UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington
, D.C. 20549
  FORM
10-K
  S
              ANNUAL REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For
the fiscal year ended December 31, 2009
 or
  £
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  Commission
File Number 333-137160
  LED
POWER GROUP, INC.
 (Name of
Registrant as specified in its charter)
 
 Nevada
                
                98-0501477(State
      or Other Jurisdiction of
                  Incorporation
      or Organization)
                
                (I.R.S.
      Employer
                  Identification
      No.)
  1694 Falmouth Road, Suite 150
                    Centerville, MA
                
                02632(Address
      of Principal Executive Offices)
                
                (Zip
      Code)
 (508) 362-4420
 (Registrant’s
telephone number, including area code)
  Securities
registered pursuant to Section 12(b) of the Act:
  Common
      Stock, par value $.0001 par value
                
                OTC
      Bulletin Board(Title
      of each class)
                
                (Name
      of each exchange on which
registered)
 Securities
registered pursuant to Section (g) of the Act:
 None
 (Title of
class)
  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes  ̈ No
x
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes  ̈  No
x
  Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such 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 Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405
of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).  Yes
 ̈  No
 ̈
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K(§229.405) is not contained herein, and will not be contained, to
the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  ̈
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definitions of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.  (check one):
  Large
accelerated filer  ̈      
Accelerated filer  ̈      
Non-accelerated filer  ̈      
Smaller reporting company x
  (Do not
check if smaller reporting company)
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).  Yes £  No
S
  State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter: As of June 30, 2009, the aggregate market value of the Company’s common
stock held by non-affiliates was $82,932.03.
  Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date: As of March 24, 2010, there were
25,629,016 shares of common stock outstanding.
  DOCUMENTS
INCORPORATED BY REFERENCE
  Exhibits
incorporated by reference are referred to under Part IV.
  
  TABLE
OF CONTENTS
  PagePART
      IITEM
      1 — BUSINESS
                  
                  1ITEM
      1A — RISK FACTORS
                  
                  2ITEM
      1B — UNRESOLVED STAFF COMMENTS
                  
                  5ITEM
      2 — PROPERTIES
                  
                  5ITEM
      3 — LEGAL PROCEEDINGS
                  
                  6ITEM
      4 — RESERVED
                  
                  6PART
      IIITEM
      5 — MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
      ISSUER PURCHASES OF EQUITY SECURITIES
                  
                  6ITEM
      6 — SELECTED FINANCIAL DATA
                  
                  6ITEM
      7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN
      OF OPERATIONS
                  
                  7ITEM
      7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
                  
                  10ITEM
      8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                  
                  10ITEM
      9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE
                  
                  10ITEM
      9A(T) — CONTROLS AND PROCEDURES
                  
                  11ITEM
      9B — OTHER INFORMATION
                  
                  12PART
      IIIITEM
      10 — DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
    GOVERNANCE
                  
                  13ITEM
      11 — EXECUTIVE COMPENSATION
                  
                  14ITEM
      12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
      RELATED STOCKHOLDER MATTERS
                  
                  15ITEM
      13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
                  
                  16ITEM
      14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES
                  
                  17PART
      IVITEM
      15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                  
                  17SIGNATURES
                  
                  19INDEX
      TO FINANCIAL STATEMENTS
                  
                  F-1INDEX
      TO EXHIBITSEXHIBIT
      31.1EXHIBIT
      31.2EXHIBIT
      32
  
  PART
I.
  Item
1.  Business.
  Background
  LED Power
Group, Inc. (“we”, “us”, “our” or the “Company”) was organized under the laws of
the State of Nevada on June 8, 2006 under the name “Drayton Harbor Resources,
Inc.” and was engaged in the exploration of mineral interest located in British
Columbia, Canada.  We have relinquished our rights to this mineral
interest and changed our focus towards the end of 2008 to the research,
development, manufacturing and sales of light-emitting diode (LED)
products.
  In
furtherance of our business objectives, on January 12, 2009, we entered into a
definitive Agreement and Plan of Merger with LED Power Group, Inc. f.k.a. LED
Power, Inc., a Nevada corporation (“LPG”) and Drayton Acquisition Sub, Inc., our
wholly-owned subsidiary, whereby Drayton Acquisition Sub, Inc. merged with and
into LPG, with LPG remaining as the surviving entity and becoming our
wholly-owned subsidiary.  Under the terms of the Agreement and Plan of
Merger, we issued 9,000,000 pre-split shares of our common stock to Trussnet
Capital Partners (Cayman) Ltd. (“Trussnet”) for all of the issued and
outstanding shares of LPG.  LPG has limited operations and owns the
rights to an Assignment Agreement with Jumbo Power Technology Ltd., Liao
Pheng-Piao and Liu Chih-Chun (“Licensors”), dated December 2008 (the “Assignment
Agreement”).  Under the terms of the Assignment Agreement, LPG was
licensed the exclusive rights to certain intellectual property owned by
Licensors in relation to the production of LED products.  We are
currently involved in a dispute with Trussnet involving the Assignment
Agreement, and until such dispute is resolved, we are unable to utilize the
intellectual property licensed thereunder to develop LED products.
  To
further facilitate our shift in business focus, on January 16, 2009, we effected
a 2.5-for-1 forward stock split of all of our issued and outstanding shares of
common stock.  Additionally, on February 2, 2009, we merged with our
wholly-owned subsidiary, LPG, for the purposes of effective a name change to
“LED Power Group, Inc.”  Effective August 10, 2009, we effected a
1-for-100 reverse split of all our issued and outstanding shares of common stock
to better position the company for growth for the rest of 2009 and to facilitate
investment and broaden ownership, and to ultimately enhance overall shareholder
value, resulting in a decrease of the outstanding shares of common stock from
72,500,000 to 725,001 and a decrease of our authorized capital to
6,000,000.  Effective November 2, 2009, the Company amended its
articles of incorporation to increase its authorized capital to 200,000,000
shares of common stock.
  On
September 24, 2009, issued an aggregate of 1,000,000 shares of our common stock
for a purchase price of $10,000 to John J. Lennon, our President, resulting in a
change of control and Mr. Lennon owning 57.14% of our issued and outstanding
shares.  On December 10, 2009, we issued an additional 23,904,015
shares of our common stock pursuant to the conversion of demand notes
payable.
  We
currently have no revenue from operations.  In order to meet our
business objectives, we will need to raise additional funds through equity or
convertible debt financing.  There can be no assurance that we will be
successful in raising additional funds and, if unsuccessful, our plans for
expanding operations and business activities may have to be
curtailed.  Any attempt to raise funds, through debt or equity
financing, would likely result in dilution to existing
shareholders.
  Development
  Our
future operations are dependent upon the identification and successful
completion of additional long-term or permanent equity financings, the support
of creditors and shareholders, and, ultimately, the achievement of profitable
operations.  There can be no assurances that we will be successful,
which would in turn significantly affect our ability to roll out our business
plan.  If not, we will likely be required to reduce operations or
liquidate assets.  We will continue to evaluate our projected
expenditures relative to our available cash and to seek additional means of
financing in order to satisfy our working capital and other cash
requirements.
   1
  We
continue to operate with very limited administrative support, and our current
officers and directors continue to be responsible for many duties to preserve
our working capital.  We expect no significant changes in the number
of employees over the next 12 months.
  We do not
anticipate making any major purchases of capital assets in the next six
months.  We believe that, with our current efforts to raise capital,
we will have sufficient cash resources to satisfy our needs over the next 12
months.  Our ability to satisfy cash requirements thereafter will
determine whether we achieve our business objectives.  Should we
require additional cash in the future, there can be no assurance that we will be
successful in raising additional debt or equity financing on terms acceptable to
our company, if at all.
  Employees
  As of
December 31, 2009, we had no full time employees.  We currently
utilize temporary contract labor throughout the year to address business and
administrative needs.
  Item
1A.  Risk Factors.
  The risks described below are the
ones we believe are the most important for you to consider, these risks are not
the only onesthatwe
face.  If events anticipated by any of the following risks actually
occur, our business, operating results or financial condition could suffer and
the trading price of our common stock could decline.
  Investors
should carefully consider the risks described below before deciding whether to
invest in our common stock.  The risks described below are not the
only ones we face.  Additional risks not presently known to us or that
we currently believe are immaterial may also impair our business operations and
financial results.  If any of the following risks actually occurs, our
business, financial condition or results of operations could be adversely
affected.  In such case, the trading price of our common stock could
decline and you could lose all or part of your investment.  Our
filings with the Securities and Exchange Commission also contain forward-looking
statements that involve risks and uncertainties.  Our actual results
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks we face described
below.
  RISKS
RELATED TO OUR BUSINESS
  Our
limited operating history may not serve as an adequate basis to judge our future
prospects and results of operations.
  We have a
limited operating history.  As such, our historical operating results
may not provide a meaningful basis for evaluating our business, financial
performance and prospects.  Accordingly, you should not rely on our
results of operations for any prior periods as an indication of our future
performance.  Our operations will be subject to all the risks inherent
in the establishment of a developing enterprise and the uncertainties arising
from the absence of a significant operating history.  We are in the
development stage and potential investors should be aware of the difficulties
normally encountered by enterprises in the development stage.  If our
business plan is not successful, and we are not able to operate profitably,
investors may lose some or all of their investment in our company.
  We have incurred losses in prior
periods and may incur losses in the future.
  We
incurred net losses of $8,644,350 for the period from June 8, 2006 (inception)
to December 31, 2009.  We cannot be assured that we can achieve or
sustain profitability on a quarterly or annual basis in the
future.  Our operations are subject to the risks and competition
inherent in the establishment of a business enterprise.  There can be
no assurance that future operations will be profitable.  We may not
achieve our business objectives and the failure to achieve such goals would have
an adverse impact on us.
  If
we are unable to obtain additional funding our business operations will be
harmed and if we do obtain additional financing our then existing shareholders
may suffer substantial dilution.
  We will
require additional funds to meet our business objectives, and to take advantage
of any available business opportunities.  In order to meet our
obligations, we will have to raise additional funds.  Obtaining
additional financing will be subject to market conditions, industry trends,
investor sentiment and investor acceptance of our business plan and
management.  These factors may make the timing, amount, terms and
conditions of additional financing unattractive or unavailable to
us.  If we are not successful in achieving financing in the amount
necessary to further our operations, implementation of our business plan may
fail or be delayed.
  2
  If
we are unable to successfully recruit qualified managerial and experienced
personnel, we may not be able to execute on our business plan.
  In order
to successfully implement and manage our business plan, we will be dependent
