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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

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

For the fiscal year ended: December 31, 2010

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

For the transition period from __________to ____________

Commission File Number: 001-34812

THT HEAT TRANSFER TECHNOLOGY, INC.(Exact name of registrant as specified in its charter)

|Nevada                                        | 20-5463509                             
|--------------------------------------------- | ---------------------------------------
|(State or other jurisdiction of incorporation | (I.R.S. Employer Identification Number)
|or organization)                              |                                        

THT Industrial Park,No. 5 Nanhuan Road, Tiexi
DistrictSiping, Jilin Province 136000Peoples Republic
of China(Address of principal executive office and zip
code)

86-434-3265241(Registrants telephone number,
including area code)

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

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

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001

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

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

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

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

Yes [  ] No [X]

The issuers revenues for its most recent fiscal year ended
December 31, 2010 were $50.25 million.

As of June 30, 2010, the aggregate market value of shares of
the issuers common stock held by non-affiliates (based upon the average bid and
asked price of $4.50 of such shares on such date as reported on the
Over-the-Counter Bulletin Board) was approximately $5.4 million. As of December
31, 2010, the aggregate market value of shares of the issuers common stock held
by non-affiliates was approximately $67.50 million. Shares of the issuers
common stock held by each executive officer and director and by each person who
owns 10 percent or more of the outstanding common stock have been excluded in
that such persons may be deemed to be affiliates of the issuer. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.

There were 20,453,500 shares of common stock outstanding as of
March 24, 2011.

DOCUMENTS INCORPORATED BY REFERENCE:

None

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THT HEAT TRANSFER TECHNOLOGY, INC.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended December 31, 2010

TABLE OF CONTENTS

|Number   |                                                                                                                          | Page
|-------- | ------------------------------------------------------------------------------------------------------------------------ | ----
|PART I   |                                                                                                                          |     
|         |                                                                                                                          |     
|Item 1.  | Business                                                                                                                 | 5   
|Item 1A. | Risk Factors                                                                                                             | 20  
|Item 2.  | Properties                                                                                                               | 28  
|Item 3.  | Legal Proceedings                                                                                                        | 29  
|Item 4.  | (Removed and Reserved)                                                                                                   | 29  
|         |                                                                                                                          |     
|PART II  |                                                                                                                          |     
|         |                                                                                                                          |     
|Item 5.  | Market for Registrants Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities | 29  
|Item 6.  | Selected Financial Data                                                                                                  | 30  
|Item 7.  | Managements Discussion and
      Analysis of Financial Condition and Results of Operations                              | 30  
|Item 7A. | Quantitative and Qualitative Disclosures about
      Market Risk                                                         | 40  
|Item 8.  | Financial Statements and
      Supplementary Data                                                                        | 40  
|Item 9   | Changes in and Disagreements with Accountants
      on Accounting and Financial Disclosure                               | 40  
|Item 9A  | Controls and Procedures                                                                                                  | 41  
|Item 9B  | Other Information                                                                                                        | 43  
|         |                                                                                                                          |     
|PART III |                                                                                                                          |     
|         |                                                                                                                          |     
|Item 10. | Directors, Executive Officers and Corporate
      Governance                                                             | 43  
|Item 11. | Executive Compensation                                                                                                   | 46  
|Item 12. | Security Ownership of Certain Beneficial Owners
      and Management and Related Stockholder Matters                     | 47  
|Item 13  | Certain Relationships and
      Related Transactions, and Director Independence                                          | 48  
|Item 14. | Principal Accountant Fees and Services                                                                                   | 49  
|         |                                                                                                                          |     
|PART IV  |                                                                                                                          |     
|         |                                                                                                                          |     
|Item 15. | Exhibits and Financial Statement Schedules                                                                               | 50  

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INTRODUCTORY NOTE

Special Note Regarding Forward-Looking Statements

This report contains information that may constitute
forward-looking statements. Generally, the words believe, expect,
intend, estimate, anticipate, project, will and similar expressions
identify forward-looking statements, which generally are not historical in
nature. All statements that address operating performance, events or
developments that we expect or anticipate will occur in the futureincluding
statements relating to volume growth, share of sales and earnings per share
growth, and statements expressing general views about future operating
resultsare forward-looking statements. Management believes that these
forward-looking statements are reasonable as and when made. However, caution
should be taken not to place undue reliance on any such forward-looking
statements because such statements speak only as of the date when made. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as required by law. In addition, forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from our historical experience and our present expectations or
projections. These risks and uncertainties include, but are not limited to,
those described in Part I, Item 1A. Risk Factors and elsewhere in this report
and those described from time to time in our future reports filed with the
Securities and Exchange Commission.

Use of Terms

Except as otherwise indicated by the context, references in
this report to:

- Beijing Juyuan refers to Beijing Juyuan Hanyang Heat Exchange Equipment
  Co., Ltd., a PRC corporation and our indirect, 75%-owned subsidiary;
- BVI refers to the British Virgin Islands;
- China, Chinese and PRC, refer to the Peoples Republic of China;
- Hong Kong refers to the Hong Kong Special Administrative Region of the
  Peoples Republic of China;
- Exchange Act refers to the Securities Exchange Act of 1934, as amended.
- Megaway refers to Megaway International Holdings Limited, a BVI
  corporation and our direct, wholly owned subsidiary, and/or its direct and
  indirect subsidiaries, as the case may be;
- RMB refers to Renminbi, the legal currency of China;
- Securities Act refers to the Securities Act of 1933, as amended;
- Siping Juyuan refers to Siping City Juyuan Hanyang Plate Heat Exchanger
  Co. Ltd., a PRC corporation and our indirect, wholly-owned subsidiary;
- Star Wealth refers to Star Wealth International Holdings Limited, a Hong
  Kong corporation and our indirect, wholly-owned subsidiary;
- THT, the Company, we, us, or our, refers to the combined
  business of THT Heat Transfer Technology, Inc., and its wholly-owned
  subsidiaries, Megaway, Star Wealth, Siping Juyuan and 75%-owned subsidiary
  Beijing Juyuan, but do not include the stockholders of THT Heat Transfer
  Technology, Inc.;
- Tianjin Juyuan refers to Juyuan Heat Equipment (Tianjin) Co., Ltd., a
  PRC corporation and our indirect, 99.5%-owned subsidiary;
- U.S. dollar, USD, $ and US$ refer to the legal currency of the
  United States; and
- Wisetop refers to Wisetop International Holdings Limited, a BVI
  corporation.

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PART I

ITEM 1 . BUSINESS Overview of Our Business

THT Heat Transfer Technology, Inc. is a Nevada holding company
which conducts its operations through China-based operating subsidiaries. We are
a leading total solution provider in the heat exchange industry. A heat
exchanger is a device built for efficient heat transfer from one medium to
another, whether the media are separated by a solid wall so that they never mix,
or the media are in direct contact. Through our Chinese operating subsidiary,
Siping Juyuan, we design, manufacture and sell plate heat exchangers,
shell-and-tube heat exchangers, heat exchanger units, other heat exchanger
products, and provide total heat exchange solutions.

Our sales revenue and net income were $50,245,929 and
$8,382,080, respectively, during the year ended December 31, 2010, and
$34,890,853 and $4,142,921, respectively, during the year ended December 31,
2009.

Our operations are headquartered in Siping, Jilin Province,
PRC. Our two Chinese operating subsidiaries are Siping Juyuan and Beijing
Juyuan.

Our Corporate History

Background and History of BTHC

The Company, formerly called BTHC VIII, Inc. (BTHC), was
organized on August 7, 2006 as a Delaware corporation to effect the
reincorporation of BTHC VIII, LLC, a Texas limited liability company, mandated
by the plan of reorganization discussed below. In accordance with the confirmed
plan of reorganization, BTHCs business plan was to identify a privately-held
operating company desiring to become a publicly held company by merging with
BTHC through a reverse merger or other acquisition transaction. On June 30,
2009, in accordance with our business plan, we completed the acquisition of
Megaway pursuant to the Share Exchange Agreement. As a result of this
acquisition, we are no longer a shell company.

In September 1999, Ballantrae Healthcare LLC and affiliated
limited liability companies including BTHC VIII, LLC (collectively,
Ballantrae) were organized for the purpose of operating nursing homes
throughout the United States. Although Ballantrae continued to increase the
number of nursing homes it operated, and, in June 2000 received a substantial
equity investment, it was unable to achieve profitability. During 2001 and 2002,
Ballantrae continued to experience severe liquidity problems and did not
generate enough revenue to cover its overhead costs. Despite obtaining
additional capital and divesting unprofitable nursing homes, by March 2003,
Ballantrae was out of cash and unable to meet its payroll obligations.

On March 28, 2003, Ballantrae filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy Code (the
Bankruptcy Code). On November 29, 2004, the United States Bankruptcy Court in
the Northern District of Texas, Dallas Division (the Bankruptcy Court)
approved the First Amended Joint Plan of Reorganization (the Plan), as
presented by Ballantrae, its affiliates and their creditors. On August 16, 2006,
pursuant to the Plan, BTHC VIII, LLC was merged into the Company.

Halter Financial Group, Inc. (HFG), participated with
Ballantrae and their creditors in structuring the Plan. As part of the Plan, HFG
provided $76,500 to be used to pay professional fees associated with the Plan
confirmation process. HFG was granted an option to be repaid through the
issuance of equity securities in 17 of the reorganized Ballantrae entities,
including the Company. HFG exercised the option, and as provided in the Plan,
70% of the Companys outstanding common stock, or 420,000 shares, were issued to
HFG in satisfaction of HFGs administrative claims. The remaining 30% of the
Companys outstanding common stock, or 180,528 shares, were issued to 581
holders of administrative and tax claims and unsecured debt. 600,528 shares (the
Plan Shares), were issued pursuant to Section 1145 of the Bankruptcy Code.

Effective August 16, 2006, HFG transferred its 420,000 Plan
Shares to Halter Financial Investments L.P., a Texas limited partnership
controlled by Timothy P. Halter. Mr. Halter also served as our sole officer and
director from our formation on August 7, 2006, until February 12, 2009, when he
was replaced by Gerard Pascale.

We were subject to the jurisdiction of the Bankruptcy Court
until we consummated the exchange transaction described below with Sino- America
Ventures, Inc., a Delaware corporation (SAV) in February 2009. Because we
consummated our merger with a qualifying entity in a timely manner, we filed a
certificate of compliance with the Bankruptcy Court asserting that the
requirements of the Plan had been satisfied, which resulted in an order granting
the discharge. Thereafter, the post discharge injunction provisions (set forth
in the Plan) and the confirmation order became effective.

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Exchange Transaction with SAV

On February 12, 2009, we entered into a share exchange agreement (the “Exchange Agreement”), with SAV and the sole stockholder of SAV, Mr. Gerard Pascale. Pursuant to the Exchange Agreement, Mr. Pascale transferred 100% of the issued and
outstanding shares of the capital stock of SAV to us in exchange for 5,404,800 newly issued shares of our common stock that constituted approximately 90% of our issued and outstanding capital stock on a fully-diluted basis as of, and immediately
after, the consummation of such exchange. As a result of this transaction, Mr. Pascale became our controlling stockholder and SAV became our subsidiary. In connection with the Exchange Agreement, our sole director and officer, Timothy P. Halter,
resigned and was replaced by Mr. Pascale as our sole director and officer.

SAV was organized on February 10, 2009 to identify a privately-held operating company desiring to become a publicly held company by combination through a reverse merger or acquisition transaction, and was dissolved on May 22, 2009.

Background and History of Megaway and its Subsidiaries

Megaway was incorporated in the British Virgin Islands on April 8, 2009.  Megaway is a holding company that has no operations or assets other than its ownership of all of the capital stock of Star Wealth.  Star Wealth was incorporated in Hong Kong
on March 25, 2009.  Star Wealth is also a holding company that has no operations or assets other than its ownership of all of the equity interests of Siping Juyuan.  Siping City Juyuan Heat Exchange Equipment Co., Ltd. (“Old Juyuan”),
the predecessor of Siping Juyuan, was first incorporated in China in December 1998.  In May 2006, Old Juyuan was divided into three individual enterprises, including Siping Juyuan.  Siping Juyuan carried on the primary business of Old Juyuan while
the other two enterprises gradually ceased operations.  Mr. Guohong Zhao, our Chairman, Chief Executive Officer and President, is the founder of Old Juyuan.  All of our manufacturing operations are conducted through Siping Juyuan.  Siping Juyuan has
a term from June 8, 2009, the date the acquisition by Star Wealth of 100% of the equity interest in Siping Juyuan was approved by the Economic Technology Cooperation Bureau of Jilin Province and Siping Juyuan became a wholly-foreign owned
enterprise, through June 7, 2029.  Siping Juyuan owns 75% of the equity interests of Beijing Juyuan, which is solely engaged in the sales of Siping Juyuan’s products, and carries no production activities.

On November 30, 2010 , Tianjin Juyuan was established as a PRC company.  Siping Juyuan owns 99.5% of Tianjin Juyuan’s equity interest and the remaining 0.5% of the equity interest is owned by our Chief Executive Officer, Mr. Guohong Zhao.
Tianjin Juyuan is in the business of manufacturing and sale of heat exchangers, heat exchanger units, air-cooled heat exchangers and other heat exchanger products with total heat exchange solution.

Acquisition of Megaway

On June 30, 2009, we completed a reverse acquisition transaction with Megaway whereby we issued to Wisetop International Holdings Limited, a BVI corporation (“Wisetop”), then the sole shareholder of Megaway, 14,800,000 shares of our
common stock in exchange for all of the issued and outstanding capital stock of Megaway.  Megaway thereby became our wholly owned subsidiary and Wisetop became our controlling stockholder.

In connection with our reverse acquisition of Megaway, we entered into a cancellation agreement with Mr. Gerald Pascale, whereby Mr. Pascale agreed to the cancellation of 4,805,387 shares of our common stock owned by him.

Upon the closing of the reverse acquisition, Mr. Gerard Pascale, our sole director and officer, submitted a resignation letter pursuant to which he resigned from all offices that he held, effective immediately, and from his position as our director
that became effective on July 10, 2009. Guohong Zhao wasappointed as our director effective upon the closing of the reverse acquisition.  In addition, our executive officers were replaced by the Siping Juyuan executive officers upon
the closing of the reverse acquisition as discussed more fully below in “Item 1. Business – Our Corporate History – Reincorporation of BTHC”.

For accounting purposes, the share exchange transaction was treated as a reverse acquisition with Megaway as the acquirer and the Company as the acquired party.  When we refer in this report to business and financial information for periods prior to
the consummation of the reverse acquisition, we are referring to the business and financial information of Megaway on a consolidated basis unless the context suggests otherwise.

Reincorporation of BTHC

On November 24, 2009, BTHC entered into an Agreement and Plan of Merger (the “Merger Agreement”), with THT Heat Transfer Technology, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“THT” or the
“Surviving Corporation”), pursuant to which BTHC agreed to merge with and into THT, with THT continuing as the surviving entity (such transaction the “Reincorporation Merger”). The Reincorporation Merger became effective on
November 30, 2009 (the “Effective Date”).

The Reincorporation Merger was consummated to move the Company’s domicile to Nevada as described in our Definitive Information Statement on Schedule 14C (the “Information Statement”), filed with the United States Securities and
Exchange Commission (“SEC”) on October 5, 2009 and is incorporated herein by reference. As described in the Information Statement, the Merger Agreement and Reincorporation Merger were duly approved by the written consent of stockholders
of the Company owning at least a majority of the
outstanding shares of the Company’s common stock, dated September 16, 2009. A copy of the Merger Agreement is incorporated herein by reference.

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Pursuant to the terms of the Merger Agreement, (i) BTHC merged with and into THT, with THT being the surviving corporation, and the Company thereby changed its name to THT Heat Transfer Technology, Inc.; (ii) from and after the Effective Date, the
Company possesses all of the rights, privileges, powers, and franchises of the predecessor corporation in the merger, and the predecessor corporation’s debts and liabilities became the debts and liabilities of the Surviving Corporation; (iii)
the predecessor corporation’s existing Board of Directors and officers became the Board of Directors and officers of the Surviving Corporation; and (iv) the Articles of Incorporation and Bylaws of THT now govern the Surviving Corporation. A
description of the provisions of the Articles of Incorporation and Bylaws of the Surviving Corporation was previously disclosed in the Information Statement. Copies of the Articles of Incorporation and Bylaws of Surviving Corporation, as amended to
date, are incorporated herein by reference.

The Reincorporation Merger did not result in any change in headquarters, business, jobs, management, location of any of offices or facilities, number of employees, assets, liabilities or net worth (other than as a result of the costs incident to the
Reincorporation Merger, which were immaterial). Management, including all directors and officers, remain the same in connection with the Reincorporation Merger. Following the Reincorporation Merger, the securities of the Surviving Corporation
continued to be registered under Section 12(g) of the Exchange Act of 1934 (the “Exchange Act”) by virtue of Rule 12g-3 of the Exchange Act.

As a result of the Reincorporation Merger, each outstanding share of BTHC’s common stock, par value $0.001 per share, was automatically converted into one share of the Surviving Corporation’s common stock, par value $0.001 per
share. Each outstanding certificate representing shares of BTHC’s common stock is deemed, without any action by the predecessor corporation’s stockholders, to represent the same number of shares of the Surviving Corporation’s
common stock.

Our Organizational Structure

The following chart reflects our organizational structure for our active subsidiaries as of the date of this Annual Report.



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Our Industry

A heat exchanger is a device built for efficient heat transfer from one medium to another.  It is widely used in various industries including metallurgy, heat and power, petrochemical, food and beverage, pharmaceutical and shipbuilding.

According to “China Heat Exchanger Industry Report” (the “Industry Report”) issued by Zero Power Intelligence Co., Ltd., an independent market research firm in China, the world heat exchanger market has grown
significantly in the past several years. The global sales value of heat exchangers grew from $29.7 billion in 2005 to $38.6 billion in 2008, representing a growth of 30%, and is expected to grow to $55.3 billion in 2012, representing a
growth of 43% in the four-year period from 2009 to 2012.

According to the Industry Report, China has become the second largest market and one of the fastest growing markets for heat exchangers.  The sales value of heat exchangers in China grew from $3.2 billion in 2005 to $5.4 billion in 2008,
representing a growth of 70%, and is expected to grow to $ 11.0 billion in 2012, representing a growth of 106% in the four-year period from 2009 to 2012.

Growth of the Chinese Heat Exchange Industry

We anticipate that growth in the Chinese heat exchanger industry will mainly be driven by the following factors:

Rapid Economic Growth in China

According to the Development Research Center of the PRC State Council, China’s GDP grew 10.1% in 2010, one of the fastest rates in the world. Because heat exchangers are widely used in various industries, including metallurgy, heat and power,
petrochemical, food and beverage, pharmaceutical and shipbuilding, the heat exchanger market benefits from the general growth of the economy.

Expanding Energy Needs

A fast growing economy requires more energy. To keep pace with rising energy demands, additional power plants are being constructed. Heat exchangers are widely used in the closed circulation systems of thermal power plants, nuclear reactor heat
exchange systems and regular water cooling systems of nuclear power plants. According to the State Electricity Regulatory Commission, energy investment in China was $84.9 billion in 2009 and is expected to grow at compound annual growth rates of
10% until 2013. The Chinese government plans to spend a total of $66 billion in nuclear power plant construction. By 2020, 23 million kilowatt level nuclear power plants will be constructed. In 2009, construction began on five new nuclear power
plants in the provinces of Zhejiang, Shandong, Guangdong and Hainan.

Environmental Protection

New environmental rules and regulations have helped reduce emissions and energy consumption. Both the Chinese and foreign governments encourage investments in order to reduce energy consumption and emissions. In many applications, industry buyers
tend to use heat exchangers instead of simple cooling systems after giving consideration to their efficiency and energy savings. In 2010, investment in energy savings and emissions reduction in China was $13 billion and is expected to reach
$20.8 billion in 2011. According to the World Nuclear Organization, as of June 2010, China had 11 operating nuclear reactors and 57 reactors in the construction or planning phases.

Rapid Urbanization

Heat exchangers are an important part of district heating systems (i.e., systems for distributing heat generated in a centralized location for residential and commercial heating requirements such as space and water heating). Such systems are
required in the cities of northern China, an area which is experiencing a rapid pace of urbanization. As well, Heating, Ventilation and Air Conditioning systems, or HVAC, which are essential for buildings, require installation of heat exchangers. In
2009, the HVAC market in China was $6.0 billion and is expected to grow at a compound annual growth rate of 25% by 2012.

Rise in Shipbuilding

The sea remains China’s most important transportation method and we expect that sea transportation will experience growth due to continued globalization. To satisfy the need for more sea transportation, more ships are required to be built.
Heat exchangers are installed in the engine cooling and air-conditioning systems of every ship. China has become a strong player in shipbuilding. According to the Chinese Ministry of Industry and Information Technology, in 2010, China delivered 65.6
million deadweight tonnage of new ships and became the world’s leading shipbuilder.

Our Competitive Strengths

We believe that the following strengths enable us to compete effectively in and to capitalize on growth in the heat exchange industry in China:

- Leading market position. In 2010, we ranked second in China in terms of sales revenue among plate heat exchange manufacturers. This leading sales position will help develop our brand and brand awareness throughout China and assist us
in acquiring an even larger market share in the future.
- Comprehensive solutionprovider. Unlike most other heat exchanger manufacturers in China, we not only provide heat exchange products, but also provide comprehensive solutions to our customers. As a total solution
provider, we analyze the working condition of our customers, provide optimized design based on analysis and simulation, offer high quality heat exchange products and continuously assist our customers in improving their heat exchange processes.8

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- Broad product range. We provide the broadest range of heat exchanger products in China, surpassed only by Alfa Laval, the global market leader for heat exchanger products. Our products include plate heat exchangers, shell and tube heat
exchangers, heat exchange units, air-cooled heat exchangers, welded plate heat exchangers and plate-and-shell heat exchangers. Our broad product variety provides our customers with one-stop purchasing convenience.
- Solid track record.Over the past ten years, we have successfully completed over 3,000 projects in more than 15 industries, including metallurgy, heat and power, petrochemical, food and beverage, pharmaceutical and shipbuilding. We
have provided heat exchange solutions to Fortune 500 companies including Shell, BP, BASF, LG, Sinopec, and China Shenhua as well as for high profile projects in both the PRC and other countries. Noteworthy projects include the Wukesong Sports Center
for the 2008 Olympics in Beijing, the Guangdong Linao nuclear plant and the BASF Chemical plant in Germany. Our strong track record and our demonstrated ability to develop and deliver high quality solutions provides our Company with a strong brand
and reputation in the industry.
- Professional sales team.We have a sales team with 127 experienced sales people, which we believe is among the largest in the Chinese market. Our sales people are organized into four groups by industry: metallurgy, heat and power,
petrochemical and shipbuilding. Each group specializes in serving customers in their specific industry. We believe this specialization allows our sales people to be more focused and equipped with superior industry knowledge and experience.

Our Growth Strategy

We are committed to enhancing our sales, profitability and cash flows through the following strategies:

- Increasing production and processing capacity. To fulfill future sales growth and enhance our capacity during peak periods, we recently expanded our production facility. Our new workshop has a floor area of 7,356 square meters and our
new production line of plate heat exchangers, with a designed capacity of 200,000 square meters annually, was implemented in the new workshop in October 2009.
- Expanding sales network. We will further expand our sales network by establishing new sales offices in China. We are also strengthening our international marketing efforts.
- Continually developing new products. We will continue to develop new products to broaden our product range so as to meet increased customer demands and seize larger market share. New products under development include semi-welded plate
heat exchangers, disassemble plate evaporators, welded plate falling-film evaporators and oversized plate-and-shell heat exchangers. These new products will help us reach a larger number of customers in the chemical, food and beverage,
pharmaceutical and refinery industries.

Our Products

Our products and heat exchange solutions are sold to customers in the chemical, metallurgical and shipbuilding industries and our products are also used with HVAC and district heating systems. Our products include plate heat exchangers, shell and
tube heat exchangers, air-cooled heat exchangers, welded plate heat exchangers, heat exchanger units, plate and shell heat exchangers.

Plate Heat Exchangers



A plate heat exchanger is a type of heat exchanger that uses metal plates to transfer heat between two fluids. This type of heat exchanger has a major advantage over a conventional shell and tube heat exchangers since the fluids are exposed to a
much larger surface area because the
fluids spread out over the plates. This spreading of fluids over the plates facilitates the transfer of heat and greatly increases the speed of the temperature change.

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The plate heat exchanger consists of a coiled pipe containing one fluid that passes through a chamber containing another fluid. The walls of the pipe are usually made of metal or another substance with a high thermal conductivity to facilitate the
interchange; the outer casing of the larger chamber is made of a plastic or coated with thermal insulation to discourage heat from escaping from the exchanger.

Plate heat exchangers are used in a variety of applications including iron, steel and aluminum manufacturing, chemical manufacturing, electric and nuclear power generation, central building air-conditioning, pharmaceutical production, and the food
and beverage industry. Plate heat exchanger sales accounted for approximately 54% of our revenues in 2010.

Shell-and-tube Heat Exchanger



A shell-and-tube heat exchanger is a type of heat exchanger that consists of a large pressure vessel, or a shell, containing a bundle of tubes.  One fluid runs through the tubes, and another fluid flows over the tubes, through the shell, to transfer
heat between the two fluids. Heat is transferred from one fluid to the other through the tube walls, either from tube side to shell side or vice versa. The fluids can be either liquids or gases on either the shell or the tube side. Shell-and-tube
heat exchanger sales accounted for approximately 5% of our revenues in 2010.

Shell-and-tube heat exchangers are generally used in the same industries as plate heat exchangers, and are most commonly used with extremely high-pressure liquids.

Heat Exchanger Units



A heat exchanger unit is a whole set of district heating control equipment. A heat exchanger unit integrates the following components: plate heat exchangers, circulating pump, water supplement pump, thermometer, manometer, sensors, conduits, valves
and industrial controls, water supplement system, pressure stabilization system, frequency conversion flux control system, heat measurement and network communication control system. Combining these components on-site at our manufacturing facilities,
we utilize our proprietary technologies to customize heat exchanger units to our client’s specifications. Sales of heat exchanger units accounted for approximately 28% of our revenues in 2010.

Our heat exchanger units are most widely used in thermal power plants and residential heating systems, which require integration of control and monitoring systems for several distinct spaces.

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Air-cooled Heat Exchanger



An air-cooled heat exchanger is a pressure vessel which cools a circulating fluid within finned tubes by forcing ambient air over the exterior of the tubes. A common example of an air cooler is a car’s radiator. Air-cooled heat exchangers are
beneficial because they increase plant efficiency and are a “green” solution as compared to cooling towers and shell and tube heat exchangers since they do not require an auxiliary water supply (therefore, no water is lost due to drift
or evaporation, and no water treatment chemicals are required). Sales of air-cooled heat exchangers accounted for 8% of our revenues in 2010.

Air-cooled heat exchangers are used in various industries where cooling liquids are too costly to obtain or are not readily available.

Welded Plate Heat Exchanger



A welded plate heat exchanger is used for heat exchange between high-pressure fluids or where a more compact product is required. Instead  of a pipe passing through a chamber, there are instead two alternating chambers, usually thin in depth,
separated at their largest surface by a corrugated metal plate. The heat transfer plates are connected by welding. Compared with other plate heat exchangers, welded plate heat exchangers can work under situations where the liquid pressure is higher.
However, since the heat transfer plates are welded, such units are less convenient to maintain and clean as compared with other types of plate heat exchangers that are connected by gaskets. Welded plate heat exchangers accounted for 1% of our
revenues in 2010.

Welded plate heat exchangers are utilized in many of the same industries as other plate heat exchangers and shell-and-tube heat exchangers.

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Plate-and-Shell Heat Exchanger



A plate-and-shell heat exchanger is a hybrid type of heat exchanger that combines aspects of the plate heat exchanger and shell-and-tube heat exchanger. Plate-and-shell heat exchangers consist of a shell with heat transfer plates inside of the shell
instead of tubes.

Advantages of a plate-and-shell heat exchanger include its high heat transfer efficiency (more than double that of a shell-and-tube heat exchanger), compact structure and light weight. Shell-and-plate heat exchangers are also resistant to high
pressure and high temperatures and are commonly used to meet the requirements of large-scale equipment used in oil refining, the chemical industry, fertilizer production and metallurgy. Sales of plate-and-shell heat exchangers accounted for 0.2% of
our total sales for 2010.

