| Nevada                                                                                           |           | 98-0522950                                  |
|--------------------------------------------------------------------------------------------------|----------------|---------------------------------------------|
| (State      or other jurisdiction of incorporation or organization)                              |           | (IRS      Employer Identification No.)      |
|                                                                                             |           |                                        |
| No.      57 Xinhua East StreetHohhot,      Inner Mongolia, People’s Republic of China |           | 010010                                      |
|                                                                                             |           |                                        |
| (Address      of principal executive offices)                                                    |           | (Zip      Code)                             |
|                                                                                             |           |                                        |
| Registrant’s  telephonenumber, including areacode                           | 1-888-597-8899 |                                        |   |
| Securities      registered under Section 12(b) of theExchange      Act:                          |           |                                        |
|                                                                                             |           |                                        |
| Common      Stock, $0.001 par value Common                                                       |           | OTCBB                                       |
| (Title      of class)                                                                            |           | (Name      of exchange on which registered) |
| Securities      registered pursuant to section 12(g) of the Act:                                 |      |                                        |

| Large      accelerated filer    o                                                       |         | Accelerated      filer     o         |
|-------------------------------------------------------------------------------------------------------------|--------------|---------------------------------------------------------------|
| Non-accelerated      filer   o  (Do      not check if a smaller reporting company) |    | Smaller      reporting company     x |

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| PART      I                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                 |   |   |
| ITEM      1. BUSINESS                                                                                                                |   | 3 |
|                                                                                                                                 |   |   |
| ITEM      1A. RISK FACTORS                                                                                                           |   | 17 |
|                                                                                                                                 |   |   |
| ITEM      1B. UNRESOLVED STAFF COMMENTS                                                                                              |   | 17 |
|                                                                                                                                 |   |   |
| ITEM      2. PROPERTIES                                                                                                              |   | 18 |
|                                                                                                                                 |   |   |
| ITEM      3. LEGAL PROCEEDINGS                                                                                                       |   | 21 |
|                                                                                                                                 |   |   |
| ITEM      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                     |   | 21 |
|                                                                                                                                 |   |   |
| PART      II                                                                                                                         |
|                                                                                                                                 |   |   |
| ITEM      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND      ISSUER PURCHASES OF EQUITY SECURITIES |   | 22 |
|                                                                                                                                 |   |   |
| ITEM      6. SELECTED FINANCIAL DATA                                                                                                 |   | 24 |
|                                                                                                                                 |   |   |
| ITEM      7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS      OF OPERATIONS                        |   | 25 |
|                                                                                                                                 |   |   |
| ITEM      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET    RISK                                                           |    | 36 |

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| · | general      economic and business conditions, both nationally and in our      markets, |
|--------|-----------------------------------------------------------------------------------------|

| · | our      expectations and estimates concerning future financial performance,      financing plans and the impact ofcompetition, |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | our      ability to implement our growthstrategy, |
|--------|---------------------------------------------------|

| · | anticipated      trends in our business, |
|--------|------------------------------------------|

| · | advances      in technologies, and |
|--------|------------------------------------|

| · | other      risk factors set forth herein. |
|--------|-------------------------------------------|

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| Year |   | Produced |    |   | External Sources |   |
|------|--------|----------|---------|--------|-----------------------|--------|
| 2004 |   |     | 506,913 |   |                  |   | 34,295 |   |
| 2005 |   |     | 612,739 |   |                  |   | 100,358 |   |
| 2006 |   |     | 549,970 |   |                  |   | 3,572 |   |
| 2007 |   |     | 459,055 |   |                  |   | 132,764 |   |
| 2008 |   |     | 264,098 |   |                  |   | 50,000 |   |

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| Registered paid up capital |    | Total Investment                                                   |
|-------------------------------------------|--------------|-------------------------------------------------------------------------|
| Less      that $ 2.1 million              |         | Cannot      exceed 1.43 times the amount of registered paid up  capital |
| $      2.1 to $ 5 million                 |         | Cannot      exceed 2 times the amount of registered paid up capital     |
| $ 5      million to $ 12 million          |         | Cannot      exceed 2.5 times the amount of registered paid up  capital  |
| More      than $ 12 million               |    | Cannot      exceed 3 times the amount of registered paid up  capital    |

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|   | · | Reserve. That part of a mineral deposit      which could be economically and legally extracted or produced at the time      of the reserve determination. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Proven (Measured) Reserves.      Reserves for which (a) quantity is computed from dimensions      revealed in outcrops, trenches, workings or drill holes; grade and/or      quality are computed from the results of detailed sampling and (b) the      sites for inspection, sampling and measurement are spaced so closely and      the geologic character is so well defined that size, shape, depth and      mineral content of reserves are  well-established. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Probable (Indicated) Reserves.      Reserves for which quantity and grade and/or quality are computed      from information similar to that used for proven (measure) reserves, but      the sites for inspection, sampling, and measurement are farther apart or      are otherwise less adequately spaced. The degree of assurance, although      lower than that for proven (measured) reserves, is high enough to assume      continuity between points ofobservation. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Proven      reserves    |   |   | 21,160 |   |
|-------------------------|--------|--------|--------|--------|
| Probable      reserves* |   |   | 4,930  |   |
| Total      reserve      |   |   | 26,090 |   |

| Year |   | Mined      OutReserves |      |   | Recovery      Rate |   |   | CoalProduced |   |
|------|--------|------------------------|-----------|--------|--------------------|--------|--------|--------------|--------|
| 2006 |   |                   | 1,374,927 |   |               |   | 40     | %            |   |   | 549,970 |   |
| 2007 |   |                   | 1,147,637 |   |               |   | 40     | %            |   |   | 459,055 |   |
| 2008 |   |                   | 330,122   |   |               |   | 80     | %            |   |   | 264,098 |   |

----

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| Year |   | Annual Production Per ton |    |   | Weighted Average Price |   |
|------|--------|------------------------------------------|---------|--------|----------------------------------|--------|
| 2004 |   |                                     | 506,913 |   |                             | $      | 10 |   |
| 2005 |   |                                     | 612,739 |   |                             | $      | 24 |   |
| 2006 |   |                                     | 549,970 |   |                             | $      | 24 |   |
| 2007 |   |                                     | 459,055 |   |                             | $      | 25 |   |
| 2008 |   |                                     | 264,098 |   |                             | $      | 33 |   |

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|   | · | Dongsheng – 70  km |
|--------|--------|--------------------------|

|   | · | Baotou City –  170km |
|--------|--------|----------------------------|

|   | · | XueJiaWan Town –  145km |
|--------|--------|-------------------------------|

|   | · | Yulin City, Shang’xi Province - 215      km |
|--------|--------|---------------------------------------------------|

|   | · | Wuhai City - 370      km |
|--------|--------|--------------------------|

----

----

| Name                  |   | Position                       |   | Period      Serving                             |   | Term      (1) |
|-----------------------|--------|--------------------------------|--------|-------------------------------------------------|--------|---------------|
| WenXiang      Ding    |   | CEO,      President, Director, |   | December      1, 2008 – November      30, |   | 1      year   |
|                  |   | Secretary,      Treasurer      |   | 2009                                            |   |          |
| YanHua      Li        |   | Director                       |   | December      1, 2008 – November      30, |   | 1      year   |
|                  |   |                           |   | 2009                                            |   |          |
| Fu      Xu            |   | CFO                            |   | December      1, 2008 – November      30, |   | 1      year   |
|                  |   |                           |   | 2009                                            |   |          |
| Locksley      Samuels |   | Director                       |   | December      1, 2008 – November      30, |   | 1      year   |
|                  |   |                           |   | 2009                                            |   |          |

----

|                              |   | High   |   |   | Low    |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
| 2008                              |   |   |   |   |   |   |   |   |
| First      Quarter                |   |   | 0.42   |   |   |   | 0.41 |   |
| Second      Quarter               |   |   | 1.02   |   |   |   | 1.01 |   |
| Third      Quarter                |   |   | 0.95   |   |   |   | 0.94 |   |
| Fourth      Quarter               |   |   | 0.42   |   |   |   | 0.42 |   |
| 2007                              |   |   |   |   |   |   |   |   |
| First      Quarter                |   |   |   |   |   |   |   |   |
| Second      Quarter (From June 8) |   | $      | 0.25   |   |   | $      | 0.25 |   |
| Third      Quarter                |   |   | 0.25   |   |   |   | 0.25 |   |
| Fourth      Quarter               |   |   | 6.00   |   |   |   | 0.25 |   |

----

|   | · | increase      or decrease the number of common shares that may be issued under the 2008      Plan; or |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | materially      modify the requirements as to eligibility for participation in the 2008      Plan. |
|--------|--------|----------------------------------------------------------------------------------------------------|

----

----

|   | · | assumptions are required to      be made; and |
|--------|--------|-----------------------------------------------|

|   | · | changes in estimates could      have a material effect on our financial  statements. |
|--------|--------|--------------------------------------------------------------------------------------|

|               |   | 2008   |       |   | %      Sales |   |   | 2007 |   |   | %      Sales |   |
|--------------------|--------|--------|------------|--------|--------------|--------|--------|------|--------|--------|--------------|--------|
| Sales              |   | $      | 19,884,097 |   |         |   | 100    | %    |   | $      | 20,282,068   |   |   |   | 100 | % |
| Cost      of Sales |   |   | 13,952,998 |   |         |   | 70     | %    |   |   | 12,945,308   |   |   |   | 64 | % |
| Gross      Profit  |   | $      | 5,931,099  |   |         |   | 30     | %    |   | $      | 7,336,760    |   |   |   | 36 | % |