upon, among other things, successfully recruiting qualified managerial and
experienced personnel.  Competition for qualified individuals is
intense.  There can be no assurance that we will be able to find,
attract and retain existing employees or that we will be able to find, attract
and retain qualified personnel on acceptable terms.
  We
are subject to new corporate governance and internal control reporting
requirements, and our costs related to compliance with, or our failure to comply
with, existing and future requirements could adversely affect our
business.
  We may
face new corporate governance requirements under the Sarbanes-Oxley Act of 2002,
as well as new rules and regulations subsequently adopted by the Securities and
Exchange Commission (“SEC”) and the Public Company Accounting Oversight
Board.  These laws, rules and regulations continue to evolve and may
become increasingly stringent in the future.  In particular, under
rules proposed by the SEC on August 6, 2006, we are required to include
management’s report on internal controls as part of our annual report for the
fiscal years ending December 31, 2008 and December 31, 2009, pursuant to Section
404 of the Sarbanes-Oxley Act.  Furthermore, under the proposed rules,
an attestation report on our internal controls from our independent registered
public accounting firm will be required as part of our annual report for the
fiscal year ending December 31, 2010.  The financial cost of
compliance with these laws, rules and regulations is expected to be
substantial.  We cannot assure you that we will be able to fully
comply with these laws, rules and regulations that address corporate governance,
internal control reporting and similar matters.  Failure to comply
with these laws, rules and regulations could materially adversely affect our
reputation, financial condition and the value of our securities.
  If
LED lighting does not achieve greater market acceptance, or if alternative
technologies are developed and gain market traction, prospects for our growth
and profitability would be limited.
  Our
future success depends on increased market acceptance of LED
lighting.  Potential customers for LED lighting systems may be
reluctant to adopt LED lighting as an alternative to traditional lighting
technology because of its higher initial cost and relatively low light output
per unit in comparison with the most powerful traditional lighting
devices.  In addition, our potential customers may have substantial
investments and know-how related to their existing lighting technologies, and
may perceive risks relating to the novelty, complexity, reliability, quality,
usefulness and cost-effectiveness of LED products when compared to other
lighting sources available in the market. If acceptance of LED lighting does not
increase significantly, then opportunities to grow our revenues and operate
profitably would be limited.  Moreover, if effective new sources of
light other than LED devices are developed, our prospective products and current
technologies could become less competitive or obsolete.  Any of these
factors could have a material and adverse impact on our growth and
profitability.
  The
technology used in the LED industry continues to change rapidly and if we are
unable to modify our products to adapt to future changes in the LED industry, we
will be unable to attract or retain customers.
  The LED
industry has been characterized by a rapid rate of development of new
technologies and manufacturing processes, rapid changes in customer
requirements, frequent product introductions and ongoing demands for greater
functionality.  Our future success will likely depend on our ability
to develop new products for use in LED applications and to adjust our product
specifications in response to these developments in a timely
manner.  If our development efforts are not successful or are delayed,
or if our newly developed products do not achieve market acceptance, we may be
unable to attract or retain customers and our operating results could be
harmed.
  Our
efforts to develop new products involve several risks, including:
  ·
              our
      ability to anticipate and respond in a timely manner to changes in
      customer requirements;
  3
  ·
              the
      significant research and development investment that we may be required to
      make before market acceptance of a particular new or enhanced
      product;
  ·
              the
      possibility that the LED industry may not accept our products after we
      have invested a significant amount of resources in development;
      and
  ·
              competition
      from new technologies, processes and products introduced by our current or
      future competitors.
  Any
dispute or other circumstances resulting in our inability to utilize our
intellectual property will significantly impair our ability to enter the LED
lighting market, thereby harming our prospects for future growth.
  We are
currently involved in a dispute with Trussnet Capital Partners (Cayman) Ltd.
regarding our license to certain intellectual property.  Until our
dispute with Trussnet is resolved, we will be unable to utilize the license to
the intellectual property on which we will depend to develop LED
products.  Similar disputes or other circumstances which inhibit our
ability to utilize our intellectual property may be costly and time consuming
and significantly delay our ability to enter the LED lighting
market.  Any such delays may significantly affect our ability to grow
our business and achieve our objectives, and may harm our ability to generate
any revenues from the LED lighting market.
  The
markets in which we operate are very competitive, and many of our competitors
and potential competitors are larger, more established and better capitalized
than we are.
  The
markets in which we operate are very competitive and have been characterized by
rapid technological change.  This competition could result in
increased pricing pressure, reduced profit margins, increased sales and
marketing expenses, and failure to increase, or the loss of, market share or
expected market share, any of which would likely seriously harm our business,
operating results and financial condition.
  Some of
our competitors and potential competitors are substantially larger and have
greater financial, technical, marketing and other resources than we
do.  Given their capital resources, the large companies with whom we
compete or may compete in the future, are in a better position to substantially
increase their manufacturing capacity, research and development efforts or to
withstand any significant reduction in orders by customers in our
markets.  Such larger companies typically have broader and diverse
product lines and market focus and thus are not as susceptible to downturns in a
particular market.  In addition, some of our competitors have been in
operation much longer than we have and therefore may have more long-standing and
established relationships with potential domestic and foreign
customers.
  We would
be at a competitive disadvantage if our competitors bring their products to
market earlier, if their products are more technologically capable than ours, or
if any of our competitors’ products or technologies were to become preferred in
the industry.  Moreover, we cannot be assured that potential customers
will not develop their own products, or acquire companies with products, that
are competitive with our future products.  Any of these competitive
threats could have a material adverse effect on our business, operating results
or financial condition.
  We
may be subject to numerous environmental laws and regulations, which could
expose us to environmental liabilities, increase our manufacturing and related
compliance costs or otherwise adversely affect our business and operating
results.
  We may be
subject to a variety of foreign, federal, state and local laws and regulations
governing the protection of the environment.  These environmental laws
and regulations include those relating to the use, storage, handling, discharge,
emission, disposal and reporting of toxic, volatile or otherwise hazardous
materials used in our planned manufacturing processes.  These
materials may have been or could be released into the environment at properties
operated by us, at other locations during the transport of the materials, or at
properties to which we send substances for treatment or disposal.  If
we were to violate or become liable under environmental laws and regulations or
become non-compliant with permits required at some of our planned facilities, we
could be held financially responsible and incur substantial costs, including
investigation and cleanup costs, fines and civil or criminal sanctions,
third-party property damage or personal injury claims.  In addition,
new laws and regulations or stricter enforcement of existing laws and
regulations could give rise to additional compliance costs and
liabilities.
  4
  RISKS
RELATED TO OUR COMMON STOCK
  Our
board of directors does not intend to declare or pay any dividends to our
stockholders in the foreseeable future.
  The
declaration, payment and amount of any future dividends will be made at the
discretion of our board of directors, and will depend upon, among other things,
the results of our operations, cash flows and financial condition, operating and
capital requirements, and other factors the board of directors considers
relevant.  There is no plan to pay dividends in the foreseeable
future, and if dividends are paid, there can be no assurance with respect to the
amount of any such dividend.
  Nevada
law and our articles of incorporation authorize us to issue shares of stock,
which shares may cause substantial dilution to our existing shareholders and/or
have rights and preferences greater than our common stock.
  Pursuant
to our Articles of Incorporation, we have, as of the date of this Report,
200,000,000 shares of common stock authorized.  As of March 24, 2010,
we have 25,629,016shares
of common stock issued and outstanding.  As a result, our Board of
Directors has the ability to issue a large number of additional shares of common
stock without shareholder approval, which, if issued, could cause substantial
dilution to our existing shareholders.
  A
limited public trading market exists for our common stock, which makes it more
difficult for our stockholders to sell their common stock in the public
markets.
  Although
our common stock is quoted on the OTCBB under the symbol “LPWR” there is a
limited public market for our common stock.  No assurance can be given
that an active market will develop or that a stockholder will ever be able to
liquidate its shares of common stock without considerable delay, if at
all.  Many brokerage firms may not be willing to effect transactions
in the securities.  Even if a purchaser finds a broker willing to
effect a transaction in these securities, the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may
exceed the selling price.  Furthermore, our stock price may be
impacted by factors that are unrelated or disproportionate to our operating
performance.  These market fluctuations, as well as general economic,
political and market conditions, such as recessions, lack of available credit,
interest rates or international currency fluctuations may adversely affect the
market price and liquidity of our common stock.
  Our
common stock may be subject to the penny stock rules which may make it more
difficult to sell our common stock.
  The SEC
has adopted regulations which generally define a “penny stock” to be any equity
security that has a market price, as defined, less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain
exceptions.  Our securities may be covered by the penny stock rules,
which impose additional sales practice requirements on broker-dealers who sell
to persons other than established customers and accredited investors such as,
institutions with assets in excess of $5,000,000 or an individual with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with his or her spouse.  For transactions covered by this rule, the
broker-dealers must make a special suitability determination for the purchase
and receive the purchaser’s written agreement of the transaction prior to the
sale.  Consequently, the rule may affect the ability of broker-dealers
to sell our securities and also affect the ability of our stockholders to sell
their shares in the secondary market.
  Item
1B.  Unresolved Staff Comments.
  None.
  Item
2.  Properties.
  We
currently maintain our registered offices at 1694 Falmouth Road, Suite 150,
Centerville, MA 02632-2933.
  5
  Item
3.  Legal Proceedings.
  None.
  Item
4.  Reserved.
  Not
applicable.
  PART
II
  Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity  Securities.
  Market
Information
  Our
common stock currently trades on the OTC Bulletin Board (“OTCBB”) exchange under
the symbol LPWR.OB.  The following table sets forth the range of high
and low bid information for our common stock as reported on the OTCBB for each
calendar quarter indicated below.  Prior to October 6, 2008, there was
no established trading market for our common stock.  Our common stock
began trading on the OTCBB on October 6, 2008.  The quotations below
reflect inter-dealer prices, without retail mark-up, markdown or commission, and
may not necessarily represent actual transactions.
  All
prices listed below have been adjusted to give retroactive effect to a 2.5-for-1
forward stock split of all issued and outstanding shares of our common stock on
January 16, 2009 and a 1-for-100 reverse split of all issued and outstanding
shares of our common stock on August 10, 2009.
  2008
                  
