|  ý | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934. |
|--------------|----------------------------------------------------------------------------------------------------|

|        o | TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|---------------|----------------------------------------------------------------------------------------------------|

| Nevada(State      or other jurisdiction ofincorporation      or organization) | 84-0601802(I.R.S.      EmployerIdentification      No.) |
|-------------------------------------------------------------------------------|---------------------------------------------------------|

| No.      485 Tengfei Third,Shuangliu      Southwest Airport Economic Development Zone,Shuangliu,      ChengduPeople’s      Republic of China, 610207 |   | N/A             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|
| (Address      of principal executive offices)                                                                                                              |   | (Zip      Code) |

----

| ITEM          |   |                                                                                                  |   | Page           |
|---------------|--------|-------------------------------------------------------------------------------------------------------|--------|----------------|
|          |   |                                                                                                  |   |           |
| PART      I   |   | FINANCIAL      INFORMATION                                                                       |   |           |
| Item      1.  |   | Financial      Statements                                                                             |   |        2  |
| Item      2.  |   | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations |   |        13 |
| Item      4T. |   | Controls      and Procedures                                                                          |   |        19 |
|          |   |                                                                                                  |   |           |
| PART      II  |   |  OTHER      INFORMATION                                                                          |   |           |
| Item      1.  |   | Legal      Proceedings                                                                                |   |        20 |
| Item      2.  |   | Unregistered      Sales of Equity and Use of Proceeds                                                 |   |        20 |
| Item      3.  |   | Defaults      Upon Senior Securities                                                                  |   |        20 |
| Item      4.  |   | Submission      of Matters to a Vote of Security Holders                                              |   |        20 |
| Item      5.  |   | Other      Information                                                                                |   |        20 |
| Item      6.  |   | Exhibits                                                                                              |   |        20 |
|          |   |                                                                                                  |   |           |
|          |   | Signatures                                                                                            |   |        21 |

----

|   |       March      31, 2009              (Unaudited)  | December      31, 2008             (Audited) |
|--------|--------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|

| ASSETS                                                                                                                                                                                                                                               |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CURRENT      ASSETS:                                                                                                                                                                                                                                 |   |   |   |   |   |   |
|   Cash      and cash equivalents                                                                                                                                                                                                           |   | $ | 1,544,091 |   |   | $ | 4,874,044 |   |
|   Accounts      receivable                                                                                                                                                                                                                 |   |   | 809,113 |   |   |   | 961,600 |   |
|   Inventories                                                                                                                                                                                                                              |   |   | 7,326,473 |   |   |   | 7,496,477 |   |
|   Due      from related party                                                                                                                                                                                                              |   |   | 2,526,004 |   |   |   | 2,313,198 |   |
|   Deferred      tax assets                                                                                                                                                                                                                 |   |   | 16,420 |   |   |   | 25,880 |   |
|   Prepaid      expenses and other sundry current assets                                                                                                                                                                                    |   |   | 897,934 |   |   |   | 898,688 |   |
|      TOTAL      CURRENT ASSETS                                                                                                                                                                                              |   |   | 13,120,035 |   |   |   | 16,569,887 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| PROPERTY,      MACHINERY AND MINING ASSETS, NET                                                                                                                                                                                                      |   |   | 21,507,245 |   |   |   | 19,549,909 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| NON-MARKETABLE      INVESTMENT                                                                                                                                                                                                                       |   |   | 43,901 |   |   |   | - |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                                                                                                                                                    |   | $ | 34,671,181 |   |   | $ | 36,119,796 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                      |   |
| CURRENT      LIABILITIES:                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |
|   Short-term      loan                                                                                                                                                                                                                     |   | $ | 1,946,266 |   |   | $ | - |   |
|   Accounts      payable – trade                                                                                                                                                                                                      |   |   | 782,686 |   |   |   | 876,221 |   |
|                                           - construction vendors |   |   | 2,544,297 |   |   |   | 2,546,890 |   |
|   Due      to stockholders                                                                                                                                                                                                                 |   |   | 6,305,885 |   |   |   | 9,032,382 |   |
|   Accrued      expenses and other sundry current liabilities                                                                                                                                                                               |   |   | 887,388 |   |   |   | 959,186 |   |
|      TOTAL      CURRENT LIABILITIES                                                                                                                                                                                         |   |   | 12,466,522 |   |   |   | 13,414,679 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| LONG-TERM      DEBT                                                                                                                                                                                                                                  |   |   | 4,390,073 |   |   |   | 4,397,215 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| STOCKHOLDERS’      EQUITY:                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |
|   Preferred      stock, $.001 par value, 25,000,000 shares authorized,            0 shares issued and outstanding at March 31, 2009       and      December 31, 2008      |   | $ | - |   |   | $ | - |   |
|   Common      stock, $.001 par value, 100,000,000 shares authorized,            44,555,131 issued at outstanding at March 31, 2009 and       December      31, 2008       |   |   |   44,555 |   |   |   |   44,555 |   |
|   Additional      paid-in capital                                                                                                                                                                                                          |   |   | 17,548,085 |   |   |   | 17,347,905 |   |
|   Accumulated      deficit                                                                                                                                                                                                                 |   |   | (1,038,552 | ) |   |   | (383,221 | ) |
|   Accumulated      other comprehensive income                                                                                                                                                                                              |   |   | 1,260,498 |   |   |   | 1,298,663 |   |
|      TOTAL      STOCKHOLDERS’ EQUITY                                                                                                                                                                                  |   |   | 17,814,586 |   |   |   | 18,307,902 |   |
|                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                |   | $ | 34,671,181 |   |   | $ | 36,119,796 |   |