----

| Heating      Revenue Per Unit |   |
|-------------------------------|--------|
|                          |   |
|                          |   | Unit      Price ($/sqm/mo.) |   |   | Area      ('000sq. meter range) |   |   | Revenue      ($) |   |
| User                          |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | Variance |   |
| Residential                   |   |   | 0.43 |   |   |   | 0.26 |   |   |   | 1010/1440 |   |   |   | 743/1010 |   |   |   | 2,154,291 |   |   |   | 1,090,916 |   |   |   | 1,063,375 |   |
| Commercial                    |   |   | 0.62 |   |   |   | 0.47 |   |   |   | 240/350 |   |   |   | 167/240 |   |   |   | 860,842 |   |   |   | 429,756 |   |   |   | 431,086 |   |
| Government                    |   |   | 0.62 |   |   |   | 0.51 |   |   |   | 290/310 |   |   |   | 245/290 |   |   |   | 877,737 |   |   |   | 644,960 |   |   |   | 232,777 |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,892,870 |   |   |   | 2,165,632 |   |   |   | 1,727,238 |   |

----

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| Electricity      Revenue Per Unit |   |
|-----------------------------------|--------|
|                              |   |
|                              |   |   |   |   |   |   |   | Units      of Power supplied |   |   |   |   |   |   |   |   |   |   |
|                              |   | Unit      Price ($/KW.h) |   |   | (1,000KW.h) |   |   | Electricity      Revenue ($)* |   |
| Period                            |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | Variance |   |
| Q1                                |   |   | 0.03 |   |   |   | 0.03 |   |   |   | 35,561 |   |   |   | 28,827 |   |   |   | 1,127,523 |   |   |   | 807,348 |   |   |   | 320,175 |   |
| Q2                                |   |   | 0.03 |   |   |   | 0.03 |   |   |   | 37,798 |   |   |   | 36,295 |   |   |   | 1,198,459 |   |   |   | 1,016,474 |   |   |   | 181,985 |   |
| Q3                                |   |   | 0.03 |   |   |   | 0.03 |   |   |   | 919 |   |   |   | 26,124 |   |   |   | 29,155 |   |   |   | 731,618 |   |   |   | (702,463 | )  |
| Q4                                |   |   | 0.03 |   |   |   | 0.03 |   |   |   | 20,922 |   |   |   | 33,387 |   |   |   | 663,363 |   |   |   | 935,107 |   |   |   | (271,744 | )  |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                             |   |   |   |   |   |   |   |   |   |   | 95,200 |   |   |   | 124,633 |   |   |   | 3,018,500 |   |   |   | 3,490,547 |   |   |   | (472,047 | )  |

|                               |   | 2008   |       |   | 2007   |   |
|------------------------------------|--------|--------|------------|--------|--------|--------|
| Salaries      and wages            |   | $      | 599,882    |   |   | $      | 641,408 |   |
| Operating      supplies            |   |   | 472,990    |   |   |   | 333,044 |   |
| Depreciation      and amortization |   |   | 2,069,366  |   |   |   | 1,654,431 |   |
| Repairs                            |   |   | 90,081     |   |   |   | 49,772 |   |
| Coal      and freight              |   |   | 9,583,012  |   |   |   | 9,892,246 |   |
| Utilities                          |   |   | 751,117    |   |   |   | 305,200 |   |
| Other                              |   |   | 386,550    |   |   |   | 69,207 |   |
|                               |   |   |       |   |   |   |   |   |
| Total                              |   | $      | 13,952,998 |   |   | $      | 12,945,308 |   |

----

|                                 |   | 2008   |      |   | %      Expenses |   |    | 2007   |   |   | %      Expenses |   |
|--------------------------------------|--------|--------|-----------|--------|-----------------|--------|---------|--------|--------|--------|-----------------|--------|
| Salaries      and Wages              |   | $      | 502,795   |   |            |   | 19      |   |   | $      | 401,952         |   |   |   | 15 |   |
| Postage      and office supplies     |   |   | 517,000   |   |            |   | 19      |   |   |   | 556,330         |   |   |   | 21 |   |
| Sales      Tax                       |   |   | 352,244   |   |            |   | 13      |   |   |   | 440,220         |   |   |   | 17 |   |
| Professional      and other fees     |   |   | 664,644   |   |            |   | 25      |   |   |   | 440,067         |   |   |   | 17 |   |
| Depreciation                         |   |   | 167,873   |   |            |   | 6       |   |   |   | 152,589         |   |   |   | 6 |   |
| Travel                               |   |   | 185,120   |   |            |   | 7       |   |   |   | 209,815         |   |   |   | 8 |   |
| Repairs                              |   |   | 153,273   |   |            |   | 6       |   |   |   | 100,205         |   |   |   | 4 |   |
| Allowance      for doubtful accounts |   |   | 1,811     |   |            |   |  1 |   |   |   | 91,439          |   |   |   |  3 |   |
| Other      expenses                  |   |   | 121,881   |   |            |   | 4       |   |   |   | 223,534         |   |   |   | 9 |   |
| Total      expenses                  |   | $      | 2,666,641 |   |            |   | 100     | %      |   | $      | 2,616,151       |   |   |   | 100 | % |

----

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| Due      date         |   | Interest      rate |   |   | Principle |   |
|-----------------------|--------|--------------------|--------|--------|-----------|--------|
| October      22, 2009 |   |               | 8.316  | %      |      | $      | 2,633,156 |   |
| March      30, 2009   |   |               | 8.964  | %      |      |   | 1,462,866 |   |
| April      23, 2009   |   |               | 8.964  | %      |      |   | 1,462,866 |   |
| Total                 |   |               |   |   |      | $      | 5,558,888 |   |

|                                                               |   | 2008   |       |    | 2007   |   |
|--------------------------------------------------------------------|--------|--------|------------|---------|--------|--------|
| Net      income (loss)                                             |   |   | 3,959,003  |    |   |   | 2,924,134 |   |
| Decrease      (increase) in accounts receivable                    |   |   | 588,491    |    |   |   | (2,321,703 | ) |
| Increase      in other receivables                                 |   |   | (3,111,908 | )  |   |   | (918,107 | ) |
| (Increase)      decrease in advances to suppliers                  |   |   | (3,060,298 | )       |   |   | 1,204,211 |   |
| (Increase)      decrease in inventory                              |   |   | (348,021   | )       |   |   | 472,142 |   |
| Increase      in deferred income                                   |   |   | 3,199,059  |    |   |   | 2,172,892 |   |
| Increase      in accounts payable                                  |   |   | 942,610    |    |   |   | 2,421,996 |   |
| (Decrease)      increase in advances from customers                |   |   | (229,577   | )       |   |   | 1,632,574 |   |
| (Decrease)      increase in accrual liabilities and other payables |   |   | (436,173   | )       |   |   | 1,484,760 |   |
| Others                                                             |   |   | 2,900,214  |    |   |   | 2,285,292 |   |
| Net      Cash Provided (Consumed) By                               |   |   |       |    |   |   |   |   |
|  Operating      Activities                                    |   | $      | 4,403,400  |    |   | $      | 11,358,191 |   |

----

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| Hangzhou      Dayuan Group, Ltd.                                  |   |   | 5,101,839        |   |
|-------------------------------------------------------------------|--------|--------|------------------|--------|
| Wenxiang      Ding                                                |   |   | 2,071,366        |   |
| Xinghe      County Haifu Coal Transportation &Sales Co., Ltd. |   |   | 1,760,278        |   |
| Ordos      City YiYuan Investment Co. Ltd.                        |   |   | 1,535,992        |   |
| Wenhua      Ding                                                  |   |   | 248,688          |   |
| Total                                                             |   |   |  10,718,163 |   |

----

----

----

|   | 1. | We      did not maintain effective controls to ensure the proper recording of      deferred income and statutoryreserves. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------|

|   | 2. | We      did not maintain effective controls to ensure the proper classification of      construction in progress, accounts receivable, other receivable and      advances to suppliers, accounts payable, other payables, advances and      loans. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | We      did not maintain effective controls to ensure the proper accounting of      mining right amortization. |
|--------|----|----------------------------------------------------------------------------------------------------------------|

|   | 4. | We      did not maintain effective controls over the period-end and year-end      closing process to ensure the accurate processing our accounts so as to      enable us to report our results on a timely  basis. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 1. | We      hired a new Chief Financial Officer on December 14, 2009 who is familiar      with U.S. GAAP reportingrequirements. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Our Chief Financial Officer will      work more closely with accounting personnel to ensure accurate and timely      period-end and year-end financial  reporting. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Additional training in U.S. GAAP      will be provided to accountingpersonnel. |
|--|----|--------------------------------------------------------------------------------|

|  | 4. | As      necessary, we will engage      independent outside accounting consultants to augment our accounting      department. |
|--|----|------------------------------------------------------------------------------------------------------------------------------|

----

| Name                  |   | Position                                            |   | Period      Serving                             |   | Term(1)  |
|-----------------------|--------|-----------------------------------------------------|--------|-------------------------------------------------|--------|---------------|
| WenXiang      Ding    |   | CEO,      President, Director, Secretary, Treasurer |   | December      1, 2008 – November 30, 2009 |   | 1      year   |
| YanHua      Li        |   | Director                                            |   | December      1, 2008 – November 30, 2009 |   | 1      year   |
| Fu      Xu            |   | CFO                                                 |   | December      1, 2008 – November 30, 2009 |   | 1      year   |
| Locksley      Samuels |   | Director                                            |   | December      1, 2008 – November 30, 2009 |   | 1      year   |

|  | (1) | Directors      hold office until the next annual stockholders’ meeting or until a      successor or successors are elected and  appointed |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | An      understanding of generally accepted accounting principles and financial      statements; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | The      ability to assess the general application of such principles in connection      with the accounting for estimates, accruals and  reserves; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Experience      preparing, auditing, analyzing or evaluating financial statements that      present a breadth and level of complexity of accounting issues that are      generally comparable to the breadth and complexity of issues that can      reasonably be expected to be raised by the registrant’s financial      statements, or experience actively supervising one or more persons engaged      in such activities; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      understanding of internal controls and procedures for financial reporting;      and |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | An      understanding of audit committeefunctions. |
|--------|--------|----------------------------------------------------|