                  Low
                  
                  
                  HighFourth
      Quarter (October 6, 2008 - December 31, 2008)
                  
                  $
                  20.00
                  
                  
                  $
                  42.802009
                  
                  Low
                  
                  
                  HighFirst
      Quarter (March 31, 2009)
                  
                  $
                  14.00
                  
                  
                  $
                  52.00Second
      Quarter (June 30, 2009)
                  
                  $
                  3.00
                  
                  
                  $
                  11.00Third
      Quarter (September 30, 2009)
                  
                  $
                  0.27
                  
                  
                  $
                  4.00Fourth
      Quarter (December 31, 2009)
                  
                  $
                  0.13
                  
                  
                  $
                  0.75
 
 The
closing price for our common stock on December 31, 2009 was
$0.13.
  Stockholders
  As of
March 24, 2010, we had 25,629,016 shares of common stock outstanding held by 33
shareholders.
  Dividends
  We have
not paid dividends to date and do not anticipate paying any dividends in the
foreseeable future.  Our Board of Directors intends to follow a policy
of retaining earnings, if any, to finance our growth.  The declaration
and payment of dividends in the future will be determined by our Board of
Directors in light of conditions then existing, including our earnings,
financial condition, capital requirements and other factors.
  Issuer
Purchases of Equity Securities
  None.
  Item
6.  Selected Financial Data.
  Not
applicable.
  6
  Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
  The
discussion and financial statements contained herein are for our fiscal years
ended December 31, 2009 and December 31, 2008.  The following
discussion should be read in conjunction with our consolidated financial
statements and notes thereto included elsewhere in this
Report.  Forward looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments.  Forward-looking statements
are based upon estimates, forecasts and assumptions that are inherently subject
to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond our control and many of which, with
respect to future business decisions, are subject to change.  These
uncertainties and contingencies can affect actual results and could cause actual
results to differ materially from those expressed in any forward-looking
statements made by us, or on our behalf.  We disclaim any obligation
to update forward-looking statements.
  Plan
of Operation
  Background
  We were
organized under the laws of the State of Nevada on June 8, 2006 under the name
“Drayton Harbor Resources, Inc.” and were engaged in the exploration of mineral
interest located in British Columbia, Canada.  We have relinquished
our rights to this mineral interest and changed our focus towards the end of
2008 to the research, development, manufacturing and sales of light-emitting
diode (LED) products.
  In
furtherance of our business objectives, on January 12, 2009, we entered into a
definitive Agreement and Plan of Merger with LED Power Group, Inc. f.k.a. LED
Power, Inc., a Nevada corporation (“LPG”) and Drayton Acquisition Sub, Inc., our
wholly-owned subsidiary, whereby Drayton Acquisition Sub, Inc. merged with and
into LPG, with LPG remaining as the surviving entity and becoming our
wholly-owned subsidiary.  Under the terms of the Agreement and Plan of
Merger, we issued 9,000,000 pre-split shares of our common stock to Trussnet
Capital Partners (Cayman) Ltd. for all of the issued and outstanding shares of
LPG.  LPG has limited operations and owns the rights to an Assignment
Agreement with Jumbo Power Technology Ltd., Liao Pheng-Piao and Liu Chih-Chun
(“Licensors”), dated December 2008 (the “Assignment
Agreement”).  Under the terms of the Assignment Agreement, LPG was
licensed the exclusive rights to certain intellectual property owned by
Licensors in relation to the production of LED products.
  To
further facilitate our shift in business focus, on January 16, 2009, we effected
a 2.5-for-1 forward stock split of all of our issued and outstanding shares of
common stock.  Additionally, on February 2, 2009, we merged with our
wholly-owned subsidiary, LPG, for the purposes of effective a name change to
“LED Power Group, Inc.”
  Effective
August 10, 2009, we effected a 1-for-100 reverse split of all our issued and
outstanding shares of common stock to better position the company for growth for
the rest of 2009 and to facilitate investment and broaden ownership, and to
ultimately enhance overall shareholder value, resulting in a decrease of the
outstanding shares of common stock from 72,500,000 to 725,001 and a decrease of
our authorized capital to 6,000,000.  Effective November 2, 2009, the
Company amended its articles of incorporation to increase its authorized capital
to 200,000,000 shares of common stock.
  On
September 24, 2009, we issued an aggregate of 1,000,000 shares of our common
stock for a purchase price of $10,000 to John J. Lennon, our President,
resulting in a change of control and Mr. Lennon owning 57.14% of our issued and
outstanding shares.  On December 10, 2009, we issued an additional
23,904,015 shares of our common stock pursuant to the conversion of demand notes
payable.
  We
currently have no revenue from operations.  In order to meet our
business objectives, we will need to raise additional funds through equity or
convertible debt financing.  There can be no assurance that we will be
successful in raising additional funds and, if unsuccessful, our plans for
expanding operations and business activities may have to be
curtailed.  Any attempt to raise funds, through debt or equity
financing, would likely result in dilution to existing
shareholders.
  7
  Critical
Accounting Policies
  The
preparation of financial statements in conformity with United States generally
accepted accounting principles requires management of our company to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods.
  Our
management routinely makes judgments and estimates about the effects of matters
that are inherently uncertain.  As the number of variables and
assumptions affecting the probable future resolution of the uncertainties
increase, these judgments become even more subjective and
complex.  Our significant accounting policies are discussed in Note 3
to our financial statements for the fiscal year ended December 31, 2009 included
in the Form 10-K.  We have identified the following accounting
policies, described below, as the most important to an understanding of our
current financial condition and results of operations.
  Development  stage
company
  The
Company complies with Financial Accounting Standards Board Statement (“SFAS”)
No. 7, Accounting and Reporting by Development Stage Enterprises, as amended,
for its characterization of the Company as a Development Stage
Company.  The Company is devoting substantially all of its present
efforts to establish a new business and none of its planned principal operations
have commenced.
  Loss
per share
  In
accordance with ASC subtopic 260-10, the basic loss per common share is computed
by dividing net loss available to common stockholders by the weighted average
number of common shares outstanding.  Diluted loss per share is
computed by dividing net loss by the weighted average number of shares of common
stock, common stock equivalents and potentially dilutive securities outstanding
during each period.  Diluted loss per common share is not presented
because it is anti-dilutive.  The weighted average number of shares
outstanding during the periods has been retroactively restated to reflect a
forward stock split of four new shares for one old share, effective on January
4, 2008, a forward stock split of 2.5 new shares for one old share, effective on
January 16, 2009, and a reverse stock split of one new share for 100 old shares,
effective on August 10, 2009.
  Long
lived assets
  Property
and equipment are stated on the basis of historical cost less accumulated
depreciation.  Depreciation is provided using the straight-line method
over the estimated useful lives of  the assets.  Major
renewals and improvements are capitalized, while minor replacements, maintenance
and repairs are charged to current operations.
  Impairment
losses are recorded on fixed assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount.  There were
no impairment losses in 2008.  During the fiscal year ended December
31, 2009, the Company recorded $8,280,000 for impairment of a license as it does
not have marketable value at this time
  Results
of Operations
  The
following is management’s discussion and analysis of certain significant factors
which have affected the Company’s financial condition and results of operations
during the periods included in the accompanying financial
statements.
  Financial
Condition as of December 31, 2009
  We
reported total current assets of $5,493 at December 31, 2009, consisting of cash
of $206 and prepaid expenses of $5,287.  Total current liabilities
reported of $105,803 consisted of $55,244 in accounts payable and accrued
liabilities and of $50,559 in notes payable, interest on notes and
advances.  We had a working capital deficiency of $100,310 at December
31, 2009.
  8
  Stockholders’
Deficiency increased from $87,841 for the year ended December 31, 2008 to
$100,310 at December 31, 2009.
  We are
currently a development stage company focused in the LED industry, and
evaluating opportunities for expansion within that industry through acquisitions
or other strategic relationships.
  Cash
and Cash Equivalents
  As of
December 31, 2009, we had cash of $206.  As such, we anticipate that
we will have to raise additional capital through debt or equity financings to
fund our operations and execute our business plan during the next 6 to 12
months.
  Results
of Operations For the Fiscal Year Ended December 31, 2009
  For the
fiscal year ended December 31, 2009, we incurred a net loss of
$8,541,509.
  Results of Operations For the Fiscal
Year Ended December 31, 2008
  For the
fiscal year ended December 31, 2008, we incurred a net loss of
$70,296.
  Results
of Operations for the Year Ended December 31, 2009 as Compared to the Year Ended
December 31, 2008
  Results of Operations, Year Ended
                
                December 31,
                    2009
                
                
                December 31,
                    2008Operating
      ExpensesGeneral
      and administrative
                
                $
                15,442
                
                
                $
                -Executive
      compensation
                
                
                30,000
                
                
                
                2,500Professional
      fees
                
                
                87,832
                
                
                
                45,045Investor
      relations and marketing
                
                
                116,621
                
                
                
                22,500Other
      ExpensesImpairment
      of license
                
                
                8,280,000
                
                
                
                -Interest
      expense
                
                
                11,614
                
                
                
                251Total
                
                $
                8,541,509
                
                
                $
                70,296
  General
and administrative expenses
  During
the fiscal year ended December 31, 2009, we incurred total expenses of
$8,541,509, as compared to $70,296 for the year ended December 31,
2008.  These expenses were related mainly to investor relations and
professional fees.  Other expenses were incurred in relation to
activities associated with maintaining a public listing, such as legal and
accounting fees.  The Company also recorded $8,280,000 for impairment
of a license as it does not have marketable value at this time
  Expenses
or other cash flows in this period may not be indicative of future periods as we
are in the early development stage.
  Liquidity
and Capital Resources
  As of
December 31, 2009, we had cash of $206, and working capital deficiency of
$100,310.  During the year ended December 31, 2009, we funded our
operations from the proceeds of private sales of equity.  We plan to
continue further financings, and we believe that this will provide sufficient
working capital to fund our operations for at least the next 12
months.  Changes in our operating plans, increased expenses,
additional acquisitions or other events may cause us to seek additional equity
or debt financing in the future.
  9
  For the
period ended December 31, 2009, we used $229,852 of net cash to fund operating
activities.  Net cash used in operating activities reflected $4,713 in
prepaid expenses offset by $15,668 in accounts payable and accrued
liabilities.
  We raised
$10,000 during the fiscal year ended December 31, 2009 from the proceeds of a
sale of common stock to John J. Lennon, our President.  Additionally,
we borrowed $220,059 through the issuance of convertible promissory
notes.
  We
anticipate that our cash requirements will be significant in the near term due
to contemplated development, manufacturing, marketing and sales of our LED
technologies and products.  Accordingly, we expect to continue to use
cash to fund operations for at least the remaining of our fiscal year ended
December 31, 2010, as we look to generating sufficient revenue to meet our
needs.
  Off-Balance
Sheet Arrangements
  There are
no off-balance sheet arrangements.
  Capital
Expenditures
  We did
not make any capital expenditures in the fiscal year ended December 31,
2009.
  Contractual
Obligations
  The
following table outlines payments due under our significant contractual
obligations over the periods shown, exclusive of interest:
  Payments Due by
                    PeriodContractual Obligations
                      At December 31, 2009
                  
                  Total
                  
                  
                  Less than 1
                      Year
                  
                  
                  1-3 years
                  
                  
                  3-5 years
                  
                  
                  More than 5
                      YearsTotal
      Debt
                  
                  $
                  50,559
                  
                  
                  $
                  50,559
                  
                  
                  $
                  
                  
                  
                  $
                  
                  
                  
                  $
  The above
table outlines our obligations as of December 31, 2009 and does not reflect any
changes in our obligations that have occurred after that date.
  Item
7A  Quantitative and Qualitative Disclosures About Market
Risk.
  Not
applicable.
  Item
8.  Financial Statements and Supplementary Data.
  Reference
is made to the financial statements, the report of our independent registered
public accounting firm, and the notes thereto of this report, which financial
statements, report, and notes are incorporated herein by reference.
  Item
9.  Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
  As
previously disclosed, on August 3, 2009, Moore and Associates, Chartered was
dismissed as our independent accountant.  On August 7, 2009, we
engaged Weaver and Martin LLC as our new independent accountant.  In
connection with this change in accountants, there was no disagreement (as that
term is used in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as
described in Item 304(a)(1)(v) of Regulation S-K).
  10
 
 Item
9A(T).  Controls and Procedures.
  Disclosure
Controls and Procedures
  We
carried out an evaluation, under the supervision and with the participation of
our management, including our principal executive officer, who is also our
principal financial officer, of the effectiveness of our disclosure controls and
procedures (as defined by Rule 13a-15(e) and 15d-15(e) promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end
of our fiscal year ending December 31, 2009, pursuant to Exchange Act Rule
13a-15.  Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
are not effective in ensuring that information required to be disclosed by us in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms and that such information is accumulated and communicated to our
management, including our principal executive officer and principal financial
officer, to allow timely decisions regarding required disclosures. This
conclusion is based primarily upon the factors discussed below.
  Management’s
Report on Internal Control over Financial Reporting
  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Exchange Act as a process designed by, or under the supervision of, our
principal executive and principal financial officers and effected by our board
of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles  (“GAAP”) and includes those policies and
procedures that:
  -
              Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of our
      assets;
  -
              Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of our management and
      directors; and
  -
              Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.  All internal control
systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.  Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be
prevented or detected on a timely basis by internal control over financial
reporting.  However, these inherent limitations are known features of
the financial reporting process.  Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this
risk.
  As of
December 31, 2009, our management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) and SEC guidance on conducting such
assessments.  Based on that evaluation, they concluded that, during
the period covered by this report, such internal controls and procedures were
not effective to detect the inappropriate application of U.S. GAAP rules as more
fully described below.  This was due to deficiencies that existed in
the design or operation of our internal controls over financial reporting that
adversely affected our internal controls and that may be considered to be
material weaknesses.
  The
matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee of
our board of directors due to a lack of a majority of independent board members
and a lack of a majority of outside directors on our board of directors,
resulting in ineffective oversight in the establishment and monitoring of
required internal controls and procedures; (2) inadequate segregation of duties
consistent with control objectives; and (3) ineffective controls over period end
financial disclosure and reporting processes.
  11
  Our
management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results.  However, our
management believes that the lack of a functioning audit committee and the lack
of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures, which could result in a material misstatement in our
financial statements in future periods.
  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Our management’s report was not subject to attestation by
our registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit us to provide only our
management’s report in this annual report.
  Management’s
Remediation Initiatives
  In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal control over financial reporting, we have initiated, or
plan to initiate upon the receipt of sufficient funds and increase in
operations, the following series of measures:
  ·
              We
      will create a position to segregate duties consistent with control
      objectives and will increase our personnel resources and technical
      accounting expertise within the accounting
  function;
  ·
              We
      plan to appoint one or more outside directors to our board of directors
      who shall be appointed to an audit committee resulting in a fully
      functioning independent audit committee who will undertake the oversight
      in the establishment and monitoring of required internal controls and
      procedures such as reviewing and approving estimates and assumptions made
      by management.
  We
anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2010.  Additionally, we plan to test our
updated controls and remediate our deficiencies by December 31,
2010.
  Changes
in Internal Control over Financial Reporting
  We have
had very limited operations and there were no changes in our internal controls
over financial reporting that occurred during the three months ended December
31, 2009 that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.  We believe
that a control system, no matter how well designed and operated, cannot provide
absolute assurance that the objectives of the control system are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within any company have been
detected.
  Item
9B.  Other Information.
  On
December 30, 2009, we issued a convertible note to a foreign accredited investor
for proceeds of $22,557.  The amount is unsecured and is due on
demand.  The principal amount bears interest at 10% per annum
calculated and payable annually.  At any time that the principal and
interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of our common stock at such price and on such
terms as being offered to investors at the time of conversion.  We
offered and sold the convertible note in reliance on Section 506 of Regulation D
and/or Regulation S of the Securities Act, and comparable exemptions for sales
to "accredited" investors under state securities laws.
 