Other heat exchange products accounted for 3.8% of our revenues for 2010.

New Products under Development

Our research and development department is constantly working on new products for our customers and enhancements to our existing products.  Currently, our research and development team is working on semi-welded plate heat exchangers, disassemble
plate evaporators, welded plate falling-film evaporators and oversized plate-and-shell heat exchangers.

- Oversized plate-and-shell heat exchanger.An oversized plate-and-shell heat exchanger utilizes a heat transfer plate that has a developed area of more than 6,000 square meters. Oversized plate-and-shell heat exchangers are commonly used in
large refinery equipment such as catalytic reforming or hydrogenation equipment used in the petrochemical industry. We expect to commercialize our oversized plate-and-shell heat exchanger in July 2011.
- Wide gap laser welded plate heat exchanger.A wide gap laser welded plate heat exchanger is well-suited for fibers or large size of solid particles for many processes, such as in sugar plant, paper mill, metallurgy, alcohol and petrochemical
industry. The laser welding technology is applied in the manufacturing process of this heat exchanger with a special pressed plate to ensure a smooth flow in the wide gap cross section. We have already completed the prototype's trial production, and
expect that the new product will be commercialized in March 2012.
- The large-scale nuclear class plate heat exchanger.The nuclear class plate heat exchanger used by nuclear island is the same as the conventional plate heat exchanger. They both have alternate channels for providing cooling, thermal fluid
through, and are completely counter-current flow. The difference is that the board area of the heat exchanger is much bigger than that of conventional plate heat exchanger, and plate exchanger must go through the National Nuclear Safety Bureau's
safe authentication, including thermal test, press drop test, anti-seismic force computation and quality control system examination. The large plate heat exchangers are mainly used in the nuclear center island cooling system and also used in other
large-sized petrochemical plant and the industry of air conditioning energy system with ice cold-storage. Commercialization is scheduled to take place between end of 2012 and the beginning of 2013.

Manufacturing

Manufacturing Facilities

Our manufacturing facilities are based in Siping City, Jilin Province, China. The total floor area of our facility is approximately 17,482 square meters. The production portion of the facility is approximately 11,275 square meters. Our research and
development center is approximately 1,164 square meters and our executive office building, garage, and dormitory are approximately 5,043 square meters. We currently have two production lines for plate heat exchangers with an annual capacity of
500,000 square meters and one welding workshop with an annual capacity of 3,000 tons. The plate heat exchanger production line produces all heat transfer plates used in our plate heat exchangers, heat exchange units, air-cooled heat exchangers, welded plate heat exchangers and
plate-and-shell heat exchangers. This production line also assembles heat
transfer plates into plate heat exchangers. The welding work shop assembles
shell and tube heat exchangers, heat exchanger units, air-cooled heat
exchangers, welded plate heat exchangers and plate-and-shell heat exchangers,
which require intensive welding operations. The facility is located on a 36,530
square meter plot of land for which we own the land use right.

12

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The capacity and utilization of our production lines are set
forth below:

Production line
    Current capacity
    2010 Utilization
    2009 UtilizationPlate heat exchanger production line
      (square meters)
    300,000
    85%
    85%Welding workshop (tons)
    3,000
    65%
    65%Plate heat exchanger production line
      (square meters)
    200,000
    13.5%
    12%


In real operation, the hours our production lines run vary
considerably from time to time over the year. This is mainly because our
products are customized rather than standard products, and our sales orders are
commonly project-based and placed unevenly over the year. In addition, the
market demand from the heat industry tends to demonstrate strong seasonality and
the period from July to October each year is commonly the peak season, when the
residential heating system for northern China is implemented. Under our current
utilization rate, our production lines have been running at full capacity during
the peak periods.

To fulfill future sales growth and to enhance our capacity
during peak periods, we further expanded our production facility. Our new
workshop, which began operations in October 2009, has a floor area of 7,356
square meters and a new production line for plate heat exchangers with a
designed capacity of 200,000 square meters. With the new workshop, we have been
able to further streamline our production lines and have more space available
for assembly and welding. In the new plate heat exchanger production line, we
installed a 6,000 ton press machine to produce smaller size heat transfer plates
while the old plate heat exchanger production line with a 22,000 ton press
machine will be used to produce larger sized heat transfer plates. With the new
workshop and the new production line, we believe both our production capacity
and efficiency will be significantly improved.

Manufacturing Processes

The following diagram illustrates the production process for
our plate heat exchangers.

Production Process for Plate Heat Exchanger Manufacturing



The manufacturing process for the plate heat exchanger begins
with the removal of edges from steel plates that we acquire as a raw material.
Once the edges are removed, we cut the steel plate down to the desired size. The
next step is the pressing of the steel plate to the desired shape and form.
After the pressing is complete, we seal and combine the heat transfer plates
together. The final step is to conduct a hydrostatic pressure test, which tests
our product for leakage and also tests the strength of the product to ensure
conformity to customer specifications.

The following diagram illustrates the production process for
our shell-and-tube heat exchangers.

13

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Production Process of Shell-and-Tube Heat Exchanger
Manufacturing



The manufacturing process for the shell-and-tube heat exchanger
begins with the welding and combination of the shell and heat exchange tube. The
next step is to conduct a hydrostatic pressure test, which tests our product for
leakage and also tests the strength of the product to ensure conformity to
customer specifications.

The production process for our heat exchange units, air-cooled
heat exchangers, welded plate heat exchangers and plate and shell heat
exchangers is similar to that of our plate heat exchanger production process,
except that additional processes are added to arrive at the finished product.
With the heat exchange units, additional components are added in the welding
workshop, including a circulating pump, water supplement pump, thermometer,
manometer, various sensors, conduits and valves. In the case of the air-cooled
heat exchanger, additional fans and blowers are added to the plate heat
exchanger in the welding workshop. With the welded plate heat exchanger, the
heat transfer plates are welded rather than connected by gaskets. Finally, in
the case of the plate and shell heat exchanger, the heat transfer plates replace
tubes inside the shell vessel.

Raw Materials

We purchase raw materials for each project and the procurement
is subject to different solutions designed to customer specifications, including
the material type, material volume and accessories. Our raw materials are mainly
metal plates made of stainless steel, carbon steel, titanium steel, nickel steel
and other steel base alloys. Different steel plates are used to produce heat
exchangers used in different environments or for use with different fluids. For
heat exchangers used in environments containing corrosive air or liquids, such
as on a ship or in alumina smelting, or used to exchange heat from
highly-corrosive fluids, such as acid and alkali chemicals, corrosion resistant
steel plates made from such metals as titanium steel, nickel steel, steel base
alloy (such as 254SMO) and Hastelloy alloy are used as raw materials. For heat
exchangers used in a regular environment or with regular fluids, stainless steel
plates and carbon steel plates are used as raw materials. We also purchase heat
transfer tubes from third party vendors to produce shell-and-tube heat
exchangers and plate-and-shell heat exchangers.

Our Suppliers and Supplier Arrangements

The raw materials that we use to produce our products are
widely available in the market. Since our products are mostly customized rather
than standard products, we usually make purchases based on orders received,
frequently in small quantities. Accordingly, we purchase from trading companies
so that we are able to place orders in small quantities and request quick
deliveries. Most of these trading companies are distributors of large global
steel or alloy manufacturers such as Nippon Yakin Co., Ltd., TISCO, Haynes
International, Inc., BAOTI, and Nippon Steel Corporation.

The following table sets forth our top ten suppliers in 2010:

Supplier
    Raw materials
    Amount US$ (in
      Thousands)Tianjin Gerui New
      Metal Co., Ltd.
    White
      Steel Plate
    5,555Shenyang Oriental
      Kunlun Stainless Steel Industrial Co., Ltd.
    White
      Steel Plate
    2,202Shenyang Tong Feng
      Da Material Co., Ltd.
    Carbon
      Steel Pate
    1,694Siping Tianyan
      Electrical Manufacturing Co., Ltd.
    White
      Steel Plate
    1,264Shenyang Kaiweixi
      Valve Co., Ltd.
    Valve
    978Xian Lianyi
      Rubber Products Co., Ltd.
    Glue
      Cushion
    940Changzhou Tengfei
      Stainless Steel Co., Ltd.
    White
      Steel Plate
    539Vela(China)Pump
      Systems Co., Ltd.
    Water
      Pump
    533


14

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Supplier
    Raw materials
    Amount US$
      (in Thousands)Shenyang Xinhua
      Stainless Steel Co., Ltd.
    White
      Steel Plate
    510Siping Xinguangju
      Automatic Control Equipment Co., Ltd.
    Electrical Parts
    485


The following table sets forth our top ten suppliers in 2009:

Supplier
    Raw materials
    Amount US$
      (in Thousands)Tianjin Gerui New
      Metal Co., Ltd.
    White
      Steel Plate
    2,692Shenyang Oriental
      Kunlun Stainless Steel Industrial Co., Ltd.
    White
      Steel Plate
    1,800Shenyang Tong Feng
      Da Material Co., Ltd.
    Carbon
      Steel Pate
    1,229Dashiqiao Xiangyun
      Petrochemical Machinery Factory
    Flange
      \ Forging
    998Xian Lianyi
      Rubber Products Co., Ltd.
    Glue
      Cushion
    961Siping Tianyan
      Electrical Manufacturing Co., Ltd.
    White
      Steel Plate
    734Zhejiang Jiuli
      Special Material Technology Co., Ltd.
    White
      Steel Tube
    647Wuxi Huarui Iron
      and Steel Trading Co., Ltd
    White
      Steel Plate
    587Jiangmen Xinhao
      Special Stainless Steel Co., Ltd.
    White
      Steel Plate
    565Siping Xinguangju
      Automatic Control Equipment Co., Ltd.
    Electrical Cabinets
    536


We pay the entire purchase price for the raw materials upon
delivery. For materials purchased domestically, we pay 100% on receipt. For
imported materials, we are usually required to make 30% deposit upon making an
order with the balance due upon receipt.

Our Customers

Our customers are widely dispersed throughout various
industries, including metallurgy, heat and power, petrochemical, food and
beverage, pharmaceutical and shipbuilding. Our products have been well received
by Fortune 500 companies in large projects worldwide. The following table
identifies some of our customers and the projects in which our products have
been used.

| | Beijing 2008 Olympics Wukesong
      Sports Center (Beijing, China)                         
| | --------------------------------------------------------------------------------------------
| | Sinopec-Shell Coal Gasification
      Plant (Yueyang, China)                                
| | BP (China) Chemical, Co., Ltd.
      (Zhuhai, China)                                        
| | Datang International Shanxi Power
      Plant (Shanxi, China)                               
| | Sinopec Yueyang Plant (Yueyang,
      China) 
    Sinopec Anqing Plant (Anqing,
      China)
| | China Shenhua Baotou Coal Chemical
    Plat (Baotou, China)                                 
| | LG Chemical Tianjin Plant
      (Tianjin, China)                                            
| | CNPC Cangzhou Plant (Cangzhou,
      China) 
    CNPC Harbin Plant (Harbin, China)          

15

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| | CGN, Linao Nuclear Plant
      (Guangdong, China)
| | -------------------------------------------------
| | BASF Chemical Plant (Germany)                    
| | Isdemir, Inc. Steel Plant
      (Turkey)         

*All marks are trademarks or registered trademarks of their
respective owners. The display of trademarks herein does not imply that a
license of any kind has been granted.

The following table sets forth our top ten customers in 2010:

Customer
    Main Products
    Amount
      US$ (in thousands) (without value-added tax)
    % of
      RevenueSongYuanShi Heating Company
    Heat Exchanger Unit
    2,560
    5.23%Zhangjiakou xuanhua construction
      investment heating Co., Ltd.
    Heat Exchanger Unit
    2,128
    4.35%Chiping Xinfa Huayu Alumina
      Co., Ltd.
    Plate Heat Exchanger
    2,050
    4.19%Department of polysilicon project for
      Kunming Metallurgical New Material Co., Ltd.
    Air-cooled Heat Exchanger
    1,207
    2.47%Mudanjiang Second Power Plant of Huadian
      Energy Co., Ltd.
    Shell-and-Tube Heat exchanger
    1,059
    2.16%Qingdao Thermal Power Group
      Co., Ltd.
    Heat Exchanger Unit
    1,017
    2.08%Qingdao Taineng Gas Group Co., Ltd.
    Heat Exchanger Unit
    665
    1.36%Heilongjiang Haohua Chemical
      Co., Ltd.
    Shell-and-Tube Heat exchanger Plate Heat Exchanger
    655
    1.34%Shandong Jinling New Materials Co., Ltd.
    Plate Heat Exchanger
    648
    1.32%Chongqing Nanshan Xianfeng
      Alumina Co., Ltd.
    Wide Channel Welding Plate Heat
      Exchanger
    590
    1.21%Total
    
    
    25.71%


The following table sets forth our top ten customers in 2009:

Customer
    Main Products
    Amount
      US$ (in thousands) (including value-added tax)
    % of
      RevenueChina National Electric Equipment Corporation
    Plate Heat Exchanger
    1,605
    4.60%Ningbo Wanhua Polyurethane Co., Ltd.
    Plate Heat Exchanger
    1,415
    4.06%China Packaging and Food Machinery Corporation
    Plate Heat Exchanger
    1,271
    3.64%Five
      Rings Technology Co., Ltd.
    Plate Heat Exchanger
    1,176
    3.37%Guangzhou Wen Chong Shipyard Co., Ltd.
    Plate Heat Exchanger
    1,048
    3.00%


16

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Tianjin Bohai Chemical Industry Co., Ltd.
    Air-cooled Heat Exchanger Plate
      Heat Exchanger
    989
    2.83%China National Machinery and Equipment Import
      & Export Corporation
    Shell-and-Tube Heat exchanger
    907
    2.60%Liaoyang Gongchangling Qinglong Heating Co., Ltd.
    Heat Exchanger Unit
    895
    2.57%China Communications Tianjin Waterway Bureau Co., Ltd.
    Plate Heat Exchanger
    815
    2.34%Jinzhou City Heating Co., Ltd.
    Plate Heat Exchanger
    774
    2.22%Total
    
    
    31.23%


Sales and Marketing

As of December 31, 2010, our sales force consisted of 127
experienced sales people organized into four groups based on industry:
metallurgy, heat and power, petrochemical and shipbuilding. Each group
specializes in serving our customers in their specific industry. We believe this
specialization allows our sales people to be more focused and equipped with
superior industry knowledge and experience. Of the 127 members of our sales
staff, 50 are based in Beijing and Siping, and 77 are based in 13 other sales
offices throughout 13 different Chinese provinces.

The following table sets forth the location of our sales
offices:

Region
    Number of offices
    LocationNorthern China
    4
    Harbin, Shenyang, Baotou, BeijingEastern China
    2
    Qingdao, ShanghaiCentral China
    3
    Wuhan, Zhengzhou, HangzhouWestern China
    4
    Xian, Taiyuan, Chengdu, Urumqi


Each sales office makes direct sales and provides after-sales
services to the customers in its area. Our sales offices in Qingdao, Wuhan,
Xian, Zhengzhou, Taiyuan, Chengdu, Harbin, Shenyang, Urumqi and Baotou are
focused on sales to the heating and power industry while our Shanghai and
Hangzhou sales offices are focused on sales to the shipbuilding industry.

Competition

The heat exchanger market in China is very fragmented and
competitive. There are over 1,500heat exchanger manufacturers in China,
most of which are relatively small in size. As a leading heat exchanger
manufacturer in China, we mainly face competition from the leading domestic
players including SmartHeat, Shanghai Accessen and Lanzhou Lanshi, as well as
the leading international players including Alfa Laval and Aluminium Plant &
Vessel Company Limited (APV), each of whom has a presence in China. The
following is a brief summary and analysis of our major competitors:

- Alfa Lavalis the largest plate heat exchanger manufacturer in the
  world. Alfa Laval has the broadest range of products covering application in
  almost all applicable industries. Since it also produces other industrial
  products like separators, Alfa Laval is also able to provide customers with
  integrated solutions of heat exchangers and other industrial products. Alfa
  Laval is especially strong in providing shell-and-tube heat exchanger products
  to the food and beverage and pharmaceutical industries. Alfa Laval is our key
  competitor in almost all industries. As compared to Alfa Laval, we are able to
  provide products of similar quality at a lower price.
- APVis one of the most established plate heat exchanger
  manufacturers in the world. Founded by Dr. Richard Seligman, who made the
  first plate heat exchanger in 1910, APV was acquired by SPX, a multi-national
  company listed on the New York Stock Exchange, in 2008. APV is especially
  strong in providing solutions and products for the power industry. As compared
  to APV, we have a broader range of products and larger production capacity and
  sales volume in China.
- SmartHeat, Inc.is a Chinese manufacturer of heat exchangers that
  is listed on NASDAQ Global Market. Its production facility is located in
  Shenyang, Northeast China. SmartHeat manufactures and sells plate heat
  exchangers, heat exchanger units and heat meters. It used to be the OEM
  service provider of Sondex, the Denmark manufacturer of plate heat exchangers,
  who is an especially strong competitor in the oil and gas industry. SmartHeat
  is more experienced than us in producing heat exchanger units but does not
  produce shell-and-tube heat exchangers. As compared to SmartHeat, we believe
  that we have stronger research and development capabilities, a wider range of
  products and that we have a more established track record in the industry.17

---

- Shanghai Accessenis a Chinese manufacturer of heat exchangers with
  its production facility in Shanghai. It started to produce and sell plate heat
  exchangers and heat exchanger units under its own brand in 2002 but does not
  produce shell-and-tube heat exchangers. As compared to Accessen, we believe
  that we have stronger research and development capabilities and wider range of
  products. We also believe that we have a more established track record in the
  industry and that we are much larger than Accessen in terms of production
  capacity and sales volume.
- Lanzhou Lanshiis a Chinese manufacturer of heat exchangers with
  its production facility in Lanzhou, Northwest China. It manufactures and sells
  plate heat exchangers and heat exchanger units. Lanzhou Lanshi caters to the
  alumina production market. As compared to Lanshi, we believe that we have
  stronger research and development capabilities and a broader range of
  products. We are also much larger than Lanshi in terms of production capacity
  and sales volume.

Intellectual Property

Trademarks

We sell all our products under trademarks of 巨元 and THT.
巨元 has been registered with the State Trademark Bureau of PRC and has a
valid term of ten years expiring August 20, 2020. THT has been registered with
the State Trademark Bureau of PRC since July 14, 2009 and has a valid term of
ten years expiring July 13, 2019.

Patents

We own seven patents, all of which are for utility models. The
term of the patents, as stipulated by the PRC Patent Law, is ten years starting
from the authorization date. The following table lists our patents, their
registration and certificate numbers and their authorization dates:

Patents
    Registration No.
    Certificate No.
    Authorization DateShell and tube helix baffle plate heat exchanger
    ZL201020107719.2
    1565896
    2010-10-20High efficiency wide flow channel disassemble
      plate heat exchanger
    ZL200920093790.7
    1512219
    2010-08-18Special high efficiency detachable type heat
      exchanger heat transfer plate
    ZL200920094384.2
    1565896
    2010-05-12A kind of plate heat exchanger use in air
      conditioning industry
    ZL200920094383.8
    1411275
    2010-05-12Variable section flow channel plate heat exchanger
    ZL200720093847.4
    1109105
    2008-10-08Wide
      flow channel disassemble plate heat exchanger
    ZL200520127760.5
    876165
    2007-03-07Wide
      flow channel welded plate heat exchanger
    ZL200520127762.4
    842256
    2006-11-29Large-scale closed cooling water circulator
    ZL200520127763.9
    CN
      2842348Y
    2006-11-29Block type heat exchanger
    ZL200520127761X
    842022
    2006-11-29Detachable ceramic multi-tube dust collector
    ZL00266939.0
    465211
    2001-11-28


Environmental Matters

Our manufacturing facilities are subject to various pollution
control regulations with respect to noise and air pollution and the disposal of
waste and hazardous materials. We also are subject to periodic inspections by
local environmental protection authorities. Our operating subsidiaries have
received certifications from the relevant PRC government agencies indicating
that their business operations are in material compliance with the relevant PRC
environmental laws and regulations. We are not currently subject to any pending
actions alleging any violations of applicable PRC environmental laws.

Regulation

Because our operating subsidiaries are located in the PRC, we
are regulated by the national and local laws of the PRC.

We are subject to the environmental regulations described in
the preceding section entitled Our Business  Environmental Matters.

There is no private ownership of land in China. Upon payment of
a land grant fee, land use rights can be obtained from the government for a
period up to 50 years, in the case of industrial land, and are typically
renewable. We have received the necessary land use rights certificate for three land lots, all of which are located at No.5 NanhuanRoad,
Tie Xi District, Siping City. The three land lots occupy a total of 36,529
square meters.

18

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We are also subject to Chinas foreign currency regulations.
The PRC government has controlled RMB reserves primarily through direct
regulation of the conversion of RMB into other foreign currencies. Although
foreign currencies, which are required for current account transactions, can
be bought freely at authorized PRC banks, the proper procedural requirements
prescribed by PRC law must be met. At the same time, PRC companies are also
required to sell their foreign exchange earnings to authorized PRC banks, and
the purchase of foreign currencies for capital account transactions still
requires prior approval of the PRC government.

Under current PRC laws and regulations, Foreign Invested
Entities (FIEs), may pay dividends only out of their accumulated after-tax
profits, if any, determined in accordance with PRC accounting standards and
regulations. In addition, FIEs in China are required to set aside at least 10.0%
of their after-tax profit based on PRC accounting standards each year to their
general reserves until the cumulative amount of such reserves reaches 50.0% of
their registered capital. These reserves are not distributable as cash
dividends. The board of directors of an FIE has the discretion to allocate a
portion of the FIEs after-tax profits to staff welfare and bonus funds, which
may not be distributed to equity owners except in the event of liquidation.

We do not face any significant government regulation in
connection with the production of our products. We do not require any special
government permits to produce our products other than those permits that are
required of all corporations in China.

Our Employees

As of December 31,2010, we employed a total of 686
full-time employees. The following table sets forth the number of employees by
function:

Function
    Number of employeesSenior Management
    4Solution design
    20Sales
    127Marketing
    17Procurement
    10Production
    333Quality Control
    23R&D
    66HR &
      Administration
    65Finance
    19Internal Audit and
      Control
    2TOTAL
    686


As required by applicable PRC law, we have entered into
employment contracts with most of our officers, managers and employees. We are
working towards entering employment contracts with those employees who do not
currently have employment contracts with us. We believe that we maintain a
satisfactory working relationship with our employees, and we have not
experienced any significant disputes or any difficulty in recruiting staff for
our operations.

Our employees in China participate in a state pension scheme
organized by PRC municipal and provincial governments. We are currently required
to contribute to the scheme at a rate of 30.6% to 31.2% of an employees average
monthly salary.

In addition, we are required by PRC law to cover employees in
China with various types of social insurance, and we believe that we are in
material compliance with the relevant PRC laws.

Insurance

We maintain property insurance for our premises located at
Siping, China where our main production facilities are located. The aggregate
maximum amount covered by our insurance policy is up to RMB 25.39 million
(approximately $3.72 million). We also maintain property insurance for our
automobiles. We do not maintain business interruption, product liability
insurance or key-man life insurance. We believe our insurance coverage is
customary and standard of companies of comparable size in comparable industries
in China. However, we cannot ensure that our existing insurance policies are
sufficient to insulate us from all loses and liabilities that we may incur.

19

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Litigation

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

Our Address

The address of THT’s principal executive office in China is No.5 Nanhuan Road, Tiexi District, Siping, Jilin Province, People’s Republic of China, 136000 and our telephone number is 86-434-3265241. We maintain a website at
www.tht.cn that contains information about us, but that information is not a part of this Annual Report.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision.  If any of the
following risks actually occurs, our business, financial condition or results of operations could suffer.  In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

We face risks related to general domestic and global economic conditions and our revenue will decrease if the industries in which our customers operate experience a protracted slowdown.

The uncertainty arising out of domestic and global economic conditions, including the recent disruption in credit markets, poses a risk to the PRC economy and may impact our ability to manage normal relationships with our customers, suppliers and
creditors. If the current situation deteriorates significantly, our business could be materially negatively impacted, as demand for our products and services may decrease from a slow-down in the general economy, or supplier or customer disruptions
may result from tighter credit markets.

In addition, because our products mainly serve as key components in projects operated by our customers who are mostly in the chemical, metallurgical, shipbuilding, HVAC and district heating industries, we are subject to the general changes in
economic conditions affecting those industry segments of the economy. If the industry segments in which our customers operate do not grow or if there is a contraction in those industries, demand for our products will decrease. Demand for our
products is typically affected by a number of overarching economic factors, including, but not limited to, interest rates, the availability and magnitude of private and governmental investment in infrastructure projects and the health of the overall
global economy. If there is a decline in economic activity in China and the other markets in which we operate or a protracted slowdown in industries on which we rely for our sales, demand for our products and our revenue will likewise decrease.

Our industry is very competitive in China.

The domestic market for heat exchange products is fragmented and highly competitive. We compete with over 1,500 small-sized, local Chinese heat exchanger manufacturers. The number of these companies varies from time to time. While we may have
greater resources than our smaller competitors, it is possible that these competitors have better access in certain local markets to customers and prospects and lower production and raw material costs. Some of our products compete on the basis of
price and are sold in fragmented markets with low barriers to entry, allowing less expensive domestic producers to gain market share and reduce our margins.

Foreign competition is intense and could have a material adverse effect on our financial condition and results of operations.

In addition to domestic competition, we face intense competition from foreign competitors.  The intensity of foreign competition is affected significantly by fluctuations in the value of the U.S. dollar against Chinese currency and by the level of
import duties imposed by the Chinese government on certain products.  Our major international competitors are Alfa Laval and APV.  Many of our competitors have more resources and greater brand recognition than we enjoy.  While our resources may not
be as great as our larger competitors, we believe our product quality and direct sales offices and distribution network are superior in China.  If our competitors are able to gain greater market share or improve their sales efforts, our sales may
decrease, we may be forced to lower our prices, or our marketing costs may increase, all of which could negatively impact our financial results.

Approximately 25.71% of our sales revenues were derived from our ten largest customers and 5.23% of our sales revenues in 2010 were derived from our largest customer, and any reduction in revenues from any of these customers would reduce our
revenues and net income.

Approximately 25.71% of our sales revenue in 2010 came from our top ten customers, with Song Yuan Shi Heating Company accounting for approximately 5.23% of our sales revenue in 2010.  If we cease to do business at or above current levels with the
top customers or with any other large customers who contribute significantly to our sales revenues, and we are unable to generate additional or substitute sales revenue, our net income would decline considerably.

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Any decrease in the availability, or increase in the cost, of raw materials could materially affect our earnings.

Our operations depend heavily on the availability of various raw materials. The raw materials for our operations are mainly metal plates made of stainless steel, carbon steel, titanium steel, nickel steel and other steel based alloy. The
availability of raw materials may decrease and their prices may fluctuate greatly.  We have long-term relationships with several suppliers; however, if our suppliers are unable or unwilling to provide us with raw materials on terms favorable to us,
we may be unable to produce certain products.  This could result in a decrease in profit and damage to our reputation in our industry. In the event our raw material and energy costs increase, we may not be able to pass these higher costs on to our
customers in full or at all. Any increase in the prices for raw materials or energy resources could materially increase our costs and therefore lower our earnings. Additionally, certain of our supply contracts are for fixed prices. Although we
currently benefit from favorable pricing in some of these supply contracts, if market prices for these raw materials decline, we may not be able to take advantage of decreasing market prices, and our profit margins may suffer.

Our rapid expansion could significantly strain our resources, management and operational infrastructure which could impair our ability to meet increased demand for our products and hurt our business results.

To accommodate our anticipated growth, we will need to expend capital resources and dedicate personnel to implement and upgrade our accounting, operational and internal management systems and enhance our record keeping and contract tracking system.
Such measures will require us to dedicate additional financial resources and personnel to optimize our operational infrastructure and to recruit more personnel to train and manage our growing employee base.  If we cannot successfully implement these
measures efficiently and cost-effectively, we will be unable to satisfy the demand for our products, which will impair our revenue growth and hurt our overall financial performance.

Our business is capital intensive and our growth strategy may require additional capital which may not be available on favorable terms or at all.