----

|                  |   |                                        |   | LONG TERM COMPENSATION |   |   |   |   |   |   |   |                    |   |   |                                    |   |   |
|-----------------------|--------|---------------------------------------------|--------|----------------------------------|--------|--------|--------|--------|--------|--------|--------|-------------------------|--------|--------|-----------------------------------------|--------|--------|
| NAME                  |   | TITLE                                       |   | YEAR                             |   | SALARY |   |   | BONUS  |   |   | OTHERANNUALCOMPENSATION |   |   | RESTRICTEDOPTIONSTOCK/PAYOUTSAWARDED(1) |   |   | SARS$ |   |   | LTIPCOMPENSATION |   |   | ALL OTHERCOMPENSATION |   |
| WenXiang      Ding    |   | President,      CEO, Secretary and Director |   | 2008                             |   | $      | 6,800  |   |   |   | -0-    |                    |   |   | -0-                                     |   |   |   | 70,000 |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
|                  |   |                                        |   | 2007                             |   | $      | 6,800  |   |   |   | -0-    |                    |   |   | -0-                                     |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
| YanHua      Li        |   | Director                                    |   | 2008                             |   | $      | 5,100  |   |   |   | -0-    |                    |   |   | -0-                                     |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
|                  |   |                                        |   | 2007                             |   | $      | 5,100  |   |   |   | -0-    |                    |   |   | -0-                                     |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
| Fu      Xu            |   | CFO                                         |   | 2008                             |   | $      | 9,000  |   |   |   | -0-    |                    |   |   | -0-                                     |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
|                  |   |                                        |   | 2007                             |   |   | N/A    |   |   |   | N/A    |                    |   |   | N/A                                     |   |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |
| Locksley      Samuels |   | Director                                    |   | 2008                             |   |   | -0-    |   |   |   | -0-    |                    |   |   | -0-                                     |   |   |   | 21,000 |   |   |   | -0- |   |   |   | -0- |   |   |   | -0- |   |
|                  |   |                                        |   | 2007                             |   |   | N/A    |   |   |   | N/A    |                    |   |   | N/A                                     |   |   |   | -0- |   |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |

| (1) | Represents      expense recognized in accordance with SFAS 123(R) as described in Note 14      of the audited financial statements included in Item  8. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Title      of Class                    |   | Name and Address of BeneficialOwner                      |   |   | Amount andNature ofBeneficial Owner |       |   | % Class (1) |   |
|----------------------------------------|--------|------------------------------------------------------------------------------|--------|--------|----------------------------------------------------|------------|--------|-----------------------|--------|
| Officers      and Directors:           |   |                                                                         |   |   |                                               |       |   |                  |   |
| None                                   |   |                                                                         | -      |   |                                               |       | -      |                  |   |   | - |   |
|                                   |   |                                                                         |   |   |                                               |       |   |                  |   |   |   |   |
| Officers      and Directors as a Group |   |                                                                         |   |   |                                               |       | -      |                  |   |   | - |   |
|                                   |   |                                                                         |   |   |                                               |       |   |                  |   |   |   |   |
| 5%      Shareholders:                  |   |                                                                         |   |   |                                               |       |   |                  |   |   |   |   |
|                                   |   |                                                                         |   |   |                                               |       |   |                  |   |   |   |   |
| Common      Stock                      |   | Georgia      Pacific Investments Inc.No.      5 New Road, Belize City,Belize |   |   |                                               | 20,589,107 | (2)    |                  |   | 46 | % |
|                                   |   |                                                                         |   |   |                                               |       |   |                  |   |   |   |   |
| Common      Stock                      |   | Axim      Holdings Inc.No.      5 New Road, Belize City,Belize               |   |   |                                               | 10,000,000 | (2)    |                  |   | 22 | % |

----

| Title      of Class             |   | Name and Address of BeneficialOwner                                             |   |   | Amount andNature ofBeneficial Owner |      |       | % Class (1) |   |
|---------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------|-----------|------------|-----------------------|--------|
|                            |   |                                                                                                |   |   |                                               |      |       |                  |   |   |   |   |
| Common      Stock               |   | YuhHsin      LiuRoom      1308, Wan De Mansion,No.1019 Shen NanZhong      Lu, Shenzhen 518046,China |   |   |                                               | 2,700,000 |       |                  |   | 6 | % |
|                            |   |                                                                                                |   |   |                                               |      |       |                  |   |   |   |   |
| Officers,      Directors and 5% |   |                                                                                                |   |   |                                               |      | 33,289,407 |                  |   |   | 74 | % |
|                            |   |                                                                                                |   |   |                                               |      |       |                  |   |   |   |   |
| Shareholders      as a Group    |   |                                                                                                |   |   |                                               |      |       |                  |   |   |   |   |

| (1) | Based      on 45,000,000 shares outstanding as of March 16,  2009. |
|-----|--------------------------------------------------------------------|

| (2) | Shares      are held pursuant to the Share Trust Agreement and Trust Agreement. Please      refer to Exhibit 10.2 and 10.3. |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

----

| Ordos      City YiYuan Investment Co. Ltd.                         |   | $      | 1,535,992  |   |
|--------------------------------------------------------------------|--------|--------|------------|--------|
| Hangzhou      Dayovan Group, Ltd.                                  |   |   | 5,101,839  |   |
| Xinghe      County Haifu Coal Transportation & Sales Co., Ltd. |   |   | 1,760,278  |   |
| WenXiang      Ding                                                 |   |   | 2,071,366  |   |
| Wenhua      Ding                                                   |   |   | 248,688    |   |
| Total                                                              |   | $      | 10,718,163 |   |

|                    |   | 2007   |   |   | 2008   |   |
|-------------------------|--------|--------|--------|--------|--------|--------|
| Audit      fees         |   | $      | 50,000 |   |   | $      | 50,000 |   |
| Audit-related      fees |   |   |   |   |   |   |   |   |
| Tax      fees           |   |   |   |   |   |   |   |   |
| All      other fees     |   |   |   |   |   |   |   |   |
| Total                   |   | $      | 50,000 |   |   | $      | 50,000 |   |

----

| ExhibitNumber  | Description                                                                                                       |
|---------------------|-------------------------------------------------------------------------------------------------------------------|
|                |                                                                                                              |
| 3.1                 | Certificate      of Incorporation, dated October 14, 2002-Omega Project Consultations Inc.      1                 |
| 3.2                 | Certificate      of Incorporation, dated November 3, 2004- China Energy Corporation 1                             |
| 3.3                 | Articles      of Incorporation, dated October 11, 2002- Omega Project Consultations Inc.      1                   |
| 3.4                 | Certificate      Amending Articles of Incorporation dated November 3, 2004 changing our      name to “China |
|                | Energy      Corporation” and increase our authorized capital to 200,000,000 from      75,000,000. 1         |
| 3.5                 | Bylaws,      effective October 12, 2002 1                                                                         |
| 10.1                | Share      Exchange Agreement between China Energy Corporation and Inner Mongolia      Tehong Coal Group          |
|                | Co.,      Ltd and Inner Mongolia Zhunger Heat Power Co., Ltd., dated November 30,      2004. 1                    |
| 10.2                | Trust      Agreement between PPI and Coal Group and Heat Power dated December 31,      2007 2                     |
| 10.3                | Share      Trust Agreement between PPI, Axim and GPI dated January 3, 2008 2                                      |
| 10.4                | 2008      Stock Option Plan 3                                                                                     |
| 10.5                | LaiYeGou      Coal Mine Permit                                                                                    |
| 23.1                | Auditor      Consent Letter dated March __, 2010                                                                  |
| 31.1                | Rule      13A-14(A) Certification Of The Chief Executive Officer                                                  |
| 31.2                | Rule      13A-14(A) Certification Of The Chief Financial Officer                                                  |
| 32.1                | Section      1350 Certification Of The  Chief Executive Officer                                         |
| 32.2                | Section      1350 Certification Of The  Chief Financial Officer                                         |

| 1 | Incorporated      by reference from our Form SB-2 that was originally filed with the SEC on      September 27, 2005. |
|---|----------------------------------------------------------------------------------------------------------------------|
| 2 | Incorporated      by reference from Form 8K filed with the SEC on January 14,      2008.                             |
| 3 | Incorporated      by reference from Form 8K filed with the SEC on February 13,      2008.                            |

----

|   | CHINA      ENERGY CORPORATION |                                                           |
|--------|-------------------------------|----------------------------------------------------------------|
|   |                          |                                                           |   |
|   | By:                           | /s/ WenXiang      Ding                                    |   |
|   |                          | WenXiang      Ding                                             |   |
|   |                          | President,      Chief Executive Officer and      Director |   |

| Signatures             |   | Title                                                |   | Date                  |
|------------------------|--------|------------------------------------------------------|--------|-----------------------|
|                   |   |                                                 |   |                  |
| /s/      WenXiang Ding |   | President,      Chief Executive Officer and Director |   | May 5,      2010 |
| WenXiang      Ding     |   |                                                 |   |                  |
|                   |   |                                                 |   |                  |
| /s/      Yanhua Li     |   |                                                 |   |                  |
| Yanhua      Li         |   | Director                                             |   | May 5,      2010 |
|                   |   |                                                 |   |                  |
| /s/      Alex Gong     |   |                                                 |   |                  |
| Alex      Gong         |   | Chief      Financial Officer                         |   | May 5,      2010 |