 On
December 31, 2009, we issued a convertible note to a foreign accredited investor
for proceeds of $10,994.  The amount is unsecured and is due on
demand.  The principal amount bears interest at 10% per annum
calculated and payable annually.  At any time that the principal and
interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of our common stock at such price and on such
terms as being offered to investors at the time of conversion.  We
offered and sold the convertible note in reliance on Section 506 of Regulation D
and/or Regulation S of the Securities Act, and comparable exemptions for sales
to "accredited" investors under state securities laws.
  12
  Subsequent
to December 31, 2009, on March 6, 2010, we issued a convertible note to a
foreign accredited investor for proceeds of $46,611.  The amount is
unsecured and is due on demand.  The principal amount bears interest
at 10% per annum calculated and payable annually. At any time that the principal
and interest shall remain outstanding, the lender has the right to convert such
principal and interest to shares of our common stock at such price and on such
terms as being offered to investors at the time of conversion. We offered and
sold the convertible note in reliance on Section 506 of Regulation D and/or
Regulation S of the Securities Act, and comparable exemptions for sales to
"accredited" investors under state securities laws.
 
 PART
III
  Item
10.  Directors, Executives Officers and Corporate
Governance.
  Directors
and Executive Officers
  The
following table sets forth the names and ages of our current directors and
executive officers, the principal offices and positions held by each
person:
  Person
                
                Age
                
                PositionJohn
      J. Lennon
                
                55
                
                President,
      Chief Executive Officer, Treasurer, Secretary,
  Director
  John J.
Lennon.On December 1,
2008, the Board of Directors of the Company appointed Mr. John J. Lennon as
President, Secretary, Treasurer and sole member of the Board of Directors of the
Company.  Our board concluded Mr. Lennon should serve as a director
based on his background in natural resource exploration, experience in raising
funds through debt and equity financing, and previous public company leadership
positions.
  Mr.
Lennon has served as President, Chief Financial Officer and Director of UV Flu
Technologies, Inc., a public company, since November 2009, President, Chief
Executive Officer and Director of Far East Wind Power Corp., a public company,
since September 2009, President of Chamberlain Capital Partners since 2004,
Director of American Durahomes from 2006, and Treasurer/Director/VP of Finance
of US Starcom from 2005 to 2007.  Mr. Lennon also has served as a
Director of American Petro-Hunter, Inc., a public company, since February 2009,
and served as President of this company from February 2009 to June
2009.  Chamberlain Capital Partners assists companies in the area of
maximizing shareholder value through increased sales, cost reduction and refined
business strategy.  Mr. Lennon has also assisted companies in
obtaining debt financing, private placements and other methods of
funding.  He is responsible for corporate reporting, press releases,
and funding related initiatives for American Durahomes, a private corporation,
and previously for US Starcom, a public entity.  On December 31, 2007,
Mr. Lennon was appointed Chief Executive Officer, President, Chief
Financial Officer, Secretary, Treasurer and director of Explortex Energy Inc., a
publicly reporting company, which is a natural resource exploration company
engaged in the participation in drilling of oil and gas in the United
States.  From 1987 to 2004, Mr. Lennon served as Senior Vice President
of Janney Montgomery Scott, Osterville, MA, Smith Barney and Prudential Bache
Securities, managing financial assets for high net worth
individuals.  Mr. Lennon also previously served as a Director,
Treasurer and VP of Finance of Brite-Strike Tactical Illumination Products,
Inc., a public company, from August 2008 to July 2009 and President of Explorex
Energy, a private corporation, from January 2008 to June 2009.
  There are
no arrangements, understandings, or family relationships pursuant to which our
executive officers were selected.
  Audit
Committee
  Our Board
of Directors has not established a separately-designated standing audit
committee within the meaning of Section 3(a)(58)(A) of the Exchange
Act.  Instead, the entire Board of Directors acts as the audit
committee within the meaning of Section 3(a)(58)(B) of the Exchange
Act.  We are seeking candidates for outside directors to serve on a
separate audit committee when we establish one.  Due to our small size
and limited operations and resources, it has been difficult to recruit outside
directors.
  Audit
Committee Financial Expert
  Due to
our small size and limited operations and resources, we currently do not have an
audit committee financial expert on our Board of Directors.
  13
  Code
of Ethics
  Given our
limited operations and resources and because we are in the development stage, we
have not yet adopted a code of ethics.  Upon commencement of
significant operations and hiring other executive officers, we intend to adopt a
code of ethics that will apply to all our officers, directors and
employees.
  Section
16(a) Beneficial Ownership Reporting Compliance
  Based
solely upon a review of Forms 3, 4 and 5 delivered to us as filed with the
Securities Exchange Commission, each of our former President and Director,
Bhupinder Malhi, and our former Chief Financial Officer and Secretary, Rogel
Gregorio, failed to file on a timely basis Form 3 and Form 4s as required
pursuant to Section 16(a) of the Exchange Act.  Mr. Malhi and Mr.
Gregorio failed to file any reports during the fiscal year ended December 31,
2008.
  Except as
set forth above, and based solely upon a review of Forms 3, 4 and 5 delivered to
us as filed with the Securities and Exchange Commission, our executive officers
and directors, and persons who own more than 10% of our common stock timely
filed all required reports pursuant to Section 16(a) of the Securities Exchange
Act.
  Item
11.  Executive Compensation.
  The
summary compensation table below shows certain compensation information for
services rendered in all capacities to us by our principal executive officer and
by each other executive officer whose total annual salary and bonus exceeded
$100,000 during the fiscal periods ended December 31, 2009 and December 31,
2008.  Other than as set forth below, no executive officer’s total
annual compensation exceeded $100,000 during our last fiscal
period.
  Summary
Compensation Table
  Name and Principal Position (a)
                      Year
                        (b)
                      
                      Salary
                          ($)(c)
                      
                      
                      Bonus
                          ($)(d)
                      
                      
                      Stock
                          Awards
                          ($)(e)(2)
                      
                      
                      Option
                          Awards
                          ($)(f)
                      
                      
                      Non-Equity
                          Incentive Plan
                          Compensation
                        ($)(g)
                      
                      
                      Non-qualified
                          Deferred
                          Compensation
                          Earnings
                        ($)(h)
                      
                      
                      All Other
                          Compensation
                        (i)
                      
                      
                      Total(j)John
      J. Lennon,
                      2009
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      30,000
                      
                      
                      $
                      30,000President,
      Chief Executive Officer, Treasurer, Secretary, Director
(1)
                      2008
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      -0-
                      
                      
                      $
                      2,500
                      
                      
                      $
                      2,500
 
 (1)           The
Company entered into a Management and Governance Consultant Agreement with
Chamberlain Capital Partners on December 1, 2008.  Pursuant to the
agreement, Chamberlain Capital Partners provides services to us relating to
corporate management and governance and consults with our officers and employees
concerning matters relating to corporate management, governance, including
day-to-day operations, accounting, regulatory compliance, marketing and investor
relation services.  We agreed to pay Chamberlain Capital Partners
$2,500 per month for services rendered pursuant to the agreement.  The
agreement expired pursuant to its own terms on November 30, 2009, and either
party had the right to terminate the agreement at any time by providing 30 days
written notice to the other party.  Effective December 1, 2009, the
agreement with Chamberlain Capital Partners is continuing on a month-to-month
basis.  Mr. Lennon is the president of Chamberlain Capital Partners,
and billed our Company a total of $30,000 and $2,500 for the fiscal years ended
December 31, 2009 and December 31, 2008, respectively, for services performed
under the Management and Governance Consultant Agreement.
  Director
Compensation
  We do not
pay compensation to directors for attendance at meetings.  We do
reimburse directors for reasonable expenses incurred during the course of their
performance.  There has been no compensation awarded to, earned by, or
paid to any of our named directors during the last fiscal year.
  14
  Pension
and Retirement Plans; Payments Upon Termination or Change of
Control
  Currently,
we do not offer any annuity, pension or retirement benefits to be paid to any of
our officers, directors or employees, in the event of
retirement.  There are also no compensatory plans or arrangements with
respect to any individual named above which results or will result from the
resignation, retirement or any other termination of employment with our company,
or from a change in the control of our Company.
  Compensation
Policies and Practices As They Relate to the Company’s Risk
Management
  We
believe that our compensation policies and practices for our employees,
including our executive officers, do not create risks that are reasonably likely
to have a material adverse effect on our company.
  Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
  Security
Ownership Of Certain Beneficial Owners And Management
  The
following table sets forth, as of March 24, 2010, the number and percentage of
outstanding shares of our common stock owned by (i) each director and each named
executive officer, (ii) all directors and named executive officers as a group,
and (iii) each person known to us to beneficially own more than 5% of our
outstanding common stock.  Share ownership is deemed to include all
shares that may be acquired through the exercise or conversion of any other
security immediately or within the next 60 days.  Such shares that may
be so acquired are also deemed outstanding for purposes of calculating the
percentage of ownership for that individual or any group of which that
individual is a member.  Unless otherwise indicated, the stockholders
listed possess sole voting and investment power with respect to the shares
shown.
  Name and Address of Beneficial Owner (1)
                
                Amount and
                    Nature of
                    Beneficial
                    Ownership (2)
                
                
                Percent of Class
                    of Common
                  Stock(2)Directors
      and Executive Officers
                  John
      J. Lennon
                  104
      Swallow Hill Drive
                  Barnstable,
      MA  02630
                
                
                1,000,000
                
                
                
                3.9
                %Ownership
      of all directors and executive officers as a group (1
    person)
                
                
                1,000,000
                
                
                