We believe that our current cash, cash flow from operations and the proceeds from the private placement in December 2010 will be sufficient to meet our present and reasonably anticipated capital and capital expenditure needs given the current state
of our production line for the marketing of the products.  We may, however, require additional cash resources due to changed business conditions, implementation of our strategy to expand our manufacturing capacity or other investments or
acquisitions we may decide to pursue.  If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities.  The sale of additional
equity securities could result in dilution to our stockholders.  The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations.
 Financing may not be available in amounts or on terms acceptable to us, if at all.  Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our
overall business prospects.

We depend heavily on key personnel, and turnover of key employees and senior management could harm our business.

Our future business and results of operations depend in significant part upon the continued contributions of our key technical and senior management personnel, including Guohong Zhao, our Chairman and Chief Executive Officer and Jianjun He, our
Chief Financial Officer.  They also depend in significant part upon our ability to attract and retain additional qualified management, technical, marketing and sales and support personnel for our operations.  If we lose a key employee, if a key
employee fails to perform in his or her current position, or if we are not able to attract and retain skilled employees as needed, our business could suffer.  Significant turnover in our senior management could significantly deplete our
institutional knowledge held by our existing senior management team.  We depend on the skills and abilities of these key employees in managing the manufacturing, technical, marketing and sales aspects of our business, any part of which could be
harmed by turnover in the future.

Unexpected equipment failures may damage our business due to production curtailments or shutdowns.

We conduct periodic inspection and maintenance of all of our equipment to minimize the impact of interruption of production and prevent breakdown because this machinery is highly specialized and cannot be repaired or replaced without significant
expense and time delay.  On occasion, our equipment may be out of service as a result of unanticipated failures which may result in material plant shutdowns or periods of reduced production.  Interruptions in production capabilities will inevitably
increase production costs and reduce our sales and earnings.  In addition to equipment failures, our facilities are also subject to the risk of catastrophic loss due to unanticipated events such as fires, explosions or adverse weather conditions.
Furthermore, any interruption in production capability may require us to make large capital expenditures to remedy the situation, which could have a negative effect on our profitability and cash flows.  In addition, longer-term business disruption
could result in a loss of customers.  If this were to occur, our future sales levels, and therefore our profitability, could be adversely affected.

Our failure to adequately protect our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights may be costly.

We strive to strengthen and differentiate our product portfolio by developing new and efficient manufacturing processes and innovative products and product improvements.  We maintain seven utility model patents and three registered trademarks and
one trademark application pending registration with State Trademark Bureau of PRC as intellectual property assets.  We believe that the protection of our intellectual
property will become increasingly important to our business.  Implementation and enforcement of intellectual property-related laws in China has historically been lacking due primarily to ambiguities in PRC intellectual property law.  Accordingly,
protection of intellectual property and proprietary rights in China may not be as effective as in the United States or other countries.  We will continue to rely on a combination of patents, trade secrets, trademarks and copyrights to provide
protection in this regard, but this protection may be inadequate.  For example, our pending or future patent applications may not be approved or, if allowed, they may not be of sufficient strength or scope. As a result, third parties may use the
technologies and proprietary processes that we have developed and compete with us, which could negatively affect any competitive advantage we enjoy, dilute our brand and harm our operating results.

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In addition, policing the unauthorized use of our proprietary technology can be difficult and expensive.  Litigation may be necessary to enforce our intellectual property rights and given the relative unpredictability of China’s legal system
and potential difficulties enforcing a court judgment in China, there is no guarantee litigation would result in an outcome favorable to us.  Furthermore, any such litigation may be costly and may divert management attention away from our core
business.  An adverse determination in any lawsuit involving our intellectual property is likely to jeopardize our business prospects and reputation.  We have no insurance coverage against litigation costs so we would be forced to bear all
litigation costs if we cannot recover them from other parties.  All of the foregoing factors could harm our business and financial condition.

If our customers and/or the ultimate consumers of products that use our products successfully assert product liability claims against us due to defects in our products, our operating results may suffer and our reputation may be harmed.

Due to the high pressures and temperatures at which many of our products are used and the fact that some of our products are relied upon by our customers or end users in their facilities or operations, or are manufactured for relatively broad
consumer use, we face an inherent risk of exposure to claims in the event that the failure, use or misuse of our products results, or is alleged to result, in bodily injury, property damage or economic loss.  We believe that we meet or exceed
existing professional specification standards recognized or required in the industries in which we operate.  We have been subject to claims in the past, none of which have had a material adverse effect on our financial condition or results of
operations, and we may be subject to claims in the future.  We currently do not maintain product liability coverage and such insurance may be difficult to obtain on terms acceptable to us and may not cover warranty claims.  A successful product
liability claim or series of claims against us, including one or more consumer claims purporting to constitute class actions, or a significant warranty claim or series of claims against us could materially decrease our liquidity and impair our
financial condition.

Our products may become subject to recall in the event of defects or other performance related issues.

We are at risk for product recall costs which are costs incurred when, either voluntarily or involuntarily, a product is recalled through a formal campaign to solicit the return of specific products due to a known or suspected performance defect.
Costs typically include the cost of the product, part or component being replaced, the cost of the recall borne by our customers and labor to remove and replace the defective part or component. Our products have not been the subject of an open
recall.  If a recall decision is made, we will need to estimate the cost of the recall and record a charge to earnings in that period. In making this estimate, judgment is required as to the quantity or volume to be recalled, the total cost of the
recall campaign, the ultimate negotiated sharing of the cost between us and our distributor or customer.  As a result, these estimates are subject to change. Excessive recall costs or our failure to adequately estimate these costs may negatively
affect our operating results.

Certain of our existing stockholders have substantial influence over our company, and their interests may not be aligned with the interests of our other stockholders.

Ms. Jinghua Zhao is the indirect, beneficial owner of approximately 72.36% of our common stock. As a result, she has significant influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially
all of our assets, election of directors and other significant corporate actions.  This concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control, which could deprive our stockholders of
an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our shares.

We have limited insurance coverage and do not carry any business interruption insurance, third-party liability insurance for our manufacturing facilities or insurance that covers the risk of loss of our products in shipment.

Operation of our manufacturing facilities involves many risks, including equipment failures, natural disasters, industrial accidents, power outages, labor disturbances and other business interruptions.  Furthermore, if any of our products are
faulty, then we may become subject to product liability claims or we may have to engage in a product recall.  We do not carry any business interruption insurance, product recall or third-party liability insurance for our manufacturing facilities or
with respect to our products to cover claims pertaining to personal injury or property or environmental damage arising from defaults with our products, product recalls, accidents on our property or damage relating to our operations.  Therefore, our
existing insurance coverage may not be sufficient to cover all risks associated with our business.  As a result, we may be required to pay for financial and other losses, damages and liabilities, including those caused by natural disasters and other
events beyond our control, out of our own funds, which could have a material adverse effect on our business, financial condition and results of operations.

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We have identified material weaknesses in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results and prevent
fraud. As a result, current and potential stockholders could lose confidence in our financial statements, which would harm the trading price of our common stock.

Companies that file reports with the SEC, including us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish and maintain a system of internal control over financial
reporting and annual reports on Form 10-K filed under the Exchange Act to contain a report from management assessing the effectiveness of a company’s internal control over financial reporting. Separately, under SOX 404, as amended by the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, public companies that are large accelerated or accelerated filers must include in their annual reports on Form 10-K an attestation report of their regular auditors attesting to and
reporting on management’s assessment of internal control over financial reporting. Non-accelerated filers and smaller reporting companies are not required to include an attestation report of their auditors in annual reports.

A report of our management is included under Item 9A “Controls and Procedures” of this report. We are a smaller reporting company and, consequently, are not required to include an attestation report of our auditor in this annual report.
However, we may become an accelerated filer and, accordingly, may be required to include an attestation report of our auditors in our annual report on Form 10-K for the fiscal year ending December 31, 2011. We have taken several measures to improve our
internal control over financial reporting after the reverse acquisition, such as hiring additional staff with knowledge of U.S. GAAP and reporting experience with the SEC. However, if and when we become subject to the auditor attestation
requirements under SOX 404, we can provide no assurance that we will receive a positive attestation from our independent auditors.

Our holding company structure may limit the payment of dividends.

We have no direct business operations, other than our ownership of our subsidiaries.  While we have no current intention of paying dividends, should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other
obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments.  In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to
make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions as discussed below.  If future
dividends are paid in RMB, fluctuations in the exchange rate for the conversion of RMB into U.S. dollars may reduce the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars.

Chinese regulations currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting standards and regulations.  Our subsidiaries in China are also required to set aside a portion of their
after tax profits according to Chinese accounting standards and regulations to fund certain reserve funds.  Currently, our subsidiaries in China are the only sources of revenues or investment holdings for the payment of dividends.  If they do not
accumulate sufficient profits under Chinese accounting standards and regulations to first fund certain reserve funds as required by Chinese accounting standards, we will be unable to pay any dividends.

We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to U.S. holders.

We believe that we are not considered a “passive foreign investment company,” or PFIC, for United States federal income tax purposes for our tax year ending December 31, 2010. However, each year we must make a separate determination as
to whether we are a PFIC. We cannot assure you that we will not be a PFIC for our tax year ending December 31, 2011 or any following tax year. If a non-U.S. corporation either (i) at least 75% of its gross income is passive income for a tax year or
(ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a tax year) is attributable to assets that produce or are held for the production of passive income, then the non-U.S. corporation will be
deemed a PFIC. The market value of our assets may be determined to a large extent by the market price of our Ordinary Shares, which is likely to fluctuate after this offering. Furthermore, how we spend as well as how quickly we spend the proceeds
from the offering will affect the composition of our income and assets. If we are treated as a PFIC for any tax year during which U.S. holders hold Ordinary Shares, certain adverse United States federal income tax consequences could apply to such
U.S. holders.

RISKS RELATED TO DOING BUSINESS IN CHINA

We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could hurt our business.

We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute
for the purpose of obtaining or retaining business.  We have operations, agreements with third parties and make sales in China, which may experience corruption.  Our activities in China create the risk of unauthorized payments or offers of payments
by one of the employees, consultants, sales agents or distributors of our Company, even though these parties are not always subject to our control.  It is our policy to implement safeguards to discourage these practices by our employees.  However,
our existing safeguards and any future improvements may prove to be less than
effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible.  Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to
other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we
invest or that we acquire.

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Changes in China’s political or economic situation could harm us and our operating results.

Economic reforms adopted by the Chinese government have had a positive effect on the economic development of the country, but the government could change these economic reforms or any of the legal systems at any time.  This could either benefit or
damage our operations and profitability.  Some of the things that could have this effect are:

- Level of government involvement in the economy;
- Control of foreign exchange;
- Methods of allocating resources;
- Balance of payments position;
- International trade restrictions; and
- International conflict.

The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, or OECD, in many ways.  For example, state-owned enterprises still constitute a large portion of the Chinese
economy and weak corporate governance and a lack of flexible currency exchange policy still prevail in China.  As a result of these differences, we may not develop in the same way or at the same rate as might be expected if the Chinese economy was
similar to those of the OECD member countries.

Our business is largely subject to the uncertain legal environment in China and your legal protection could be limited.

The Chinese legal system is a civil law system based on written statutes.  Unlike common law systems, it is a system in which precedents set in earlier legal cases are not generally used.  The overall effect of legislation enacted over the past 20
years has been to enhance the legal protections afforded to foreign invested enterprises in China.  However, these laws, regulations and legal requirements are relatively recent and are evolving rapidly, and their interpretation and enforcement
involve uncertainties.  These uncertainties could limit the legal protections available to foreign investors, such as the right of foreign invested enterprises to hold licenses and permits such as requisite business licenses.  In addition, all of
our executive officers and our directors are residents of China and not of the U.S., and substantially all the assets of these persons are located outside the U.S.  As a result, it could be difficult for investors to effect service of process in the
U.S., or to enforce a judgment obtained in the U.S. against our Chinese operations and subsidiaries.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities.

China only recently has permitted provincial and local economic autonomy and private economic activities.  The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through
regulation and state ownership.  Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other
matters.  We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements.  However, the central or local governments of the jurisdictions in which we operate may impose new, stricter
regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies,
could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

Future inflation in China may inhibit our ability to conduct business in China.

In recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation.  During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2% .  These factors have
led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation.  High inflation may in the future cause the Chinese government
to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products and our company.

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Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.

The majority of our revenues will be settled in Renminbi and U.S. dollars, and any future restrictions on currency exchanges may limit our ability to use revenue generated in Renminbi to fund any future business activities outside China or to make
dividend or other payments in U.S. dollars.  Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the Renminbi for current account transactions, significant restrictions still remain, including primarily
the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in China authorized to conduct foreign exchange business. In addition, conversion of Renminbi
for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that
the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the Renminbi.

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident stockholders to personal liability, limit our ability to acquire PRC companies or to
inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us or otherwise materially adversely affect us.

In October 2005, the PRC State Administration of Foreign Exchange, or SAFE, issued the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China,
generally referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity
financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (i)
purporting to cover the establishment or acquisition of control by PRC residents of offshore entities which merely acquire “control” over domestic companies or assets, even in the absence of legal ownership; (ii) adding requirements
relating to the source of the PRC resident’s funds used to establish or acquire the offshore entity; (iii) covering the use of existing offshore entities for offshore financings; (iv) purporting to cover situations in which an offshore SPV
establishes a new subsidiary in China or acquires an unrelated company or unrelated assets in China; and (v) making the domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such
registration, notably, the business plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under Circular 75 are required in connection with any increase or decrease of capital, transfer of shares,
mergers and acquisitions, equity investment or creation of any security interest in any assets located in China to guarantee offshore obligations, and Notice 106 makes the offshore SPV jointly responsible for these filings. In the case of an SPV
which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006; this date was subsequently
extended indefinitely by Notice 106, which also required that the Registrant establish that all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure to comply with
the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could also result in the SPV’s
affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

We believe our stockholders who are PRC residents as defined in Circular 75 have registered with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC
subsidiaries.  However, we cannot provide any assurances that their existing registrations have fully complied with, and they have made all necessary amendments to their registration to fully comply with, all applicable registrations or approvals
required by Circular 75.  Moreover, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies.  For
example, our present and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC
resident beneficial holders.  In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75.  We also have little control over either our present or prospective direct or indirect
stockholders or the outcome of such registration procedures.  A failure by our PRC resident beneficial holders or future PRC resident stockholders to comply with Circular 75, if SAFE requires it, could subject these PRC resident beneficial holders
to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and
prospects.

Our business and financial performance may be materially adversely affected if the PRC regulatory authorities determine that our acquisition of Siping Juyuan constitutes a Round-trip Investment without MOFCOM approval.

On August 8, 2006, six PRC regulatory agencies promulgated the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the 2006 M&A Rule, which became effective on September 8, 2006. According to the 2006 M&A
Rule, a “Round-trip Investment” is defined as having taken place when a PRC business that is owned by PRC individual(s) is sold to a non-PRC entity that is established or controlled, directly or indirectly, by those same PRC
individual(s). Under the 2006 M&A Rules, any Round-trip Investment must be approved by the MOFCOM, and any indirect arrangement or series of arrangements which achieves the same end result without the approval of MOFCOM is a violation of PRC
law.

On June 30, 2009, Mr. Guohong Zhao, our Chairman and CEO and a founder of Siping Juyuan, entered into an option agreement with Ms. Jinghua Zhao, the sole shareholder of Wisetop, pursuant to which Mr. Guohong Zhao was granted an option, exercisable
after 180 days, to
acquire all of the equity interests of Wisetop owned by Ms. Jinghua Zhao at an exercise price of $3,246,160.  This option expires on June 30, 2011.

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Also on June 30, 2009, Wisetop entered into separate option agreements with the other original founders of Siping Juyuan, pursuant to which such founders were granted options, exercisable after 90 days, to purchase an aggregate of 10,240,786 shares
of our common stock owned by Wisetop at a total exercise price of $7,291,440.  These options also expire on June 30, 2011. The founders exercised their options on December 17, 2010.

After Mr. Guohong Zhao and the founders (collectively referred to herein as the PRC Individuals) exercise these options, they will be our controlling stockholders.  Their acquisition of our equity interest, or the Acquisition, is required to be
registered with the competent administration of industry and commerce authorities, or AIC, in Beijing.  The PRC Individuals are required to make filings with the Beijing SAFE, to register the Company and its non-PRC subsidiaries to qualify them as
SPVs, pursuant to Circular 75 and Circular 106.

The PRC regulatory authorities may take the view that the Acquisition and the Share Exchange Agreement are part of an overall series of arrangements which constitute a Round-trip Investment, because at the end of these transactions, the PRC
Individuals will become majority owners and effective controlling parties of a foreign entity that acquired ownership of our Chinese subsidiaries.  The PRC regulatory authorities may also take the view that the registration of the Acquisition with
the relevant AIC in Beijing and the filings with the Beijing SAFE may not be evidence that the Acquisition has been properly approved because the relevant parties did not fully disclose to the AIC, SAFE or MOFCOM the overall restructuring
arrangements, the existence of the Share Exchange Agreement and its link with the Acquisition. If the PRC regulatory authorities take the view that the Acquisition constitutes a Round-trip Investment under the 2006 M&A Rules, we cannot assure
you we may be able to obtain the approval required from MOFCOM.

If the PRC regulatory authorities take the view that the Acquisition constitutes a Round-trip Investment without MOFCOM approval, they could invalidate our acquisition and ownership of our Chinese subsidiaries. Additionally, the PRC regulatory
authorities may take the view that the Acquisition constitutes a transaction which requires the prior approval of the China Securities Regulatory Commission, or CSRC, before MOFCOM approval is obtained. We believe that if this takes place, we may be
able to find a way to re-establish control of our Chinese subsidiaries’ business operations through a series of contractual arrangements rather than an outright purchase of our Chinese subsidiaries. But we cannot assure you that such
contractual arrangements will be protected by PRC law or that the registrant can receive as complete or effective economic benefit and overall control of our Chinese subsidiaries’ business than if the Company had direct ownership of our
Chinese subsidiaries. In addition, we cannot assure you that such contractual arrangements can be successfully effected under PRC law. If we cannot obtain MOFCOM or CSRC approval if required by the PRC regulatory authorities to do so, and if we
cannot put in place or enforce relevant contractual arrangements as an alternative and equivalent means of control of our Chinese subsidiaries, our business and financial performance will be materially adversely affected.

Under the New EIT Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

China passed a new Enterprise Income Tax Law, or the New EIT Law, and its implementing rules, both of which became effective on January 1, 2008. Under the New EIT Law, an enterprise established outside of China with “de facto management
bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes.  The implementing rules of the New EIT Law define de facto
management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto
Management Bodies, or the Notice, further interpreting the application of the New EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities.  Pursuant to the Notice, an enterprise incorporated in an offshore
jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operation reside or perform their duties mainly in
China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial properties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) 1⁄2 directors
with voting rights or senior management often resident in China.  Such resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its
non-PRC shareholders.  However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person.  Nor are detailed measures on imposition of tax from non-domestically incorporated resident
enterprises are available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

However, as our case substantially meets the foregoing criteria, there is a likelihood that we are deemed to be a resident enterprise by Chinese tax authorities.  If the PRC tax authorities determine that we are a “resident enterprise”
for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting
obligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the
New EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange
control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes.  Finally, it is
possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to
gains derived by our non-PRC shareholders from transferring our shares.  We are actively monitoring the possibility of “resident enterprise” treatment for the 2008 tax year and are evaluating appropriate organizational changes to avoid
this treatment, to the extent possible.

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If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.

The value of our securities will be affected by the currency exchange rate between U.S. dollars and RMB.

The value of our common stock will be affected by the foreign exchange rate between U.S. dollars and RMB, and between those currencies and other currencies in which our sales may be denominated.  For example, if we need to convert U.S. dollars into
RMB for our operational needs and the RMB appreciates against the U.S. dollar at that time, our financial position, our business, and the price of our common stock may be harmed.  Conversely, if we decide to convert our RMB into U.S. dollars for the
purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the RMB, the U.S. dollar equivalent of our earnings from our subsidiaries in China would be reduced.

Because our business is located in the PRC, we may have difficulty establishing adequate management, legal and financial controls, which we are required to do in order to comply with U.S. securities laws.

PRC companies have historically not adopted a Western style of management and financial reporting concepts and practices, which includes strong corporate governance, internal controls and computer, financial and other control systems. Most of our
middle and top management staff are not educated and trained in the Western system, and we may have difficulty hiring new employees in the PRC with such training. In addition, we may need to rely on a new and developing communication infrastructure
to efficiently transfer our information from retail outlets to our headquarters. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial
statements, books of account and corporate records and instituting business practices that meet Western standards. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under
Section 404 of the Sarbanes-Oxley Act of 2002. This may result in significant deficiencies or material weaknesses in our internal controls, which could impact the reliability of our financial statements and prevent us from complying with SEC rules
and regulations and the requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.

RISKS RELATED TO THE MARKET FOR OUR STOCK

We are subject to penny stock regulations and restrictions.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain
exemptions.  If our common stock becomes a “penny stock,” we may become subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule.  This rule imposes addition l sales practice requirements on broker-dealers that sell such
securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their
spouses).  For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale.  As a result, this rule may
affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market.  Disclosure is also required to be
made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities.  Finally, monthly statements are required to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stock.

There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule.  In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act,
which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

27

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Our common stock is subject to price volatility related and unrelated to our operations.

The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other companies in the same industry, trading
volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This
volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

Our common stock may be delisted from The NASDAQ Global Market, which could negatively impact the price of our common stock and our ability to access the capital markets.

The listing standards of The NASDAQ Global Market provide that a company, in order to qualify for continued listing, must maintain a minimum stock price, satisfy standards relative to minimum stockholders' equity, minimum market value of publicly
held shares and various additional requirements. If after listing we fail to comply with all listing standards applicable to issuers listed on The NASDAQ Global Market, our common stock may be delisted. If our common stock is delisted, it could
reduce the price of our common stock and the levels of liquidity available to our stockholders. In addition, the delisting of our common stock could materially adversely affect our access to the capital markets and any limitation on liquidity or
reduction in the price of our common stock could materially adversely affect our ability to raise capital. Delisting from The NASDAQ Global Market could also result in other negative consequences, including the potential loss of confidence by
suppliers, customers and employees, the loss of institutional investor interest and fewer business development opportunities.

Certain provisions of our Certificate of Incorporation may make it more difficult for a third party to effect a change-in-control.

Our Certificate of Incorporation authorizes the Board of Directors to issue up to 10,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the
board of directors without further action by the stockholders.  These terms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights and redemption rights
provisions.  The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock.  In addition, specific rights granted to future holders of preferred stock could be
used to restrict our ability to merge with, or sell assets to, a third party.  The ability of the board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a
change-in-control, which in turn could prevent the stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

ITEM 2. PROPERTIES

Land Use Rights

There is no private land ownership in China. Individuals and companies are permitted to acquire land use rights for specific purposes. We were granted land use rights from the PRC government for 36,529.6 square meters of three land slots located at
No.5 NanhuanRoad, Tiexi District, Siping City, Jilin Province, China. The land use rights will expire on December 8, 2056, December 30, 2056 and December 30, 2057, respectively.

Mortgages were created over the land use rights of the three land lots with an area of 17,682.78 square meters, 11,619.6 square meters and 7,227.22 square meters, respectively. Such mortgages are used for securing the Company’s indebtedness
with China Agriculture Bank, Siping Branch. We believe that all our properties have been adequately maintained, are generally in good condition and are suitable and adequate for our business.

Buildings

Our manufacturing facilities are based in Siping City, Jilin Province, China. The total floor area of our facility is approximately 17,482 square meters. The production portion of the facility is approximately 11,275 square meters. Our research and
development center is approximately 1,164 square meters and our executive office building, garage, and dormitory are approximately 5,043 square meters. We currently have two production lines for plate heat exchangers with an annual capacity of
500,000 square meters and one welding workshop with an annual capacity of 3,000 tons. Our welding facility is located on a 36,530 square meter plot of land for which we own the land use right.

We currently own ten buildings covered by ten Property Ownership Certificates issued by Siping City Housing Administration Bureau. All the buildings are located at No.5 Nanhuan Road, Tie Xi District, Siping City. The building with an area of
4,633.93 square meters was mortgaged to secure our indebtedness to China Agriculture Bank, Siping Branch on November 8, 2010.

Our new workshop, which began operations in October 2009, has a floor area of 7,356 square meters and a new production line for plate heat exchangers with a designed capacity of 200,000 square meters.

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Buildings under Construction

Our third workshop and our research center, located at the
south side of NanhuanRoad, Tie Xi District, Siping City, are under construction.
We have obtained a License for Construction Land Planning (Ref. Di Zi No.
200802050) issued by Siping City Construction Bureau on July 25, 2008, which
shows that the land area approved for the Companys above-mentioned construction
is 11,781 square meters.

We also acquired a License for Construction Project Planning
(Ref. Jian Zi No. 200803043) issued on September 5, 2008 by Siping City
Construction Bureau. The License shows that the area of construction will be
7,716 square meters.

Leased Properties

We currently lease nine real properties as representative
offices in Shanghai, Zhengzhou, Taiyuan, Baotou, Shenyang, Harbin, Beijing,
Wuhan and Qingdao.

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. (REMOVED AND RESERVED).

PART II

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

Market for our Common Stock

Our common stock is quoted on the NASDAQ Global Market and
trades under the symbol THTI.

The following table sets forth, for the periods indicated, the
high and low closing prices of our common stock as reported by nasdaq.com. These
prices reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

Closing PricesHigh
    
    
    LowYear Ended December 31, 20104thQuarter
    $
    4.38
    
    $
    3.253rdQuarter
    $
    4.90
    
    $
    3.982ndQuarter
    $
    5.35
    
    $
    4.101stQuarter
    $
    5.33
    
    $
    3.95


Closing PricesHigh
    
    
    LowYear Ended December 31, 20094thQuarter
    $
    5.33
    
    $
    4.823rdQuarter
    $
    N/A
    
    $
    N/A2ndQuarter
    $
    N/A
    
    $
    N/A1stQuarter
    $
    N/A
    
    $
    N/A


Reports to Stockholders

We plan to furnish our stockholders with an annual report for
each fiscal year ending December 31 containing financial statements audited by
our independent certified public accountants. Additionally, we may, in our sole
discretion, issue unaudited quarterly or other interim reports to our
stockholders when we deem appropriate. We intend to maintain compliance with the
periodic reporting requirements of the Exchange Act.

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Approximate Number of Holders of Our Common Stock

On March 24, 2011, there were 847 stockholders of record of our common stock.

Dividend Policy

We have never declared or paid cash dividends on shares of our common stock and because we intend to retain and use any future earnings for the development and expansion of our business, do not anticipate paying any cash dividends in the foreseeable
future. Our board of directors will make any future decisions regarding dividends.

Recent Sales of Unregistered Securities

On June 30, 2009, we issued 14,800,000 shares of our common stock to Wisetop, the sole shareholder of Megaway. The total consideration for the 14,800,000 shares of our common stock was 1 share of Megaway, which is all the issued and outstanding
capital stock of Megaway. The number of our shares issued to Wisetop was determined based on an arms-length negotiation. The issuance of our shares to Wisetop was made in reliance on the exemption provided by Section 4(2) of the Securities Act for
the offer and sale of securities not involving a public offering and Regulation D promulgated thereunder. Please refer to Item 3.02 of our Current Report on Form 8-K filed by the Company on July 7, 2009.

ITEM 6. SELECTED FINANCIAL DATA Not Applicable.

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

Forward-Looking Statements

This Annual Report on Form 10-K contains statements that constitute “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as
amended. The words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify
forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or expectation of our company, its directors or its officers with respect to events, conditions, and
financial trends that may affect our future plans of operations, business strategy, operating results, and financial position. Persons reviewing this Annual Report on Form 10-K are cautioned that any forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors. These risks and uncertainties include, but are not
limited to, the factors mentioned in the “Risk Factors” section of our Registration Statement on Form S-1 filed on July 20, 2010, and other risks mentioned in this Form 10-K or in our other reports filed with the SEC since the filing
date of our Registration Statement.

Although these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by law, we undertake no responsibility or obligation to update publicly these forward-looking statements, but may do so in the
future in written or oral statements. Investors should take note of any future statements made by us or on our behalf.

The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes that appear in Part I, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report. Our
audited consolidated financial statements are stated in U.S. Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion and analysis covers the Company's audited consolidated results
of operations for the twelve month periods ended December 31, 2010 and 2009.