----

----

----

|                                                                                                                |   | 2008               |       |   | 2007               |   |
|---------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|--------------------|--------|
|                                                                                                                |   | (as      restated) |       |   | (as      restated) |   |
| ASSETS                                                                                                              |   |               |       |   |               |   |
| Current      assets:                                                                                                |   |               |       |   |               |   |
| Cash      and cash equivalents                                                                                      |   | $                  | 456,802    |   |               | $      | 1,489,762 |   |
| Certificate      of deposit                                                                                         |   |               | -          |   |               |   | 94,698 |   |
| Accounts      receivable, net of allowance for doubtful accounts of $102,401 and      $94,698, respectively         |   |               | 3,006,456  |   |               |   | 3,602,649 |   |
| Other      receivables                                                                                              |   |               | 4,333,548  |   |               |   | 1,221,640 |   |
| Advances      to suppliers                                                                                          |   |               | 2,750,536  |   |               |   | 1,180,386 |   |
| Inventories                                                                                                         |   |               | 500,154    |   |               |   | 152,133 |   |
| Total      current assets                                                                                           |   |               | 11,047,496 |   |               |   | 7,741,268 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| Fixed      assets:                                                                                                  |   |               |       |   |               |   |   |   |
| Property,      plant and equipment                                                                                  |   |               | 38,566,119 |   |               |   | 29,027,912 |   |
| Construction      in progress                                                                                       |   |               | 9,809,230  |   |               |   | 7,626,025 |   |
|                                                                                                                |   |               | 48,375,349 |   |               |   | 36,653,937 |   |
| Less:      accumulated depreciation and amortization                                                                |   |               | (4,778,216 | )      |               |   | (2,934,087 | ) |
| Net      fixed assets                                                                                               |   |               | 43,597,133 |   |               |   | 33,719,850 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| Other      assets:                                                                                                  |   |               |       |   |               |   |   |   |
| Investment      property, net of accumulated depreciation of $120,686 and $69,755,      respectively                |   |               | 1,978,873  |   |               |   | 1,871,881 |   |
| Mining      right, net of amortization of $492,575 and $400,303,      respectively                                  |   |               | 3,916,413  |   |               |   | 3,532,407 |   |
| Long      term investments                                                                                          |   |               | 255,776    |   |               |   | 3,889,184 |   |
| Restricted      cash                                                                                                |   |               | 148,668    |   |               |   | 136,453 |   |
| Notes      receivable                                                                                               |   |               | 2,802,850  |   |               |   | 5,011,133 |   |
| Total      other assets                                                                                             |   |               | 9,102,580  |   |               |   | 14,441,058 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                  | 63,747,209 |   |               | $      | 55,902,176 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |               |       |   |               |   |   |   |
| Current      liabilities:                                                                                           |   |               |       |   |               |   |   |   |
| Short      term bank loans                                                                                          |   | $                  | 5,558,888  |   |               | $      | 9,469,825 |   |
| Accounts      payable                                                                                               |   |               | 9,389,617  |   |               |   | 6,745,522 |   |
| Advance      from customers                                                                                         |   |               | 3,350,659  |   |               |   | 2,426,135 |   |
| Accrued      liabilities                                                                                            |   |               | 326,611    |   |               |   | 413,374 |   |
| Other      payables                                                                                                 |   |               | 929,463    |   |               |   | 1,147,215 |   |
| Shareholder      loans                                                                                              |   |               | 10,718,163 |   |               |   | 8,877,015 |   |
| Current      portion of long term obligation                                                                        |   |               | -          |   |               |   | 1,082,266 |   |
| Current      portion of deferred income                                                                             |   |               | 581,903    |   |               |   | 188,505 |   |
| Total      current liabilities                                                                                      |   |               | 30,855,304 |   |               |   | 30,349,857 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| Non-current      liabilities                                                                                        |   |               |       |   |               |   |   |   |
| Long      term obligation                                                                                           |   |               | -          |   |               |   | 1,623,399 |   |
| Deferred      income                                                                                                |   |               | 4,790,048  |   |               |   | 1,984,387 |   |
| Total      non-current liabilities                                                                                  |   |               | 4,790,048  |   |               |   | 3,607,786 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| Total      liabilities                                                                                              |   |               | 35,645,352 |   |               |   | 33,957,643 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| Stockholders’      equity:                                                                                    |   |               |       |   |               |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |               | 45,000     |   |               |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |               | 8,655,805  |   |               |   | 8,655,805 |   |
| Paid      in capital – stock options                                                                          |   |               | 315,000    |   |               |   | - |   |
| Retained      earnings                                                                                              |   |               | 8,545,786  |   |               |   | 5,706,522 |   |
| Statutory      reserves                                                                                             |   |               | 6,968,841  |   |               |   | 5,849,102 |   |
| Accumulated      other comprehensive income                                                                         |   |               | 3,571,425  |   |               |   | 1,688,104 |   |
| Total      stockholders’ equity                                                                               |   |               | 28,101,857 |   |               |   | 21,944,533 |   |
|                                                                                                                |   |               |       |   |               |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                  | 63,747,209 |   |               | $      | 55,902,176 |   |

----

|                                                              |   | 2008               |        |   | 2007               |   |
|-------------------------------------------------------------------|--------|--------------------|-------------|--------|--------------------|--------|
|                                                              |   | (as      restated) |        |   | (as      restated) |   |
|                                                              |   |               |        |   |               |   |
| Revenues                                                          |   | $                  | 19,884,097  |   |               | $      | 20,282,068 |   |
| Cost      of revenues                                             |   |               | (13,952,998 | )      |               |   | (12,945,308 | ) |
| Gross      profit                                                 |   |               | 5,931,099   |   |               |   | 7,336,760 |   |
|                                                              |   |               |        |   |               |   |   |   |
| Operating      expenses:                                          |   |               |        |   |               |   |   |   |
| Selling      and marketing                                        |   |               | (394,298    | )      |               |   | (493,775 | ) |
| General      and administrative                                   |   |               | (2,272,343  | )      |               |   | (2,122,376 | ) |
| Total      operating expenses                                     |   |               | (2,666,641  | )      |               |   | (2,616,151 | ) |
|                                                              |   |               |        |   |               |   |   |   |
| Income      from operations                                       |   |               | 3,264,458   |   |               |   | 4,720,609 |   |
|                                                              |   |               |        |   |               |   |   |   |
| Other      income and expenses:                                   |   |               |        |   |               |   |   |   |
| Financing      expenses, net                                      |   |               | (765,388    | )      |               |   | (704,098 | ) |
| Government      subsidies                                         |   |               | 3,042,579   |   |               |   | 690,782 |   |
| Non-operating      income                                         |   |               | 319,925     |   |               |   | 62,740 |   |
| Non-operating      expenses                                       |   |               | (399,093    | )      |               |   | (121,670 | ) |
|                                                              |   |               |        |   |               |   |   |   |
| Income      before income taxes                                   |   |               | 5,462,481   |   |               |   | 4,648,363 |   |
|                                                              |   |               |        |   |               |   |   |   |
| Provision      for income taxes                                   |   |               | (1,503,478  | )      |               |   | (1,724,229 | ) |
|                                                              |   |               |        |   |               |   |   |   |
| Net      income                                                   |   |               | 3,959,003   |   |               |   | 2,924,134 |   |
|                                                              |   |               |        |   |               |   |   |   |
| Other      comprehensive income:                                  |   |               |        |   |               |   |   |   |
| Foreign      currency translation adjustment                      |   |               | 1,883,321   |   |               |   | 812,167 |   |
| Total      comprehensive income                                   |   | $                  | 5,842,324   |   |               | $      | 3,736,301 |   |
|                                                              |   |               |        |   |               |   |   |   |
| Net      income per common share basic and diluted                |   | $                  | 0.09        |   |               | $      | 0.07 |   |
|                                                              |   |               |        |   |               |   |   |   |
| Weighted      average common shares outstanding basic and diluted |   |               | 45,000,000  |   |               |   | 45,000,000 |   |

----

|                                         |   | Common Stock |       |   |   |   |   | Paid-in                  |   |   |                |   |   |               |    |   | Accumulated        |   |       |                     |   |
|----------------------------------------------|--------|-------------------|------------|--------|--------|--------|--------|--------------------------|--------|--------|---------------------|--------|--------|--------------------|---------|--------|--------------------|--------|------------|--------------------------|--------|
|                                         |   | Shares            |       |   | Amount |   |   | AdditionalPaid-inCapital |   |   | CapitalStockOptions |   |   | RetainedEarnings   |    |   | StatutoryReserves  |   |       | OtherComprehensiveIncome |   |   | TotalStockholders’Equity |   |
|                                         |   |              |       |   |   |   |   |                     |   |   |                |   |   | (as      restated) |    |   | (as      restated) |   |       | (as      restated)       |   |   | (as      restated) |   |
|                                         |   |              |       |   |   |   |   |                     |   |   |                |   |   |               |    |   |               |   |       |                     |   |   |   |   |
| Balance      as of November 30, 2006         |   |              | 45,000,000 |   |   | $      | 45,000 |                     |   | $      | 8,655,805           |   |   | $                  | -       |   |               | $      | 4,164,902  |                     |   | $ | 4,466,588 |   |   | $ | 875,937 |   |   | $ | 18,208,232 |   |
|                                         |   |              |       |   |   |   |   |                     |   |   |                |   |   |               |    |   |               |   |       |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                              |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | -       |   |               |   | 2,924,134  |                     |   |   | - |   |   |   | - |   |   |   | 2,924,134 |   |
| Foreign      currency translation adjustment |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | -       |   |               |   | -          |                     |   |   | - |   |   |   | 812,167 |   |   |   | 812,167 |   |
| Appropriation      of statutory reserves     |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | -       |   |               |   | (1,382,514 | )                        |   |   | 1,382,514 |   |   |   | - |   |   |   | - |   |
| Balance      as of November 30, 2007         |   |              | 45,000,000 |   |   | $      | 45,000 |                     |   | $      | 8,655,805           |   |   |               | -       |   |               |   | 5,706,522  |                     |   |   | 5,849,102 |   |   |   | 1,688,104 |   |   |   | 21,944,533 |   |
|                                         |   |              |       |   |   |   |   |                     |   |   |                |   |   |               |    |   |               |   |       |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Value      of stock options granted          |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | 315,000 |   |               |   | -          |                     |   |   | - |   |   |   | - |   |   |   | 315,000 |   |
| Net      income                              |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | -       |   |               |   | 3,959,003  |                     |   |   | - |   |   |   | - |   |   |   | 3,959,003 |   |
| Foreign      currency translation adjustment |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | -       |   |               |   | -          |                     |   |   | - |   |   |   | 1,883,321 |   |   |   | 1,883,321 |   |
| Appropriation      of statutory reserves     |   |              | -          |   |   |   | -      |                     |   |   | -                   |   |   |               | -       |   |               |   | (1,119,739 | )                        |   |   | 1,119,739 |   |   |   | - |   |   |   | - |   |
| Balance      as of November 30, 2008         |   |              | 45,000,000 |   |   | $      | 45,000 |                     |   | $      | $8,655,805          |   |   | $                  | 315,000 |   |               | $      | 8,545,786  |                     |   | $ | 6,968,841 |   |   | $ | 3,571,425 |   |   | $ | 28,101,857 |   |