                3.9
                %
 (1)
              Unless
      otherwise noted, the security ownership disclosed in this table is of
      record and beneficial.  Unless provided for otherwise, the
      address for each of the beneficial owners named below is the Company’s
      business address.
  (2)
              Under
      Rule 13d-3 under the Exchange Act, shares not outstanding but subject to
      options, warrants, rights, conversion privileges pursuant to which such
      shares may be acquired within 60 days after March 24, 2010 are deemed to
      be outstanding for the purpose of computing the percentage of outstanding
      shares owned by the persons having such rights, but are not deemed
      outstanding for the purpose of computing the percentage for such other
      persons.
  We do not
know of any other shareholder who has more than 5 percent of the issued
shares.
  There are
no voting trusts or similar arrangements known to us whereby voting power is
held by another party not named herein which may at a subsequent date result in
a change of control.  We know of no trusts, proxies, power of
attorney, pooling arrangements, direct or indirect, or any other contract
arrangement or device with the purpose or effect of divesting such person or
persons of beneficial ownership of our common shares or preventing the vesting
of such beneficial ownership.
  Securities
Authorized For Issuance Under Equity Compensation Plans
  None.
  15
  Item
13.  Certain Relationships and Related Transactions, and Director
Independence.
  Related
Party Transactions
  In
connection with Mr. Lennon’s appointment as President, Chief Executive Officer,
Treasurer, Secretary and Director, we entered into a Management and Governance
Consultant Agreement with Chamberlain Capital Partners on December 1,
2008.  Pursuant to the agreement, Chamberlain Capital Partners
provides services to us relating to corporate management and governance and
consults with our officers and employees concerning matters relating to
corporate management, governance, including day-to-day operations, accounting,
regulatory compliance, marketing and investor relation services.  We
agreed to pay Chamberlain Capital Partners $2,500 per month for services
rendered pursuant to the agreement.  The agreement expired pursuant to
its own terms on November 30, 2009, and either party had the right to terminate
the agreement at any time by providing 30 days written notice to the other
party.  Mr. Lennon is the President of Chamberlain Capital
Partners.
  Review,
Approval or Ratification of Transactions with Related Persons
  Although
we have not adopted a Code of Ethics, we rely on our board to review related
party transactions on an ongoing basis to prevent conflicts of
interest.  Our board reviews a transaction in light of the
affiliations of the director, officer or employee and the affiliations of such
person’s immediate family.  Transactions are presented to our board
for approval before they are entered into or, if this is not possible, for
ratification after the transaction has occurred.  If our board finds
that a conflict of interest exists, then it will determine the appropriate
remedial action, if any.  Our board approves or ratifies a transaction
if it determines that the transaction is consistent with the best interests of
the Company.
  Director
Independence
  During
2009, we did not have any independent directors on our board.  We
evaluate independence by the standards for director independence established by
applicable laws, rules, and listing standards including, without limitation, the
standards for independent directors established by The New York Stock Exchange,
Inc., The NASDAQ National Market, and the SEC.
  Subject
to some exceptions, these standards generally provide that a director will not
be independent if (a) the director is, or in the past three years has been, an
employee of ours; (b) a member of the director’s immediate family is, or in the
past three years has been, an executive officer of ours; (c) the director or a
member of the director’s immediate family has received more than $120,000 per
year in direct compensation from us other than for service as a director (or for
a family member, as a non-executive employee); (d) the director or a member of
the director’s immediate family is, or in the past three years has been,
employed in a professional capacity by our independent public accountants, or
has worked for such firm in any capacity on our audit; (e) the director or a
member of the director’s immediate family is, or in the past three years has
been, employed as an executive officer of a company where one of our executive
officers serves on the compensation committee; or (f) the director or a member
of the director’s immediate family is an executive officer of a company that
makes payments to, or receives payments from, us in an amount which, in any
twelve-month period during the past three years, exceeds the greater of
$1,000,000 or two percent of that other company’s consolidated gross
revenues.
  Board
Leadership Structure and Role in Risk Oversight
  John J.
Lennon serves the Company both as its principal executive officer and sole
director.  At present, we have determined this leadership structure is
appropriate for our Company due to our small size and limited operations and
resources.
  The Board
is actively involved in the general oversight of risks that could affect our
Company.  This oversight is conducted primarily through regular
monitoring and oversight of particular risks within the Company, as well as the
Company’s engagement of Chamberlain Capital Partners, which provides our Company
with, among other things, corporate management and governance and regulatory
compliance consulting services.
  16
  Item
14.  Principal Accounting Fees and Services.
  The
following table shows the fees paid or accrued by us for the audit and other
services provided by Moore and Associates, Chartered, the Company’s independent
registered public accounting firm for fiscal year 2008 and for fiscal year 2009
until August 3, 2009 for the fiscal periods shown:
  2009
                  
                  
                  2008Audit
      Fees
                  
                  $
                  0
                  
                  
                  $
                  6,500Audit
      - Related Fees
                  
                  
                  -
                  
                  
                  
                  -Tax
      Fees
                  
                  
                  -
                  
                  
                  
                  -All
      Other Fees
                  
                  
                  -
                  
                  
                  
                  -Total
                  
                  $
                  0
                  
                  
                  $
                  8,000
 
  The
following table shows the fees paid or accrued by us for the audit and other
services provided by Weaver & Martin LLC, the Company’s independent
registered public accounting firm since August 7, 2009 for the fiscal period
shown:
  2009Audit
      Fees(1)
                  
                  $
                  12,000Audit
      Related Fees
                  
                  $
                  3,500Tax
      Fees
                  
                  
                  -All
      Other Fees
                  
                  
                  -Total
                  
                  $
                  15,500
 
 (1)
                The
      registration of the Company’s prior auditor, Moore and Associates,
      Chartered, under the Public Company Accounting Oversight Board was revoked
      on August 27, 2009.  As a result, the audit opinion of Moore and
      Associates for fiscal year 2008 has been rendered
      invalid.  Accordingly, amounts included in Audit Fees include
      amounts paid or accrued by us for the audit of both fiscal years 2008 and
      2009 by Weaver and Martin
LLC.
  Audit
fees consist of fees billed for professional services rendered for the audit of
our financial statements and review of the interim financial statements included
in quarterly reports and services that are normally provided by the above
auditors in connection with statutory and regulatory fillings or
engagements.
  In the
absence of a formal audit committee, the full Board of Directors pre-approves
all audit and non-audit services to be performed by the independent registered
public accounting firm in accordance with the rules and regulations promulgated
under the Exchange Act.  The Board of Directors pre-approved 100% of
the audit, audit-related and tax services performed by the independent
registered public accounting firms in fiscal 2009 and 2008.  The
percentage of hours expended on the respective principal accountants’ engagement
to audit the Company’s financial statements for the most recent fiscal year that
were attributed to work performed by persons other than the respective principal
accountants’ full-time, permanent employees was 0%.
  PART
IV
  Item
15.  Exhibits, Financial Statement Schedules.
  (a)  Financial
Statements and Financial Statement Schedules
  (1)
              Financial
      Statements are listed in the Index to Financial Statements on page F-1 of
      this report.
  (2)
              No
      financial statement schedules are included because such schedules are not
      applicable, are not required, or because required information is included
      in the consolidated financial statements or notes
  thereto.
  17
  (b)  Exhibits
  Exhibit
                        Number
                      
                      Exhibit3.1
                      
                      Articles
      of Incorporation of Company, including all amendments to date.
      (1)3.2
                      
                      Bylaws
      of Company. (2)10.1
                      
                      Agreement
      and Plan of Merger among Drayton Harbor Resources, Inc., Drayton
      Acquisition Sub, Inc. and LED Power, Inc. dated January 12, 2009.
      (3)10.2
                      
                      Management
      and Governance Consultant Agreement between Drayton Harbor Resources Inc.
      and Chamberlain Capital Partners dated December 1, 2008.
    (4)10.3
                      
                      Assignment
      and Assumption Agreement between Trussnet Capital Partners (HK) Ltd. and
      LED Power, Inc. dated January 12, 2009. (4)10.4
                      
                      Exclusive
      License Agreement among Jumbo Power Technology Ltd., Liao Pheng-Piao, and
      Liu Chih-Chun and Trussnet Capital Partners (HK) Ltd. dated December 2008.
      (4)16
                      
                      Letter
      from Moore & Associates, Chartered, dated August 7, 2009.
      (5)21
                      
                      List
      of Subsidiaries.31.1
                      
                      Certification
      of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a), promulgated under the Securities Exchange Act of 1934, as
      amended.31.2
                      
                      Certification
      of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a), promulgated under the Securities Exchange Act of 1934, as
      amended.32.1
                      
                      Certification
      Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of
2002.
 (1)
              Incorporated
      herein by reference to exhibits previously filed on Registrant’s
      Registration Statement on Form SB-1, filed on September 7, 2006, Current
      Reports on Form 8-K, filed February 5, 2009 and August 11, 2009, and
      Schedule 14C Information, filed on October 13,
  2009.
  (2)
              Incorporated
      herein by reference to exhibits previously filed on Registrant’s Quarterly
      Report on Form 10-Q, filed on May 14,
2009.
  (3)
              Incorporated
      herein by reference to exhibits previously filed on Registrant’s Current
      Report on Form 8-K, filed on January 16,
2009.
  (4)
              Incorporated
      herein by reference to exhibits previously filed on Registrant’s Annual
      Report on Form 10-K, filed on March 31,
2009.
  (5)
              Incorporated
      herein by reference to exhibits previously filed on Registrant’s Current
      Report on Form 8-K, filed on August 7,
2009.
  18
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
  LED
      POWER GROUP, INC.Dated:  March
      30, 2010
                    /s/ John J. LennonBy:  John
      J. LennonIts:  President,
      Secretary, Treasurer and Director(Principal
      Executive Officer)Dated:  March
      30, 2010
                    /s/ John J. LennonBy:  John
      J. LennonIts:  President,
      Secretary, Treasurer and Director(Principal
      Financial Officer and Principal Accounting
  Officer)
  Pursuant
to requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
  Signature
                  
                  Capacity
                  
                  Date/s/ John J. Lennon
                  
                  President,
      Secretary,
                  
                  March
      30, 2010John
      J. Lennon
                  
                  Treasurer
      and Director
  19
  LED
Power Group, Inc.
 Index
to Financial Statements
 December
31, 2009
  INDEX
  Report
      of independent registered public accounting firm
                              
                              F-2Balance sheets –December 31, 2009 and 2008
                              
                              F-3Statements of operations –For the years ended December 31, 2009 and 2008 and for the period
      from June 8, 2006 (Inception) to December 31, 2009
                              
                              F-4Statements of stockholders’
      equity - For the period from June 8, 2006 (Inception) to December
      31, 2009
                              
                              F-5Statements of cash flows –For the years ended December 31, 2009 and 2008 and for the period
      from June 8, 2006 (Inception) to December 31, 2009
                              
                              F-6Notes
      to the financial statements
                              
                              F-7
  F-1
  To the
Board of Directors and Stockholders
 LED Power
Group, Inc.
 Centerville,
Massachusetts
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 We have
audited the accompanying balance sheet of LED Power Group, Inc. (A Development
Stage Company) as of December 31, 2009 and 2008 and the related statements of
operations, stockholders’ deficit, and cash flows for the years then ended and
for the period of June 8, 2006 (Inception) to December 31, 2009.  LED
Power Group, Inc.’s management is responsible for these financial
statements.  Our responsibility is to express an opinion on these
financial statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  Our audit of the financial statements includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of LED Power Group, Inc. as of
December 31, 2009 and 2008 and the results of its operations, stockholders’
deficit, and cash flows for the years then ended and for the period of June 8,
2006 (Inception) to December 31, 2009 in conformity with accounting principles
generally accepted in the United States of America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and is dependent upon the continued sale of its securities or obtaining debt
financing for funds to meet its cash requirements.  These factors
raise substantial doubt about the Company’s ability to continue as a going
concern.  The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
 
 /s/Weaver
& Martin, LLC
 
 Weaver
& Martin, LLC
 Kansas
City, Missouri
 March 30,
2010
  F-2


LED
Power Group, Inc.


(A
Development Stage Company)


Balance
Sheets





December 31, 2009
                
                
                December 31, 2008ASSETSCurrent
      assetsCash
                
                $
                206
                
                
                $
                10Prepaid
      expenses
                
                
                5,287
                
                
                
                10,000Total
      current assets
                
                
                5,493
                
                
                
                10,010Total
      assets
                
                $
                5,493
                
                
                $
                10,010LIABILITIES
      and STOCKHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable and accrued liabilities
                
                $
                55,244
                
                
                $
                39,576Notes
      payable
                
                
                17,007
                
                
                
                17,007Convertible
      demand notes payable
                
                
                33,552
                
                
                
                41,258Advances
                
                
                -
                
                
                
                10Total
      current liabilities
                
                
                105,803
                
                
                
                97,851Total
      liabilities
                
                
                105,803
                
                
                
                97,851STOCKHOLDERS'
      DEFICITCapital
      stockCommon
      - 200,000,000 shares authorized at $0.001 par value 25,629,016 and 500,001
      shares issued and outstanding at December 31, 2009 and 2008,
      respectively.
                
                
                25,629
                
                
                
                500Additional
      paid in capital
                
                
                8,518,411
                
                
                
                14,500Deficit
      accumulated during development stage
                
                
                (8,644,350
                )
                
                
                (102,841
                )Total
      stockholders' deficit
                
                
                (100,310
                )
                
                
                (87,841
                )Total
      liabilities and stockholders' deficit
                
                $
                5,493
                
                
                $
                10,010





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


F-3


LED
Power Group, Inc.