Our Business

THT is a Nevada holding company whose China-based indirect operating subsidiary Siping Juyuan manufactures and sells heat exchangers.  Since 1998, we have been providing total heat exchange solutions to our customers.  Our major products are plate
heat exchangers, air-cooled heat exchangers and heat exchanger units. Unlike most other heat exchanger manufacturers in China, we not only provide heat exchange products, but also provide total solution to our customers.  As a total solution
provider, we analyze the working condition of our customers; provide optimized design based on analysis and simulation, offer high quality heat exchange products, and continuously assist our customer in improving heat exchange process.

Over the past 10 years, we have successfully completed over 3,000 projects in more than 15 industries, including metallurgy, heat and power, petrochemical, food and beverage, pharmaceutical and shipbuilding.  We have provided heat exchange solutions
to Fortune 500 companies, including Shell, BP, BASF, LG, Sinopec, and China Shenhua.  We have also provided heat exchange products for important Chinese and
international projects such as the Beijing 2008 Olympics Wukesong Sports Center, Guangdong Linao nuclear plant and BASF Chemical plant in Germany.

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As of December 31, 2010, we had 686 employees. We currently have two production lines for plate heat exchangers with an annual capacity of 500,000 square meters and one welding workshop with an annual capacity of 3,000 tons.

Revenue

We generate our revenue from the sales of our heat exchange products.

Cost of Sales

Cost of revenue includes our direct costs to manufacture our products, including the cost of our raw materials, employee remuneration for staff engaged in production activity, and related expenses that are directly attributable to the production of
products.

Gross Profit and Gross Margin

Gross profit is equal to the difference between our revenue and the cost of sales. Gross margin is equal to gross profit divided by revenue.

Operating Expenses

Our operating expenses consist of salaries, sales commission, research and development expense and other selling expense and general and administrative expenses. We expect most components of our operating expenses will increase as our business grows
and as we incur increased costs related to being a public company.

Principal Factors Affecting Our Financial Performance

We believe that the following factors will continue to affect our financial performance:

Growth ofChina’sUrbanization and Industrialization

According to China Heat Association, the annual growth rate of the heat exchange industry in China is expected to be 106% from 2009 to 2012.  This growth is fueled by rapid industrialization and manufacturing industries developing in China. If this
growth continues, we believe that we will be able to sustain our growth and continue to be a leader in the heat exchange industry in China.

PRC Regulations

China has looked favorably on the heat exchange industry and has loosened regulations to promote manufacturing growth in China, which ultimately benefits the Company and similarly situated companies.

The Chinese government committed to promote the development of China’s urbanization, which includes the heat exchange industry, through, among other things, tax incentives, import/export support and capital support. In addition, the stimulus
package offered by the Chinese government will provide market opportunities for us.  As long as China continues to promote economic growth and allows manufacturing companies to grow and expand their operations, we expect our operations will be
positively effected by PRC regulations.

Taxation

United States

The Company is subject to the United States Federal and state income tax at a statutory rate of 34%.  No provision for the U.S. Federal income taxes has been made as the Company had no taxable income in this jurisdiction for the reporting periods.

The Company has not recognized a deferred tax liability for the undistributed earnings of its non-U.S. subsidiaries as of December 31, 2010 because the Company currently does not expect those unremitted earnings to reverse and become taxable to the
Company in the foreseeable future. A deferred tax liability will be recognized when the Company no longer plans to permanently reinvest undistributed earnings. Calculation of related unrecognized deferred tax liability is not practicable.

British Virgin Islands

Megaway was incorporated in the BVI and, under the current laws of the BVI, is not subject to income taxes.

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Hong Kong

Star Wealth was incorporated in Hong Kong and is subject to
Hong Kong profits tax at a tax rate of 16.5% . No provision for Hong Kong
profits tax has been made as Star Wealth had no taxable income during the
reporting periods.

PRC

A company registered in China is subject to national and local
income taxes within China at the applicable tax rate on the taxable income as
reported in its PRC statutory financial statements in accordance with relevant
income tax laws. Under the Provisional Taxation Regulation of the Peoples
Republic of China effective before January 1, 2008, income tax was generally
payable by enterprises at a rate of 33% of their taxable income.

A company registered in China is subject to national and local
income taxes within China at the applicable tax rate on the taxable income as
reported in its PRC statutory financial statements in accordance with relevant
income tax laws. Under the Provisional Taxation Regulation of the Peoples
Republic of China effective before January 1, 2008, income tax was generally
payable by enterprises at a rate of 33% of their taxable income.

In 2007, China passed the New EIT Law and its implementing
rules, both of which became effective on January 1, 2008. The New EIT Law
significantly curtails tax incentives granted to foreign-invested enterprises
under the previous law. The New EIT Law, however, (i) reduces the statutory rate
of enterprise income tax from 33% to 25%, (ii) permits companies to continue to
enjoy their existing tax incentives, adjusted by certain transitional phase-out
rules, and (iii) introduces new tax incentives, subject to various qualification
criteria.

Substantially all of our income may be derived from dividends
we receive from our PRC operating subsidiaries described above. The New EIT Law
and its implementing rules generally provide that a 10% withholding tax applies
to China-sourced income derived by non-resident enterprises for PRC enterprise
income tax purposes. We expect that such 10% withholding tax will apply to
dividends paid to us by our PRC subsidiaries, but this treatment will depend on
our status as a non-resident enterprise. For detailed discussion of PRC tax
issues related to resident enterprise status, see Risk Factors  Risks Related
to Doing Business in China  Under the New EIT Law, we may be classified as a
resident enterprise of China. Such classification will likely result in
unfavorable tax consequences to us and our non-PRC shareholders.

Prior to January 2008, the Siping Juyuan and Beijing Juyuan
were subject to PRC statutory enterprise income tax, or EIT, at the rate of 30%
for national tax plus 3% for local tax.

Siping Juyuan was entitled to a special tax concession, or the
Tax Concession, because it employed the required number of handicapped staff
according to the relevant PRC tax rules. In particular, this Tax Concession
decreased the Siping Juyuans EIT liability in the year ended December 31, 2007
and entitled Siping Juyuan to a refund of value-added tax paid in the years
ended December 31, 2010, 2009 and 2008.

Beijing Juyuan, being a sino-foreign joint venture enterprise,
was entitled to two years EIT exemption, from the first profit making calendar
year of operations after offset of accumulated taxable losses, followed by a 50%
tax reduction for the immediate next three calendar years, or the Tax Holiday.
The Tax Holiday commenced in the fiscal year of 2008.

Pursuant to the new EIT law, commencing from January 1, 2008,
Siping Juyuan and Beijing Juyuan were subject to PRC EIT at the statutory rate
of 25%. As Siping Juyuan was qualified as a High-tech Enterprise, it was
entitled to a preferential EIT rate of 15% during the reporting periods. Beijing
Juyuan was subject to EIT at the rate of 12.5% and 0% during the years ended
December 31, 2010 and 2009 respectively.

We incurred income taxes of $1,498,442 for the year ended
December 31, 2010, an increase of $834,451 or 125.67% from the taxes we incurred
in the same 2009 period, which were $663,991. This increase in taxes was more
than offset by our higher revenues and operating profits.

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Results of Operations

The following tables set forth key components of our results of
operations for the periods indicated, in dollars and as a percentage of revenue.

|              |   | Year Ended December 31, |  
|------------- | - | ----------------------- | -
|              |   | 2010                    |  
|              |   |                         |  
|Sales revenue | $ | 50,245,929              |  
|Cost of sales |   | (28,550,685             | )
|Gross profit  |   | 21,695,244              |  

|Expenses                                                |   |            |   |   |           |    
|------------------------------------------------------- | - | ---------- | - | - | --------- | ---
|Administrative expenses                                 |   | 4,359,595  |   |   | 3,064,790 |    
|Research and development costs                          |   | 1,151,948  |   |   | 1,096,285 |    
|Selling expenses                                        |   | 6,602,622  |   |   | 5,782,045 |    
|Total operating expenses                                |   | 12,114,165 |   |   | 9,943,120 |    
|                                                        |   |            |   |   |           |    
|Income from operations                                  |   | 9,581,079  |   |   | 4,980,038 |    
|                                                        |   |            |   |   |           |    
|Interest income                                         |   | 14,238     |   |   | 16,672    |    
|Other income                                            |   | 984,851    |   |   | 491,557   |    
|Finance costs                                           |   | (699,646   | ) |   | (681,355  | )  
|                                                        |   |            |   |   |           |    
|Income before income taxes and noncontrolling interests |   | 9,880,522  |   |   | 4,806,912 |    
|Income taxes                                            |   | (1,498,442 | ) |   | (663,991  | )  
|                                                        |   |            |   |   |           |    
|Net income before noncontrolling interests              | $ | 8,382,080  |   | $ | 4,142,921 |    
|                                                        |   |            |   |   |           |    
|As a Percentage of Sales Revenue                        |   |            |   |   |           |    
|Sales revenue                                           |   | 100 %      |   |   | 100.0 %   |    
|Cost of sales                                           |   | 56.82 %    |   |   | 57.23 %   |    
|Gross profit                                            |   | 43.18 %    |   |   | 42.77 %   |    
|                                                        |   |            |   |   |           |    
|Expenses                                                |   |            |   |   |           |    
|Administrative expenses                                 |   | 8.68 %     |   |   | 8.78 %    |    
|Research and development costs                          |   | 2.29 %     |   |   | 3.14 %    |    
|Selling expenses                                        |   | 13.14 %    |   |   | 16.57 %   |    
|Total operating expenses                                |   | 24.11 %    |   |   | 28.49 %   |    
|                                                        |   |            |   |   |           |    
|Income before income taxes and noncontrolling interests |   | 19.66 %    |   |   | 13.78 %   |    
|Income taxes                                            |   | 2.98 %     |   |   | (1.90     | ) %
|                                                        |   |            |   |   |           |    
|Net income before noncontrolling interests              |   | 16.68 %    |   |   | 11.87 %   |    

Comparison of Fiscal Year Ended December 31, 2010 and Fiscal
Year Ended December 31, 2009

Sales Revenue. Our sales revenue is generated from sales
of heat exchange products. Sales revenue increased approximately $15.36 million,
or 44.01%, to approximately $50.25 million in 2010 from approximately $34.89
million in 2009. The increase in sales came primarily from all three of our
product lines  PHEs, PHE units and Air-cooled Heat Exchanger. Continued
government stimulus in energy-saving industries, strong economic growth in China
and our successful market expansion were the primary factors driving the
increased sales revenue. Also, the wide sales network, excellent solutions and
high quality products of the Company led to the significant increase in our
sales revenue. Our sales volume in 2010 amounted to 3,998 units, an increase of
1,603 units, as compared with 2,395 units for 2009. Net sales in 2010 were
$50.25 million, with $14.30 million for PHE units and $27.02 million for PHEs,
while our net sales in 2009 were $34.89 million, with $5.78 million for PHE
units, $21.93 million for PHEs. In particular, the sales revenue from Air-cooled
Heat Exchanger increased by approximately $3.34 million, or 495.69%, to
approximately $4.02 million in 2010 from approximately $0.67 million in 2009.
Our sales from our PHEs increased $5.09 million or 23.23% increase in sales in
2010, compared with last year was mainly attributable to market acceptance of
our excellent total solution and high quality products in the metallurgy,
petrochemical and shipbuilding industries. Our PHE unit sales increased by $8.52
million or 147.23% compared to last year due to rapid urbanization in China.
Increase in sales of Air-cooled Heat Exchanger products compared with last year
was a result of strong market demand in water-deficient area of China.

Cost of Sales. Our cost of sales is primarily comprised
of the costs of our raw materials, labor and factory overhead. Our cost of sales
increased approximately 8.58 million, or 42.98%, to approximately $28.55 million
in 2010 from approximately $19.97 million in 2009. The increase was mainly
attributable to the significant increase in our sales volume and sales revenue
in 2010. The material cost is normally 91.32% of total cost, while factory
overhead cost is about 6.49% and labor cost about 2.19% of total cost. Cost of
sales as a percentage of sales revenue was 56.82% during 2010 as compared to
57.23% during 2009.

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Gross Profit. Our gross profit is equal to the
difference between our sales revenue and our cost of sales. Our gross profit
increased approximately $6.77 million, or 45.38%, to approximately $21.70
million during 2010 from approximately $14.92 million in 2009. Gross profit as a
percentage of sales revenue was 43.18% during 2010 as compared to 42.77% during
2009. Such percentage increase was mainly attributable to our efforts to
optimize our product mix and maximize our profitability. In response to the
market demand and through intensive sales efforts, we significantly increased
sales of high gross margin products to the petrochemical, shipbuilding and heat
and power industry which include air-cooled heat exchangers, plate heat
exchangers and plate heat exchangers unit.

Administrative Expenses. Our administrative expenses
consist of the costs associated with staff and support personnel who manage our
business activities. Our administrative expenses increased approximately $1.29
million, or 42.25%, to approximately $4.36 million during 2010 from
approximately $3.06 million in 2009. As a percentage of sales revenue,
administrative expenses in 2010 decreased to 8.68%, as compared to 8.78% for
2009. The amount increased was mainly attributable to the recruitment of, and
compensation paid to, our expanded management team and the allowance for
doubtful accounts. As a result of the expansion of our management team, the
salary of management team and administration staff increased by approximately
$0.36 million, or 32.14% to approximately $1.48 million in 2010 from
approximately $1.12 million in 2009. Traveling expense increased by
approximately $0.09 million, or 32.07% to approximately $0.39 million in 2010
from approximately $0.29 million in 2009. Allowance for doubtful accounts
increased by approximately $0.47 million, or 191.51%, to approximately $0.71
million in 2010 compared with approximately $0.24 million in 2009.

Research and Development Expenses.Our
research and development expenses consist of the costs associated with R&D
personnel and expense in R&D projects. Our R&D expenses increased
approximately $0.06 million, or 5.08%, to approximately $1.15 million in 2010
from approximately $1.10 million in 2009. The increase was mainly attributable
to our continued efforts to strengthen our R&D function and increased input
in the development of new products.

Selling Expenses. Our selling expenses include sales
commissions, the cost of advertising and promotional materials, salaries and
fringe benefits of sales personnel, after-sale support services and other sales
related costs. Our selling expenses increased approximately $0.82 million, or
14.19%, to approximately $6.60 million during 2010 from approximately $5.78
million in 2009. As a percentage of sales revenue, selling expenses in 2010
decreased to 13.14%, as compared to 16.57% for 2009. The amount increased was
primarily attributable to the significant increase in travel expenses and
transportation costs. Because of our market expansion, our travel expense
increased by approximately $0.45 million, or 13.98%, to approximately $3.67
million in 2010 from approximately $3.22 million in 2009. The salary of sales
personnel increased by approximately $0.15 million, or 11.36%, to approximately
$1.47 million in 2010 from approximately $1.32 million in 2009.

Total Operating Expenses. Our total expenses increased
approximately $2.17 million, or 21.83%, to approximately $12.11 million during
2010 from approximately $9.94 million in 2009. This increase was mainly due to
the increase in our administrative expenses, research and development expenses
and selling expenses. As a percentage of sales revenue, total expenses in 2010
decreased to 24.11%, as compared to 28.49% for 2009. This decrease was primarily
attributable to the significantly increase in our sales revenue.

Income before income taxes and noncontrolling interests. Income
before income taxes increased approximately $5.07 million, or 105.55%, to
approximately $9.88 million in 2010 from approximately $4.81 million in 2009.
Income before income taxes as a percentage of sales revenue increased to 19.66%
in 2010, as compared to 13.78% in 2009 due to the factors described above.

Income Taxes. Our income taxes increased to
approximately $1.50 million in 2010 from approximately $0.66 million during
2009. This increase was mainly due to income before income taxes increased
approximately $5.07 million, or 105.55%, to approximately $9.88 million in 2010
from approximately $4.81 million in 2009 and the income tax rate were same both
2010 and 2009.

Net income before noncontrolling interests. Our net income
increased approximately $4.24 million, or 102.32%, to approximately $8.38
million in 2010 from approximately $4.14 million in 2009 as a result of the
factors described above.

Liquidity and Capital Resources

As of December 31, 2010, we had cash and cash equivalents of
$18.44 million and restricted cash of $1.68 million. The following table
provides detailed information about our net cash flow for all financial
statements periods presented in this report.

Cash Flow(All amounts in thousands of U.S. dollars)

|                                          |   | Fiscal Year Ended December 31, |  
|----------------------------------------- | - | ------------------------------ | -
|                                          |   | 2010                           |  
|Net cash used in operating activities     | $ | (2,356                         | )
|Net cash used in investing activities     |   | (1,022                         | )
|Net cash provided by financing activities |   | 16,046                         |  
|Net cash inflows (outflows)               |   | 13,058                         |  

Operating Activities

Net cash used in operating activities was $2.36 million in
2010, as compared to $6.25 million net cash used in operating activities in
2009. Cash flow used in operating activities decreased $3.89 million in 2010
from 2009. The decrease in cash used in operating activities in 2010 was mainly due to
increased net income, despite increases in working capital levels (specifically,
accounts receivables and inventory) driven mainly by increased sales.

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Investing Activities

Net cash used in investing activities was $1.02 million in
2010, as compared to $1.25 million net cash used in investing activities in
2009. The change was mainly attributable to $1.03 million increase in capital
investment from 2009 to 2010.

Financing Activities

Net cash provided by financing activities was $16.05 million in
2010, as compared to $0.34 million net cash provided by financing activities in
2009. The cash inflow was mainly due to net increase of short-term loans of
approximately $2.66 million and the issuance of common stock of approximately
$13.39 million (net of issuance costs) in December 2010.

As of December 31, 2010, the amount, maturity date and term of
each of our bank loans are as follows:

(dollars in millions)

|Bank                                                         |   | Amount    |  |  | Maturity Date    |  |  | Duration    | 
|------------------------------------------------------------ | - | --------- |  |  | ---------------- |  |  | ----------- | 
|Bank of Communications, Changchun Branch                     | $ | 3,033,889 |  |  | May 20, 2011     |  |  | 1 year      | 
|Agricultural Bank of China, Siping Branch                    | $ | 3,033,889 |  |  | December 8, 2011 |  |  | 1 year      | 
|Industrial and Commercial Bank of China,
      Siping Branch | $ | 3,033,889 |  |  | January 28, 2011 |  |  | Half a year | 
|Industrial and Commercial Bank of China, Siping Branch       | $ | 1,516,944 |  |  | April 16, 2011   |  |  | Half a year | 

We believe that we maintain good relationships with the various
banks we deal with and our current available working capital, after receiving
the aggregate proceeds from our planned capital raising activities and bank
loans referenced above, should be adequate to sustain our operations at our
current levels through at least the next twelve months.

Obligations Under Material Contracts

We are party to the following loan agreements:

- Commission Loan Agreement, dated July 24, 2008, among Siping Juyuan,
  Siping City Fu Guo Investment and Development Co., Ltd. and Siping City Credit
  Association Union, pursuant to which Siping City Credit Association Union,
  entrusted by Siping City Fu Guo Investment and Development Co., Ltd., provided
  a loan with a total amount of RMB 28,000,000 (approximately $4,102,000). The
  agreement is for a term of three years, maturing on June 26, 2011. The first
  interest rate is 6% above the lending rate over the same period published by
  the PRC; the annual interest rate is 8.0136%. The interest rate is adjusted
  each June 21; the adjusted interest rate is 6% above the lending rate of the
  same category over the same period published by the PRC. We have not yet
  repaid the loan balance of RMB 11,000,000 (approximately $1,668,639).
- Loan Agreement, dated May 31, 2010, between Siping Juyuan and Bank of
  Communications, Changchun Branch, pursuant to which Changchun Branch of Bank
  of Communications provided a loan with a total amount of RMB 20,000,000
  (approximately $3,033,889). The agreement is for a term from May 31, 2010 to
  May 20, 2011. The interest rate is based on the benchmark interest rate
  published by the PRC.
- Loan Agreement, dated December 9, 2010, between Siping Juyuan and Siping
  Branch of Agriculture Bank of China, pursuant to which Siping Branch of
  Agriculture Bank of China provided a loan with a total amount of RMB
  20,000,000 (approximately $3,033,889). The agreement is for a term from
  December 10, 2010 to December 8, 2011. The annual interest rate is 5.56%.
- Loan Agreement, dated July 29, 2010, between Siping Juyuan and Siping
  Branch of Industrial and Commercial Bank of China, pursuant to which Siping
  Branch of Industrial and Commercial Bank of China provided a loan with a total
  amount of RMB 20,000,000 (approximately $3,033,889). The agreement is for a
  term from July 30, 2010 to January 28, 2011. The interest rate is based on the
  benchmark interest rate published by the PRC.
- Loan Agreement, dated October 19, 2010, between Siping Juyuan and Siping
  Branch of Industrial and Commercial Bank of China, pursuant to which Siping
  Branch of Industrial and Commercial Bank of China provided a loan with a total
  amount of RMB 10,000,000 (approximately $1,516,944). The agreement is for a
  term from October 20, 2010 to April 16, 2011. The interest rate is based on
  the benchmark interest rate published by the PRC.35

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Critical Accounting Policies

Basis of presentation and consolidation

After the consummation of the reorganization detailed above, Mr. Zhao and the other original stockholders of Siping Juyuan maintain control over Siping Juyuan by virtue of the option agreements.  Accordingly, accounting for recapitalization is
adopted for the preparation of these consolidated financial statements.  These financial statements, issued under the name of the Company, represent the continuation of the financial statements of Siping Juyuan.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The consolidated financial statements include the financial statements of the Company and its subsidiaries.  All significant inter-company balances and transactions have been eliminated on consolidation.

Use of estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the reporting periods.  These accounts and estimates include, but are not limited to, the valuation of trade receivables, other receivables, inventories and deferred income
taxes and the estimation on useful lives and residual values of property, plant and equipment.  Actual results could differ from those estimates.

Noncontrolling interest

Noncontrolling interest on the consolidated balance sheets is resulted from the consolidation of 75% and 99.5% owned subsidiaries, Beijing Juyuan and Tianjin Juyuan, respectively.

Noncontrolling interest on the consolidated statements of income and comprehensive income represents the minority stockholders’ proportionate share of the net losses of Beijing Juyuan and Tianjin Juyuan.

Concentration of credit risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other receivables.  As of December 31, 2010 and 2009,
substantially all of the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which management believes are of high credit quality.  With respect to trade receivables, the
Company extends credit based on an evaluation of the customer’s financial condition.  The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade and other receivables.

During the years ended December 31, 2010 and 2009, the Company did not have any customers which contributed 10% or more to the Company’s sales revenue.

As of December 31, 2010 and 2009, the Company did not have any balance of gross trade receivable due from individual customer that represented 10% or more of the Company’s gross trade receivables.

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less.  As of December 31, 2010 and 2009, almost all the cash and cash equivalents were denominated in RMB
and were placed with banks in the PRC.  They are not freely convertible into foreign currencies and the remittance of these funds out of the PRC is subject to exchange control restrictions imposed by the PRC government.  The remaining insignificant
balance of cash and cash equivalents were denominated in United States dollars (“USD”).

Allowance for doubtful debts

The Company establishes an allowance for doubtful debts based on management’s assessment of the collectibility of trade receivables and other receivables.  A considerable amount of judgment is required in assessing the amount of the allowance
and the Company considers the historical level of credit losses and applies percentages to aged receivable categories.  The Company makes judgments about the creditworthiness of each debtor based on ongoing credit evaluations, and monitors current
economic trends that might impact the level of credit losses in the future.  If the financial condition of the debtors were to deteriorate, resulting in their inability to make payments, a larger allowance may be required.

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Bad debts are written off when identified. The Company extends
unsecured credit to customers ranging from three to six months in the normal
course of business. The Company does not accrue interest on trade receivables.

Historically, losses from uncollectible accounts have not
significantly deviated from the general allowance estimated by the management
and no significant additional bad debts have been written off directly to the
profit and loss. This general provisioning policy has not changed in the past
since establishment and the management considers that the aforementioned general
provisioning policy is adequate and not too excessive and does not expect to
change this established policy in the near future.

Retention receivable

Retention receivable is the amount withheld by a customer until
the warranty period is over. Retention receivables which were expected to be
collected within one year of $3,737,059 and $1,232,917 were included in the
balance of trade receivable as of December 31, 2010 and 2009, respectively.
Retention receivables which were expected to be collected after one year of
$1,409,057 and $795,144 were presented separately as non-current assets.

Inventories

Inventories are stated at the lower of cost or market value.
Cost is determined on a weighted average basis and includes all expenditures
incurred in bringing the goods to the point of sale and putting them in a
saleable condition. In assessing the ultimate realization of inventories, the
management makes judgments as to future demand requirements compared to current
or committed inventory levels. The Companys reserve requirements generally
increase with its projected demand requirements; decrease due to market
conditions and product life cycle changes. The Company estimates the demand
requirements based on market conditions, forecasts prepared by its customers,
sales contracts and orders in hand.

Property, plant and equipment

Property, plant and equipment are stated at cost less
accumulated depreciation. Cost represents the purchase price of the asset and
other costs incurred to bring the asset into its existing use.

Depreciation is provided on the straight-line basis (after
taking into account the respective estimated residual values) over the estimated
useful lives of property, plant and equipment. The principal useful lives and
residual value are as follows :-

Estimated useful lives
    
    Residual valueBuildings
    20 years
    
    5%Plant and machinery
    6 years
    
    5%Office equipment
    2 - 5 years
    
    Nil - 5%Motor vehicles
    3 - 5 years
    
    5%


Maintenance or repairs are charged to expense as incurred. Upon
sale or disposition, the applicable amounts of asset cost and accumulated
depreciation are removed from the accounts and the net amount less proceeds from
disposal is charged or credited to income.

Construction in progress mainly represents expenditures in
respect of the Companys corporate campus and factories, including offices,
factories and research center, under construction. All direct costs relating to
the acquisition or construction of the Companys corporate campus and factories
are capitalized as construction in progress. No depreciation is provided in
respect of construction in progress.

Land use rights

Land use rights are stated at cost less accumulated
amortization. Amortization is provided using the straight-line method over the
terms of the lease of 50 years obtained from the relevant PRC land authority.

Impairment of long-lived assets

Long-lived assets are tested for impairment in accordance with
ASC 360-10-45 Impairment or Disposal of Long-Lived Assets. The Company
periodically evaluates potential impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be
recoverable. The Company recognizes impairment of long-lived assets in the event
that the net book values of such assets exceed the future undiscounted cash
flows attributable to such assets. During the reporting periods, the Company did
not identify any indicators that would require testing for impairment.

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Government grants

The government grant is recognized in the consolidated statements of income and comprehensive income when the relevant performance criteria are met.  Grants applicable to purchase of property, plant and equipment and/or encourage research and
development activities are credited to deferred income upon receipt and are amortized over the life of depreciable assets.

During the year ended December 31, 2010, the Company recorded government grant income of $336,908.  The grants were received to reward the Company’s successful listing in overseas market ($295,068), to subsidize the expenses incurred
by the Company in prior years for constructing its new plant and facilities ($34,463) and to reward the Company’s contributions to the economy of Siping City ($7,377).

During the year ended December 31, 2009, the Company recorded government grant income of $116,944, which was received to subsidize the expenses incurred by the Company in prior years for constructing its new plant and facilities.

Revenue recognition

Revenue from sales of the Company’s products is recognized when products are delivered and customer acceptance is made, the sales price is fixed or determinable, no other significant obligations of the Company exist and collection is
reasonably assured.

There were no sales returns and allowances for the years ended December 31, 2010 and 2009.  The Company does not provide unconditional right of return, prices protection or any other concessions to its customers.  Generally, the Company provides
free after-sale service for a period ranging from half year to 1 year.  After-sale expense was $15,369 and $16,577 for the years ended December 31, 2010 and 2009 respectively.

Cost of sales

Cost of sales consists primarily of materials costs, freight charges, purchasing and receiving costs, inspection costs, wages, employee compensation, depreciation and related costs, which are directly attributable to the production of products.
Write-down of inventories to lower of cost or market is also recorded in cost of sales if any.

Administrative expenses

Administrative expenses consist primarily of rent paid, office expenses, entertainment, traveling expenses, staff welfare, consumables, labor protection and salaries and wages which are incurred at the administrative level.

Selling expenses

Selling expenses consist primarily of advertising, salaries and transportation costs incurred during the selling activities.  Advertising, transportation, research and development expenses Advertising, transportation, research and development
expenses are charged to expense as incurred.