----

|                                                                                        |   | 2008               |       |   | 2007               |   |
|---------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|--------------------|--------|
|                                                                                        |   | (as      restated) |       |   | (as      restated) |   |
|                                                                                        |   |               |       |   |               |   |
| Cash      flows from operating activities:                                                  |   |               |       |   |               |   |
| Net      income                                                                             |   | $                  | 3,959,003  |   |               | $      | 2,924,134 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |               |       |   |               |   |   |   |
| Allowance      for doubtful accounts                                                        |   |               | -          |   |               |   | 93,698 |   |
| Depreciation      and amortization                                                          |   |               | 2,281,398  |   |               |   | 1,883,148 |   |
| Options      issued for services                                                            |   |               | 315,000    |   |               |   | - |   |
| Interest      accrued on shareholder loans                                                  |   |               | 209,118    |   |               |   | 393,186 |   |
| Loss      on disposal of property, plant and equipment                                      |   |               | -          |   |               |   | 444 |   |
| Loss      from long term investments                                                        |   |               | -          |   |               |   | 19,182 |   |
| Gain      from short term investments                                                       |   |               | -          |   |               |   | (9,668 | ) |
| Changes      in operating assets and liabilities:                                           |   |               |       |   |               |   |   |   |
| Decrease      (increase) in certificate of deposit                                          |   |               | 94,698     |   |               |   | (94,698 | ) |
| Decrease      (increase) in accounts receivable                                             |   |               | 588,491    |   |               |   | (2,321,703 | ) |
| (Increase)      in other receivables                                                        |   |               | (3,111,908 | )      |               |   | (918,107 | ) |
| (Increase)      decrease in advances to suppliers                                           |   |               | (3,060,298 | )      |               |   | 1,204,211 |   |
| (Increase)      decrease in inventories                                                     |   |               | (348,021   | )      |               |   | 472,142 |   |
| Increase      in deferred income                                                            |   |               | 3,199,059  |   |               |   | 2,172,892 |   |
| Increase      in accounts payable                                                           |   |               | 942,610    |   |               |   | 2,421,996 |   |
| (Decrease)      increase in advance from customers                                          |   |               | (229,577   | )      |               |   | 1,632,574 |   |
| (Decrease)      increase in accrued liabilities and other payables                          |   |               | (436,173   | )      |               |   | 1,484,760 |   |
| Net      cash provided by operating activities                                              |   |               | 4,403,400  |   |               |   | 11,358,191 |   |
|                                                                                        |   |               |       |   |               |   |   |   |
| Cash      flows from investing activities:                                                  |   |               |       |   |               |   |   |   |
| Purchase      of property, plant and equipment                                              |   |               | (4,552,335 | )      |               |   | (4,269,620 | ) |
| Increase      in construction in progress                                                   |   |               | (1,029,104 | )      |               |   | (6,108,776 | ) |
| Payments      made on mining right obligation                                               |   |               | (152,614   | )      |               |   | - |   |
| Proceeds      from disposal of short term investments                                       |   |               | -          |   |               |   | 61,919 |   |
| Increase      in long term investments                                                      |   |               | -          |   |               |   | (3,732,553 | ) |
| Proceeds      from disposal of long term investments                                        |   |               | 3,633,408  |   |               |   | - |   |
| Increase      in notes receivable                                                           |   |               | (2,126,434 | )      |               |   | (332,277 | ) |
| Payments      received on notes receivable                                                  |   |               | 4,334,717  |   |               |   | - |   |
| Net      cash provided by (used in) investing activities                                    |   |               | 107,638    |   |               |   | (14,381,307 | ) |
|                                                                                        |   |               |       |   |               |   |   |   |
| Cash      flows from financing activities:                                                  |   |               |       |   |               |   |   |   |
| Proceeds      from short term bank loans                                                    |   |               | 5,424,000  |   |               |   | 9,143,872 |   |
| Principal      payments made on short term bank loans                                       |   |               | (9,991,578 | )      |               |   | (6,531,337 | ) |
| Advance      from shareholders                                                              |   |               | 2,024,754  |   |               |   | 157,461 |   |
| Repayment      of shareholder loans                                                         |   |               | (1,141,895 | )      |               |   | (424,537 | ) |
| Repayment      of long term obligation                                                      |   |               | (2,705,665 | )      |               |   | - |   |
| Net      cash (used in) provided by financing activities                                    |   |               | (6,390,384 | )      |               |   | 2,345,459 |   |
|                                                                                        |   |               |       |   |               |   |   |   |
| Effect      of exchange rate changes on cash                                                |   |               | 846,386    |   |               |   | 1,404,183 |   |
| Net      change in cash and cash equivalents                                                |   |               | (1,032,960 | )      |               |   | 726,526 |   |
|                                                                                        |   |               |       |   |               |   |   |   |
| Cash      and cash equivalents, beginning of year                                           |   |               | 1,489,762  |   |               |   | 763,236 |   |
|                                                                                        |   |               |       |   |               |   |   |   |
| Cash      and cash equivalents, end of year                                                 |   | $                  | 456,802    |   |               | $      | 1,489,762 |   |
|                                                                                        |   |               |       |   |               |   |   |   |
| Supplemental disclosure of cash      flow information:                                      |   |               |       |   |               |   |   |   |
| Cash      paid for interest                                                            |   | $                  | 755,959    |   |               | $      | 612,356 |   |
| Cash      paid for income taxes                                                             |   | $                  | 2,373,379  |   |               | $      | 751,865 |   |
|                                                                                        |   |               |       |   |               |   |   |   |
| Supplemental disclosure of      non-cash investing and financing activities:      |   |               |       |   |               |   |   |   |
| Property      and equipment disposed and exchanged for reduction in      payables      |   | $                  | -          |   |               | $      | 23,970 |   |
| Property,      plant and equipment purchased with financing                                 |   | $                  | 1,701,485  |   |               | $      | 1,086,083 |   |

----

| 1. | Organization      and Business |
|----|--------------------------------|

----

| 2. | Summary      of Significant Accounting Policies |
|----|-------------------------------------------------|

----

----

|                                                                                                                                                                   |   | November 30,2008 |   | November 30,2007 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|-----------------------|--------|
| Balance      sheet items, except for the registered and paid-up capital, additional      paid-in capital, statutory reserve and retained earnings, as of year      end |   | US$1=RMB6.8359        |   | US$1=RMB7.3919        |   |
|                                                                                                                                                                   |   |                  |   |                  |   |
| Amounts      included in the statements of operations, statements of changes in      stockholders’ equity and statements of cash flows for the    year           |   | US$1=RMB7.0059        |   | US$1=RMB7.6554        |   |

----

----

----

----

Net Income Per Share

----

|                                            |   | November 30, 2008 |      |   | November 30, 2007 |   |
|-------------------------------------------------|--------|-----------------------------|-----------|--------|-----------------------------|--------|
|                                            |   | (as restated)          |      |   | (as restated)          |   |
|                                            |   |                        |      |   |                        |   |
| Statutory      surplus reserve and welfare fund |   | $                           | 1,932,528 |   |                        | $      | 1,311,054 |   |
| Safety      and maintenance reserve             |   |                        | 5,036,313 |   |                        |   | 4,538,048 |   |
| Total      statutory reserves                   |   | $                           | 6,968,841 |   |                        | $      | 5,849,102 |   |

----

----

|                               |   | For      the Years Ended November 30, |       |
|------------------------------------|--------|---------------------------------------|------------|
|                               |   | 2008                                  |       |   | 2007 |   |
|                               |   | Heat                                  |       |   | Coal |   |   |   |   |   | Heat |   |   | Coal |   |   |   |   |
|                               |   | Power                                 |       |   | Group |   |   | Total |   |   | Power |   |   | Group |   |   | Total |   |
|                               |   | (restated)                            |       |   | (restated) |   |   | (restated) |   |   | (restated) |   |   | (restated) |   |   | (restated) |   |
|                               |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales      to external customers   |   | $                                     | 7,008,528  |   |   | $ | 12,875,569 |   |   | $ | 19,884,097 |   |   | $ | 5,656,179 |   |   | $ | 14,625,889 |   |   | $ | 20,282,068 |   |
| Interest      expenses, net        |   |                                  | 208,283    |   |   |   | 557,105 |   |   |   | 765,388 |   |   |   | 398,802 |   |   |   | 305,296 |   |   |   | 704,098 |   |
| Depreciation      and amortization |   |                                  | 2,037,973  |   |   |   | 243,425 |   |   |   | 2,281,398 |   |   |   | 1,579,638 |   |   |   | 303,510 |   |   |   | 1,883,148 |   |
| Segment      profit (loss)         |   |                                  | (1,701,522 | ) |   |   | 4,965,980 |   |   |   | 3,264,458 |   |   |   | (851,488 | ) |   |   | 5,572,097 |   |   |   | 4,720,609 |   |