|   |   |   |   |
|--------|--------|--------|--------|

----

|   |                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                        |  Three      Months Ended March 31,  |
|-------------------------------------------------------------|-----------------------------------------------|
|                                                        | 2009                                     |   | 2008  |
| SALES                                                       | $      2,308,619                              |   | $      1,909,707 |
|                                                        |                                          |   |   |
| COST      OF SALES                                          | 1,811,687                                     |   | 1,117,495 |
|                                                        |                                          |   |   |
| GROSS      PROFIT                                           | 496,932                                       |   | 792,212 |
|                                                        |                                          |   |   |
| OPERATING      EXPENSES:                                    |                                          |   |   |
|   General      and administrative expenses        | 968,595                                       |   | 106,668 |
|   Selling      and marketing expenses             | 70,497                                        |   | 58,920 |
|   Research      and development expenses          | 11,018                                        |   | 2,096 |
|      TOTAL      OPERATING EXPENSES | 1,050,110                                     |   | 167,684 |
|                                                        |                                          |   |   |
| OPERATING      INCOME (LOSS)                                | (553,178)                                     |   | 624,528 |
|                                                        |                                          |   |   |
| Interest      income (expense)                              | (90,333)                                      |   | 7,075 |
|                                                        |                                          |   |   |
| INCOME      (LOSS) BEFORE PROVISION FOR INCOME TAXES        | (643,511)                                     |   | 631,603 |
|                                                        |                                          |   |   |
| Provision      for income taxes                             | 11,821                                        |   | 156,234 |
|                                                        |                                          |   |   |
| NET      INCOME (LOSS)                                      | (655,332)                                     |   | 475,369 |
|                                                        |                                          |   |   |
| OTHER      COMPREHENSIVE INCOME (LOSS):                     |                                          |   |   |
|   Foreign      currency translation adjustment    | (28,929)                                      |   | 570,600 |
|                                                        |                                          |   |   |
| COMPREHENSIVE      INCOME (LOSS)                            | $(684,261)                                    |   | $      1,045,969 |
|                                                        |                                          |   |   |
|                                                        |                                          |   |   |
| Basic      and diluted income (loss) per common share       | $(0.01)                                       |   | $0.01 |
|                                                        |                                          |   |   |
|                                                        |                                          |   |   |
| Weighted      average number of common shares outstanding   | 44,555,131                                    |   | 44,555,131 |
|                                                        |                                          |   |   |