Advertising expenses amounting to $2,390 and $877 for the years ended December 31, 2010 and 2009 respectively are included in selling expenses.

Transportation expenses amounting to $873,701 and $808,112 for the years ended December 31, 2010 and 2009 respectively are included in selling expenses.

Income taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”.  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards 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.

Comprehensive income

The Company has adopted ASC 220, “Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances.  Components of comprehensive income include net income and
foreign currency translation adjustments.  As of December 31, 2010 and 2009, the only component of accumulated other comprehensive income was foreign currency translation adjustments.

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Foreign currency translation

The functional currencies of the Company and its subsidiaries include USD and RMB.  The Company and its subsidiaries maintain their financial statements in their respective functional currency.  Monetary assets and liabilities denominated in
currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date.  Transactions denominated in currencies other than the functional currency are translated into the
functional currency at the exchange rates prevailing at the dates of the transactions.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income or loss for the respective periods.

For financial reporting purposes, the financial statements of the subsidiaries that are prepared using RMB have been translated into USD.  Assets and liabilities are translated at the exchange rates at the balance sheet date and revenue and expenses
are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates.  Any translation adjustments resulting are not included in determining net income or loss but are included in foreign currency
translation adjustments to accumulated other comprehensive income, a component of stockholders’ equity.  The exchange rates in effect as of December 31, 2010 and 2009 were RMB1 for $0.1517 and $0.1463 respectively. The average exchange
rates for the years ended December 31, 2010 and 2009 were RMB1 for $0.1475 and $0.1462 respectively. There was no significant fluctuation in the exchange rates for conversion of RMB to US$ after the balance sheet date.

Fair value of financial instruments

ASC 825 requires the disclosure of the estimated fair value of financial instruments including those financial instruments for which fair value option was not elected.

As of December 31, 2010, the carrying amounts of the Company’s financial assets and liabilities approximated their fair values due to short maturities or the applicable interest rates approximate the current market rates. As of December 31,
2009, the fair value of the Company’s long-term loan was $3,442,357 (carrying amount : $3,363,950). The fair value was estimated using discounted cash flow analysis, based on the Company’s incremental borrowing rates for similar
types of borrowing arrangements.

Stock-based compensation

The Company adopted the provisions of ASC 718 which requires the use of the fair value method of accounting for share-based compensation.  Under the fair value based method, compensation cost related to employee stock options or similar equity
instruments which are equity-classified awards, is measured at the grant date based on the value of the award and is recognized over the requisite service period, which is usually the vesting period.  ASC 718 also requires measurement of cost of a
liability-classified award based on its current fair value.

Basic and diluted earnings per share

The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”.  Basic earnings per share is computed by dividing net income attributable to the Company’s common stockholders by the weighted average number
of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to the Company’s common stockholders by the sum of the weighted average number of common stock outstanding and dilutive
potential common stock during the period.

Recently issued accounting pronouncements

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2009-13 “Revenue Recognition (Topic 605) - Multiple-Deliverable Revenue Arrangements”. ASU 2009-13
requires companies to allocate revenue in multiple-element arrangements based on an element’s estimated selling price if vendor-specific or other third party evidence of value is not available. ASU 2009-13 is to be applied on a prospective
basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with earlier application permitted. The Company is currently evaluating the impact of the adoption of ASU 2009-13 on its
financial statements.

In January 2010, the FASB issued ASU 2010-06 “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements” that expands the required disclosures about fair value measurements. This guidance
provides for new disclosures requiring the Company to (i) disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers and (ii) present separately
information about purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements. This guidance also provides clarification of existing disclosures requiring the Company to (i) determine each class of assets and
liabilities based on the nature and risks of the investments rather than by major security type and (ii) for each class of assets and liabilities, disclose the valuation techniques and inputs used to measure fair value for both Level 2 and Level 3
fair value measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3
fair value measurements. Those
disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact of the adoption of the disclosures about
the roll forward of activity in Level 3 fair value measurements on its financial statements.

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In April, 2010, the FASB issued ASU 2010-13 “Compensation-Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades -
a consensus of the FASB Emerging Issues Task Force”. ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial
portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies
as equity. The amendments in this update do not expand the recurring disclosures required by Topic 718. Disclosures currently required under Topic 718 are applicable to a share-based payment award, including the nature and the term of share-based
payment arrangements. The amendments in this update are effective for fiscal year, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company is currently evaluating the impact of the adoption of ASU 2010-13
on its financial statements.

In July 2010, the FASB issued ASU 2010-20 “Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses”. The objective of ASU 2010-20 is to provide financial statement users
with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. Under ASU 2010-20, an entity is required to provide disclosures so that financial statement users can evaluate the
nature of the credit risk inherent in the entity’s portfolio of financing receivables, how that risk is analyzed and assessed to arrive at the allowance for credit losses, and the changes and reasons for those changes in the allowance for
credit losses. ASU 2010-20 is applicable to all entities, both public and non-public and is effective for interim and annual reporting periods ending on or after December 15, 2010. Comparative disclosure for earlier reporting periods that ended
before initial adoption is encouraged but not required. However, comparative disclosures are required to be disclosed for those reporting periods ending after initial adoption. The Company is currently evaluating the impact of the adoption of ASU
2010-20 on its financial statements.

In October 2010, the FASB issued ASU 2010-26 “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts”. The ASU is effective for interim and annual reporting periods beginning after December 15, 2011, with earlier
adoption permitted. The provisions of the new standard can be applied either prospectively or retrospectively. The standard amends ASC Topic 944 “Financial Services – Insurance” and modifies the definition of the types of costs
incurred by insurance entities that can be capitalized in the acquisition of new and renewal contracts. The Company is currently evaluating the impact of the adoption of ASU 2010-26 on its financial statements.

Inflation

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

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Seasonality

Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introductions.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA The financial statements required by this item begin on page F-1 hereof.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Change in Accountants

On July 7, 2009 we reported a change of independent auditors. On June 30, 2009, concurrent with the share exchange transaction, our board of directors recommended and approved the dismissal of SW Hatfield CPA, or SW Hatfield, as our independent
auditor, effective upon the filing of the consummation of the share exchange transaction.

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SW Hatfield’s reports on our financial statements as of and for the fiscal years ended December 31, 2008 and December 31, 2007 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope, or accounting principles, except that its report for the fiscal year ended December 31, 2008 contained a going concern qualification as to the ability of us to continue.

During the fiscal years ended 2008 and 2007 and during the subsequent interim period prior to SW Hatfield’s dismissal, there were (1) no disagreements with SW Hatfield on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of SW Hatfield, would have caused SW Hatfield to make reference to the subject matter of the disagreements in connection with its reports, and (2)
no events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.

Concurrent with the decision to dismiss SW Hatfield as our independent auditor, our board of directors elected to continue the existing relationship of our new subsidiary Siping Juyuan with PKF Hong Kong, Certified Public Accountants
(“PKF”) and appointed PKF as our independent registered public accounting firm.

During the fiscal years ended 2008 and 2007 and through to the date of appointment of PKF, neither us nor anyone acting on our behalf consulted PKF with respect to (i) the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us or oral advice was provided that PKF concluded was an important factor considered by us in
reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304(a)(1)(iv) and (v), respectively, of Regulation S-K.

We furnished SW Hatfield with a copy of this disclosure on June 25, 2009, providing SW Hatfield with the opportunity to furnish us with a letter addressed to the SEC stating whether it agrees with the statements made by us herein in response to Item
304(a) of Regulation S-K and, if not, stating the respect in which it does not agree. A letter from SW Hatfield, dated June 30, 2009 is filed as Exhibit 16.1 to this report.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, Messrs. Guohong Zhao and Jianjun He, respectively, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure
controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports,
such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal
executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management is not aware of any material weakness in our internal control over financial reporting which causes them to believe
that any material inaccuracies or errors existed in our financial statements as of December 31, 2010. The reportable conditions and other areas of our internal control over financial reporting identified by us as needing improvement have not
resulted in a material restatement of our financial statements. Nor are we aware of any instance where such reportable conditions or other identified areas of weakness have resulted in a material misstatement or omission in any report we have filed
with or submitted to the Commission.

The Company has engagedNew Century Concepts Consultants Limited (“New Century”) as its internal control consultant. New Century started evaluation of the effectiveness of our disclosure controls and procedures on October 27,
2010. It will assist the Company to address issues of timeliness and completeness in financial reporting when we are preparing SEC filings. New Century will issue an evaluation report with suggested remedial measures. We will implement such measures
to ensure the importance of internal controls and compliance with established policies and procedures are fully understood by all the relevant employees. We will provide training to our employees to ensure these procedures are properly performed. We
will also evaluate hiring additional personnel involved in the preparation of the financial statements and disclosures with the requisite expertise in generally accepted accounting principals to ensure the proper application thereof. Management
believes the actions described above will strengthen our internal control over financial reporting.

Internal Controls Over Financial Reporting

Management’s Annual Report on Internal Control over Financial Reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting refers to the process designed by, or under the supervision of, our chief
executive officer and chief financial
officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. GAAP, and includes those policies and procedures that:

41

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- 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 U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization 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.

During our assessment of the effectiveness of internal control over financial reporting as of December 31, 2010, our management identified material weakness related to the following:

1. Accounting and Finance Personnel Weaknesses –  US GAAP expertise. Our current accounting staff is relatively new and inexperienced, and needs substantial training to meet the higher demands of being a
U.S. public company. The accounting skills and understanding necessary to fulfill the requirements of U.S. GAAP-based reporting, including the skills of subsidiary financial statements consolidation, are inadequate and were inadequately supervised.
The lack of sufficient and adequately trained accounting and finance personnel resulted in an ineffective segregation of duties relative to key financial reporting functions.

2. Lack of Internal Audit Function  – We lack qualified resources to perform the internal audit functions properly. In addition, the scope and effectiveness of the internal audit function are yet to be developed.

3. Lack of Internal Audit System – We lack an internal audit department, which renders ineffective our ability to prevent and detect control lapses and errors in the accounting of
certain key areas like revenue recognition, purchase approvals, inter-company transactions, cash receipt and cash disbursement authorizations, inventory safeguard and proper accumulation for cost of products, in accordance with our appropriate
costing method.

The Company’s management has identified the steps necessary to address the material weaknesses described above and in 2010, we have continued to implement these remedial procedures.

1. Hire, as needed, additional accounting and operations personnel and outside contractors with technical accounting expertise and reorganized the accounting and finance department to ensure that accounting personnel with adequate experience, skills
and knowledge relating to complex, non-routine transactions are directly involved in the review and accounting evaluation of our complex, non-routine transactions.

2. Involve, as needed, both internal accounting and operations personnel and outside contractors with technical accounting expertise early in the evaluation of our complex, non-routine transaction to obtain additional guidance as to the application
of generally accepted accounting principles to such a proposed transaction.

3. Require that our senior accounting personnel and the principal accounting officer review our complex, non-routine transactions to evaluate and approve the accounting treatment for such transactions.

4. Evaluate our internal audit function in relation to our financial resources and requirements.

Our management is not aware that the material weakness in our internal control over financial reporting causes them to believe that any material inaccuracies or errors existed in our financial statements as of December 31, 2010. The reportable
conditions and other areas of our internal control over financial reporting identified by us as needing improvement have not resulted in a material restatement of our financial statements. Nor are we aware of any instance where such reportable
conditions or other identified areas of weakness have resulted in a material misstatement or omission in any report we have filed with or submitted to the Commission.

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 and procedures may deteriorate.

Management remains committed to improving its internal controls and will continue to work to put effective controls in place. The Company is actively recruiting staff with good knowledge of U.S. GAAP to assist in the Company’s financial
reporting.

Because the Company is a smaller reporting company, this annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to
attestation by our registered public accounting firm.

42

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Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over
financial reporting during the fourth quarter of fiscal year 2010 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

Item 9B. Other Information. None.

PART III

Item 10. Directors, Executive Officers, and Corporate
Governance

Directors and Executive Officers

The following table sets forth the name and position of each of
our current executive officers and directors.

|Name              |  | Age |  | Position                                              
|----------------- |  | --- |  | ------------------------------------------------------
|Guohong Zhao      |  | 50  |  | Chairman, President and CEO                           
|Jianjun He        |  | 38  |  | Chief Financial Officer, Treasurer and
      Secretary
|Yue Cui           |  | 50  |  | Vice President of Production                          
|Fucai Zhan        |  | 40  |  | Vice President of R&D                                 
|Wenquan Tao       |  | 71  |  | Director                                              
|William P. Haus   |  | 47  |  | Director                                              
|To Tsang          |  | 35  |  | Director                                              
|Gerard Pascale(1) |  | 41  |  | Director                                              

|(1) | Former President, Chief Financial Officer and Secretary
      prior to June 30, 2009 and current director until the 10thday
      following the mailing by us of the Information Statement to our
      stockholders.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Guohong Zhao. Mr. Zhao became our Chairman and
CEO on June 30, 2009, the day that we consummated our reverse acquisition of
Megaway. As the founder of Siping Juyuan, Mr. Zhao has served as the Chairman
and CEO of Siping Juyuan for over 10 years since 1998. From 1996 to 1997, he was
the Chairman and CEO of Siping City Traffic Safety Equipment Co., Ltd., a
manufacturer of traffic safety equipment. Before 1995, he worked in senior
positions in China Agriculture Bank, Siping Branch. Mr. Zhao graduated from
Jilin Province Radio and Television University in 1986, holding a college degree
in Economics. Mr. Zhao has over 10 years experience in the heat exchanger
industry and over 20 years management experience.

Jianjun He.Mr. He became our Chief Financial
Officer on June 30, 2009, the day that we consummated our reverse acquisition of
Megaway. Mr. He has served as the CFO of Siping Juyuan since 2007. From 1999 to
2007, he worked as senior financial officer in Jilin Grain Group, a state-owned
enterprise engaged in the grain processing and trading business. From 1995 to
1999, he worked as senior financial officer in Jilin Chia Tai Enterprise Co.
Ltd, an enterprise engaged in the animal feed business, which is a joint venture
of Chia Tai Group, the largest business group of Thailand. Mr. He graduated from
Changchun Taxation College in 1995 with major in Auditing and obtained master
degree in Jilin University in 2005. He has more than 10 years experience in
accounting and finance and is an associate member of the Chinese Institute of
Certified Public Accounts.

Yue Cui. Mr. Cui became our Vice President of Production
on June 30, 2009, the day that we consummated our reverse acquisition of
Megaway. Mr. Cui has served as Vice President of Production of Siping Juyuan
since 2006. From 2000 to 2006, he was the operation manager of Siping Juyuan.
From 1979 to 2000, he was the production manager of Siping Tool Factory, a tool
manufacturer. With 20 years experience in manufacturing industry, he has
significantly improved the production management of the Company.

Fucai Zhan. Mr. Zhan became our Vice President of
Research and Development on June 30, 2009, the day that we consummated our
reverse acquisition of Megaway. Mr. Zhan joined Siping Junyuan in 1999 as Vice
President of Sales and was appointed as Vice President of Research and
Development in 2009. Before joining Siping Juyuan, he worked as production
manager, Research and Development manager and assistant to GM in Dong Feng
Siping Auto Parts Co., Ltd. Mr. Zhan possesses over 15 years comprehensive
experience in production, research and development, and sales and is well
positioned to lead our research and development function to be highly market
oriented. Mr. Zhan graduated from Jilin University of Technology in 1996.

Wenquan Tao.Mr. Wenquan Tao has been working as a
professor at School of Energy & Power Engineering of Xian Jiaotong
University since 1986. Mr. Tao is currently an academician of the Chinese
Academy of Science, a member of the Advisory Board of Numerical Heat Transfer
and a member of Editorial Board of Progress in Computational Fluid Dynamics. In
addition, he is an associate editor of ASME Journal of Heat Transfer, associate
editor of International Journal of Heat & Mass Transfer, and an associate
editor of International
Communications in Heat & Mass Transfer. In 2003, Mr. Tao was honored by the Ministry of Education of China as National Distinguished Professor. Mr. Tao graduated from Xi’an Jiaotong University with a M.S. and a B.S. in Power Machinery
Engineering.

43

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William P. Haus, CFA.Mr. William Haus has extensive experience in business and finance for public companies as well as China-based companies. Mr. Haus is currently General Partner of Haus Capital Fund, a small investment partnership. From
March to July 2010, Mr. Haus was a Senior Partner with Halter Financial Group in its Shanghai, China office. From August 2008 to February 2010, Mr. Haus was Chief Executive Officer and director of CS China Acquisition Corporation, a Special Purpose
Acquisition Corporation (SPAC) created to effect a business combination with a China-based private company which it did successfully on February 2, 2010. From September 2005 to May 2008, Mr. Haus was an Analyst for The Pinnacle Fund & the
Pinnacle China Fund, both of which are hedge funds focused on investment opportunities in the United States and China. From March 2000 to September 2005, Mr. Haus was an Equity Research Analyst covering both the Healthcare Information Technology and
Pharmaceutical Outsourcing industries for two securities brokerage firms. Mr. Haus graduated from the State University of New York College at Fredonia with a B.S. in Business Administration and a B.A. in Economics and received a Master of Business
Administration in Finance from Boston University. Mr. Haus is a Chartered Financial Analyst (CFA) and member of the CFA Institute.

To Tsang.Mr. To Tsang has extensive knowledge with overseas capital markets and has advised various PRC companies on their pre-IPO restructurings, pre-IPO financing and securities offerings on the overseas capital markets and has advised on
numerous reverse acquisitions of overseas public companies by PRC companies. Since May 2008, he has been a partner at King & Wood, practicing mergers and acquisitions, corporate restructurings, securities offerings, and other corporate advisory
matters. From April 2006 to April 2008, Mr. Tsang worked as a Hong Kong solicitor with DLA Piper. From July 1997 to March 2006, Mr. Tsang worked as a Hong Kong trainee and paralegal for Michael Cheuk, Wong & Kee. Mr. Tsang holds an LL.M. from
the University of London, a PCLL from the City University of Hong Kong, and an LL.B. from Xiamen University. He is admitted as a Solicitor to the High Court of Hong Kong as well as a PRC qualified lawyer.

Gerard Pascale.  Mr. Pascale became our Chairman, President, Chief Financial Officer and Secretary on February 12, 2009. On June 30, 2009, Mr. Pascale resigned from all offices he held with us.  On the same date, Mr. Pascale submitted his
resignation as a member of our board of directors, which will become effective on the 10th day following the mailing of the Information Statement to our stockholders, which Information Statement was mailed on June 30, 2009.  Mr. Pascal is
also the President and Founder of SC Financial, LLC, which specializes in advising both US and international clients on valuation, financial modeling and the responsibilities of publicly traded US companies.  For the previous three years, Mr.
Pascale was responsible for managing the affairs of clients of Heritage Management Consultants.  In this role he specialized in providing finance and SEC support throughout the entire process of listing in the US.  This role included developing
business plans, reviewing financial statement preparation, preparing financial projections and budgets and preparing and making presentations to US investors.  Mr. Pascale has an MBA from the University of Chicago.  Mr. Pascale has been a Certified
Public Accountant since 1993.

Except as noted above, there are no other agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director is acting on behalf of no will any of them act at the
direction of any other person.

Directors are elected until their successors are duly elected and qualified.

Board Composition and Committees

The Board of Directors is currently composed of five members: Guohong Zhao, Fucai Zhan, William Haus, Wenquan Tao and To Tsang. We currently have standing audit, corporate governance and nominating, and compensation committees.

Our audit committee comprises William Haus, Wenquan Tao and To Tsang. William Haus serves as the chairman of the audit committee. The audit committee is primarily responsible for reviewing the services performed by our independent auditors,
evaluating our accounting policies and our system of internal controls. Mr. Haus serves as our audit committee financial expert as that term is defined by the applicable SEC rules.

The corporate governance and nominating committee comprises William Haus, Wenquan Tao and To Tsang with Mr. Tao as the chairman. The committee is primarily responsible for nominating directors and setting policies and procedures for the nomination
of directors. The committee is also responsible for overseeing the creation and implementation of our corporate governance policies and procedures.

The compensation committee comprises William Haus, Wenquan Tao and To Tsang with Mr. Tsang as the chairman. The compensation committee is primarily responsible for reviewing and approving our compensation and benefit policies, including compensation
of executive officers.

Independent Directors

Our Board is currently composed of five members, three of which, William Haus, Wenquan Tao and To Tsang, are “independent” as that term is defined by Rule 4200(a)(15) of the NASDAQ listing standards.

44

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Policy Regarding Board Attendance

Our directors are expected to attend Board meetings as frequently as necessary to properly discharge their responsibilities and to spend the time needed to prepare for each such meeting. Our directors are expected to attend annual meetings of
stockholders, but we do not have a formal policy requiring them to do so.

Family Relationships

There are no family relationships among our directors or officers.

Involvement in Certain Legal Proceedings

None of our directors or executive officers has, during the past ten years:

- been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
- had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or
within two years prior to that time;
- been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting,
his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
- been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or vacated;
- been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants),
relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction,
order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;
or
- been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as
defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Section 16(A) Beneficial Ownership Reporting Compliance

Under U.S. securities laws, directors, certain executive officers and persons holding more than 10% of our common stock must report their initial ownership of the common stock, and any changes in that ownership, to the SEC. The SEC has designated
specific due dates for these reports. Based solely on our review of copies of such reports filed with the SEC by and written representations of our directors and executive offers, we believe that our directors and executive offers filed the required
reports on time in the 2010 fiscal year.

Code of Ethics

On September 25, 2009, our board of directors adopted a new code of ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. The new
code replaces our prior code of ethics that applied only to our principal executive officer, principal financial officer, principal accounting officer or controller and any person who performed similar functions, and addresses, among other things,
honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of
the code. A copy of the Code of Ethics can be found as Exhibit 14.1 in our current report on Form 8-K filed on September 28, 2009.

45

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Item 11. Executive Compensation

Summary Compensation Table Fiscal Years Ended December 31,
2010 and 2009

The following table sets forth information concerning all cash
and non-cash compensation awarded to, earned by or paid to the named persons for
services rendered in all capacities during the noted periods. No executive
officer received total annual salary and bonus compensation in excess of
$100,000.

|                             |      |        |       |        |        | Non-         | Non-          |              |       
|---------------------------- | ---- | ------ | ----- | ------ | ------ | ------------ | ------------- | ------------ | ------
|                             |      |        |       |        |        | Equity       | qualified     |              |       
|                             |      |        |       |        |        | Incentive    | Plan Deferred |              |       
|**Name and**                 |      |        |       | Stock  | Option | Compensation | Compensation  | All Other    |       
|**Principal**                |      | Salary | Bonus | Awards | Awards | Earnings     | Earnings      | Compensation | Total 
|**Position**                 | Year | ($)    | ($)   | ($)    | ($)    | ($)          | ($)           | ($)          | ($)   
|Guohong Zhao,                | 2010 | 16,819 | 0     | 0      | 0      | 0            | 0             | 0            | 16,819
|CEO and President (1)        | 2009 | 16,724 | 0     | 0      | 0      | 0            | 0             | 0            | 16,724
|Gerard Pascale,              | 2010 | 0      | 0     | 0      | 0      | 0            | 0             | 0            | 0     
|former Chairman and CEO (2)  | 2009 | 0      | 0     | 0      | 0      | 0            | 0             | 0            | 0     
|Timothy P. Halter,           | 2010 | 0      | 0     | 0      | 0      | 0            | 0             | 0            | 0     
|former President and CEO (3) | 2009 | 0      | 0     | 0      | 0      | 0            | 0             | 0            | 0     

|(1) | On June 30, 2009, we acquired Megaway in a reverse
      acquisition transaction that was structured as a share exchange and in
      connection with that transaction, Mr. Zhao became our Chief Executive
      Officer, President and director. Prior to the effective date of the
      reverse acquisition, Mr. Zhao served at Megaways wholly owned subsidiary
      Siping Juyuan as its chief executive officer. The annual, long term and
      other compensation shown in this table include the amount Mr. Zhao
      received from Siping Juyuan prior to the consummation of the reverse
      acquisition.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | Gerard Pascale resigned from all offices he held with us
      and his position as our director upon the closing of the reverse
      acquisition of Megaway on June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | Mr. Timothy P. Halter served as our President and sole
      director from our formation on August 7, 2006 until his resignation and
      appointment of Mr. Pascale on February 12, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                               

Employment Agreements

We do not have any employment agreement with any of our
management.

We have not provide retirement benefits (other than a state
pension scheme in which all of our employees in China participate) or severance
or change of control benefits to our named executive officer.

Outstanding Equity Awards at Fiscal Year End

None of our executive officers received any equity awards,
including, options, restricted stock or other equity incentives during the
fiscal year ended December 31, 2010.

Payment of Post-Termination Compensation

The Company does not have change-in-control agreements with any
of its executive officers, and the Company is not obligated to pay severance or
other enhanced benefits to executive officers upon termination of their
employment.

Director Compensation

The following table sets forth all compensation awarded to,
earned by or paid to the directors in 2010:

Name
    Fees
      Earned or Paid in Cash
    Stock Awards
    Option Awards
    TotalGuohong Zhao
    N/A
    N/A
    N/A
    N/AFucai Zhan
    N/A
    N/A
    N/A
    N/AWenquan Tao
    $6,000
    N/A
    N/A
    $6,000To Tsang
    $6,000
    N/A
    N/A
    $6,000William P. Haus
    $9,000
    N/A
    N/A
    $9,000


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William Haus, Wenquan Tao and To Tsang were appointed directors
effective as of September 25, 2009. On the same day, the Company entered into
separate independent director contracts and indemnification agreements with each
of them. Under the terms of the independent directors contracts, the Company
agreed to pay Mr. Tao an annual fee of $24,000, Mr. Tsang an annual fee of
$24,000 and Mr. Haus an annual fee of $36,000, as compensation for the services
to be provided by them as independent directors. Under the terms of the
indemnification agreement, we agreed to indemnify the independent director
against expenses, judgments, fines, penalties or other amounts actually and
reasonably incurred by the independent director in connection with any
proceeding if the independent director acted in good faith and in our best
interests. It is our practice to reimburse our directors for reasonable travel
expenses related to attendance at board of directors and committee meetings.

Mr. Guohong Zhao and Mr. Fucai Zhan are paid in their capacity
as executive officers of the Company and they do not receive any additional
compensation for their service as directors.

Limitation of Liability and Indemnification of Officers and
Directors

Our bylaws provide for the indemnification of our present and
prior directors and officers or any person who may have served at our request as
a director or officer of another corporation in which we own shares of capital
stock or of which we are a creditor against expenses actually and necessarily
incurred by them in connection with the defense of any actions, suits or
proceedings in which they, or any of them, are made parties, or a party, by
reason of being or having been director(s) or officer(s) of us or of such other
corporation, in the absence of negligence or misconduct in the performance of
their duties. This indemnification policy could result in substantial
expenditure by us, which we may be unable to recoup.

Insofar as indemnification by us for liabilities arising under
the Securities Exchange Act of 1934 may be permitted to our directors, officers
and controlling persons pursuant to provisions of the Articles of Incorporation
and Bylaws, or otherwise, we have been advised that in the opinion of the SEC,
such indemnification is against public policy and is, therefore, unenforceable.
In the event that a claim for indemnification by such director, officer or
controlling person of us in the successful defense of any action, suit or
proceeding is asserted by such director, officer or controlling person, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

At the present time, there is no pending litigation or
proceeding involving a director, officer, employee or other agent of ours in
which indemnification would be required or permitted. We are not aware of any
threatened litigation or proceeding which may result in a claim for such
indemnification.

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

The following table sets forth information regarding beneficial
ownership of our common stock as of March 24, 2011 (i) by each person who is
known by us to beneficially own more than 5% of our common stock; (ii) by each
of our officers and directors; and (iii) by all of our officers and directors as
a group.

Unless otherwise specified, the address of each of the persons
set forth below is in care of Siping Juyuan, THT Industrial Park, No. 5 Nanhuan
Road, Tiexi District, Siping City, Jilin Province, Peoples Republic of China.