(A
Development Stage Company)


Statements
of Operations


For
the Years Ended December 31, 2009 and 2008


And
for the period from June 8, 2006 (Inception) to December 31, 2009





Period from June 8,December 31,
                
                
                2006 (Inception) to2009
                
                
                2008
                
                
                December 31, 2009Revenues
                
                $
                -
                
                
                $
                -
                
                
                $
                -Operating
      expensesGeneral
      and administrative
                
                
                15,442
                
                
                
                -
                
                
                
                16,747Executive
      compensation
                
                
                30,000
                
                
                
                2,500
                
                
                
                32,500Professional
      fees
                
                
                87,832
                
                
                
                45,045
                
                
                
                149,117Investor
      relations and marketing
                
                
                116,621
                
                
                
                22,500
                
                
                
                139,121Loss
      from operations
                
                
                249,895
                
                
                
                70,045
                
                
                
                337,485Other
      income and expensesImpairment
      of mineral rights
                
                
                -
                
                
                
                -
                
                
                
                (15,000
                )Impairment
      of license
                
                
                (8,280,000
                )
                
                
                -
                
                
                
                (8,280,000
                )Interest
      expense
                
                
                (11,614
                )
                
                
                (251
                )
                
                
                (11,865
                )(8,291,614
                )
                
                
                (251
                )
                
                
                (8,306,865
                )Net
      loss
                
                $
                (8,541,509
                )
                
                $
                (70,296
                )
                
                $
                (8,644,350
                )Net
      loss per share - basic and diluted
                
                $
                (2.14
                )
                
                $
                (0.14
                )Weighted
      average shares outstanding
                
                
                3,997,288
                
                
                
                500,001





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


F-4


LED
Power Group, Inc.


(A
Development Stage Company)


Statements
of Stockholders' Equity (Deficit)


For
the period from June 8, 2006 (Inception) to December 31, 2009





AccumulatedCommon Stock
                        
                        
                        Additional
                        
                        
                        Deficit during
                        
                        
                        TotalPaid-In
                        
                        
                        Exploration
                        
                        
                        Stockholders'Number
                        
                        
                        Amount
                        
                        
                        Capital
                        
                        
                        Stage
                        
                        
                        Equity (Deficit)Balance,
      at inception
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Stock
      issued to founders for cash
                        
                        
                        750,001
                        
                        
                        
                        750
                        
                        
                        
                        14,250
                        
                        
                        
                        -
                        
                        
                        
                        15,000Net
      loss from inception (June 8, 2006) to December 31, 2006
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        (15,855
                        )
                        
                        
                        (15,855
                        )Balance,
      December 31, 2006
                        
                        
                        750,001
                        
                        
                        
                        750
                        
                        
                        
                        14,250
                        
                        
                        
                        (15,855
                        )
                        
                        
                        (855
                        )Retirement
      of founders' common stock
                        
                        
                        (250,000
                        )
                        
                        
                        (250
                        )
                        
                        
                        250
                        
                        
                        
                        
                        
                        
                        
                        -Net
      loss for year
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        (16,690
                        )
                        
                        
                        (16,690
                        )Balance,
      December 31, 2007
                        
                        
                        500,001
                        
                        
                        
                        500
                        
                        
                        
                        14,500
                        
                        
                        
                        (32,545
                        )
                        
                        
                        (17,545
                        )Net
      loss for year
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        (70,296
                        )
                        
                        
                        (70,296
                        )Balance,
      December 31, 2008
                        
                        
                        500,001
                        
                        
                        
                        500
                        
                        
                        
                        14,500
                        
                        
                        
                        (102,841
                        )
                        
                        
                        (87,841
                        )Stock
      issued for license
                        
                        
                        225,000
                        
                        
                        
                        225
                        
                        
                        
                        8,279,775
                        
                        
                        
                        
                        
                        
                        
                        8,280,000Stock
      issued for cash
                        
                        
                        1,000,000
                        
                        
                        
                        1,000
                        
                        
                        
                        9,000
                        
                        
                        
                        
                        
                        
                        
                        10,000Stock
      issued for debt conversion
                        
                        
                        23,904,015
                        
                        
                        
                        23,904
                        
                        
                        
                        215,136
                        
                        
                        
                        
                        
                        
                        
                        239,040Net
      loss for period
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        (8,541,509
                        )
                        
                        
                        (8,541,509
                        )Balance,
      December 31, 2009
                        
                        
                        25,629,016
                        
                        
                        $
                        25,629
                        
                        
                        $
                        8,518,411
                        
                        
                        $
                        (8,644,350
                        )
                        
                        $
                        (100,310
                        )





*The
common stock issued has been retroactively restated to reflect forward stock
splits of 4 new shares for 1 old share, effective January 4, 2008, a 2.5 new
shares for 1 old share, effective January 16, 2009 and a 1 new share for 100 old
shares, effective August 10, 2009





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


F-5


LED
Power Group, Inc.


(A
Development Stage Company)


Statements
of Cash Flows


For
the Years Ended December 31, 2009 and 2008


And
for the period from June 8, 2006 (Inception) to December 31, 2009





Period
      from June 8,December 31,
                    
                    
                    2006
      (Inception) to2009
                    
                    
                    2008
                    
                    
                    December 31, 2009Operating
      activitiesNet
      loss
                    
                    $
                    (8,541,509
                    )
                    
                    $
                    (70,296
                    )
                    
                    $
                    (8,644,350
                    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Item
      not affecting cash:Impairment
      of license
                    
                    
                    8,280,000
                    
                    
                    
                    -
                    
                    
                    
                    8,280,000Impairment
      of mineral rights
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    15,000Changes
      in:Accrued
      interest
                    
                    
                    11,275
                    
                    
                    
                    251
                    
                    
                    
                    11,526Prepaid
      expenses
                    
                    
                    4,713
                    
                    
                    
                    (10,000
                    )
                    
                    
                    (5,287
                    )Accounts
      payable and accrued liabilities
                    
                    
                    15,668
                    
                    
                    
                    39,038
                    
                    
                    
                    55,244Cash
      used in operating activities
                    
                    
                    (229,852
                    )
                    
                    
                    (41,007
                    )
                    
                    
                    (287,866
                    )Investing
      ActivitiesAcquisition
      of mineral rights
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (15,000
                    )Cash
      flows used in investing activities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (15,000
                    )Financing
      activitiesProceeds
      from issue of common stock
                    
                    
                    10,000
                    
                    
                    
                    -
                    
                    
                    
                    25,000Proceeds
      from demand notes
                    
                    
                    220,059
                    
                    
                    
                    41,007
                    
                    
                    
                    261,066Proceeds
      from notes payable to related parties
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    17,007Proceeds
      from advances
                    
                    
                    (10
                    )
                    
                    
                    10
                    
                    
                    
                    -Cash
      flows provided by financing activities
                    
                    
                    230,049
                    
                    
                    
                    41,017
                    
                    
                    
                    303,073Net
      increase (decrease) in cash
                    
                    
                    196
                    
                    
                    
                    10
                    
                    
                    
                    206Cash,
      beginning of period
                    
                    
                    10
                    
                    
                    
                    -
                    
                    
                    
                    -Cash,
      end of period
                    
                    $
                    206
                    
                    
                    $
                    10
                    
                    
                    $
                    206SUPPLEMENTAL
      CASH DISCLOSURESCash
      paid for:Income
      taxes
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Interest
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -SUPPLEMENTAL
      NON-CASH DISCLOSURESCommon
      stock issued for license
                    
                    $
                    8,280,000
                    
                    
                    $
                    -
                    
                    
                    $
                    8,280,000Common
      stock issued for convertible notes
                    
                    $
                    239,040
                    
                    
                    $
                    -
                    
                    
                    $
                    239,040





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


F-6


LED
Power Group, Inc.


(A
Development Stage Company)


Notes
to Financial Statements


December
31, 2009 and 2008




1.
            Nature
      of operations





LED Power
Group, Inc. (the “Company”) was incorporated in the State of Nevada, United
States of America, on June 8, 2006, under the name Drayton Harbor Resources,
Inc.




The
Company had limited operations acquiring and exploring mineral interests and,
during the fiscal year ended December 31, 2008, relinquished its rights to the
mineral interest and changed its business focus to the research, development,
manufacturing and sales of light-emitting diode (LED) products.  In
furtherance of its business objectives, on January 12, 2009, the Company entered
into a definitive Agreement and Plan of Merger with LED Power Group, Inc. f.k.a.
LED Power, Inc., a Nevada corporation ("LPG") and Drayton Acquisition Sub, Inc.,
wholly-owned subsidiary of the Company, incorporated on December 3, 2008,
whereby Drayton Acquisition Sub, Inc. merged with and into LPG, with LPG
remaining as the surviving entity and becoming its wholly-owned
subsidiary.  LPG has limited operations and owns the rights to an
assignment agreement with Jumbo Power Technology Ltd., Liao Pheng-Piao and Liu
Chih-Chun (“Licensors”) dated December 2008 (the “Assignment
Agreement”).  Under the terms of the Assignment Agreement, LPG was
licensed the exclusive rights to certain intellectual property owned by
Licensors in relation to the production of LED products.





The
Company is listed on the Over-the-Counter Bulletin Board under the symbol
LPWR.





2.
            Going
      concern





These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which assumes that the
Company will be able to meet its obligations and continue its operations for its
next fiscal year.  Realization values may be substantially different
from carrying values as shown and these financial statements do not give effect
to adjustments that would be necessary to the carrying values and classification
of assets and liabilities should the Company be unable to continue as a going
concern.  At December 31, 2009, the Company had not yet achieved
profitable operations, has accumulated losses of $8,644,350 since its inception,
has a working capital deficiency of $100,310 and expects to incur further losses
in the development of its business, all of which raises substantial doubt about
the Company’s ability to continue as a going concern.  The Company’s
ability to continue as a going concern is dependent upon its ability to generate
future profitable operations and/or to obtain the necessary financing to meet
its obligations and repay its liabilities arising from normal business
operations when they come due.





The
Company expects to continue to incur substantial losses as it executes its
business plan and does not expect to attain profitability in the near
future.  Since its inception, the Company has funded operations
through short-term borrowings and equity investments in order to meet its
strategic objectives.  The Company's future operations are dependent
upon external funding and its ability to execute its business plan, realize
sales and control expenses.  Management believes that sufficient
funding will be available from additional borrowings and private placements to
meet its business objectives including anticipated cash needs for working
capital, for a reasonable period of time.  However, there can be no
assurance that the Company will be able to obtain sufficient funds to continue
the development of its business operation, or if obtained, upon terms favorable
to the Company.





3.
            Summary
      of significant accounting policies





The
accompanying financial statements of LED Power Group, Inc. have been prepared in
accordance with accounting principles generally accepted in the United States of
America and the rules of the Securities and Exchange Commission
(“SEC”).  Because a precise determination of many assets and
liabilities is dependent upon future events, the preparation of financial
statements for a period necessarily involves the use of estimates, which have
been made using careful judgment.  Actual results may vary from these
estimates.


F-7





a.
            Cash
      and cash equivalents


Cash and
cash equivalents are defined as cash on hand, demand deposits and short-term,
highly liquid investments with an original maturity of ninety days or
less.





b.
            Development
      stage company


The
Company complies with Financial Accounting Standard Board Statement (“SFAS”) No.
7 for its characterization of the Company as a Development Stage
Company.  The Company is devoting substantially all of its present
efforts to establish a new business and none of its planned principal operations
have commenced.





c.
            Loss
      per share


In
accordance with ASC subtopic 260-10, the basic loss per common share is computed
by dividing net loss available to common stockholders by the weighted average
number of common shares outstanding.  Diluted loss per share is
computed by dividing net loss by the weighted average number of shares of common
stock, common stock equivalents and potentially dilutive securities outstanding
during each period.  Diluted loss per common share is not presented
because it is anti-dilutive.  The weighted average number of shares
outstanding during the periods has been retroactively restated to reflect the
following:





·
            a
      forward stock split of 4 new shares for one old share, effective January
      4, 2008;


·
            a
      forward stock split of 2.5 new shares for one old share, effective January
      16, 2009;


·
            a
      reverse stock split of one new share for 100 old shares, effective August
      10, 2009.





d.
            Income
      taxes


The
Company accounts for income taxes under ASC topic 740-10-25.  Under
ASC 740-10-25, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between their financial statement
carrying amounts and their respective tax bases.  Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.





e.
            Long-lived
      assets


Property
and equipment are stated on the basis of historical cost less accumulated
depreciation.  Depreciation is provided using the straight-line method
over the estimated useful lives of  the assets.  Major
renewals and improvements are capitalized, while minor replacements, maintenance
and repairs are charged to current operations.