----

|                                                                                                                                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |  Three Months Ended March      31, |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |  2009 |   |   |  2008 |   |
| OPERATING      ACTIVITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |
|   Net      income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $ | (655,332 | ) |   | $ | 475,369 |   |
|   Adjustments      to reconcile net income (loss) to net cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
|     provided      by (used in) operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|       Issuance      of stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 200,180 |   |   |   | - |   |
|       Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 368,720 |   |   |   | 96,099 |   |
|            Deferred tax assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 9,460  |   |   |   |   |   |
|   Changes in      assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |
|     (Increase)      decrease in -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
|         Accounts      receivable - trade                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 151,045 |   |   |   | (225,532 | ) |
|         Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 157,766 |   |   |   | (3,356,432 | ) |
|         Advance      for purchases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | (229,880 | ) |   |   | (2,899,383 | ) |
|         Prepaid      expenses and other sundry current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 168,317 |   |   |   | 77,486 |   |
|         Accounts      payable – trade                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | (92,253 | ) |   |   | (331 | ) |
|                         -      construction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 1,544 |   |   |   | - |   |
|         Accrued      expenses and other sundry current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | (9,523 | ) |   |   | 163,782 |   |
| NET      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 70,044 |   |   |   | (5,668,942 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| INVESTING      ACTIVITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |
|   Investment      in third party company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | (43,883 | ) |   |   | - |   |
|   Acquisition      of property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | (706,774 | ) |   |   | (4,042,609 | ) |
|   Government      subsidy for acquisition of property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 2,018,639 |   |   |   | - |   |
|   Acquisition      of land use rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | (3,666,306 | ) |   |   | - |   |
|   Acquisition      of exploration rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | - |   |   |   | (219,206 | ) |
|   Acquisition      of extraction rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (2,589 | ) |   |   | (75,385 | ) |
| NET      CASH (USED IN) INVESTING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | (2,400,913 | ) |   |   | (4,337,200 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| FINANCING      ACTIVITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |
|   Proceeds      from short-term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 1,945,500 |   |   |   | - |   |
|   Capital      contribution                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | - |   |   |   | 6,805,911 |   |
|   Advance      from (payments to) stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | (2,727,610 | ) |   |   | 400,092 |   |
|   Advance      from (payments to) related party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | (216,478 | ) |   |   | 580,850 |   |
| NET      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | (998,588 | ) |   |   | 7,786,853 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| EFFECT      OF EXCHANGE RATE ON CASH                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | (496 | ) |   |   | 62,652 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| DECREASE      IN CASH AND CASH AND CASH EQUIVALENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | (3,329,953 | ) |   |   | (2,156,637 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS – BEGINNING OF PERIOD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 4,874,044 |   |   |   | 2,619,176 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS – END OF PERIOD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 1,544,091 |   |   | $ | 462,539 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |

| Supplemental      disclosures of cash flow information: |   |   |   |   |   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|   Interest      paid                          |   | $      | 69,563 |   |   | $      | 92,472 |   |
|   Income      taxes paid                      |   | $      | 2,846  |   |   | $      | 156,235 |   |
|                                                    |   |   |   |   |   |   |   |   |

----

|   |
|--------|

| 1   | BASIS      OF PRESENTATION |
|---------------|----------------------------|

----

| Mineral      exploration costs are expensed according to the term of the license      granted to the Company.  Extraction rights are stated at the      lower of cost and recoverable amount.  When extraction rights      are obtained from the government according to the mining industry practice      in the PRC, extraction rights and other costs incurred prospectively to      develop the property are capitalized as incurred and are amortized using      the units-of-production (“UOP”) method over the estimated life of the      mineralized body based on estimated recoverable volume through to the end      of the period over which the Company has extraction rights.  At      the Company’s underground mines, these costs include the cost of building      access ways, shaft sinking and access, lateral development, drift      development, ramps and infrastructure development. Major      development costs incurred after the commencement of production are      amortized using the UOP method based on estimated recoverable volume in      mineralized material.  To the extent that these costs benefit      the entire mineralized body, they are amortized over the estimated life of      the mineralized body.  Costs incurred to access specific      mineralized blocks or areas that only provide benefit over the life of      that area are amortized over the estimated life of that specific      mineralized block or area.  Interest cost allocable to the cost      of developing mining properties and to constructing new facilities, if      any, is capitalized until assets are ready for their intended      use.  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                 |   |   | March 31,      2009   |   |   |   |  December 31,      2008       |   |
|----------------------|--------|--------|---------------------------------|--------|--------|--------|------------------------------------------------------------------|--------|
| Raw      Materials   |   | $      | 3,931,637                       |   |   | $      | 4,351,326                                                        |   |
| Work      in process |   |   | 957,141                         |   |   |   | 1,080,390                                                        |   |
| Finished      goods  |   |   | 2,437,695                       |   |   |   | 2,064,761                                                        |   |
|                 |   | $      | 7,326,473                       |   |   | $      | 7,496,477                                                        |   |