Name and Address of Beneficial
      Owner
    Office, If Any
    Title of Class
    Amount and Nature
      of Beneficial Ownership(1)
    Percent of
      Class(2)Officers and DirectorsGerard Pascale 28 Cottonwood Lane Hilton
      Head, SC 29926
    Director (4)
    Common stock, $0.001 par value
    19,412
    *Guohong Zhao
    Chairman, CEO and
      President
    Common stock, $0.001
      par value
    0
    *Jianjun He
    Chief Financial Officer
    Common stock, $0.001 par value
    0
    *Yue Cui
    Vice President of
      Production
    Common stock, $0.001
      par value
    0
    *Fucai Zhan
    Vice President of R&D
    Common stock, $0.001 par value
    0
    *All officers and directors as a group (5 persons named above)
    
    Common stock, $0.001 par value
    19,412
    *


47

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Name and Address of Beneficial
      Owner
    Office, If Any
    Title of Class
    Amount and Nature
      of Beneficial Ownership(1)
    Percent of
      Class(2)5% Security HoldersInfinity
    
    Common stock, $0.001 par value
    2,812,500
    13.8%Wisetop International Holdings Limited
    
    Common stock, $0.001 par value
    4,559,214
    22.3%Jinghua Zhao
    
    Common stock, $0.001 par value
    4,559,214(3)
    22.3%Xiaomei Fang
    
    Common stock, $0.001 par value
    1,070,533
    5.2%


* Less than 1%

|(1) | Beneficial Ownership is determined in accordance with the
      rules of the SEC and generally includes voting or investment power with
      respect to securities. Each of the beneficial owners listed above has
      direct ownership of and sole voting power and investment power with
      respect to the shares of our common stock.                                                     
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                    
|(2) | A total of 20,453,500 shares of our common stock are
      considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of March
      24, 2011. For each beneficial owner above, any options exercisable within
      60 days have been included in the denominator.                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                    
|(3) | Represents 4,559,214 shares that are indirectly held by
      Ms. Zhao, through Wisetop International Holdings Limited, a BVI company
      owned and controlled by her. Ms. Zhaos ownership interests in Wisetop are
      subject to an option agreement, which gives our Chairman and CEO, Mr.
      Guohong Zhao, an option to acquire all of Ms. Zhaos ownership interests
      in Wisetop.
|    |                                                                                                                                                                                                                                                                                                                                                                                                    
|(4) | Gerald Pascale resigned from his position as a director
      on June 30, 2009, the day that we consummated our reverse acquisition of
      Megaway.                                                                                                                                                                                                                                              

Changes in Control

Pursuant to an option agreement, dated June 30, 2009, between
Ms. Jinghua Zhao and Mr. Guohong Zhao, Mr. Zhao was granted an option to acquire
all of the equity interests of Wisetop owned by Ms. Zhao. In addition, pursuant
to an option agreement, dated June 30, 2009, between Wisetop and 19 original
founders of Siping Juyuan, the founders were granted an option to acquire an
aggregate of 10,240,786 shares our common stock currently owned by Wisetop. On
December 17, 2010, the founders exercised their options. Other than the
foregoing, we do not currently have any arrangements which if consummated may
result in a change of control of our Company.

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

Transactions with Related Persons

In the fiscal year ended December 31, 2010, none of our
directors, director nominees or executive officers has been involved in any
transactions with us or any of our directors, executive officers, affiliates or
associates which are required to be disclosed pursuant to the rules and
regulations of the SEC.

Director Independence

Our Board is currently composed of 5 members, of which Wenquan
Tao, To Tsang and William Haus are independent as that term is defined under
the NASDAQ listing standards.

All actions of the board of directors require the approval of a
majority of the directors in attendance at a meeting at which a quorum is
present. Our directors have a duty of to act in good faith with a view to our
interests. In fulfilling their duty of care to us, our directors must ensure
compliance with our Certificate of Incorporation. During 2010, our board met
twice and no director missed any meetings of the board.

48

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The following is a summary of the fees billed to the Company by
its principal accountants for professional services rendered for the fiscal
years ended December 31, 2010 and 2009:

|                   |   | Year Ended December 31, | 
|------------------ | - | ----------------------- | 
|                   |   | 2010                    | 
|Audit Fees         | $ | 94,000                  | 
|Audit-Related Fees |   | -                       | 
|Tax Fees           |   | -                       | 
|All Other Fees     |   | -                       | 
|TOTAL              | $ | 94,000                  | 

Audit Fees. PKF was paid aggregate fees of approximately
$94,000 and $86,000 for the fiscal years ended December 31, 2010 and 2009,
respectively, for professional services rendered for the audit of our annual
financial statements and review of quarter condensed consolidated financial
statements.

Audit Related Fees.There was no audit related fees paid
to PKF for the fiscal years ended December 31, 2010 and 2009. Tax
Fees.There was no tax fees paid to PKF for the fiscal years ended December
31, 2010 and 2009.

All Other Fees. PKF was paid no other fees
for professional services during the fiscal years ended December 31, 2010 and
2009.

Pre-Approval Policies and Procedures

Under the Sarbanes-Oxley Act of 2002, all audit and non-audit
services performed by our auditors must be approved in advance by the Audit
Committee of our Board of Directors to assure that such services do not impair
the auditors independence from us. In accordance with its policies and
procedures, the Audit Committee pre-approved the audit service performed by PKF
for our financial statements as of and for the year ended December 31, 2010.
None of the fees for noted above were for the provision of services other than
audit, review or attest services.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT AND SCHEDULES.

Financial Statements and Schedules

The financial statements are set forth under Item 8 of this
Annual Report on Form 10-K.

Exhibit List

49

---

Exhibits (Including Those Incorporated By Reference).

Exhibit Index

|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.1     |  | Share Exchange Agreement, dated
      as of June 30, 2009, by and among the Company, Megaway International
      Holdings Limited and its sole shareholder. [incorporated by reference to
      Exhibit 2.1 of the Companys Current Report on Form 8-K filed on July 7,
      2009]                                                                                                                                                 
|2.2     |  | Share Exchange Agreement, dated as of February
      12, 2009, by and among the Company, Sino- America Ventures, Inc. and its
      shareholders [incorporated by reference to Exhibit 2.1 of the Companys
      Current Report on Form 8-K filed on February 13, 2009]                                                                                                                                                             
|2.3     |  | First Amended Joint Plan of
      Reorganization dated September 29, 2004 [incorporated by reference to
      Exhibit 2.1 of the Companys Registration Statement on Form 10-SB filed on
      September 21, 2006]                                                                                                                                                                                                                   
|2.4     |  | Order Confirming First Amended Joint Plan of
      Reorganization dated November 29, 2004 [incorporated by reference to
      Exhibit 2.2 of the Companys Registration Statement on Form 10 filed on
      September 21, 2006]                                                                                                                                                                                                      
|2.5     |  | Agreement and Plan of Merger,
      dated as of November 24, 2009, between BTHC VIII, Inc. and THT Heat
      Transfer Technology, Inc. [incorporated by reference to Exhibit 2.1 of the
      Companys Current Report on Form 8-K filed on December 4, 2009]                                                                                                                                                                       
|3.1     |  | Certificate of Incorporation of BTHC VIII, Inc.
      [incorporated by reference to Exhibit 3.4 of the Companys Registration
      Statement on Form 10-SB filed on September 21, 2006]                                                                                                                                                                                                                                             
|3.2     |  | Certificate of Merger of BTHC
      VIII, LLC into the Company [incorporated by reference to Exhibit 3.2 of
      the Companys Registration Statement on Form 10-SB filed on September 21,
      2006]                                                                                                                                                                                                                              
|3.3     |  | Certificate of Amendment of Certificate of
      Incorporation [incorporated by reference to Exhibit 3.1 of the Companys
      Current Report on Form 8-K filed on October 16, 2007]                                                                                                                                                                                                                                                
|3.4     |  | Bylaws of BTHC VIII, Inc.
      [incorporated by reference to Exhibit 3.5 of the Companys Registration
      Statement on Form 10-SB filed on September 21, 2006]                                                                                                                                                                                                                                                                   
|3.5     |  | Articles of Incorporation of THT Heat Transfer
      Technology, Inc. [incorporated by reference to Exhibit 3.1 of the
      Companys Current Report on Form 8-K filed on December 4, 2009]                                                                                                                                                                                                                                         
|3.6     |  | Bylaws of THT Heat Transfer
      Technology, Inc. [incorporated by reference to Exhibit 3.2 of the
      Companys Current Report on Form 8-K filed on December 4, 2009]                                                                                                                                                                                                                                                            
|4.1     |  | Cancellation Agreement, dated June 30, 2009, by
      and between the Company (formerly BTHC VIII, Inc.) and Gerald Pascale
      [incorporated by reference to Exhibit 4.1 of the Companys Current Report
      on Form 8-K filed on July 7, 2009]                                                                                                                                                                                 
|4.2     |  | Form of Registration Rights
      Agreement [incorporated by reference to Exhibit 4.1 of the Companys
      Current Report on Form 8-K filed on November 3, 2010]                                                                                                                                                                                                                                                                   
|10.1    |  | Commission Loan Agreement (English
      translation), dated July 24, 2008, by and among Siping Juyuan, Siping City
      Fu Guo Investment and Development Co., Ltd. and Siping City Credit
      Association Union [incorporated by reference to Exhibit 10.1 of the
      Companys Current Report on Form 8-K filed on July 7, 2009]                                                                                             
|10.2    |  | Loan Agreement (English
      translation), dated September 27, 2008, by and between Siping Juyuan and
      the Siping Branch of the Agriculture Bank of China [incorporated by
      reference to Exhibit 10.2 of the Companys Current Report on Form 8-K
      filed on July 7, 2009]                                                                                                                                            
|10.3    |  | Loan Agreement (English translation) , dated
      September 27, 2007, by and between Siping Juyuan and the Siping Branch of
      the Agriculture Bank of China. [incorporated by reference to Exhibit 10.4
      of the Companys Current Report on Form 8-K filed on July 7, 2009]                                                                                                                                                
|10.4    |  | Maximum Amount Mortgage
      Agreement (English translation), dated September 27, 2007, by and among
      Siping Juyuan, Siping City Ju Yuan Heat Exchange Equipment Co., Ltd ,
      Siping City Ju Yuan Han Yang Pressure Vessel Co., Ltd. and the Siping
      Branch of the Agriculture Bank of China [incorporated by reference to
      Exhibit 10.4 of the Companys Current Report on Form 8-K filed on July 7,
      2009]
|10.5    |  | Form of Labor Contract (English translation)
      for contracts signed before January 1, 2008 [incorporated by reference to
      Exhibit 10.5 of the Companys Current Report on Form 8-K filed on July 7,
      2009]                                                                                                                                                                                                             
|10.6    |  | Form of Non-Disclosure
      Agreement (English translation) for agreements signed before January 1,
      2008 [incorporated by reference to Exhibit 10.6 of the Companys Current
      Report on Form 8-K filed on July 7, 2009]                                                                                                                                                                                                  
|10.7    |  | Form Labor Contract (English translation) for
      contracts signed after January 1, 2008, by and between Siping Juyuan and
      its employees [incorporated by reference to Exhibit 10.7 of the Companys
      Current Report on Form 8-K filed on July 7, 2009]                                                                                                                                                                 

50

---

|Exhibit |  |                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |  | Description                                                                                                                                                                                                                                          
|10.8    |  | Form of Supplementary Agreement
      to Labor Contract (English translation) [incorporated by reference to
      Exhibit 10.8 of the Companys Current Report on Form 8-K filed on July 7,
      2009]                                              
|10.9    |  | Independent Director Agreement, dated as of
      September 25, 2009, by and between BTHC VIII, Inc. and Wenquan Tao
      [incorporated by reference to Exhibit 10.1 of the Companys Current Report
      on Form 8-K filed on September 28, 2009] 
|10.10   |  | Independent Director Agreement,
      dated as of September 25, 2009, by and between BTHC VIII, Inc. and William
      Haus [incorporated by reference to Exhibit 10.2 of the Companys Current
      Report on Form 8-K filed on September 28, 2009]
|10.11   |  | Independent Director Agreement, dated as of
      September 25, 2009, by and between BTHC VIII, Inc. and To Tsang
      [incorporated by reference to Exhibit 10.3 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]    
|10.12   |  | Indemnification Agreement,
      dated as of September 25, 2009, by and between the Company and Wenquan Tao
      [incorporated by reference to Exhibit 10.4 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]          
|10.13   |  | Indemnification Agreement, dated as of
      September 25, 2009, by and between the Company and William Haus
      [incorporated by reference to Exhibit 10.5 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]         
|10.14   |  | Indemnification Agreement,
      dated as of September 25, 2009, by and between the Company and To Tsang
      [incorporated by reference to Exhibit 10.6 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]             
|10.15   |  | Form of Securities Purchase Agreement
      [incorporated herein by reference to Exhibit 10.1 of the Companys Current
      Report on Form 8-K filed on November 3, 2010]                                                                           
|10.16   |  | Form of Lockup Agreement
      [incorporated herein by reference to Exhibit 10.2 of the Companys Current
      Report on Form 8-K filed on November 3, 2010]                                                                                        
|10.17   |  | Form of Make Good Escrow Agreement
      [incorporated herein by reference to Exhibit 10.3 of the Companys Current
      Report on Form 8-K filed on November 3, 2010]                                                                              
|10.18   |  | Form of Right of Co-Sale
      Agreement [incorporated herein by reference to Exhibit 10.4 of the
      Companys Current Report on Form 8-K filed on November 3, 2010]                                                                              
|10.19   |  | Form of Closing Escrow Agreement [incorporated
      herein by reference to Exhibit 10.5 of the Companys Current Report on
      Form 8-K filed on November 3, 2010]                                                                                
|14.1    |  | Code of Ethics of the Company
      (formerly BTHC VIII, Inc.) [incorporated herein by reference to Exhibit
      14.1 of the Companys Current Report on Form 8-K filed on September 28,
      2009]                                                
|16.1    |  | Letter from SW Hatfield CPA regarding change in
      certifying accountant [incorporated by reference to Exhibit 16.1 of the
      Companys Current Report on Form 8-K filed on July 7, 2009]                                                      
|21*     |  | Subsidiaries of the Company                                                                                                                                                                                                                          
|31.1*   |  | Certifications of Chief Executive Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                            
|31.2*   |  | Certifications of Chief
      Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002                                                                                                                                      
|32.1*   |  | Certification of Chief Executive Officer
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                             
|32.2*   |  | Certification of Chief
      Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002                                                                                                                                       
|99.1    |  | Audit Committee Charter [incorporated herein by
      reference to Exhibit 99.1 of the Companys Current Report on Form 8-K
      filed on September 28, 2009]                                                                                       
|99.2    |  | Compensation Committee Charter
      [incorporated herein by reference to Exhibit 99.2 of the Companys Current
      Report on Form 8-K filed on September 28, 2009]                                                                                
|99.3    |  | Governance and Nominating Committee Charter
      [incorporated herein by reference to Exhibit 99.3 of the Companys Current
      Report on Form 8-K filed on September 28, 2009]                                                                   

*Filed herewith

51

---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

| |                | THT HEAT TRANSFER          | 
| | -------------- | -------------------------- | 
| |                | TECHNOLOGY, INC.           | 
| |                |                            | 
| | March 28, 2011 | By :/s/ Guohong
      Zhao | 
| | (Date Signed)  | Guohong Zhao, President    | 

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

Each person whose signature appears below hereby authorizes
Guohong Zhao and Jianjun He as attorney-in-fact to sign on his behalf,
individually, and in each capacity stated below, and to file all amendments
and/or supplements to this annual report on Form 10-K.

|Signature              |  | Capacity                                                                                     |  | Date          
|---------------------- |  | -------------------------------------------------------------------------------------------- |  | --------------
|                       |  |                                                                                              |  |               
|/s/ Guohong
      Zhao |  | President, Director and Chief Executive Officer
      (Principal Executive Officer)          |  | March 28, 2011
|Guohong Zhao           |  |                                                                                              |  |               
|                       |  |                                                                                              |  |               
|/s/ Jianjun
      He   |  | Chief Financial Officer (Principal Financial
      Officer and Principal Accounting Officer) |  | March 28, 2011
|Jianjun He             |  |                                                                                              |  |               
|                       |  |                                                                                              |  |               
|/s/ To
      Tsang     |  | Director                                                                                     |  | March 28, 2011
|To Tsang               |  |                                                                                              |  |               
|                       |  |                                                                                              |  |               
|/s/ William
      Haus |  | Director                                                                                     |  | March 28, 2011
|William Haus           |  |                                                                                              |  |               
|                       |  |                                                                                              |  |               
|/s/ Wenquan
      Tao  |  | Director                                                                                     |  | March 28, 2011
|Wenquan Tao            |  |                                                                                              |  |               
|                       |  |                                                                                              |  |               
|/s/ Fucai
      Zhan   |  | Vice President of R&D and Director                                                           |  | March 28, 2011
|Fucai Zhan             |  |                                                                                              |  |               

---

THT Heat Transfer Technology, Inc.

Consolidated Financial Statements
For the year ended December 31, 2010
(Stated in US dollars)



---

THT Heat Transfer Technology, Inc.Consolidated
Financial StatementsFor the year ended December 31, 2010Index to Consolidated Financial Statements

|                                                                       | Page      
|---------------------------------------------------------------------- | ----------
|Report of Independent Registered Public
      Accounting Firm          | F-2       
|Consolidated Balance Sheets                                            | F-3       
|Consolidated Statements of Income and Other
      Comprehensive Income | F-4       
|Consolidated Statement of Equity                                       | F-5       
|Consolidated Statements of Cash Flows                                  | F-6       
|Notes to Consolidated Financial Statements                             | F-7 - F-26

---

Report of Independent Registered Public Accounting Firm

To the Directors and Stockholders of
THT Heat Transfer Technology, Inc.

We have audited the accompanying consolidated balance sheets of THT Heat Transfer Technology, Inc. (the Company) and its subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of income and comprehensive
income, equity and cash flows for each of the two years in the period ended December 31, 2010.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2010 and 2009, and the consolidated results of their
operations and their cash flows for each of the two years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.

/s/
PKF 
Certified Public Accountants
Hong Kong, China 
March  28, 2011

F-2

---

THT Heat Transfer Technology, Inc.Consolidated
Balance Sheets(Stated in US Dollars)

|                                                                                                                                           |   | As of December 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------------ | -
|                                                                                                                                           |   | 2010               |  
|ASSETS                                                                                                                                     |   |                    |  
|Current assets                                                                                                                             |   |                    |  
|Cash and cash equivalents                                                                                                                  | $ | 18,438,430         |  
|Restricted cash - Note 4                                                                                                                   |   | 1,677,566          |  
|Counter guarantee receivable - Note 13                                                                                                     |   | 212,372            |  
|Trade receivables, net - Note 5                                                                                                            |   | 25,651,880         |  
|Bills receivable                                                                                                                           |   | 469,161            |  
|Other receivables, prepayments and deposits, net - Note 6                                                                                  |   | 6,197,565          |  
|Inventories, net - Note 7                                                                                                                  |   | 13,705,690         |  
|Deferred tax assets - Note 8                                                                                                               |   | 163,239            |  
|                                                                                                                                           |   |                    |  
|Total current assets                                                                                                                       |   | 66,515,903         |  
|Retention receivable - Note 3                                                                                                              |   | 1,409,057          |  
|Counter guarantee receivable - Note 13                                                                                                     |   | -                  |  
|Property, plant and equipment, net - Note 9                                                                                                |   | 6,797,947          |  
|Land use rights - Note 10                                                                                                                  |   | 1,005,428          |  
|                                                                                                                                           |   |                    |  
|TOTAL ASSETS                                                                                                                               | $ | 75,728,335         |  
|                                                                                                                                           |   |                    |  
|LIABILITIES AND EQUITY                                                                                                                     |   |                    |  
|                                                                                                                                           |   |                    |  
|LIABILITIES                                                                                                                                |   |                    |  
|Current liabilities                                                                                                                        |   |                    |  
|Trade payables                                                                                                                             | $ | 2,803,874          |  
|Other payables and accrued expenses - Note
      11                                                                                        |   | 13,364,671         |  
|Income tax payable                                                                                                                         |   | 1,380,979          |  
|Short-term bank loans - Note 12                                                                                                            |   | 10,618,610         |  
|Current maturities of long-term loan - Note 13                                                                                             |   | 1,668,639          |  
|                                                                                                                                           |   |                    |  
|Total current liabilities                                                                                                                  |   | 29,836,773         |  
|Long-term loan - Note 13                                                                                                                   |   | -                  |  
|                                                                                                                                           |   |                    |  
|TOTAL LIABILITIES                                                                                                                          |   | 29,836,773         |  
|                                                                                                                                           |   |                    |  
|COMMITMENTS AND CONTINGENCIES- Note
      21                                                                                               |   |                    |  
|                                                                                                                                           |   |                    |  
|STOCKHOLDERS EQUITY                                                                                                                       |   |                    |  
|Preferred stock : par value of $0.001 per share                                                                                            |   |                    |  
|Authorized 10,000,000 shares, none issued
      and outstanding                                                                            |   |                    |  
|Common stock : par value $0.001 per share - Note 14                                                                                        |   |                    |  
|Authorized 190,000,000 shares in 2010 and
      2009; issued and outstanding 20,453,500 shares in 2010 and 16,000,000
      shares in 2009 |   | 20,454             |  
|Additional paid-in capital                                                                                                                 |   | 27,396,455         |  
|Statutory reserve - Note 15                                                                                                                |   | 1,902,632          |  
|Accumulated other comprehensive income                                                                                                     |   | 1,961,950          |  
|Retained earnings                                                                                                                          |   | 14,671,962         |  
|                                                                                                                                           |   |                    |  
|Total THT Heat Transfer Technology Inc.
      stockholders equity                                                                         |   | 45,953,453         |  
|Noncontrolling interests                                                                                                                   |   | (61,891            | )
|                                                                                                                                           |   |                    |  
|TOTAL EQUITY                                                                                                                               |   | 45,891,562         |  
|                                                                                                                                           |   |                    |  
|TOTAL LIABILITIES AND EQUITY                                                                                                               | $ | 75,728,335         |  

See the accompanying notes to consolidated financial statements

F-3

---

THT Heat Transfer Technology, Inc.Consolidated
Statements of Income and Comprehensive Income(Stated in US Dollars)

|                                                                                        |   | Year ended December 31, |  
|--------------------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                                        |   | 2010                    |  
|                                                                                        |   |                         |  
|Sales revenue - Note 22                                                                 | $ | 50,245,929              |  
|Cost of sales                                                                           |   | (28,550,685             | )
|                                                                                        |   |                         |  
|Gross profit                                                                            |   | 21,695,244              |  
|                                                                                        |   |                         |  
|Operating expenses                                                                      |   |                         |  
|Administrative expenses                                                                 |   | 4,359,595               |  
|Research and development expenses                                                       |   | 1,151,948               |  
|Selling expenses                                                                        |   | 6,602,622               |  
|                                                                                        |   |                         |  
|                                                                                        |   | 12,114,165              |  
|                                                                                        |   |                         |  
|Income from operations                                                                  |   | 9,581,079               |  
|Interest income                                                                         |   | 14,238                  |  
|Other income - Note 16                                                                  |   | 984,851                 |  
|Finance costs - Note 17                                                                 |   | (699,646                | )
|                                                                                        |   |                         |  
|Income before income taxes and noncontrolling interests                                 |   | 9,880,522               |  
|Income taxes - Note 8                                                                   |   | (1,498,442              | )
|                                                                                        |   |                         |  
|Net income before noncontrolling interests                                              |   | 8,382,080               |  
|Net loss attributable to noncontrolling interests - Note 3                              |   | 303,576                 |  
|                                                                                        |   |                         |  
|Net income attributable to THT Heat Transfer Technology,
      Inc. common stockholders | $ | 8,685,656               |  
|                                                                                        |   |                         |  
|Net income before noncontrolling interests                                              | $ | 8,382,080               |  
|Other comprehensive income (loss)                                                       |   |                         |  
|Foreign currency translation adjustments                                                |   | 1,243,472               |  
|                                                                                        |   |                         |  
|Comprehensive income                                                                    |   | 9,625,552               |  
|Comprehensive loss attributable to noncontrolling interests                             |   | 303,170                 |  
|                                                                                        |   |                         |  
|Comprehensive income attributable to THT Heat Transfer                                  |   |                         |  
|Technology, Inc. common stockholders                                                    | $ | 9,928,722               |  
|                                                                                        |   |                         |  
|Earnings per share attributable to THT Heat
      Transfer Technology,                  |   |                         |  
|Inc. common stockholders - Note 18                                                      |   |                         |  
|- Basic and diluted                                                                     | $ | 0.53                    |  
|                                                                                        |   |                         |  
|Weighted average number of shares
      outstanding                                     |   |                         |  
|- Basic and diluted                                                                     |   | 16,305,034              |  

See the accompanying notes to consolidated financial
statements

F-4

---

THT HeatTransferTechnology,Inc.ConsolidatedStatementsofEquity(Statedin USDollars)

|                                                                           |  | THT Heat Transfer Technology
      Inc. stockholders |  |   |         |  |   |            |  
|-------------------------------------------------------------------------- |  | ---------------------------------------------------- |  | - | ------- |  | - | ---------- | -
|                                                                           |  |                                                      |  |   |         |  |   |            |  
|                                                                           |  |                                                      |  |   |         |  |   | Additional |  
|                                                                           |  | Common stock                                         |  |   | paid-in |  |   | Statutory  |  
|                                                                           |  | No. of shares                                        |  |   | Amount  |  |   | capital    |  
|                                                                           |  |                                                      |  |   |         |  |   |            |  
|Balance, January 1, 2009                                                   |  | 14,800,000                                           |  | $ | 14,800  |  | $ | 14,010,900 |  
|Recapitalization                                                           |  | 1,200,000                                            |  |   | 1,200   |  |   | (200       | )
|Net income (loss)                                                          |  | -                                                    |  |   | -       |  |   | -          |  
|Foreign currency translation adjustments                                   |  | -                                                    |  |   | -       |  |   | -          |  
|Appropriation to reserves                                                  |  | -                                                    |  |   | -       |  |   | -          |  
|                                                                           |  |                                                      |  |   |         |  |   |            |  
|Balance, December 31, 2009                                                 |  | 16,000,000                                           |  |   | 16,000  |  |   | 14,010,700 |  
|Common stock issued for private placement, net of issuance costs - Note 14 |  | 4,453,500                                            |  |   | 4,454   |  |   | 12,745,755 |  
|Inducement to private
      placement - Note 19                            |  | -                                                    |  |   | -       |  |   | 640,000    |  
|Net income (loss)                                                          |  | -                                                    |  |   | -       |  |   | -          |  
|Foreign currency translation
      adjustments                             |  | -                                                    |  |   | -       |  |   | -          |  
|Appropriation to reserves                                                  |  | -                                                    |  |   | -       |  |   | -          |  
|                                                                           |  |                                                      |  |   |         |  |   |            |  
|Balance, December 31, 2010                                                 |  | 20,453,500                                           |  | $ | 20,454  |  | $ | 27,396,455 |  

