 
|Dawang Rural Credit Cooperatives | $ | 2,391  |  |  | 6.975%        |  |  | April 2012    |  |  | 32 months | 

The outstanding bank loans listed above are used primarily
for general working capital and for the purchase of raw materials . The Company
has an operating line of credit from the China Merchandise Bank with a maximum
available credit of approximately $4.93 million. The amount withdrawn from the
line of credit is due in six months from the date of withdrawal. The line of
credit will expire on March 24, 2011 and is guaranteed by Zhaoqing Haoyan
Industrial Co. Ltd. and Mr. Tsoi.

The Company has an operating line of credit from the Shenzhen
Development Bank with total available credit to a maximum of approximately $4.48
million. The line of credit is available until December 31, 2010 and the amounts
withdrawn from this line of credit are due on or before that date.

The Company has an operating line of credit from the Dawang
Rural Credit Cooperative with total available credit to a maximum of
approximately $2.69 million. The loan is secured by the Companys land use right
and certain buildings. Both the due date of the loan and the expiry date of the
line of credit are April 1, 2012.

Inflation

Inflation and changing prices have not had a material effect on
our business and we do not expect that inflation or changing prices will
materially affect our business in the foreseeable future. However, our
management will closely monitor the price change in travel industry and
continually maintain effective cost control in operations.

Off Balance Sheet Arrangements

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

Seasonality

Our operating results and operating cash flows were subject to
seasonal variations. This pattern may change, however, as a result of new market
opportunities or new product introduction. Typically, the revenues from both
motorcycle and electric car were higher in the second half year than that in the
first half year as results of national holidays

Critical Accounting Policies

Our critical accounting policies are those that both (1) are
most important to the portrayal of the financial condition and results of
operations and (2) require managements most difficult, subjective, or complex
judgments, often requiring estimates about matters that are inherently
uncertain. There have been no material changes from the methodology applied by
management for critical accounting estimates previously disclosed in Jinhao
Powers fiscal 2009 and 2008 Annual Report on Form S-1.

Recently adopted accounting pronouncements

In June 2009, the FASB issued FASB Accounting Standard Update,
Consolidations: Improvement to Financial Reporting by Enterprises Involved with
Variable Interest Entities. This standard eliminates certain scope exceptions
previously permitted, provides additional guidance for determining whether
an entity is a variable interest entity, and requires companies to more
frequently reassess whether they must consolidate variable interest entities.
The changes also replace the previously required quantitative approach to
determining the primary beneficiary of a variable interest entity with a
requirement for an enterprise to perform a qualitative analysis to determine
whether the enterprises variable interest or interests give it a controlling
financial interest in a variable interest entity. The standard is effective for
interim and annual reporting periods beginning after January 1, 2010. The
adoption on January 1, 2010 of this standard did not have a material effect on
the Companys interim consolidated financial statements.

25

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In January 2010, the FASB issued the guidance, Improving
Disclosures about Fair Value Measurements. This guidance amends existing
disclosure requirements about fair value measurement and clarifies and provides
additional disclosure requirements related to recurring and non-recurring fair
value measurements. This guidance became effective for the Company on January 1,
2010. The adoption of this ASU did not have a material impact on the Companys
interim consolidated financial statements.

In March 2010, the FASB issued the standard, Scope Exception
Related to Embedded Credit Derivatives to provide clarification on the
bifurcation scope exception for embedded credit derivative features. The
standard became effective for the Company on July 1, 2010. The adoption of this
standard did not have a material impact on the Companys interim consolidated
financial statements.

Recent accounting pronouncements to be adopted

In April 2010, the FASB issued the guidance Compensation-Stock
Compensation (Topic 718): Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the Underlying
Equity Security Trades. The guidance clarifies that share-based payment awards
with an exercise price denominated in the currency of a market in which a
substantial portion of the underlying equity security trades should not be
considered to meet the criteria requiring classification as a liability. The
guidance is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2010. Early adoption is permitted. The
Company does not expect the adoption of this standard will have a material
impact on its consolidated financial statements.

In July, 2010, the FASB issued the standard Disclosures about
the Credit Quality of Financing Receivables and the Allowance for Credit Losses
(ASU 2010-20) which expands the disclosure requirements concerning the credit
quality of an entitys financing receivables and its allowance for credit
losses. The standard is effective for interim and annual reporting periods
beginning on or after December 15, 2010. The Company does not expect the
adoption of this guidance will have a material impact on its consolidated
financial statements.

|Foreign exchange rates used:             |  | September 30, |  |  | December 31, |  |  | September 30, | 
|---------------------------------------- |  | ------------- |  |  | ------------ |  |  | ------------- | 
|                                         |  | 2010          |  |  | 2009         |  |  | 2009          | 
|                                         |  |               |  |  |              |  |  |               | 
|Period end RMB/U.S. Dollar exchange rate |  | 6.6905        |  |  | 6.8259       |  |  | 6.8262        | 
|Average RMB/U.S. Dollar exchange rate    |  | 6.7677        |  |  | 6.8307       |  |  | 6.8319        | 

|ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.
|------ | -----------------------------------------------------------------

None

|ITEM 4 | CONTROLS AND PROCEDURES.
|------ | ------------------------

Evaluation of Disclosure Controls and Procedures

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

As required by Rule 13a-15 under the Exchange Act, our
management, including our Chief Executive Officer and Chief Financial Officer
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of September 30, 2010. Based on our assessment, our
Chief Executive Officer and Chief Financial Officer determined that, as of September 30, 2010, and as of the date that the evaluation of
the effectiveness of our disclosure controls and procedures was completed, our
disclosure controls and procedures were not effective as of September 30, 2010.

26

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Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2010, there were no
changes in our internal control over financial reporting identified in
connection with the evaluation performed during the period covered by this
report that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

27

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PART IIOTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

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

|ITEM 1A. | RISK FACTORS.
|-------- | -------------

Investors are directed to the Risk Factors section of our
Form S-1 with the SEC on October 29, 2010. There have been no material changes
to the risk factors disclosed therein.

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

None.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

|ITEM 4. | (REMOVED AND RESERVED).
|------- | -----------------------



|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

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

|ITEM 6. | EXHIBITS.
|------- | ---------

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

|Exhibit No. | Description                                                                                                                                                              
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1        | Certification of Principal Executive Officer
    filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                         
|31.2        | Certification of Principal Financial Officer  filed
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                        
|32.1        | Certifications of Principal Executive Officer furnished pursuant to 18
    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.
|32.2        | Certifications of Principal Financial Officer
    furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.

28

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SIGNATURES

In accordance with Section 13 or
15(d) of the Exchange Act, the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|Date: November 12, 2010 | JINHAO MOTOR COMPANY
|----------------------- | --------------------
|                        |                     
|                        | By:                 
|                        |                     
|                        |                     
|                        |                     
|                        | By:                 
|                        |                     
|                        |                     
|                        |                     

29

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EXHIBIT INDEX

|Exhibit No. | Description                                                                                                                                                              
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1        | Certification of Principal Executive Officer
    filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                         
|31.2        | Certification of Principal Financial Officer  filed
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                        
|32.1        | Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.
|32.2        | Certifications of Principal Financial Officer
    furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.

30

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