----

|   |               | March      31, 2009 | December      31, 2008 |       |
|--------|--------------------|---------------------|------------------------|------------|
|   | March 2009    | $0                  |                   | $3,800,000 |   |
|   | July      2009     | 4,805,418           |                   | 2,912,558  |   |
|   | November      2009 | 1,463,358           |                   | 1,465,738  |   |
|   | On      Demand     | 37,109              |                   | 854,086    |   |
|   |               | $6,305,885          |                   | $9,032,382 |   |

----

|   |                                                                                                |  March      31  |
|--------|-----------------------------------------------------------------------------------------------------|---------------------------|
|   |                                                                                                | 2009                 |   | 2008  |
|   | U.S.      statutory rate                                                                            | 35%                       |   | 35% |
|   | Tax      rate difference between PRC and U.S.                                                       | -10%                      |   | -2% |
|   | Net      loss carryforward from prior period                                                        | 0%                        |   | -14% |
|   | GAAP      and Chinese tax law difference on    amortization      of intangibles |  2%                  |   |  -8% |
|   | Valuation      allowance                                                                            | -29%                      |   | 14% |
|   | Effective      tax rate                                                                             | -2%                       |   | 25% |

| Revenue                            |   | $      | -         |   |   | $      | 2,308,619 |   |   | $      | -       |   |   | $      | -        |   |   | $      | 2,308,619 |   |
|------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|--------|----------|--------|--------|--------|-----------|--------|
| Operating      profit (loss)       |   |   | (279,042  | )      |   |   | 100,008   |   |   |   | (14,438 | )      |   |   | (359,706 | )      |   |   | (553,178  | )      |
| Depreciation      and amortization |   |   | 319,575   |   |   |   | 45,082    |   |   |   | 4,063   |   |   |   | -        |   |   |   | 368,720   |   |
| Capital      expenditures          |   |   | 1,647,667 |   |   |   | 706,774   |   |   |   | 2,589   |   |   |   | -        |   |   |   | 2,537,030 |   |

12           CONCENTRATIONS

----

----

----

----

|                                                                                                                                              | Three      Months Ended March 31, |
|---------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
|                                                                                                                                              |                              |   | 2009 |   |   |   | 2008 |   |   |
|                                                                                                                                              |                              |   |   |
| Sales                                                                                                                                             |                            |   | $ | 2,308,619 |   |   |   | $ | 1,909,707 |   |   |
| Cost      of sales                                                                                                                                |                              |   |   | 1,811,687 |   |   |   |   | 1,117,495 |   |   |
| Gross      profit                                                                                                                                 |                              |   |   | 496,932 |   |   |   |   | 792,212 |   |   |
| Expenses                                                                                                                                          |                              |   |   |   |   |   |   |   |   |   |   |
| General      & administrative expenses (including non-cash stock compensation      expenses of $200,180 for the 3 months ended March in 2009) |                              |   |   | 968,595 |   |   |   |   | 106,668 |   |   |
| Selling      expenses                                                                                                                             |                              |   |   | 70,497 |   |   |   |   | 58,920 |   |   |
| Research      and development expenses                                                                                                            |                              |   |   | 11,018 |   |   |   |   | 2,096 |   |   |
| Total      operating expenses                                                                                                                     |                              |   |   | 1,050,110 |   |   |   |   | 167,684 |   |   |
| Income      (Loss) from operations                                                                                                                |                              |   |   | (553,178 | ) |   |   |   | 624,528 |   |   |
| Interest      income (expenses)                                                                                                                   |                              |   |   | (90,333 | ) |   |   |   | 7,075 |   |   |
| Income      (loss) before income taxes                                                                                                            |                              |   |   | (643,511 | ) |   |   |   | 631,603 |   |   |
| Provision      for income taxes                                                                                                                   |                              |   |   | 11,821 |   |   |   |   | 156,234 |   |   |
| Net      (loss) income                                                                                                                            |                              |   | $ | (655,332 | ) |   |   | $ | 475,369 |   |   |
|                                                                                                                                              |                              |   |   |   |   |   |   |   |   |   |   |
|  As      a Percentage of Sales                                                                                                               |                              |   |   |   |   |   |   |   |   |   |   |
| Sales                                                                                                                                             |                              |   |   | 100.0 | % |   |   |   | 100.0 | % |   |
| Cost      of sales                                                                                                                                |                              |   |   | 78.5 | % |   |   |   | 58.8 | % |   |
| Gross      profit                                                                                                                                 |                              |   |   | 21.5 | % |   |   |   | 41.5 | % |   |
| Expenses                                                                                                                                          |                              |   |   |   |   |   |   |   |   |   |   |
| General      & administrative expenses                                                                                                        |                              |   |   | 42.0 | % |   |   |   | 5.6 | % |   |
| Selling      expenses                                                                                                                             |                              |   |   | 3.1 | % |   |   |   | 3.1 | % |   |
| Research      and development expenses                                                                                                            |                              |   |   | 0.5 | % |   |   |   | 0.1 | % |   |
| Total      operating expenses                                                                                                                     |                              |   |   | 45.5 | % |   |   |   | 8.7 | % |   |
| Income/(loss)      before income taxes                                                                                                            |                              |   |   | (27.9 | )      % |   |   |   | 33.1 | % |   |
| Provision      for income taxes                                                                                                                   |                              |   |   | 0.5 | % |   |   |   | 8.2 | % |   |
| Net      (loss) income                                                                                                                            |                              |   |   | (28.4 | )      % |   |   |   | 25.0 | % |   |