|                          |   | November      30, 2008 |       |   | November      30, 2007 |   |
|-------------------------------|--------|------------------------|------------|--------|------------------------|--------|
|                          |   | Heat                   |       |   | Coal                   |   |   |   |   |   | Heat |   |   | Coal |   |   |   |   |
|                          |   | Power                  |       |   | Group                  |   |   | Total |   |   | Power |   |   | Group |   |   | Total |   |
|                          |   | (restated)             |       |   | (restated)             |   |   | (restated) |   |   | (restated) |   |   | (restated) |   |   | (restated) |   |
|                          |   |                   |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment      assets           |   | $                      | 43,592,370 |   |                   | $      | 20,154,839 |   |   | $ | 63,747,209 |   |   | $ | 31,609,658 |   |   | $ | 24,292,518 |   |   | $ | 55,902,176 |   |
| Construction      in progress |   |                   | 2,107,353  |   |                   |   | 7,701,877 |   |   |   | 9,809,230 |   |   |   | 3,049,679 |   |   |   | 4,576,346 |   |   |   | 7,626,025 |   |
| Investment      property, net |   |                   | -          |   |                   |   | 1,978,873 |   |   |   | 1,978,873 |   |   |   | - |   |   |   | 1,871,880 |   |   |   | 1,871,880 |   |

|                                                                   |   | November      30, 2008 |       |   | November      30, 2007 |   |
|------------------------------------------------------------------------|--------|------------------------|------------|--------|------------------------|--------|
|                                                                   |   | (as      restated)     |       |   | (as      restated)     |   |
|                                                                   |   |                   |       |   |                   |   |
| Ordos      City YiYuan Investment Co., Ltd.                            |   | $                      | 1,535,992  |   |                   | $      | 988,422 |   |
| Hangzhou      Dayuan Group, Ltd.                                       |   |                   | 5,101,839  |   |                   |   | 4,993,475 |   |
| Xinghe      County Haifu Coal Transportation & Sales Co.,Ltd. |   |                   | 1,760,278  |   |                   |   | 1,586,331 |   |
| Wenxiang      Ding                                                     |   |                   | 2,071,366  |   |                   |   | 902,937 |   |
| Wenhua      Ding                                                       |   |                   | 248,688    |   |                   |   | 405,850 |   |
|  Total                                                            |   | $                      | 10,718,163 |   |                   | $      | 8,877,015 |   |

----

|                                            |   | November 30, 2008 |       |   | November 30, 2007 |   |
|-------------------------------------------------|--------|-----------------------------|------------|--------|-----------------------------|--------|
|                                            |   | Balance(as restated)   |       |   | Interestrate                |   |   | Balance(as restated) |   |   | Interestrate |   |
| Shareholder      loans – interest free    |   | $                           | 2,320,055  |   |                        |   | 0 | % |   | $ | 1,308,787 |   |   |   | 0 | % |
| Shareholder      loans – interest bearing |   |                        | 6,699,921  |   |                        |   | 3.16 | % |   |   | 6,195,972 |   |   |   | 6.31 | % |
| Interest      payable                           |   |                        | 1,698,187  |   |                        |   |   |   |   |   | 1,372,256 |   |   |   |   |   |
| Total                                           |   | $                           | 10,718,163 |   |                        |   |   |   |   | $ | 8,877,015 |   |   |   |   |   |

| Year      Ending  |   | Annual |    |
|-------------------|--------|--------|---------|
| November      30, |   | Amount |    |
|              |   |   |    |
| 2009              |   | $      | 87,772  |   |
| 2010              |   |   | 87,772  |   |
| 2011              |   |   | 87,772  |   |
| 2012              |   |   | 7,314   |   |
| Total             |   | $      | 270,630 |   |

----

|                                               |   | November      30, 2008 |      |   | November      30, 2007 |   |
|----------------------------------------------------|--------|------------------------|-----------|--------|------------------------|--------|
|                                               |   | (as      restated)     |      |   | (as      restated)     |   |
|                                               |   |                   |      |   |                   |   |
| Loans      to suppliers and other associated firms |   | $                      | 1,133,515 |   |                   | $      | 794,445 |   |
| Deposit      funds to secure agreements            |   |                   | 140,418   |   |                   |   | - |   |
| Employee      expense advances                     |   |                   | 104,223   |   |                   |   | 73,074 |   |
| Government      subsidies receivable               |   |                   | 1,828,581 |   |                   |   | 270,566 |   |
| Heat      network access fee receivable            |   |                   | 1,126,811 |   |                   |   | 83,555 |   |
| Total                                              |   | $                      | 4,333,548 |   |                   | $      | 1,221,640 |   |

|                             |   | November      30, 2008 |       |   | November      30, 2007 |   |
|----------------------------------|--------|------------------------|------------|--------|------------------------|--------|
|                             |   | (as      restated)     |       |   | (as      restated)     |   |
|                             |   |                   |       |   |                   |   |
| Buildings                        |   | $                      | 10,049,203 |   |                   | $      | 7,830,109 |   |
| Machinery      & equipment   |   |                   | 26,452,156 |   |                   |   | 20,312,757 |   |
| Automotive      equipment        |   |                   | 684,546    |   |                   |   | 535,304 |   |
| Office      Equipment            |   |                   | 649,137    |   |                   |   | 349,742 |   |
| Construction      in progress    |   |                   | 9,809,230  |   |                   |   | 7,626,025 |   |
| Fixed      assets to be disposed |   |                   | 731,077    |   |                   |   | - |   |
|                             |   |                   | 48,375,349 |   |                   |   | 36,653,937 |   |
| Accumulated      depreciation    |   |                   | (4,778,216 | )      |                   |   | (2,934,087 | ) |
| Fixed      assets, net           |   | $                      | 43,597,133 |   |                   | $      | 33,719,850 |   |

|                                        |   | November      30, 2008 |    |   | November      30, 2007 |   |
|---------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                        |   | (as      restated)     |    |   | (as      restated)     |   |
|                                        |   |                   |    |   |                   |   |
| LiTai      Coking Co.,Ltd                   |   | $                      | 255,776 |   |                   | $      | 236,537 |   |
| Guanbanwusu                                 |   |                   | -       |   |                   |   | 1,758,682 |   |
| Inner      Mongolia Tehong Biology Co. Ltd. |   |                   | -       |   |                   |   | 1,893,965 |   |
| Total      long term investments            |   | $                      | 255,776 |   |                   | $      | 3,889,184 |   |

----

|                                                          |   | November      30, 2008 |      |   | November      30, 2007 |   |
|---------------------------------------------------------------|--------|------------------------|-----------|--------|------------------------|--------|
|                                                          |   | (as      restated)     |      |   | (as      restated)     |   |
|                                                          |   |                   |      |   |                   |   |
| Inner      Mongolia XiangRong Investment Management Co., Ltd. |   | $                      | -         |   |                   | $      | 484,226 |   |
| Inner      Mongolia Tehong Glass Co.,Ltd.                     |   |                   | -         |   |                   |   | 2,687,055 |   |
| Tehong      Biology                                           |   |                   | -         |   |                   |   | 1,163,436 |   |
| Inner      Mongolia Tehong Coal Chemical Co.,Ltd              |   |                   | 760,690   |   |                   |   | - |   |
| QuanYing      Coal Mine                                       |   |                   | 301,350   |   |                   |   | - |   |
| Inner      Mongolia XinKe Kaolin Fabrication Plant            |   |                   | 1,740,810 |   |                   |   | 676,416 |   |
| Total      notes receivable                                   |   | $                      | 2,802,850 |   |                   | $      | 5,011,133 |   |

|                                                 |   | November 30, 2008 |      |   | November 30, 2007 |   |
|------------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|
|                                                 |   |              |      |   |              |   |
| Bank      loan due 7/7/08, with interest at 9.854%   |   | $                 | -         |   |              | $      | 2,705,664 |   |
| Bank      loan due 9/28/08, with interest at 9.854%  |   |              | -         |   |              |   | 2,435,098 |   |
| Bank      loan due 10/24/09, with interest at 9.854% |   |              | -         |   |              |   | 1,623,399 |   |
| Bank      loan due 3/26/08, with interest at 9.854%  |   |              | -         |   |              |   | 1,352,832 |   |
| Bank      loan due 4/23/08, with interest at 9.854%  |   |              | -         |   |              |   | 1,352,832 |   |
| Bank      loan due 10/22/09, with interest at 8.316% |   |              | 2,633,156 |   |              |   | - |   |
| Bank      loan due 3/30/09, with interest at 8.964%  |   |              | 1,462,866 |   |              |   | - |   |
| Bank      loan due 4/23/09, with interest at 8.964%  |   |              | 1,462,866 |   |              |   | - |   |
| Total                                                |   | $                 | 5,558,888 |   |              | $      | 9,469,825 |   |

----

----

|                       |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total     |   |
|----------------------------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|--------|-----------|--------|
| Long      term investments |   | $            | -      |   |         | $      | -      |         |   | $      | 255,776   |   |   | $ | 255,776 |   |
| Notes      receivable      |   |         | -      |   |         |   | -      |         |   |   | 2,802,850 |   |   |   | 2,802,850 |   |
| Total                      |   | $            | -      |   |         | $      | -      |         |   | $      | 3,058,626 |   |   | $ | 3,058,626 |   |

|                                                  |   | Long TermInvestments |       |   | Notes Receivable |   |       | Total  |   |
|-------------------------------------------------------|--------|---------------------------|------------|--------|-----------------------|--------|------------|--------|--------|
|                                                  |   |                      |       |   |                  |   |       |   |   |
| Balance,      December 1, 2007                        |   | $                         | 3,889,184  |   |                  | $      | 5,011,133  |   |   | $ | 8,900,317 |   |
| Purchases,      sales, issuance and settlements (net) |   |                      | (3,633,408 | )      |                  |   | (2,208,283 | )      |   |   | (5,841,691 | ) |
| Balance,      November 30, 2008                       |   | $                         | 255,776    |   |                  | $      | 2,802,850  |   |   | $ | 3,058,626 |   |

|                               |   | 2008               |       |   | 2007               |   |
|------------------------------------|--------|--------------------|------------|--------|--------------------|--------|
|                               |   | (as restated) |       |   | (as restated) |   |
|                               |   |               |       |   |               |   |
| Salaries      and wages            |   | $                  | 599,882    |   |               | $      | 641,408 |   |
| Operating      supplies            |   |               | 472,990    |   |               |   | 333,044 |   |
| Depreciation      and amortization |   |               | 2,069,366  |   |               |   | 1,654,431 |   |
| Repairs                            |   |               | 90,081     |   |               |   | 49,772 |   |
| Coal      and freight              |   |               | 9,583,012  |   |               |   | 9,892,246 |   |
| Utilities                          |   |               | 751,117    |   |               |   | 305,200 |   |
| Other                              |   |               | 386,550    |   |               |   | 69,207 |   |
| Total                              |   | $                  | 13,952,998 |   |               | $      | 12,945,308 |   |