See the accompanying notes to consolidated financial statements

F-5

---

THT Heat Transfer Technology, Inc.Consolidated
Statements of Cash Flows(Stated in US Dollars)

|                                                                                                                                                                   |   | Year ended December 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ----------------------- | -
|                                                                                                                                                                   |   | 2010                    |  
|Cash flows from operating activities                                                                                                                               |   |                         |  
|Net income attributable to THT Heat Transfer Technology,
      Inc. common stockholders                                                                            | $ | 8,685,656               |  
|Adjustments to reconcile net income
      attributable to THT Heat Transfer Technology, Inc. common stockholders to
      net cash used in operating activities :- |   |                         |  
|Depreciation and amortization                                                                                                                                      |   | 850,964                 |  
|Gain on disposal of property, plant and
      equipment                                                                                                            |   | (754                    | )
|Deferred taxes                                                                                                                                                     |   | (61,060                 | )
|Allowance for doubtful accounts                                                                                                                                    |   | 712,826                 |  
|Allowance for obsolete inventories                                                                                                                                 |   | -                       |  
|Noncontrolling interests                                                                                                                                           |   | (303,576                | )
|Changes in operating assets and liabilities :-                                                                                                                     |   |                         |  
|Restricted cash                                                                                                                                                    |   | (243,444                | )
|Trade receivables                                                                                                                                                  |   | (10,648,991             | )
|Bills receivable                                                                                                                                                   |   | 35,763                  |  
|Other receivables, prepayments and deposits                                                                                                                        |   | 286,291                 |  
|Inventories                                                                                                                                                        |   | (3,083,015              | )
|Retention receivable                                                                                                                                               |   | (568,334                | )
|Trade payables                                                                                                                                                     |   | 809,803                 |  
|Other payables and accrued expenses                                                                                                                                |   | 307,103                 |  
|Income tax payable                                                                                                                                                 |   | 864,475                 |  
|                                                                                                                                                                   |   |                         |  
|Net cash flows used in operating activities                                                                                                                        |   | (2,356,293              | )
|                                                                                                                                                                   |   |                         |  
|Cash flows from investing activities                                                                                                                               |   |                         |  
|Payments to acquire property, plant and equipment                                                                                                                  |   | (1,032,429              | )
|Proceeds from disposal of property, plant
      and equipment                                                                                                      |   | 10,327                  |  
|                                                                                                                                                                   |   |                         |  
|Net cash flows used in investing activities                                                                                                                        |   | (1,022,102              | )
|                                                                                                                                                                   |   |                         |  
|Cash flows from financing activities                                                                                                                               |   |                         |  
|Proceeds from issuance of common stock, net of issuance costs                                                                                                      |   | 13,390,209              |  
|Proceeds from bank loans                                                                                                                                           |   | 10,327,378              |  
|Repayment of bank loans                                                                                                                                            |   | (5,901,359              | )
|Repayment of long-term loan                                                                                                                                        |   | (1,770,408              | )
|Decrease in restricted cash                                                                                                                                        |   | -                       |  
|Decrease in bills payable                                                                                                                                          |   | -                       |  
|Cash acquired from reverse acquisition                                                                                                                             |   | -                       |  
|                                                                                                                                                                   |   |                         |  
|Net cash flows provided by financing activities                                                                                                                    |   | 16,045,820              |  
|                                                                                                                                                                   |   |                         |  
|Effect of foreign currency translation on cash and cash
      equivalents                                                                                          |   | 391,378                 |  
|                                                                                                                                                                   |   |                         |  
|Net increase (decrease) in cash and cash equivalents                                                                                                               |   | 13,058,803              |  
|Cash and cash equivalents - beginning of
      year                                                                                                                |   | 5,379,627               |  
|                                                                                                                                                                   |   |                         |  
|Cash and cash equivalents - end of year                                                                                                                            | $ | 18,438,430              |  
|                                                                                                                                                                   |   |                         |  
|Supplemental disclosures for cash flow
      information                                                                                                           |   |                         |  
|Cash paid for :-                                                                                                                                                   |   |                         |  
|Interest                                                                                                                                                           | $ | 549,409                 |  
|Income taxes                                                                                                                                                       | $ | 823,959                 |  
|                                                                                                                                                                   |   |                         |  
|Non-cash investing and financing transactions:                                                                                                                     |   |                         |  
|Issue of 14,800,000 shares of common stock
      for reverse acquisition                                                                                           | $ | -                       |  
|Warrants issued to the financial advisor in
    connection with the private placement                                                                              | $ | 396,939                 |  

See accompanying notes to consolidated financial statements

F-6

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|1. | Corporate information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | THT Heat Transfer Technology, Inc. (the Company or THT or the Surviving Corporation) is the surviving corporation pursuant to the Reincorporation Merger as detailed below. The Companys
shares are quoted for trading on the Nasdaq Global Market in the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Reincorporation Merger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On November 24, 2009, BTHC VIII, Inc. ("BTHC") entered into an Agreement and Plan of Merger (the "Merger Agreement") with THT, a Nevada corporation and wholly-owned subsidiary of BTHC. Pursuant to the Merger Agreement, BTHC agreed
to merge with and into THT, with THT continuing as the surviving entity (the "Reincorporation Merger"). The Reincorporation Merger became effective on November 30, 2009 (the "Effective Time").                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | As a result of the Reincorporation Merger, the legal domicile of the Surviving Corporation is now Nevada. The Merger Agreement and Reincorporation Merger were duly approved by the written consent of stockholders of BTHC owning at
least a majority of the outstanding shares of BTHC's common stock, dated September 16, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Pursuant to the terms of the Merger Agreement, (i) BTHC merged into THT, with THT being the surviving corporation, and BTHC thereby changed its name to THT Heat Transfer Technology, Inc.; (ii) from and after the Effective Time,
THT possesses all of the rights, privileges, powers, and franchises of BTHC, and BTHC's debts and liabilities became the debts and liabilities of THT; (iii) BTHC's existing Board of Directors and officers became the Board of Directors and officers
of the Surviving Corporation; and (iv) the Articles of Incorporation and Bylaws of THT now govern the Surviving Corporation.                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Reincorporation Merger did not result in any change in headquarters, business, jobs, management, location of any of offices or facilities, number of employees, assets, liabilities or net worth (other than as a result of the
costs incident to the Reincorporation Merger, which are immaterial). Management, including all directors and officers, remain the same in connection with the Reincorporation Merger. There were no substantive changes in the employment agreements for
executive officers or in other direct or indirect interests of the current directors or executive officers as a result of the Reincorporation Merger.                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | As a result of the Reincorporation Merger, each outstanding share of BTHC's common stock, par value $0.001 per share, was automatically converted into one share of THT's common stock, par value $0.001 per share. Each
outstanding certificate representing shares of BTHC's common stock is deemed, without any action by BTHC's stockholders, to represent the same number of shares of THT's common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Reorganization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Before the Reincorporation Merger and on June 30, 2009, BTHC entered into a Share Exchange Agreement (the Share Exchange Agreement) with Megaway International Holdings Limited, a British Virgin Islands corporation
("Megaway"), and its sole shareholder, Wisetop International Holdings Limited, a British Virgin Islands corporation ("Wisetop"). Pursuant to the Share Exchange Agreement, Megaway became a wholly-owned subsidiary of the Company and Wisetop was issued
14,800,000 shares of the Company's common stock, which, after giving effect to the Cancellation Agreement disclosed below, constituted 92.5% of the Companys issued and outstanding capital stock on a fully-diluted basis as of and immediately
after the consummation of the transactions contemplated by the Share Exchange Agreement, in exchange for 100% of the issued and outstanding shares of Megaway.

F-7

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|1. | Corporate information (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Megaway was dormant since its incorporation until it acquired 100% of the outstanding capital stock of Star Wealth International Holdings Limited ("Star Wealth"), a Hong Kong corporation on May 5, 2009. Star Wealth was also
dormant since its incorporation until it acquired 100% of the equity interest of Siping City Juyuan Hanyang Plate Heat Exchanger Co., Ltd. (Siping Juyuan), a PRC corporation, on May 10, 2009.                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On May 10, 2009, Star Wealth entered into an equity transfer agreement with all of the shareholders of Siping Juyuan to acquire their entire interests in Siping Juyuan at a total cash consideration of RMB60,000,000
($8,795,075). The equity transfer agreement was approved by the local government of the Peoples Republic of China (the PRC) on May 31, 2009.                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Siping Juyuan has a 75% directly owned subsidiary, Beijing Juyuan Hanyang Heat Exchange Equipment Co. Ltd (Beijing Juyuan).                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | As a condition precedent to the consummation of the Share Exchange Agreement, on June 30, 2009, the Company entered into a cancellation agreement, or the Cancellation Agreement, with Mr. Gerald Pascale, who was the major
stockholder of the Company immediately before the Share Exchange Agreement and served as the Companys sole director and officer from February 12, 2009 until June 30, 2009 when he was replaced by Guohong Zhao (Mr. Zhao), a founder
of Siping Juyuan, whereby Mr. Pascale agreed to the cancellation of 4,805,387 shares of the Companys common stock owned by him.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Mr. Zhao was appointed as the Companys director and chief executive officer effective upon the closing of the above reverse acquisition. In addition, the Companys executive officers were replaced by the executive
officers of Siping Juyuan upon the closing of the reverse acquisition.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On June 30, 2009, Mr. Zhao entered into an option agreement with Ms. Jinghua Zhao, the sole shareholder of Wisetop, pursuant to which Mr. Zhao was granted an option, exercisable after 180 days, to acquire all of the equity
interests of Wisetop owned by Ms. Jinghua Zhao at an exercise price of $3,246,160. This option expires on June 30, 2011.                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Also on June 30, 2009, Wisetop entered into separate option agreements with the other original stockholders of Siping Juyuan, pursuant to which such stockholders were granted options, exercisable after 90 days, to purchase an
aggregate of 10,240,786 shares of the Companys common stock owned by Wisetop at total exercise price of $7,291,440. The stockholders exercised these options on December 17, 2010.                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | After Mr. Zhao exercises the above option, he together with the other original stockholders will be the Companys controlling stockholders holding 92.5% equity interest.                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On November 30, 2010, Juyuan Heat Equipment (Tianjin) Co., Ltd. (Tianjin Juyuan) was established in the PRC, of which Siping Juyuan and Mr. Zhao contributed $1,467,555 and $37,630 respectively to its registered
capital, representing 99.5% and 0.5% equity interest in Tianjin Juyuan respectively. Tianjin Juyuan has no business activity yet and is planning to be engaged in manufacturing and trading of plate heat exchangers and various related products.                                                                                                                               

F-8

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THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|2. | Description of business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is a holding company whose primary business are conducted through its subsidiaries, namely Siping Juyuan which is located in the Jilin Province and Beijing Juyuan which is located in Beijing City of the PRC. The
Company is engaged in the manufacturing and trading of plate heat exchangers and various related products.                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Siping Juyuan was established in the PRC on May 31, 2006 following the division (the Division) of Siping City Juyuan Heat Exchange Equipment Co., Ltd. (Old Juyuan Company) into three companies, namely
Siping Juyuan, Siping City Juyuan Heat Exchange Equipment Co., Ltd. (New Juyuan Company) and Siping City Juyuan Hanyang Pressure Vessels Co., Ltd (Juyuan Hanyang Pressure Vessels).                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | Summary of significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Basis of presentation and consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | After the consummation of the reorganization detailed in note 1 above, Mr. Zhao and the other original stockholders of Siping Juyuan maintain control over Siping Juyuan by virtue of the option agreements. Accordingly, accounting
for recapitalization is adopted for the preparation of these consolidated financial statements. These financial statements, issued under the name of the Company, represent the continuation of the financial statements of Siping Juyuan.                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions have been eliminated on consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates
of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of trade receivables, other receivables, inventories and
deferred income taxes and the estimation on useful lives and residual values of property, plant and equipment. Actual results could differ from those estimates.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Noncontrolling interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Noncontrolling interest on the consolidated balance sheets is resulted from the consolidation of 75% and 99.5% owned subsidiaries, Beijing Juyuan and Tianjin Juyuan, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Noncontrolling interest on the consolidated statements of income and comprehensive income represents the minority stockholders proportionate share of the net losses of Beijing Juyuan and Tianjin Juyuan.                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-9

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other receivables. As of December 31,
2010 and 2009, substantially all of the Companys cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which management believes are of high credit quality. With respect to trade
receivables, the Company extends credit based on an evaluation of the customers financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade and other
receivables.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | During the years ended December 31, 2010 and 2009, the Company did not have any customers which contributed 10% or more to the Companys sales revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | As of December 31, 2010 and 2009, the Company did not have any balance of gross trade receivable due from individual customer that represented 10% or more of the Companys gross trade receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less. As of December 31, 2010 and 2009, almost all the cash and cash equivalents were
denominated in RMB and were placed with banks in the PRC. They are not freely convertible into foreign currencies and the remittance of these funds out of the PRC is subject to exchange control restrictions imposed by the PRC government. The
remaining insignificant balance of cash and cash equivalents were denominated in United States dollars (USD).                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Allowance for doubtful debts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company establishes an allowance for doubtful debts based on managements assessment of the collectibility of trade receivables and other receivables. A considerable amount of judgment is required in assessing the amount
of the allowance and the Company considers the historical level of credit losses and applies percentages to aged receivable categories. The Company makes judgments about the creditworthiness of each debtor based on ongoing credit evaluations, and
monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the debtors were to deteriorate, resulting in their inability to make payments, a larger allowance may be required.        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Bad debts are written off when identified. The Company extends unsecured credit to customers ranging from three to six months in the normal course of business. The Company does not accrue interest on trade receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Historically, losses from uncollectible accounts have not significantly deviated from the general allowance estimated by the management and no significant additional bad debts have been written off directly to the profit and loss.
This general provisioning policy has not changed in the past since establishment and the management considers that the aforementioned general provisioning policy is adequate and not too excessive and does not expect to change this established policy
in the near future.                                                                                                                                                                                                                          

F-10

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies
      (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Retention receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Retention receivable is the amount withheld by a customer
      until the warranty period is over. Retention receivables which were
      expected to be collected within one year of $3,737,059 and $1,232,917 were
      included in the balance of trade receivable as of December 31, 2010 and
      2009, respectively. Retention receivables which were expected to be
      collected after one year of $1,409,057 and $795,144 were presented
      separately as non-current assets.                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Inventories are stated at the lower of cost or market
      value. Cost is determined on a weighted average basis and includes all
      expenditures incurred in bringing the goods to the point of sale and
      putting them in a saleable condition. In assessing the ultimate
      realization of inventories, the management makes judgments as to future
      demand requirements compared to current or committed inventory levels. The
      Companys reserve requirements generally increase with its projected
      demand requirements; decrease due to market conditions and product life
      cycle changes. The Company estimates the demand requirements based on
      market conditions, forecasts prepared by its customers, sales contracts
      and orders in hand.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Property, plant and equipment are stated at cost less
      accumulated depreciation. Cost represents the purchase price of the asset
      and other costs incurred to bring the asset into its existing
  use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Depreciation is provided on the straight-line basis
      (after taking into account the respective estimated residual values) over
      the estimated useful lives of property, plant and equipment. The principal
      useful lives and residual value are as follows
:-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                     |  | Estimated useful lives |  |  | Residual value |   
| | ------------------- |  | ---------------------- |  |  | -------------- | --
| |                     |  |                        |  |  |                |   
| | Buildings           |  | 20years                |  |  |                | 5%
| | Plant and machinery |  | 6years                 |  |  |                | 5%
| | Office equipment    |  | 2 -5years              |  |  | Nil -          | 5%
| | Motor vehicles      |  | 3 -5years              |  |  |                | 5%

Maintenance or repairs are charged to
expense as incurred. Upon sale or disposition, the applicable amounts of asset
cost and accumulated depreciation are removed from the accounts and the net
amount less proceeds from disposal is charged or credited to income.

Construction in progress mainly
represents expenditures in respect of the Companys corporate campus and
factories, including offices, factories and research center, under construction.
All direct costs relating to the acquisition or construction of the Companys
corporate campus and factories are capitalized as construction in progress. No
depreciation is provided in respect of construction in progress.

Land use rights

Land use rights are stated at cost less
accumulated amortization. Amortization is provided using the straight-line
method over the terms of the lease of 50 years obtained from the relevant PRC
land authority.

F-11

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Impairment of long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Long-lived assets are tested for impairment in accordance with ASC 360-10-45 Impairment or Disposal of Long-Lived Assets. The Company periodically evaluates potential impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cash flows attributable
to such assets. During the reporting periods, the Company did not identify any indicators that would require testing for impairment.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Government grants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The government grant is recognized in the consolidated statements of income and comprehensive income when the relevant performance criteria are met. Grants applicable to purchase of property, plant and equipment and/or encourage
research and development activities are credited to deferred income upon receipt and are amortized over the life of depreciable assets.                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended December 31, 2010, the Company recorded government grant income of $336,908. The grants were received to reward the Companys successful listing in overseas market ($295,068), to subsidize the
expenses incurred by the Company in prior years for constructing its new plant and facilities ($34,463) and to reward the Companys contributions to the economy of Siping City ($7,377).                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended December 31, 2009, the Company recorded government grant income of $116,944, which was received to subsidize the expenses incurred by the Company in prior years for constructing its new plant and
facilities.                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Revenue from sales of the Companys products is recognized when products are delivered and customer acceptance is made, the sales price is fixed or determinable, no other significant obligations of the Company exist and
collection is reasonably assured.                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | There were no sales returns and allowances for the years ended December 31, 2010 and 2009. The Company does not provide unconditional right of return, prices protection or any other concessions to its customers. Generally, the
Company provides free after-sale service for a period ranging from half year to 1 year. After-sale expense was $15,369 and $16,577 for the years ended December 31, 2010 and 2009 respectively.                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cost of sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cost of sales consists primarily of materials costs, freight charges, purchasing and receiving costs, inspection costs, wages, employee compensation, depreciation and related costs, which are directly attributable to the
production of products. Write-down of inventories to lower of cost or market is also recorded in cost of sales if any.                                                                                                                                                                                                                                                            

F-12

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Administrative expenses consist primarily of rent paid, office expenses, entertainment, traveling expenses, staff welfare, consumables, labor protection and salaries and wages which are incurred at the administrative level.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Rental expenses under operating leases were $82,461 and $65,999 for the years
ended December 31, 2010 and 2009 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Selling expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Selling expenses consist primarily of advertising, salaries and transportation costs incurred during the selling activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Advertising, transportation, research and development expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Advertising, transportation, research and development expenses are charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Advertising expenses amounting to $2,390 and $877 for the years ended December 31, 2010 and 2009 respectively are included in selling expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Transportation expenses amounting to $873,701 and $808,112 for the years ended December 31, 2010 and 2009 respectively are included in selling expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards 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.                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company has adopted ASC 220, Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Components of comprehensive income include
net income and foreign currency translation adjustments. As of December 31, 2010 and 2009, the only component of accumulated other comprehensive income was foreign currency translation adjustments.                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The functional currencies of the Company and its subsidiaries include USD and RMB. The Company and its subsidiaries maintain their financial statements in their respective functional currency. Monetary assets and liabilities
denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are
translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income or loss for the respective
periods.

F-13

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Foreign currency translation(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | For financial reporting purposes, the financial statements of the subsidiaries that are prepared using RMB have been translated into USD. Assets and liabilities are translated at the exchange rates at the balance sheet date and
revenue and expenses are translated at the average exchange rates and stockholders equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income or loss but are included in
foreign currency translation adjustments to accumulated other comprehensive income, a component of stockholders equity. The exchange rates in effect as of December 31, 2010 and 2009 were RMB1 for $0.1517 and $0.1463 respectively. The
average exchange rates for the years ended December 31, 2010 and 2009 were RMB1 for $0.1475 and $0.1462 respectively. There was no significant fluctuation in the exchange rates for conversion of RMB to US$ after the balance sheet
date.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | ASC 825 requires the disclosure of the estimated fair value of financial instruments including those financial instruments for which fair value option was not elected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | As of December 31, 2010, the carrying amounts of the Companys financial assets and liabilities (including the current maturity of long-term loan) approximated their fair values due to short maturities or the applicable
interest rates approximate the current market rates. As of December 31, 2009, the fair value of the Companys long-term loan was $3,442,357 (carrying amount : $3,363,950). The fair value was estimated using discounted cash flow
analysis, based on the Companys incremental borrowing rates for similar types of borrowing arrangements.                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company adopted the provisions of ASC 718 which requires the use of the fair value method of accounting for share-based compensation. Under the fair value based method, compensation cost related to employee stock options or
similar equity instruments which are equity-classified awards, is measured at the grant date based on the value of the award and is recognized over the requisite service period, which is usually the vesting period. ASC 718 also requires measurement
of cost of a liability-classified award based on its current fair value.                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Basic and diluted earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company reports earnings per share in accordance with ASC 260 Earnings Per Share. Basic earnings per share is computed by dividing net income attributable to the Companys common stockholders by the weighted
average number of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to the Companys common stockholders by the sum of the weighted average number of common stock outstanding
and dilutive potential common stock during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Off-balance sheet arrangements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company does not have any off-balance sheet arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-14

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Recently issued accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-13 Revenue Recognition (Topic 605) - Multiple-Deliverable Revenue Arrangements. ASU
2009-13 requires companies to allocate revenue in multiple-element arrangements based on an elements estimated selling price if vendor-specific or other third party evidence of value is not available. ASU 2009-13 is to be applied on a
prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with earlier application permitted. The Company is currently evaluating the impact of the adoption of ASU 2009-13 on
its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In January 2010, the FASB issued ASU 2010-06 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements that expands the required disclosures about fair value measurements.
This guidance provides for new disclosures requiring the Company to (i) disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers and (ii) present
separately information about purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements. This guidance also provides clarification of existing disclosures requiring the Company to (i) determine each class of
assets and liabilities based on the nature and risks of the investments rather than by major security type and (ii) for each class of assets and liabilities, disclose the valuation techniques and inputs used to measure fair value for both Level 2
and Level 3 fair value measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact
of the adoption of the disclosures about the roll forward of activity in Level 3 fair value measurements on its financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In April, 2010, the FASB issued ASU 2010-13 Compensation-Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity
Security Trades - a consensus of the FASB Emerging Issues Task Force. ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a
substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it
otherwise qualifies as equity. The amendments in this update do not expand the recurring disclosures required by Topic 718. Disclosures currently required under Topic 718 are applicable to a share-based payment award, including the nature and the
term of share-based payment arrangements. The amendments in this update are effective for fiscal year, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company is currently evaluating the impact of the
adoption of ASU 2010-13 on its financial statements.                                                                                                                                                                                                                                                                                                                                                      

F-15

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|3. | Summary of significant accounting policies
      (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Recently issued accounting pronouncements(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In July 2010, the FASB issued ASU 2010-20 Receivables
      (Topic 310): Disclosures about the Credit Quality of Financing Receivables
      and the Allowance for Credit Losses. The objective of ASU 2010-20 is to
      provide financial statement users with greater transparency about an
      entitys allowance for credit losses and the credit quality of its
      financing receivables. Under ASU 2010-20, an entity is required to provide
      disclosures so that financial statement users can evaluate the nature of
      the credit risk inherent in the entitys portfolio of financing
      receivables, how that risk is analyzed and assessed to arrive at the
      allowance for credit losses, and the changes and reasons for those changes
      in the allowance for credit losses. ASU 2010-20 is applicable to all
      entities, both public and non-public and is effective for interim and
      annual reporting periods ending on or after December 15, 2010. Comparative
      disclosure for earlier reporting periods that ended before initial
      adoption is encouraged but not required. However, comparative disclosures
      are required to be disclosed for those reporting periods ending after
      initial adoption. The Company is currently evaluating the impact of the
      adoption of ASU 2010-20 on its financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In October 2010, the FASB issued ASU 2010-26 Accounting
      for Costs Associated with Acquiring or Renewing Insurance Contracts. The
      ASU is effective for interim and annual reporting periods beginning after
      December 15, 2011, with earlier adoption permitted. The provisions of the
      new standard can be applied either prospectively or retrospectively. The
      standard amends ASC Topic 944 Financial Services  Insurance and
      modifies the definition of the types of costs incurred by insurance
      entities that can be capitalized in the acquisition of new and renewal
      contracts. The Company is currently evaluating the impact of the adoption
      of ASU 2010-26 on its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|4. | Restricted cash
|-- | ---------------

| |                                                                                               |   | As of December 31, | 
| | --------------------------------------------------------------------------------------------- | - | ------------------ | 
| |                                                                                               |   | 2010               | 
| |                                                                                               |   |                    | 
| | Bank deposits held as collateral for performance bonds
      issued by the banks to customers | $ | 1,677,566          | 

| | When the Companys customers request to receive
      performance bonds issued by the banks in relation to the Companys
      performance under the sales contracts, the Company has to place deposits with banks equal to 100% of the bonds amount at the time of
      issuance.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | Trade receivables, net
|-- | ----------------------

| |                                 |   | As of December 31, |  
| | ------------------------------- | - | ------------------ | -
| |                                 |   | 2010               |  
| |                                 |   |                    |  
| | Trade receivables               | $ | 27,005,255         |  
| | Allowance for doubtful accounts |   | (1,353,375         | )
| |                                 |   |                    |  
| |                                 | $ | 25,651,880         |  

As of December 31, 2010 and 2009, the
Companys trade receivables of $5,922,542 and $Nil, respectively, were pledged
as collateral under certain loan arrangements (Note 12).

F-16

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|5. | Trade receivables, net (Contd)                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                           
|   | An analysis of the allowance for doubtful accounts for
      the years ended December 31, 2010 and 2009 is as follows
  :-

| |                                   |   | Year ended December 31, | 
| | --------------------------------- | - | ----------------------- | 
| |                                   |   | 2010                    | 
| |                                   |   |                         | 
| | Balance at beginning of year      | $ | 598,215                 | 
| | Addition of bad debt expense, net |   | 712,826                 | 
| | Translation adjustments           |   | 42,334                  | 
| |                                   |   |                         | 
| | Balance at end of year            | $ | 1,353,375               | 

|6. | Other receivables, prepayments and
  deposits
|-- | ---------------------------------------------

| |                                 |   | As of December 31, |  
| | ------------------------------- | - | ------------------ | -
| |                                 |   | 2010               |  
| |                                 |   |                    |  
| | Advances to staff               | $ | 689,392            |  
| | Deposits for public bid         |   | 897,729            |  
| | Prepayments to suppliers        |   | 4,511,729          |  
| | Other receivables               |   | 168,964            |  
| |                                 |   |                    |  
| |                                 |   | 6,267,814          |  
| | Allowance for doubtful accounts |   | (70,249            | )
| |                                 |   |                    |  
| |                                 | $ | 6,197,565          |  

The advances to staff mainly represent
advances for handling selling and logistic activities for the Company in the
ordinary course of business.

No further allowance for doubtful
accounts was provided during the current year. Allowance of $67,695 was charged
to the consolidated statement of income and comprehensive income during the year
ended December 31, 2009.

|7. | Inventories
|-- | -----------

| |                                    |   | As of December 31, |  
| | ---------------------------------- | - | ------------------ | -
| |                                    |   | 2010               |  
| |                                    |   |                    |  
| | Raw materials                      | $ | 3,065,946          |  
| | Work-in-progress                   |   | 10,658,253         |  
| | Finished goods                     |   | -                  |  
| |                                    |   |                    |  
| |                                    |   | 13,724,199         |  
| | Allowance for obsolete inventories |   | (18,509            | )
| |                                    |   |                    |  
| |                                    | $ | 13,705,690         |  

No further allowance for obsolete
inventories was provided during the current year. Allowance of $17,836 was
charged to the consolidated statement of income and comprehensive income during
the year ended December 31, 2009.

F-17

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|8. | Income tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | United States                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company is subject to the United States Federal and
      state income tax at a statutory rate of 34%. No provision for the U.S.
      Federal income taxes has been made as the Company had no taxable income in
      this jurisdiction for the reporting periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company has not recognized a deferred tax liability
      for the undistributed earnings of its non-U.S. subsidiaries as of December
      31, 2010 because the Company currently does not expect those unremitted
      earnings to reverse and become taxable to the Company in the foreseeable
      future. A deferred tax liability will be recognized when the Company no
      longer plans to permanently reinvest undistributed earnings. Calculation
      of related unrecognized deferred tax liability is not
  practicable.                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | BVI                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Megaway was incorporated in the BVI and, under the
      current laws of the BVI, is not subject to income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | HK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Star Wealth was incorporated in Hong Kong and is subject
      to Hong Kong profits tax at a tax rate of 16.5%. No provision for Hong
      Kong profits tax has been made as Star Wealth had no taxable income during
      the reporting periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | PRC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Siping Juyuan, Beijing Juyuan and Tianjin Juyuan are
      subject to PRC enterprise income tax (EIT) at the statutory rate of 25%.
      As Siping Juyuan was qualified as a High-tech Enterprise, it was
      entitled to a preferential EIT rate of 15% during the reporting periods.
      Beijing Juyuan, being a Sino-foreign joint venture enterprise, is entitled
      to two years EIT exemption from the first profit making calendar year of
      operations after offset of accumulated taxable losses, followed by a 50%
      tax reduction for the immediate next three calendar years (Tax Holiday).
      The Tax Holiday commenced in the fiscal year 2008 and Beijing Juyuan was
      subject to EIT at the rate of 12.5% and 0% during the years ended December
      31, 2010 and 2009 respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Siping Juyuan was also entitled to a special tax
      concession (Tax Concession) because it employed the required number of
      handicapped staff according to the relevant PRC tax rules. In particular,
      this Tax Concession entitled Siping Juyuan refund of value-added tax paid
      during the reporting periods (Note 16).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The components of the provision for income taxes are
      :-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                |   | Year ended December 31, |  
| | -------------- | - | ----------------------- | -
| |                |   | 2010                    |  
| |                |   |                         |  
| | Current taxes  | $ | 1,559,502               |  
| | Deferred taxes |   | (61,060                 | )
| |                |   |                         |  
| |                | $ | 1,498,442               |  

F-18

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|8. | Income taxes (Contd)                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                
|   | The effective income tax expense differs from the PRC
      statutory income tax rate of 25% for the years ended December 31, 2010 and
      2009 as follows :-

| |                                                                                                                 |   | Year ended December 31, |  
| | --------------------------------------------------------------------------------------------------------------- | - | ----------------------- | -
| |                                                                                                                 |   | 2010                    |  
| |                                                                                                                 |   |                         |  
| | Provision for income taxes at applicable
      tax rate                                                         | $ | 2,470,131               |  
| | Non-taxable items for tax                                                                                       |   | (309,887                | )
| | Non-deductible items for tax                                                                                    |   | 184,342                 |  
| | Additional deduction from tax bureau on research and development expenses and salary for
      disabled workers |   | (188,005                | )
| | Preferential Tax Rate                                                                                           |   | (811,901                | )
| | Valuation allowance                                                                                             |   | 153,762                 |  
| |                                                                                                                 |   |                         |  
| | Income tax expense                                                                                              | $ | 1,498,442               |  

The amount of benefit from Preferential
Tax Rate was $811,901 and $413,534 for the years ended December 31, 2010 and
2009, respectively, and the effect on earnings per share was $0.05 and $0.03,
respectively.