----

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|                                                               | Three      Months Ended March 31, |
|--------------------------------------------------------------------|-----------------------------------|
|                                                               |                              | 2009 |   |   | 2008 |   |   |
|                                                               |                              |   |
| Net      cash (used in) provided by operating activities           |                            |   |   | $ | 70,044 |   |   |   |   | $ | (5,668,942 | ) |   |
| Net      cash used in investing activities                         |                            |   |   |   | (2,400,913 | ) |   |   |   |   | (4,337,200 | ) |   |
| Net      cash (used in) provided by financing activities |                            |   |   |   | (998,588 | ) |   |   |   |   | 7,786,853 |   |   |
| Effect      of exchange rate changes on cash                       |                            |   |   |   | (496 | ) |   |   |   |   | 62,652 |   |   |
| Net      increase (decrease) in cash                               |                            |   |   | $ | (3,329,953 | )  |   |   |   | $ | 2,156,637 |   |   |
| Cash      at beginning of period                                   |                            |   |   |   | 4,874,044 |   | ??/FONT> |   |   |   | 2,619,176 |   |   |
| Cash      at end of period                                         |                            |   |   | $ | 1,544,091 |   |   |   |   | $ | 462,539 |   |   |

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|                         |   | Payments      due by Period (in $) |
|------------------------------|--------|------------------------------------|
| Contractual      Obligations |   | Total                              |   | Less      Than 1 Year |   | 1 – 3Years |   | 3 – 5Years |   | More      Than5      Years |
| Loans      from shareholders |   | $                                  | 6,305,885 |   |   | $ | 6,305,885 |   |   | $ | ---- |   |   | $ | — |   |   | $ | — |   |
| Long      term debt          |   | $                                  | 4,390,073 |   |   | $ | -- |   |   | $ |    4,390,073 |   |   |   | — |   |   |   | — |   |
|                    |   | $                                  | 10,695,958 |   |   | $ | 6,305,885 |   |   | $ |    4,390,073 |   |   | $ | — |   |   | $ | — |   |

----

g.

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|      |   |                                                                                                                                                                                                       |   |          |   | Incorporated by Reference |   |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|-------------------------------------|--------|
| ExhibitNo |   | Exhibit Title                                                                                                                                                                                         |   | FiledHerewith |   | Form                                |   | ExhibitNo. |   | File No. |   | FilingDate |   |
| 31.1      |   | Certification      of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 and      15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002                     |   | X             |   |                                |   |   |   |   |   |   |   |
| 31.2      |   | Certification      of Chief Financial Officer pursuant to Exchange Act Rules 13a-14 and      15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002                     |   | X             |   |                                |   |   |   |   |   |   |   |
| 32.1      |   | Certification      of Chief Executive Officer and Principal Financial Officer pursuant to 18      U.S.C. § 1350, as adopted pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002  |   | X             |   |                                |   |   |   |   |   |   |   |

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|   |                                       |   |
|--------|--------------------------------------------|--------|
|   |   Apollo      Solar Energy, Inc. |

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