----

|                                 |   | 2008               |            |   | 2007               |   |
|--------------------------------------|--------|--------------------|-----------------|--------|--------------------|--------|
|                                 |   | (as restated) |            |   | (as restated) |   |
|                                 |   |               |            |   |               |   |
| Salaries      and wages              |   | $                  | 502,795         |   |               | $      | 401,952 |   |
| Postage      and office supplies     |   |               | 517,000         |   |               |   | 556,330 |   |
| Sales      tax                       |   |               | 352,244         |   |               |   | 440,220 |   |
| Professional      and other fees     |   |               | 664,644         |   |               |   | 440,067 |   |
| Depreciation                         |   |               | 167,873         |   |               |   | 152,589 |   |
| Travel                               |   |               | 185,120         |   |               |   | 209,815 |   |
| Repairs                              |   |               | 153,273         |   |               |   | 100,205 |   |
| Allowance      for doubtful accounts |   |               | 1,811           |   |               |   | 91,439 |   |
| Other      expenses                  |   |               | 121,881         |   |               |   | 223,534 |   |
| Total                                |   | $                  | 2,666,      641 |   |               | $      | 2,616,151 |   |

15. Income Taxes

----

| Year |   | Amount |    |
|------|--------|--------|---------|
| 2009 |   | $      | -       |   |
| 2010 |   |   | 221,534 |   |
| 2011 |   |   | -       |   |
| 2012 |   |   | -       |   |
| 2013 |   |   | 920,176 |   |

|                     |   | November 30, 2008 |     |   | November 30, 2007 |   |
|--------------------------|--------|-----------------------------|----------|--------|-----------------------------|--------|
|                     |   | (as restated)          |     |   | (as restated)          |   |
|                     |   |                        |     |   |                        |   |
| Deferred      tax assets |   | $                           | 285,428  |   |                        | $      | 67,607 |   |
| Valuation      allowance |   |                        | (285,428 | )      |                        |   | (67,607 | ) |
| Balance      recognized  |   | $                           | -        |   |                        | $      | - |   |

| 2008                                                                                    |   | Income BeforeIncome Taxes |                  |   | Tax Provision |   |      | Rate of Tax |   |
|-----------------------------------------------------------------------------------------|--------|-------------------------------------|-----------------------|--------|--------------------|--------|-----------|-----------------------|--------|
|                                                                                    |   | (as      restated)                  |                  |   | (as      restated) |   |      |                  |   |
| As      reported on the Consolidated statements of operations                      |   | $                                   | 5,462,481             |   |               | $      | 1,503,478 |                  |   |   | 27.5 | % |
| Losses      not used in calculation of taxable income on the tax      returns |   |                                | 551,431               |   |               |   | -         |                  |   |   | (2.5 | )% |
| As      calculated with statutory rate                                                  |   | $                                   |   6,013,912 |   |               | $      | 1,503,478 |                  |   |   | 25 | % |

| 2007                                                                                 |   | Income BeforeIncome Taxes |      |   | Tax Provision |   |      | Rate of Tax |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|--------|--------------------|--------|-----------|-----------------------|--------|
|                                                                                 |   | (as      restated)                  |      |   | (as      restated) |   |      |                  |   |
| As      reported on the consolidated statements of operations                   |   | $                                   | 4,648,363 |   |               | $      | 1,724,229 |                  |   |   | 37.1 | % |
| Losses      not used in calculation taxable income on the tax      returns |   |                                | 576,573   |   |               |   | -         |                  |   |   | (4.1 | )% |
| As      calculated with statutory rate                                               |   | $                                   | 5,224,936 |   |               | $      | 1,724,229 |                  |   |   | 33 | % |

----

| Dividend      yield                                  | 0.0%    |
|------------------------------------------------------|---------|
| Expected      volatility                             | 196.73% |
| Risk      free interest rate                         | 2.13%   |
| Expected      term (in years)                        | 2.38    |
| Weighted      average value of stock options granted | $0.07   |

----

|                                                                                                                |   | November 30, |       |
|---------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                                |   | 2008              |       |   | 2007 |   |
| ASSETS                                                                                                              |   |              |       |   |   |   |
| Other      assets:                                                                                                  |   |              |       |   |   |   |
| Investment      in subsidiaries                                                                                     |   | $                 | 28,465,996 |   |   | $ | 22,215,555 |   |
| Total      other assets                                                                                             |   |              | 28,465,996 |   |   |   | 22,215,555 |   |
|                                                                                                                |   |              |       |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                 | 28,465,996 |   |   | $ | 22,215,555 |   |
|                                                                                                                |   |              |       |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |              |       |   |   |   |   |   |
| Current      liabilities:                                                                                           |   |              |       |   |   |   |   |   |
| Accrued      liabilities                                                                                            |   | $                 | 89,000     |   |   | $ | 44,500 |   |
| Shareholder      loans                                                                                              |   |              | 275,139    |   |   |   | 226,522 |   |
| Total      current liabilities                                                                                      |   |              | 364,139    |   |   |   | 271,022 |   |
|                                                                                                                |   |              |       |   |   |   |   |   |
| Stockholders’      equity:                                                                                    |   |              |       |   |   |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |              | 45,000     |   |   |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |              | 8,655,805  |   |   |   | 8,655,805 |   |
| Paid      in capital – stock options                                                                          |   |              | 315,000    |   |   |   | - |   |
| Retained      earnings                                                                                              |   |              | 19,086,052 |   |   |   | 13,243,728 |   |
| Total      stockholders’ equity                                                                               |   |              | 28,101,857 |   |   |   | 21,944,533 |   |
|                                                                                                                |   |              |       |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                 | 28,465,996 |   |   | $ | 22,215,555 |   |

|                                                               |   | For the Years Ended November 30, |      |
|--------------------------------------------------------------------|--------|-----------------------------------------------------------|-----------|
|                                                               |   | 2008                                                      |      |   | 2007 |   |
| Revenues:                                                          |   |                                                      |      |   |   |   |
|   Share      of earnings from investment in subsidiaries |   | $                                                         | 6,251,824 |   |   | $ | 3,830,801 |   |
| Total      revenues                                                |   |                                                      | 6,251,824 |   |   |   | 3,830,801 |   |
|                                                               |   |                                                      |      |   |   |   |   |   |
| Operating      expenses:                                           |   |                                                      |      |   |   |   |   |   |
| General      and administrative                                    |   |                                                      | 94,500    |   |   |   | 94,500 |   |
| Professional      and other fees                                   |   |                                                      | 315,000   |   |   |   | - |   |
| Total      operating expenses                                      |   |                                                      | 409,500   |   |   |   | 94,500 |   |
|                                                               |   |                                                      |      |   |   |   |   |   |
| Net      income                                                    |   | $                                                         | 5,842,324 |   |   | $ | 3,736,301 |   |

----

|                                                                                                  |   | For the Years Ended November 30, |       |
|-------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|------------|
|                                                                                                  |   | 2008                                                      |       |   | 2007 |   |
|                                                                                                  |   |                                                      |       |   |   |   |
| Cash      flows from operating activities:                                                            |   |                                                      |       |   |   |   |
| Net      income                                                                                       |   | $                                                         | 5,842,324  |   |   | $ | 3,736,301 |   |
| Adjustments      to reconcile net income to net cash provided by (used in) operating      activities: |   |                                                      |       |   |   |   |   |   |
| Share      of earnings from investment in subsidiaries                                                |   |                                                      | (6,251,824 | ) |   |   | (3,830,801 | ) |
| Options      issued for services                                                                      |   |                                                      | 315,000    |   |   |   | - |   |
| Changes      in operating assets and liabilities:                                                     |   |                                                      |       |   |   |   |   |   |
| Increase      in accrued liabilities and other payables                                               |   |                                                      | 44,500     |   |   |   | 44,500 |   |
| Net      cash (used in) operating activities                                                          |   |                                                      | (50,000    | ) |   |   | (50,000 | ) |
|                                                                                                  |   |                                                      |       |   |   |   |   |   |
| Cash      flows from financing activities:                                                            |   |                                                      |       |   |   |   |   |   |
| Advance      from shareholders                                                                        |   |                                                      | 50,000     |   |   |   | 50,000 |   |
| Net      cash provided by financing activities                                                        |   |                                                      | 50,000     |   |   |   | 50,000 |   |
|                                                                                                  |   |                                                      |       |   |   |   |   |   |
| Net      increase in cash and cash equivalents                                                        |   |                                                      | -          |   |   |   | - |   |
|                                                                                                  |   |                                                      |       |   |   |   |   |   |
| Cash      and cash equivalents, beginning of year                                                     |   |                                                      | -          |   |   |   | - |   |
|                                                                                                  |   |                                                      |       |   |   |   |   |   |
| Cash      and cash equivalents, end of year                                                           |   | $                                                         | -          |   |   | $ | - |   |

lative net earnings since thefirst quarter of 2007.