ASC 740 requires recognition and
measurement of uncertain income tax positions using a more-likely-than-not
approach. The management evaluated the Companys tax positions and considered
that no provision for uncertainty in income taxes was necessary as of December
31, 2010 and 2009.

Deferred tax assets as of December 31,
2010 and 2009 are composed of the following :-

| |                                    |   | As of December 31, |  
| | ---------------------------------- | - | ------------------ | -
| |                                    |   | 2010               |  
| | Short-term                         |   |                    |  
| | Allowance for doubtful accounts    | $ | 160,463            |  
| | Allowance for obsolete inventories |   | 2,776              |  
| |                                    |   |                    |  
| |                                    |   | 163,239            |  
| | Long-term                          |   |                    |  
| | Net operating loss carried forward |   | 158,098            |  
| | Valuation allowances               |   | (158,098           | )
| |                                    |   |                    |  
| |                                    |   | -                  |  
| |                                    |   |                    |  
| | Total deferred tax assets          | $ | 163,239            |  

In assessing the realizability of
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible or are utilized. Based upon an assessment of the level of
historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are tested whether they are deductible
or can be utilized, management believes that the deferred tax assets as of
December 31, 2010 and 2009 are more likely than not to be realized, except for
the deferred tax assets relating to the net operating loss carried forward
incurred by a subsidiary.

F-19

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|9. | Property, plant and equipment,
  net
|-- | ------------------------------------

| |                                                                    |   | As of December 31,      |  
| | ------------------------------------------------------------------ | - | ----------------------- | -
| |                                                                    |   | 2010                    |  
| | Cost :-                                                            |   |                         |  
| | Buildings                                                          | $ | 3,847,047               |  
| | Plant and machinery                                                |   | 3,239,819               |  
| | Office equipment                                                   |   | 612,154                 |  
| | Motor vehicles                                                     |   | 318,934                 |  
| |                                                                    |   |                         |  
| |                                                                    |   | 8,017,954               |  
| | Accumulated depreciation                                           |   | (2,761,361              | )
| | Construction in progress                                           |   | 1,541,354               |  
| |                                                                    |   |                         |  
| | Net                                                                | $ | 6,797,947               |  
| |                                                                    |   |                         |  
| | During the reporting periods, depreciation
      is included in :- |   |                         |  
| |                                                                    |   |                         |  
| |                                                                    |   | Year ended December 31, |  
| |                                                                    |   | 2010                    |  
| |                                                                    |   |                         |  
| | Cost of sales and overheads of inventories                         | $ | 381,155                 |  
| | Research and development expenses                                  |   | 272,169                 |  
| | Administrative expenses                                            |   | 176,678                 |  
| |                                                                    | $ | 830,002                 |  

As of December 31, 2010 and 2009,
property, plant and equipment with net book values of $2,931,629 and $2,972,439,
respectively, were pledged as collateral under certain loan arrangements (Note
12).

During the year ended December 31,
2010, property, plant and equipment with net book value of $9,573 were disposed
of at a consideration of $10,327, resulting in a gain of $754. During the year
ended December 31, 2009, property, plant and equipment with net book value of
$13,214 were disposed of at a consideration of $73,967, resulting in a gain of
$60,753.

|10. | Land use rights
|--- | ---------------

| |                          |   | As of December 31, |  
| | ------------------------ | - | ------------------ | -
| |                          |   | 2010               |  
| |                          |   |                    |  
| | Land use rights          | $ | 1,068,589          |  
| | Accumulated amortization |   | (63,161            | )
| |                          |   |                    |  
| |                          | $ | 1,005,428          |  

The Company obtained the right from the
relevant PRC land authority for a period of fifty years to use the land on which
the Companys office premises, production facilities and warehouse are situated.
As of December 31, 2010 and 2009, the land use rights were pledged as collateral
under certain loan arrangements (Note 12).

During the years ended December 31,
2010 and 2009, amortization amounted to $20,962 and $20,825 respectively. The
estimated amortization expense for each of the five succeeding years from 2010
is approximately $21,000 each year.

F-20

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|11. | Other payables and accrued
  expenses
|--- | -------------------------------------

| |                                     |   | As of December 31, | 
| | ----------------------------------- | - | ------------------ | 
| |                                     |   | 2010               | 
| |                                     |   |                    | 
| | Accrued audit fee                   | $ | 71,840             | 
| | Receipt in advance from customers   |   | 7,896,814          | 
| | Pension payable                     |   | 546,436            | 
| | Salaries payable                    |   | 283,300            | 
| | Other payables and accrued expenses |   | 4,566,281          | 
| |                                     |   |                    | 
| |                                     | $ | 13,364,671         | 

Pension payable represents accrued
staff medical, industry injury claims, labor and unemployment insurances, all of
which are third parties insurance and the insurance premiums are based on
certain percentage of salaries. The obligations of the Company are limited to
those premiums contributed by the Company.

Included in other payables as of
December 31, 2010 and 2009 was an amount of $2,243,561 and $1,721,465
respectively, representing governmental financial support received for the
Companys efficient heat exchange equipment manufacture project. The project
will be subject to the governments inspection and whether the government
support is repayable or not is subject to the inspection results.

|12. | Short-term bank loans
|--- | ---------------------

| |                      |   | As of December 31, | 
| | -------------------- | - | ------------------ | 
| |                      |   | 2010               | 
| |                      |   |                    | 
| | Secured bank loans   | $ | 7,584,721          | 
| | Unsecured bank loans |   | 3,033,889          | 
| |                      |   |                    | 
| |                      | $ | 10,618,610         | 

All bank loans are repayable within one
year and carry annual interest at 100% of the benchmark interest rate published
by the Peoples Bank of China (the PBOC) or at a fixed rate of 5.56% per
annum.

The secured bank loans were secured by
the following assets of the Company :-

| |                                        |   | As of December 31, | 
| | -------------------------------------- | - | ------------------ | 
| |                                        |   | 2010               | 
| |                                        |   |                    | 
| | Trade receivables (Note 5)             |   | 5,922,542          | 
| | Property, plant and equipment (Note 9) |   | 2,931,629          | 
| | Land use rights (Note 10)              |   | 1,005,428          | 
| |                                        |   |                    | 
| |                                        | $ | 9,859,599          | 

The unsecured bank loans as of December
31, 2010 and 2009 were guaranteed by Mr. Zhao and a non-related party who did
not receive any compensation for acting as guarantors for the Company.

During the reporting periods, there was
no covenant requirement under the bank loans granted to the Company.

F-21

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|13. | Long-term loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The loan is borrowed from a non-financial institution, bearing interest at an annual rate of 106% of the benchmark rate of the PBOC for three-year to five-year long-term loans and guaranteed by a third party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company paid a counter guarantee of $212,372 and $204,762
as of December 31, 2010 and 2009, respectively, to the third party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The outstanding principal balance of the long-term loan as of December 31, 2010 will mature prior to the year ending December 31, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|14. | Common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On November 2, 2010, the Company entered into a securities purchase agreement (the Securities Purchase Agreement) with several accredited investors (the Investors) pursuant to which the Company agreed to
issue and sell to the Investors 4,453,500 shares of the Companys common stock, representing approximately 21.8% of the issued and outstanding capital stock of the Company on a fully-diluted basis as of and immediately after
consummation of the transactions contemplated by the Securities Purchase Agreement, for an aggregate purchase price of approximately $14,251,200, or $3.20 per share (the Placement Price). Before the deduction of fair value of the
escrow arrangement (Note 19), the Company received approximately $13,390,000 in net proceeds after deducting the issuance costs.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In connection with the offering of shares under the private placement, 222,675 warrants were issued to the financial advisor on December 7, 2010, as partial compensation for services, to purchase an aggregate of 222,675 shares of
common stock of the Company, representing 5% of the offered shares. The warrants have a term of three years and are exercisable from the first anniversary of the issuance and have an exercise price of $3.84.
The fair value of these warrants was $396,939 and they were outstanding as of December
31, 2010.                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In connection with its entry into the Securities Purchase Agreement, the Company also entered into a make good escrow arrangement with Wisetop, the Investors and other parties, details of which are set out in note 19 to the
consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|15. | Statutory reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The statutory reserve in the consolidated balance sheets comprises Siping Juyuans statutory reserve. In accordance with the relevant laws and regulations of the PRC, each of Siping Juyuan, Beijing Juyuan and Tianjin Juyuan
is required to set aside at least 10% of their respective after-tax net profits each year determined in accordance with PRC GAAP and if any, to fund the statutory reserve until the balance of the reserve reaches 50% of their respective registered
capital. The statutory reserve is not distributable in the form of cash dividends and can be used to make up cumulative prior year losses.                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Beijing Juyuan and Tianjin Juyuan did not make any appropriation to statutory reserve as they incurred losses for the years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-22

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|16. | Other income                                   |   | Year ended December 31, | 
|--- | ---------------------------------------------- | - | ----------------------- | 
|    |                                                |   | 2010                    | 
|    |                                                |   |                         | 
|    | Refund of value-added tax under Tax Concession | $ | 294,331                 | 
|    | Sales of scrapped materials                    |   | 295,812                 | 
|    | Government grants                              |   | 336,908                 | 
|    | Other income                                   |   | 57,800                  | 
|    |                                                |   |                         | 
|    |                                                | $ | 984,851                 | 
|    |                                                |   |                         | 
|    |                                                |   |                         | 
|17. | Finance costs                                  |   | Year ended December 31, | 
|    |                                                |   | 2010                    | 
|    |                                                |   |                         | 
|    | Interest expense                               | $ | 550,258                 | 
|    | Bank charges and net exchange loss             |   | 149,388                 | 
|    |                                                |   |                         | 
|    |                                                | $ | 699,646                 | 

|18. | Earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The basic  earnings per share is calculated
      using the net income attributable to the Companys common stockholders and
      the weighted average number of shares outstanding during the reporting
      periods. All share and per share data reflects the recapitalization as if
      it occurred as of the beginning of the first period presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | As of December 31, 2010, the warrant shares issued to the
      financial advisor were outstanding and anti-dilutive. There were no
      dilutive instruments as of December 31, 2009. Accordingly, the basic and
      diluted earnings per share are the same for both the reporting
    periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|19. | Make good escrow agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In connection with its entry into the Securities Purchase
      Agreement, on November 2, 2010, the Company entered into a make good
      escrow agreement (the Make Good Escrow Agreement) with Wisetop (the
      Pledgor), the Investors, Infinity I-China Fund (Cayman) L.P. and the
      escrow agent, pursuant to which the Pledgor agreed to certain make good
      provisions in the event that the Company does not meet certain income
      thresholds for fiscal years 2010 and/or 2011. Pursuant to the Make Good
      Escrow Agreement, the Pledgor established an escrow account and delivered
      to the escrow agent certificates evidencing 2,000,000 shares of the
      Companys common stock held by the Pledgor (the Escrow Shares) along
      with blank stock powers, to be held for the benefit of the
    Investors.                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | If the Company fails to report After Tax Net Income
      (ATNI) reported in the Annual Report of at least $8 million (the 2010
      Guaranteed ATNI) under U.S. GAAP for the fiscal year ended December 31,
      2010, as filed with the Securities Exchange Commission (the SEC) on Form
      10-K, the escrow agent shall transfer the 2010 Make Good Shares to the
      Investors on a pro rata basis for no consideration other than payment of
      their respective investment amount paid to the Company at the closing of
      the private placement (the "Closing") and
      without any need for action or notice by or on behalf of any investor. The
      2010 Make Good Shares are calculated based on the following formula, as
      equitably adjusted for any stock splits, stock combinations, stock
      dividends or similar transactions: ((2010 Guaranteed ATNI - 2010 audited
      ATNI)/$8 million) multiplied by 50% of the Escrow
Shares.

F-23

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|19. | Make good escrow agreement (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | If the Company fails to report ATNI reported in the Annual Report of at least $12 million (the 2011 Guaranteed ATNI) under U.S. GAAP for the fiscal year ending December 31, 2011, as filed with the SEC on Form 10-K,
the escrow agent shall transfer the 2011 Make Good Shares to the Investors on a pro rata basis for no consideration other than payment of their respective investment amount paid to the Company at the Closing and without any need for action or notice
by or on behalf of any investor. The 2011 Make Good Shares are calculated based on the following formula, as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions: ((2011 Guaranteed ATNI - 2011 audited
ATNI)/$12 million) multiplied by 50% of the Escrow Shares.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | If prior to the second anniversary of the filing of either of the 2010 Annual Report or 2011 Annual Report (as applicable), the Company or their auditors report or recognize that the financial statements contained in such report
are subject to amendment or restatement such that the Company would recognize or report adjusted ATNI of less than either of the 2010 Guaranteed ATNI or the 2011 Guaranteed ATNI (as applicable), then notwithstanding any prior return of 2010 Make
Good Shares and 2011 Make Good Shares to the Pledgor, the Pledgor shall , within 10 business days following the earlier of the filing of such amendment or restatement or recognition, deliver the relevant 2010 Make Good Shares and 2011 Make Good
Shares to the Investors without any further action on the part of the Investors.                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | If the 2010 audited ATNI is equal to or greater than the 2010 Guaranteed ATNI, no transfer of the 2010 Make Good Shares shall be required by the Pledgor to the Investors and 50% of the Escrow Shares shall be promptly returned to
the Pledgor without the need of any approval or consent thereto by any investor. The remaining 50% of the Escrow Shares shall continue to be held in escrow by the escrow agent. If the 2011 audited ATNI is equal to or greater than the 2011 Guaranteed
ATNI, no transfer of the 2011 Make Good Shares shall be required by the Pledgor to the Investors and the remaining 50% of the Escrow Shares shall be promptly returned to the Pledgor without the need of any approval or consent thereto by any
investor.                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Pursuant to ASC 718-10-S99-2, the SEC staff generally believes that escrow arrangement, which is in substance an inducement made to facilitate the transaction on behalf of the issuer, should be recognized and measured according to
its nature and reflected as a reduction of the proceeds allocated to the newly-issued securities. The Company considers the aforementioned escrow arrangement as an inducement to facilitate the private placement on behalf of the Company rather than
as compensatory and accordingly, adopted ASC 718-10-S99-2 to recognize this arrangement. The management estimated the probability of the Company not achieving the 2010 Guaranteed ATNI and 2011 Guaranteed ATNI to be 10% (the Probability
%) and calculated the fair value of the escrow arrangement with reference to the Probability % and the Placement Price. The calculated fair value of $640,000 was deducted from the placement proceeds with a corresponding credit in
additional paid-in capital, resulting in no net change in the Companys equity.

F-24

---

THT Heat Transfer Technology, Inc.Notes to Consolidated Financial Statements(Stated in US Dollars)

|20. | Defined contribution plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Pursuant to the relevant PRC regulations, the Company is required to make contributions at a rate of 30.6% to 31.2% of employees salaries and wages to a defined contribution retirement scheme organized by a state-sponsored
social insurance plan in respect of the retirement benefits for the Companys employees in the PRC. The only obligation of the Company with respect to the retirement scheme is to make the required contributions under the plan. No forfeited
contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the consolidated statements of income and comprehensive income. The Company contributed $232,939 and
$124,679 for the years ended December 31, 2010, and 2009, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|21. | Commitments and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Capital commitment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | As of December 31, 2010 and 2009, the Company had capital commitments amounting to $447,210 and $551,304 respectively, in respect of the construction of the Companys campus and factory that were contracted for but
not provided in the consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | As of December 31, 2010 and 2009, the Company had contingencies arising from the division of Old Juyuan Company into Siping Juyuan, New Juyuan Company and Juyuan Hanyang Pressure Vessels. According to the division agreement of Old
Juyuan Company (Division Agreement), all parties to the Division Agreement undertook joint and several liabilities for the indebtedness of Old Juyuan Company.                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In accordance with ASC 450 Contingencies, the Company records a liability in the consolidated financial statements for these contingencies when a loss is known or considered probable and the amount can be reasonably
estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is possible but not known or probable, and can be
reasonably estimated, the estimated loss or range of loss is disclosed. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded.                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Companys loss in respect of this undertaking is possible but not known or probable. Accordingly, no liability was recognized as of December 31, 2010 and 2009 respectively. The Company believes that a reasonable estimate
of the possible loss range from $Nil to approximately $1,681,000 as of December 31, 2010 (2009: from $Nil to approximately $1,621,000).                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-25

---

THT Heat Transfer Technology, Inc.Notes to
Consolidated Financial Statements(Stated in US Dollars)

|22. | Segment information                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company is solely engaged in the manufacturing and
      trading of plate heat exchangers and various related products. Since the
      nature of the products, their production processes, and their distribution
      methods are substantially similar, they are considered as a single
      reportable segment under ASC 280 Segment Reporting. The Companys sales
      revenues by products for the years ended December 31, 2010 and 2009 were
      as follows :-

| |                               | Year ended December 31, |           
| | ----------------------------- | ----------------------- | ----------
| |                               |                         | 2010      
| |                               |                         |           
| | Plate heat exchanger          | $                       | 27,022,806
| | Heat exchange unit            |                         | 14,299,218
| | Air-cooled heat exchanger     |                         | 4,018,987 
| | Shell-and-tube heat exchanger |                         | 2,529,491 
| | Others                        |                         | 2,375,427 
| |                               |                         |           
| |                               | $                       | 50,245,929

|    | All of the Companys long-lived assets and revenues
      classified based on the customers are located in the PRC.                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                         
|23. | Related party transactions                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                         
|    | Apart from the transactions as disclosed in note 12 to
      the consolidated financial statements, the Company had no other material
      transactions carried out with its related parties during the reporting
      periods.                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                         
|24. | Subsequent events                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                         
|    | The Company has evaluated all events or transactions that
      occurred through the date the consolidated financial statements were
      issued, and has determined that there were no material recognizable nor
      subsequent events or transactions which would require recognition or
      disclosure in the consolidated financial
statements.

F-26

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Exhibit Index

|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.1     |  | Share Exchange Agreement, dated
      as of June 30, 2009, by and among the Company, Megaway International
      Holdings Limited and its sole shareholder. [incorporated by reference to
      Exhibit 2.1 of the Companys Current Report on Form 8-K filed on July 7,
      2009]                                                                                                                                                 
|2.2     |  | Share Exchange Agreement, dated as of February
      12, 2009, by and among the Company, Sino- America Ventures, Inc. and its
      shareholders [incorporated by reference to Exhibit 2.1 of the Companys
      Current Report on Form 8-K filed on February 13, 2009]                                                                                                                                                             
|2.3     |  | First Amended Joint Plan of
      Reorganization dated September 29, 2004 [incorporated by reference to
      Exhibit 2.1 of the Companys Registration Statement on Form 10-SB filed on
      September 21, 2006]                                                                                                                                                                                                                   
|2.4     |  | Order Confirming First Amended Joint Plan of
      Reorganization dated November 29, 2004 [incorporated by reference to
      Exhibit 2.2 of the Companys Registration Statement on Form 10 filed on
      September 21, 2006]                                                                                                                                                                                                      
|2.5     |  | Agreement and Plan of Merger,
      dated as of November 24, 2009, between BTHC VIII, Inc. and THT Heat
      Transfer Technology, Inc. [incorporated by reference to Exhibit 2.1 of the
      Companys Current Report on Form 8-K filed on December 4, 2009]                                                                                                                                                                       
|3.1     |  | Certificate of Incorporation of BTHC VIII, Inc.
      [incorporated by reference to Exhibit 3.4 of the Companys Registration
      Statement on Form 10-SB filed on September 21, 2006]                                                                                                                                                                                                                                             
|3.2     |  | Certificate of Merger of BTHC
      VIII, LLC into the Company [incorporated by reference to Exhibit 3.2 of
      the Companys Registration Statement on Form 10-SB filed on September 21,
      2006]                                                                                                                                                                                                                              
|3.3     |  | Certificate of Amendment of Certificate of
      Incorporation [incorporated by reference to Exhibit 3.1 of the Companys
      Current Report on Form 8-K filed on October 16, 2007]                                                                                                                                                                                                                                                
|3.4     |  | Bylaws of BTHC VIII, Inc.
      [incorporated by reference to Exhibit 3.5 of the Companys Registration
      Statement on Form 10-SB filed on September 21, 2006]                                                                                                                                                                                                                                                                   
|3.5     |  | Articles of Incorporation of THT Heat Transfer
      Technology, Inc. [incorporated by reference to Exhibit 3.1 of the
      Companys Current Report on Form 8-K filed on December 4, 2009]                                                                                                                                                                                                                                         
|3.6     |  | Bylaws of THT Heat Transfer
      Technology, Inc. [incorporated by reference to Exhibit 3.2 of the
      Companys Current Report on Form 8-K filed on December 4, 2009]                                                                                                                                                                                                                                                            
|4.1     |  | Cancellation Agreement, dated June 30, 2009, by
      and between the Company (formerly BTHC VIII, Inc.) and Gerald Pascale
      [incorporated by reference to Exhibit 4.1 of the Companys Current Report
      on Form 8-K filed on July 7, 2009]                                                                                                                                                                                 
|4.2     |  | Form of Registration Rights
      Agreement [incorporated by reference to Exhibit 4.1 of the Companys
      Current Report on Form 8-K filed on November 3, 2010]                                                                                                                                                                                                                                                                   
|10.1    |  | Commission Loan Agreement (English
      translation), dated July 24, 2008, by and among Siping Juyuan, Siping City
      Fu Guo Investment and Development Co., Ltd. and Siping City Credit
      Association Union [incorporated by reference to Exhibit 10.1 of the
      Companys Current Report on Form 8-K filed on July 7, 2009]                                                                                             
|10.2    |  | Loan Agreement (English
      translation), dated September 27, 2008, by and between Siping Juyuan and
      the Siping Branch of the Agriculture Bank of China [incorporated by
      reference to Exhibit 10.2 of the Companys Current Report on Form 8-K
      filed on July 7, 2009]                                                                                                                                            
|10.3    |  | Loan Agreement (English translation) , dated
      September 27, 2007, by and between Siping Juyuan and the Siping Branch of
      the Agriculture Bank of China. [incorporated by reference to Exhibit 10.4
      of the Companys Current Report on Form 8-K filed on July 7, 2009]                                                                                                                                                
|10.4    |  | Maximum Amount Mortgage
      Agreement (English translation), dated September 27, 2007, by and among
      Siping Juyuan, Siping City Ju Yuan Heat Exchange Equipment Co., Ltd ,
      Siping City Ju Yuan Han Yang Pressure Vessel Co., Ltd. and the Siping
      Branch of the Agriculture Bank of China [incorporated by reference to
      Exhibit 10.4 of the Companys Current Report on Form 8-K filed on July 7,
      2009]
|10.5    |  | Form of Labor Contract (English translation)
      for contracts signed before January 1, 2008 [incorporated by reference to
      Exhibit 10.5 of the Companys Current Report on Form 8-K filed on July 7,
      2009]                                                                                                                                                                                                             
|10.6    |  | Form of Non-Disclosure
      Agreement (English translation) for agreements signed before January 1,
      2008 [incorporated by reference to Exhibit 10.6 of the Companys Current
      Report on Form 8-K filed on July 7, 2009]                                                                                                                                                                                                  
|10.7    |  | Form Labor Contract (English translation) for
      contracts signed after January 1, 2008, by and between Siping Juyuan and
      its employees [incorporated by reference to Exhibit 10.7 of the Companys
      Current Report on Form 8-K filed on July 7, 2009]                                                                                                                                                                 

---

|Exhibit |  |                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |  | Description                                                                                                                                                                                                                                          
|10.8    |  | Form of Supplementary Agreement
      to Labor Contract (English translation) [incorporated by reference to
      Exhibit 10.8 of the Companys Current Report on Form 8-K filed on July 7,
      2009]                                              
|10.9    |  | Independent Director Agreement, dated as of
      September 25, 2009, by and between BTHC VIII, Inc. and Wenquan Tao
      [incorporated by reference to Exhibit 10.1 of the Companys Current Report
      on Form 8-K filed on September 28, 2009] 
|10.10   |  | Independent Director Agreement,
      dated as of September 25, 2009, by and between BTHC VIII, Inc. and William
      Haus [incorporated by reference to Exhibit 10.2 of the Companys Current
      Report on Form 8-K filed on September 28, 2009]
|10.11   |  | Independent Director Agreement, dated as of
      September 25, 2009, by and between BTHC VIII, Inc. and To Tsang
      [incorporated by reference to Exhibit 10.3 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]    
|10.12   |  | Indemnification Agreement,
      dated as of September 25, 2009, by and between the Company and Wenquan Tao
      [incorporated by reference to Exhibit 10.4 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]          
|10.13   |  | Indemnification Agreement, dated as of
      September 25, 2009, by and between the Company and William Haus
      [incorporated by reference to Exhibit 10.5 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]         
|10.14   |  | Indemnification Agreement,
      dated as of September 25, 2009, by and between the Company and To Tsang
      [incorporated by reference to Exhibit 10.6 of the Companys Current Report
      on Form 8-K filed on September 28, 2009]             
|10.15   |  | Form of Securities Purchase Agreement
      [incorporated herein by reference to Exhibit 10.1 of the Companys Current
      Report on Form 8-K filed on November 3, 2010]                                                                           
|10.16   |  | Form of Lockup Agreement
      [incorporated herein by reference to Exhibit 10.2 of the Companys Current
      Report on Form 8-K filed on November 3, 2010]                                                                                        
|10.17   |  | Form of Make Good Escrow Agreement
      [incorporated herein by reference to Exhibit 10.3 of the Companys Current
      Report on Form 8-K filed on November 3, 2010]                                                                              
|10.18   |  | Form of Right of Co-Sale
      Agreement [incorporated herein by reference to Exhibit 10.4 of the
      Companys Current Report on Form 8-K filed on November 3, 2010]                                                                              
|10.19   |  | Form of Closing Escrow Agreement [incorporated
      herein by reference to Exhibit 10.5 of the Companys Current Report on
      Form 8-K filed on November 3, 2010]                                                                                
|14.1    |  | Code of Ethics of the Company
      (formerly BTHC VIII, Inc.) [incorporated herein by reference to Exhibit
      14.1 of the Companys Current Report on Form 8-K filed on September 28,
      2009]                                                
|16.1    |  | Letter from SW Hatfield CPA regarding change in
      certifying accountant [incorporated by reference to Exhibit 16.1 of the
      Companys Current Report on Form 8-K filed on July 7, 2009]                                                      
|21*     |  | Subsidiaries of the Company                                                                                                                                                                                                                          
|31.1*   |  | Certifications of Chief Executive Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                            
|31.2*   |  | Certifications of Chief
      Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002                                                                                                                                      
|32.1*   |  | Certification of Chief Executive Officer
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                             
|32.2*   |  | Certification of Chief
      Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002                                                                                                                                       
|99.1    |  | Audit Committee Charter [incorporated herein by
      reference to Exhibit 99.1 of the Companys Current Report on Form 8-K
      filed on September 28, 2009]                                                                                       
|99.2    |  | Compensation Committee Charter
      [incorporated herein by reference to Exhibit 99.2 of the Companys Current
      Report on Form 8-K filed on September 28, 2009]                                                                                
|99.3    |  | Governance and Nominating Committee Charter
      [incorporated herein by reference to Exhibit 99.3 of the Companys Current
      Report on Form 8-K filed on September 28, 2009]                                                                   

*Filed herewith

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