Impairment
losses are recorded on fixed assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount.  There were
no impairment losses in 2008.  During the fiscal year ended December
31, 2009, the Company recorded $8,280,000 for impairment of a license as it does
not have marketable value at this time (refer to notes 9 and 13).





f.
            Equity
      financing


The
Company issues common stock and other equity instruments in order to raise
capital.  In each case, the Company evaluates the characteristics of
these instruments in the context of the provisions of SFAS 150 in order to
determine the appropriate equity or liability classification.





g.
            Foreign
      currency translation


Monetary
items denominated in a foreign currency are translated into US dollars, the
reporting currency, at exchange rates prevailing at the balance sheet date and
non-monetary items are translated at exchange rates prevailing when the assets
were acquired or obligations incurred.  Foreign currency denominated
revenue and expense items are translated at exchange rates prevailing at the
transaction date.  Gains or losses arising from the translations are
included in operations.


F-8





h.
            Advertising


The
Company expenses advertising costs as incurred.  The Company has not
incurred advertising expenses for the year ended December 31, 2009, and for the
period from inception to December 31, 2009.





4.
            Recent
      accounting pronouncements





a.
            The
      FASB issued ASC subtopic 855-10 (formerly SFAS 165 “Subsequent
      Events”), incorporating guidance on subsequent events into
      authoritative accounting literature and clarifying the time following the
      balance sheet date which management reviewed for events and transactions
      that may require disclosure in the financial statements.  The
      Company has adopted this standard.  The standard increased our
      disclosure by requiring disclosure reviewing subsequent
      events.  ASC 855-10 is included in the “Subsequent Events”
      accounting guidance.





b.
            In
      April 2009, the FASB issued ASC subtopic 820-10 (formerly Staff Position
      No. FAS 157-4, Determining Fair Value When
      Volume and Level of Activity for the Asset or Liability Have Significantly
      Decreased and Identifying Transactions That Are Not
      Orderly”).  ASC 820-10 provides guidance on how to
      determine the fair value of assets and liabilities when the volume and
      level of activity for the asset/liability has significantly
      decreased.  FSP 157-4 also provides guidance on identifying
      circumstances that indicate a transaction is not orderly.  In
      addition, FSP 157-4 requires disclosure in interim and annual periods
      of the inputs and valuation techniques used to measure fair value and a
      discussion of changes in valuation techniques.  The Company
      determined that adoption of FSP 157-4 did not have a material impact
      on its results of operations and financial
  position.





c.
            In
      July 2006, the FASB issued ASC subtopic 740-10 (formerly
      Interpretation No. (“FIN”) 48, “Accounting for Uncertainty in
      Income Taxes”).  ASC 740-10 sets forth a recognition
      threshold and valuation method to recognize and measure an income tax
      position taken, or expected to be taken, in a tax return.  The
      evaluation is based on a two-step approach.  The first step
      requires an entity to evaluate whether the tax position would “more likely
      than not,” based upon its technical merits, be sustained upon examination
      by the appropriate taxing authority.  The second step requires
      the tax position to be measured at the largest amount of tax benefit that
      is greater than 50 percent likely of being realized upon ultimate
      settlement.  In addition, previously recognized benefits from
      tax positions that no longer meet the new criteria would no longer be
      recognized.  The application of this Interpretation will be
      considered a change in accounting principle with the cumulative effect of
      the change recorded to the opening balance of retained earnings in the
      period of adoption.  Adoption of this new standard did not have
      a material impact on our financial position, results of operations or cash
      flows.





d.
            In
      April 2008, the FASB issued ASC 815-40 (formerly Emerging Issues Task
      Force (“EITF”) 07-05, "Determining whether an
      Instrument (or Embedded Feature) Is Indexed to an Entity’s Own
      Stock").  ASC815-40 applies to any freestanding financial
      instruments or embedded features that have the characteristics of a
      derivative, and to any freestanding financial instruments that are
      potentially settled in an entity’s own common stock.  ASC 815-40
      is effective for financial statements issued for fiscal years beginning
      after December 15, 2008.  The adoption of this pronouncement did
      not have a material impact on its financial position, results of
      operations or cash flows.


F-9





e.
            In
      June 2009, the FASB issued ASC 105 Accounting Standards
      Codification TMand the Hierarchy of Generally Accepted Accounting
      Principles.  The FASB Accounting Standards Codification
      TM (the “Codification”) has become the source of authoritative accounting
      principles recognized by the FASB to be applied by nongovernmental
      entities in the preparation of financial statements in accordance with
      Generally Accepted Accounting Principles (“GAAP”).  All existing
      accounting standard documents are superseded by the Codification and any
      accounting literature not included in the Codification will not be
      authoritative.  Rules and interpretive releases of the SEC
      issued under the authority of federal securities laws, however, will
      continue to be the source of authoritative generally accepted accounting
      principles for SEC registrants.  Effective September 30,
      2009, all references made to GAAP in our consolidated financial statements
      will include references to the new Codification.  The
      Codification does not change or alter existing GAAP and, therefore, will
      not have an impact on our financial position, results of operations or
      cash flows.





f.
            In
      June 2009, the FASB issued changes to the consolidation guidance
      applicable to a variable interest entity (VIE). FASB ASC Topic 810,
      "Consolidation," amends the guidance governing the determination of
      whether an enterprise is the primary beneficiary of a VIE, and is,
      therefore, required to consolidate an entity, by requiring a qualitative
      analysis rather than a quantitative analysis.  The qualitative
      analysis will include, among other things, consideration of who has the
      power to direct the activities of the entity that most significantly
      impact the entity's economic performance and who has the obligation to
      absorb losses or the right to receive benefits of the VIE that could
      potentially be significant to the VIE.  This standard also
      requires continuous reassessments of whether an enterprise is the primary
      beneficiary of a VIE.  FASB ASC 810 also requires enhanced
      disclosures about an enterprise's involvement with a VIE.  Topic
      810 is effective as of the beginning of interim and annual reporting
      periods that begin after November 15, 2009.  This will not have
      an impact on the Company’s financial position, results of operations or
      cash flows.





g.
            In
      June 2009, the FASB issued Financial Accounting Standards Codification No.
      860 - Transfers and Servicing.  FASB ASC No. 860 improves the
      relevance, representational faithfulness, and comparability of the
      information that a reporting entity provides in its financial statements
      about a transfer of financial assets; the effects of a transfer on its
      financial position, financial performance, and cash flows; and a
      transferor's continuing involvement, if any, in transferred financial
      assets.  FASB ASC No. 860 is effective as of the beginning of
      each reporting entity's first annual reporting period that begins after
      November 15, 2009, for interim periods within that first annual reporting
      period and for interim and annual reporting periods
      thereafter.  The adoption of FASB ASC No. 860 will not have an
      impact on the Company’s financial
statements.





h.
            International
      Financial Reporting Standards


In
November 2008, the Securities and Exchange Commission (“SEC”) issued for comment
a proposed roadmap regarding potential use of financial statements prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board.  Under the proposed
roadmap, the Company would be required to prepare financial statements in
accordance with IFRS in fiscal year 2014, including comparative information also
prepared under IFRS for fiscal 2013 and 2012.  The Company is
currently assessing the potential impact of IFRS on its financial statements and
will continue to follow the proposed roadmap for future
developments.





5.
            Financial
      instruments





a.
            Credit
      risk


The
Company maintains cash deposits with financial institutions, which from time to
time may exceed federally insured limits.  The Company has not
experienced any losses in connection with these deposits and believes it is not
exposed to any significant credit risk from cash.





b.
            Fair
      values


Financial
instruments that are subject to fair disclosure requirements are carried in the
financial statements at amounts that approximate fair value and include cash,
accounts payable and accrued expenses and notes payable.  Fair values
are based on assumptions concerning the amount and timing of estimated future
cash flows and assumed discount rates reflecting varying degrees of
risk.


F-10





c.    Liquidity
risk


The
Company is exposed to liquidity risk as its continued operations are dependent
upon obtaining additional capital or achieving profitable operations to satisfy
its liabilities as they come due.





6.
            Fair
      value measurements





The
Company adopted ASC Topic 820-10 at the beginning of 2009 to measure the fair
value of certain of its financial assets required to be measured on a recurring
basis.  The adoption of ASC Topic 820-10 did not impact the Company’s
financial condition or results of operations.  ASC Topic 820-10
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value.  The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements).  ASC Topic 820-10 defines
fair value as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants on
the measurement date.  A fair value measurement assumes that the
transaction to sell the asset or transfer the liability occurs in the principal
market for the asset or liability.  The three levels of the fair value
hierarchy under ASC Topic 820-10 are described below:





Level
1 – Valuations based on quoted prices in active markets for identical
assets or liabilities that an entity has the ability to access.





Level
2 – Valuations based on quoted prices for similar assets and liabilities in
active markets, quoted prices for identical assets and liabilities in markets
that are not active, or other inputs that are observable or can be corroborated
by observable data for substantially the full term of the assets or
liabilities.





Level
3 – Valuations based on inputs that are supportable by little or no market
activity and that are significant to the fair value of the asset or
liability.





The
following table presents a reconciliation of all assets and liabilities measured
at fair value on a recurring basis as of December 31, 2008:





Level 1
                  
                  
                  Level 2
                  
                  
                  Level 3
                  
                  
                  Fair ValueCash
                  
                  $
                  10
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  10Accounts
      payable
                  
                  
                  -
                  
                  
                  
                  39,576
                  
                  
                  
                  -
                  
                  
                  
                  39,576Notes
      payable
                  
                  
                  -
                  
                  
                  
                  17,007
                  
                  
                  
                  -
                  
                  
                  
                  17,007Demand
      notes payable
                  
                  
                  -
                  
                  
                  
                  41,258
                  
                  
                  
                  -
                  
                  
                  
                  41,258$
                  10
                  
                  
                  $
                  97,841
                  
                  
                  $
                  -
                  
                  
                  $
                  97,851





The
following table presents a reconciliation of all assets and liabilities measured
at fair value on a recurring basis as of December 31, 2009:




Level 1
                  
                  
                  Level 2
                  
                  
                  Level 3
                  
                  
                  Fair ValueCash
                  
                  $
                  206
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  206Accounts
      payable
                  
                  
                  -
                  
                  
                  
                  55,244
                  
                  
                  
                  -
                  
                  
                  
                  55,244Notes
      payable
                  
                  
                  -
                  
                  
                  
                  17,007
                  
                  
                  
                  -
                  
                  
                  
                  17,007Demand
      notes payable
                  
                  
                  -
                  
                  
                  
                  33,552
                  
                  
                  
                  -
                  
                  
                  
                  33,552$
                  206
                  
                  
                  $
                  105,803
                  
                  
                  $
                  -
                  
                  
                  $
                  106,009




F-11




7.
            Notes
      payable to related parties





During
the year ended December 31, 2007, the Company received $17,006 pursuant to
promissory notes with two of its former directors.  The notes are
unsecured, bear no interest and don’t have any specific terms of
repayment.   At December 31, 2009 and 2008, these notes are
included on the balance sheets.





8.
            Demand
      notes payable





On
February 4, 2008, the Company received $636 pursuant to a convertible promissory
note.  On June 25, 2008, the Company received $6,432 pursuant to
another convertible promissory note.  The notes are unsecured, bear no
interest and are due on demand.  These notes can be converted, at the
option of the lender, into shares of common stock of the Company, at such price
and in such terms as being offered to investors at the time of
conversion.  On November 15, 2009, these notes were converted into
706,777 shares of common stock of the Company.





During
the year ended December 31, 2008, the Company received $33,939 pursuant to five
convertible promissory notes.  These notes are unsecured, bears
interest at 10% per annum calculated annually, and are due on
demand.  Any payments of principal or interest in arrears bear
interest at 30% per annum calculated annually.  Default in payment
shall, at the option of the holder, render the entire balance
payable.  The notes and accrued interest can be converted, at the
option of the lender, into shares of common stock of the Company, at such price
and in such terms as being offered to investors at the time of
conversion.  On November 15, 2009, these notes and accrued interest of
$3,232 were converted into 3,717,072 shares of common stock of the Company, as
follows:




Accrued
                        
                        
                        Shares issuedDate
                        
                        Principal
                        
                        
                        interest
                        
                        
                        upon cnversion17-Oct-08
                        
                        $
                        632
                        
                        
                        $
                        78
                        
                        
                        
                        71,0267-Nov-08
                        
                        
                        990
                        
                        
                        
                        105
                        
                        
                        
                        109,49624-Nov-08
                        
                        
                        7,265
                        
                        
                        
                        709
                        
                        
                        
                        797,3224-Dec-08
                        
                        
                        15,053
                        
                        
                        
                        1,427
                        
                        
                        
                        1,647,99517-Dec-08
                        
                        
                        10,000
                        
                        
                        
                        912
                        
                        
                        
                        1,091,233




During
the year ended December 31, 2009, the Company received $151,508 pursuant to 14
convertible promissory notes.  These notes are unsecured, bears
interest at 10% per annum calculated annually, and are due on
demand.  Any payments of principal or interest in arrears bear
interest at 30% per annum calculated annually.  Default in payment
shall, at the option of the holder, render the entire balance
payable.  The notes and accrued interest can be converted, at the
option of the lender, into shares of common stock of the Company, at such price
and in such terms as being offered to investors at the time of
conversion.  On November 15, 2009, these notes and accrued interest of
$7,114 were converted into 15,862,222 shares of common stock of the Company, as
follows:


F-12




Accrued
                
                
                Shares issuedDate
                
                Principal
                
                
                interest
                
                
                upon cnversion15-Jan-09
                
                $
                3,701
                
                
                $
                308
                
                
                
                400,87320-Jan-09
                
                
                20,000
                
                
                
                1,638
                
                
                
                2,163,83622-Jan-09
                
                
                10,000
                
                
                
                814
                
                
                
                1,081,3706-Apr-09
                
                
                37,500
                
                
                
                2,291
                
                
                
                3,979,11026-May-09
                
                
                5,000
                
                
                
                237
                
                
                
                523,69928-May-09
                
                
                5,000
                
                
                
                234
                
                
                
                523,42517-Jul-09
                
                
                10,000
                
                
                
                332
                
                
                
                1,033,15127-Jul-09
                
                
                779
                
                
                
                24
                
                
                
                80,26031-Jul-09
                
                
                4,985
                
                
                
                146
                
                
                
                513,1141-Aug-09
                
                
                14,084
                
                
                
                409
                
                
                
                1,449,33017-Aug-09
                
                
                7,500
                
                
                
                185
                
                
                
                768,49331-Aug-09
                
                
                10,000
                
                
                
                208
                
                
                
                1,020,8221-Sep-09
                
                
                7,652
                
                
                
                157
                
                
                
                780,97115-Oct-09
                
                
                15,307
                
                
                
                131
                
                
                
                1,543,768




On July
15, 2009, the Company received $35,000 pursuant to a convertible promissory
note.  The note is unsecured, bears interest at 6% per annum
calculated annually, and is due on demand.  Any payments of principal
or interest in arrears bear interest at 30% per annum calculated
annually.  Default in payment shall, at the option of the holder,
render the entire balance payable.  The note and accrued can be
converted, at the option of the lender, into shares of common stock of the
Company, at such price and in such terms as being offered to investors at the
time of conversion.  On November 15, 2009, this note and accrued
interest of $1,179 was converted into 3,617,946 shares of common stock of the
Company.





On
December 30, 2009, the Company received $22,557 pursuant to a convertible
promissory note.  The note is unsecured, bears interest at 10% per
annum calculated annually, and is due on demand.  Any payments of
principal or interest in arrears bear interest at 30% per annum calculated
annually.  Default in payment shall, at the option of the holder,
render the entire balance payable.  The note and accrued can be
converted, at the option of the lender, into shares of common stock of the
Company, at such price and in such terms as being offered to investors at the
time of conversion.  At December 31, 2009, the Company has accrued $1
in interest pursuant to this note.





On
December 31, 2009, the Company received $10,994 pursuant to a convertible
promissory note.  The note is unsecured, bears interest at 10% per
annum calculated annually, and is due on demand.  Any payments of
principal or interest in arrears bear interest at 30% per annum calculated
annually.  Default in payment shall, at the option of the holder,
render the entire balance payable.  The note and accrued can be
converted, at the option of the lender, into shares of common stock of the
Company, at such price and in such terms as being offered to investors at the
time of conversion.





Subsequent
to December 31, 2009, on March 6, 2010, the Company received $46,611 pursuant to
a convertible promissory note.  The note is unsecured, bears interest
at 10% per annum calculated annually, and is due on demand.  Any
payments of principal or interest in arrears bear interest at 30% per annum
calculated annually.  Default in payment shall, at the option of the
holder, render the entire balance payable.  The note and accrued can
be converted, at the option of the lender, into shares of common stock of the
Company, at such price and in such terms as being offered to investors at the
time of conversion.





9.
            Capital
      stock





On
January 4, 2008, the Company forward split its issued common shares on the basis
of four new shares for one old share.  The Company increased its
authorized share capital from 150 million to 600 million shares.





On
January 12, 2009, the Company issued 9,000,000 (pre-split) (225,000 post-split)
shares of its common stock to Trussnet Capital Partners (Cayman) Ltd. for all of
the issued and outstanding shares of LED Power Group, Inc. pursuant to a merger
agreement and underlying assignment agreement.  Under the terms of the
agreements, the Company has acquired the license to exclusive rights of certain
intellectual property in relation to the production of LED
products.  The shares were valued at fair market on the day of the
agreements, being $0.92 per share (refer to note 14).


F-13





On
January 16, 2009, the Company forward split its issued common shares on the
basis of 2 and one half new shares for one old share.





On August
10, 2009, the Company reverse split its issued common shares on the basis of one
new share for one hundred old shares, and reduced its authorized capital form
600,000,000 to 6,000,000 shares of common stock.





On
September 24, 2009, the Company issued 1,000,000 shares of common stock at $0.01
per share, for gross proceeds of $10,000.





Effective
November 2, 2009, the Company amended its articles of incorporation to increase
its authorized capital to 200,000,000 shares of common stock.





The
number of shares referred to in these financial statements has been restated to
give retroactive effect on the stock splits.





On
December 10, 2009, the Company issued an additional 23,904,015 shares of its
common stock pursuant to the conversion of demand notes payable.





At
December 31, 2009, the Company had 25,629,016 shares of common stock issued and
outstanding.




10.
            Income
      taxes





The
Company follows ASC subtopic 740-10 (formerly Statement of Financial Accounting
Standard No. 109, “Accounting for Income Taxes”) for recording the provision for
income taxes.  ASC 740-10 requires the use of the asset and liability
method of accounting for income taxes.  Under the asset and liability
method, deferred tax assets and liabilities are computed based upon the
difference between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled.  Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period.  If available evidence suggests that it is more
likely than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets to
the amount that is more likely than not to be realized.  Future
changes in such valuation allowance are included in the provision for deferred
income taxes in the period of change.





Deferred
income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods.  Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they
relate.  Deferred taxes arising from temporary differences that are
not related to an asset or liability are classified as current or non-current
depending on the periods in which the temporary differences are expected to
reverse.  Our deferred tax assets consist of the benefit from net
operating loss (“NOL”) carry-forwards and from the impairment of our license in
2009.  The NOL carry-forwards begin to expire in 2028.  Our
deferred tax assets are offset by a valuation allowance due to the uncertainty
of their realization.





The
Company’s effective income tax rate is higher than would be expected if the
federal statutory rate were applied to income before tax, primarily because of
expenses deductible for financial reporting purposes that are not deductible for
tax purposes during the year ended December 31, 2008 and 2009.





The
provision for income tax, using an effective tax rate of thirty-four percent
(34%), consists of the following for the years ended December 31, 2009 and
2008:


F-14





2009
                  
                  
                  2008Current
      income tax benefit:Net
      loss
                  
                  $
                  (2,901,500
                  )
                  
                  $
                  (23,900
                  )Non-deductible
      expenses
                  
                  
                  2,815,600
                  
                  
                  
                  -Change
      in valuation allowance
                  
                  
                  85,900
                  
                  
                  
                  23,900Net
      income tax benefits
                  
                  $
                  -
                  
                  
                  $
                  -





At
December 31, 2009, we had an NOL carryover of approximating $356,722 that is
available to offset future taxable income.  The cumulative tax effect
at the expected rate of thirty-four percent (34%) of significant items
comprising our net deferred tax amount is as follows for the years ended
December 31, 2009 and 2008:




2009
                  
                  
                  2008Defered
      tax asset attributable to:Net
      operating loss carryover
                  
                  $
                  121,300
                  
                  
                  $
                  35,000Less:
      valuation allowance
                  
                  
                  (121,300
                  )
                  
                  
                  (35,000
                  )Net
      deferred tax asset
                  
                  $
                  -
                  
                  
                  $
                  -





11.
            Related
      party transactions





a.
            During
      the fiscal year ended December 31, 2007, the Company received $17,006
      pursuant to promissory notes with two of its former
      directors.  The notes are unsecured, bear no interest and don’t
      have any specific terms of
repayment;





b.
            In
      December 2008, the Company entered into a contract for management services
      with a company controlled by the President and a director of the Company,
      requiring the payment of $2,500 per month plus applicable expenses for a
      period of one year, expiring on November 30, 2009.  This
      commitment can be terminated by either party with 30 days
      notice.  During the year ended December 31, 2009, $30,000 was
      paid or accrued pursuant to this
agreement.





12.
            Commitments





a.
            On
      November 1, 2008, the Company entered into a contract for investor
      relations services requiring the payment of $7,500 per month expiring on
      October 31, 2010.  This commitment can be terminated by either
      party with 90 days written notice;





b.
            On
      November 15, 2008, the Company entered into a contract for communication
      support services requiring the payment of $3,750 per month expiring on
      November 14, 2010.  This commitment was terminated effective
      March 31, 2009;





c.
            On
      December 1, 2008, the Company entered into a contract for management
      consulting services with a company controlled by the President and a
      director of the Company requiring the payment of $2,500 per month expiring
      on November 30, 2009.  This commitment can be terminated by
      either party with 30 days written
notice.


F-15





13.
            Merger





On
January 12, 2009, the Company entered into a definitive Agreement and Plan of
Merger with LED Power Group, Inc. f.k.a. LED Power, Inc., a Nevada corporation
("LPG") and Drayton Acquisition Sub, Inc., our wholly-owned subsidiary, whereby
Drayton Acquisition Sub, Inc. merged with and into LPG, with LPG remaining as
the surviving entity and becoming the Company’s wholly-owned
subsidiary.  Under the terms of the Agreement and Plan of Merger, the
Company issued 9,000,000 pre-split shares of its common stock to Trussnet
Capital Partners (Cayman) Ltd. for all of the issued and outstanding shares of
LPG.  LPG has limited operations and owns the rights to an assignment
agreement with Jumbo Power Technology Ltd., Liao Pheng-Piao and Liu Chih-Chun
(“Licensors”) dated December 2008 (the “Assignment Agreement”).  Under
the terms of the Assignment Agreement, LPG was licensed the exclusive rights to
certain intellectual property owned by Licensors in relation to the production
of LED products.  Additionally, on February 2, 2009, the Company
merged with our wholly-owned subsidiary LPG for the purposes of effective a name
change to “LED Power Group, Inc.”





The
9,000,000 shares were valued at fair market on the day of the agreements, being
$0.92 per share.  During the fiscal year ended December 31, 2009,
$8,280,000 was recorded for impairment of the license as it does not have
marketable value at this time.





14.
            Subsequent
      events





In
preparing these financial statements, the Company has evaluated events and
transactions for potential recognition or disclosure through March 24, 2010, the
date the financial statements were issued.





Subsequent to December 31, 2009, on
March 6, 2010,the Company
received $46,611 pursuant to a convertible promissory note.  The note
is unsecured, bears interest at 10% per annum calculated annually, and is due on
demand.Any payments of
principal or interest in arrears bear interest at 30% per annum calculated
annually.  Default in payment shall, at the option of the holder,
render the entire balance payable.  The note and accrued can be
converted, at the option of the lender, into shares of common stock of the
Company, at such price and in such terms as being offered to investors at the
time of conversion.


F-16