----

----

|                                                                                                                |   | November 30, 2008 |       |   | November 30, 2007 |   |
|---------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                |   | As PreviouslyReported  |       |   | Effect ofRestatement   |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                                                              |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      assets:                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                      |   | $                           | 296,455    |   |                        | $      | 160,347 |   |   | $ | 456,802 |   |   | $ | 1,478,264 |   |   | $ | 11,498 |   |   | $ | 1,489,762 |   |
| Certificate      of deposit                                                                                         |   |                        | -          |   |                        |   | - |   |   |   | - |   |   |   | - |   |   |   | 94,698 |   |   |   | 94,698 |   |
| Accounts      receivable, net                                                                                       |   |                        | 4,724,882  |   |                        |   | (1,718,426 | ) |   |   | 3,006,456 |   |   |   | 3,683,819 |   |   |   | (81,170 | ) |   |   | 3,602,649 |   |
| Other      receivables                                                                                              |   |                        | 2,128,642  |   |                        |   | 2,204,906 |   |   |   | 4,333,548 |   |   |   | 914,451 |   |   |   | 307,189 |   |   |   | 1,221,640 |   |
| Advances      to suppliers                                                                                          |   |                        | 4,637,041  |   |                        |   | (1,886,505 | ) |   |   | 2,750,536 |   |   |   | 1,180,386 |   |   |   | - |   |   |   | 1,180,386 |   |
| Inventories                                                                                                         |   |                        | 685,985    |   |                        |   | (185,831 | ) |   |   | 500,154 |   |   |   | 152,133 |   |   |   | - |   |   |   | 152,133 |   |
| Total      current assets                                                                                           |   |                        | 12,473,005 |   |                        |   | (1,425,509 | ) |   |   | 11,047,496 |   |   |   | 7,409,053 |   |   |   | 332,215 |   |   |   | 7,741,268 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      assets:                                                                                                  |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant and equipment                                                                                  |   |                        | 33,668,657 |   |                        |   | 4,897,462 |   |   |   | 38,566,119 |   |   |   | 28,987,311 |   |   |   | 40,601 |   |   |   | 29,027,912 |   |
| Construction      in progress                                                                                       |   |                        | 10,710,321 |   |                        |   | (901,091 | ) |   |   | 9,809,230 |   |   |   | 7,626,021 |   |   |   | 4 |   |   |   | 7,626,025 |   |
|                                                                                                                |   |                        | 44,378,978 |   |                        |   | 3,996,371 |   |   |   | 48,375,349 |   |   |   | 36,613,332 |   |   |   | 40,605 |   |   |   | 36,653,937 |   |
| Less:      accumulated depreciation and amortization                                                                |   |                        | (4,700,282 | )      |                        |   | (77,934 | ) |   |   | (4,778,216 | ) |   |   | (2,903,646 | ) |   |   | (30,441 | ) |   |   | (2,934,087 | ) |
| Net      fixed assets                                                                                               |   |                        | 39,678,696 |   |                        |   | 3,918,437 |   |   |   | 43,597,133 |   |   |   | 33,709,686 |   |   |   | 10,164 |   |   |   | 33,719,850 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      assets:                                                                                                  |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      property, net                                                                                       |   |                        | 1,979,029  |   |                        |   | (156 | ) |   |   | 1,978,873 |   |   |   | 1,872,366 |   |   |   | (485 | ) |   |   | 1,871,881 |   |
| Mining      right, net                                                                                              |   |                        | 3,468,906  |   |                        |   | 447,507 |   |   |   | 3,916,413 |   |   |   | 3,347,484 |   |   |   | 184,923 |   |   |   | 3,532,407 |   |
| Long      term investments                                                                                          |   |                        | 255,776    |   |                        |   | - |   |   |   | 255,776 |   |   |   | 3,889,182 |   |   |   | 2 |   |   |   | 3,889,184 |   |
| Restricted      cash                                                                                                |   |                        | -          |   |                        |   | 148,668 |   |   |   | 148,668 |   |   |   | - |   |   |   | 136,453 |   |   |   | 136,453 |   |
| Notes      receivable                                                                                               |   |                        | 2,832,107  |   |                        |   | (29,257 | ) |   |   | 2,802,850 |   |   |   | 4,790,480 |   |   |   | 220,653 |   |   |   | 5,011,133 |   |
| Total      other assets                                                                                             |   |                        | 8,535,818  |   |                        |   | 566,762 |   |   |   | 9,102,580 |   |   |   | 13,899,512 |   |   |   | 541,546 |   |   |   | 14,441,058 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                           | 60,687,519 |   |                        | $      | 3,059,690 |   |   | $ | 63,747,209 |   |   | $ | 55,018,251 |   |   | $ | 883,925 |   |   | $ | 55,902,176 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                           |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short      term bank loans                                                                                          |   | $                           | 5,558,888  |   |                        | $      | - |   |   | $ | 5,558,888 |   |   | $ | 10,552,091 |   |   | $ | (1,082,266 | ) |   | $ | 9,469,825 |   |
| Accounts      payable                                                                                               |   |                        | 7,780,928  |   |                        |   | 1,608,689 |   |   |   | 9,389,617 |   |   |   | 6,011,492 |   |   |   | 734,030 |   |   |   | 6,745,522 |   |
| Advance      from customers                                                                                         |   |                        | 4,675,139  |   |                        |   | (1,324,480 | ) |   |   | 3,350,659 |   |   |   | 2,721,869 |   |   |   | (295,734 | ) |   |   | 2,426,135 |   |
| Accrued      liabilities                                                                                            |   |                        | 291,373    |   |                        |   | 35,238 |   |   |   | 326,611 |   |   |   | 1,754,584 |   |   |   | (1,341,210 | ) |   |   | 413,374 |   |
| Other      payables                                                                                                 |   |                        | 5,958,701  |   |                        |   | (5,029,238 | ) |   |   | 929,463 |   |   |   | 4,746,160 |   |   |   | (3,598,945 | ) |   |   | 1,147,215 |   |
| Shareholder      loans                                                                                              |   |                        | 10,208,965 |   |                        |   | 509,198 |   |   |   | 10,718,163 |   |   |   | 7,568,227 |   |   |   | 1,308,788 |   |   |   | 8,877,015 |   |
| Current      portion of long term obligation                                                                        |   |                        | -          |   |                        |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,082,266 |   |   |   | 1,082,266 |   |
| Current      portion of deferred income                                                                             |   |                        | -          |   |                        |   | 581,903 |   |   |   | 581,903 |   |   |   | - |   |   |   | 188,505 |   |   |   | 188,505 |   |
| Total      current liabilities                                                                                      |   |                        | 34,473,994 |   |                        |   | (3,618,690 | ) |   |   | 30,855,304 |   |   |   | 33,354,423 |   |   |   | (3,004,566 | ) |   |   | 30,349,857 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-current      liabilities                                                                                        |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long      term obligation                                                                                           |   |                        | -          |   |                        |   | - |   |   |   | - |   |   |   | 1,623,399 |   |   |   | - |   |   |   | 1,623,399 |   |
| Deferred      income                                                                                                |   |                        | 3,018,568  |   |                        |   | 1,771,480 |   |   |   | 4,790,048 |   |   |   | 1,664,841 |   |   |   | 319,546 |   |   |   | 1,984,387 |   |
| Total      non-current liabilities                                                                                  |   |                        | 3,018,568  |   |                        |   | 1,771,480 |   |   |   | 4,790,048 |   |   |   | 3,288,240 |   |   |   | 319,546 |   |   |   | 3,607,786 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                              |   |                        | 37,492,562 |   |                        |   | (1,847,210 | ) |   |   | 35,645,352 |   |   |   | 36,642,663 |   |   |   | (2,685,020 | ) |   |   | 33,957,643 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity:                                                                                    |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |                        | 45,000     |   |                        |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |   |   | - |   |   |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |                        | 8,655,805  |   |                        |   | - |   |   |   | 8,655,805 |   |   |   | 8,655,805 |   |   |   | - |   |   |   | 8,655,805 |   |
| Paid      in capital – stock options                                                                          |   |                        | 315,000    |   |                        |   | - |   |   |   | 315,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Retained      earnings                                                                                              |   |                        | 9,952,516  |   |                        |   | (1,406,730 | ) |   |   | 8,545,786 |   |   |   | 6,692,664 |   |   |   | (986,142 | ) |   |   | 5,706,522 |   |
| Statutory      reserves                                                                                             |   |                        | 1,819,915  |   |                        |   | 5,148,926 |   |   |   | 6,968,841 |   |   |   | 1,189,058 |   |   |   | 4,660,044 |   |   |   | 5,849,102 |   |
| Accumulated      other comprehensive income                                                                         |   |                        | 2,406,721  |   |                        |   | 1,164,704 |   |   |   | 3,571,425 |   |   |   | 1,793,061 |   |   |   | (104,957 | ) |   |   | 1,688,104 |   |
| Total      stockholders’ equity                                                                               |   |                        | 23,194,957 |   |                        |   | 4,906,900 |   |   |   | 28,101,857 |   |   |   | 18,375,588 |   |   |   | 3,568,945 |   |   |   | 21,944,533 |   |
|                                                                                                                |   |                        |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                           | 60,687,519 |   |                        | $      | 3,059,690 |   |   | $ | 63,747,209 |   |   | $ | 55,018,251 |   |   | $ | 883,925 |   |   | $ | 55,902,176 |   |

----

|                                            |   | Year ended November 30, 2008 |        |   | Year ended November 30, 2007 |   |
|-------------------------------------------------|--------|--------------------------------------------------|-------------|--------|--------------------------------------------------|--------|
|                                            |   | As PreviouslyReported                       |        |   | Effect ofRestatement                        |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                        |   | $                                                | 19,562,793  |   |                                             | $      | 321,304 |   |   | $ | 19,884,097 |   |   | $ | 20,251,033 |   |   | $ | 31,035 |   |   | $ | 20,282,068 |   |
| Cost      of revenues                           |   |                                             | (13,691,217 | )      |                                             |   | (261,781 | ) |   |   | (13,952,998 | ) |   |   | (13,597,468 | ) |   |   | 652,160 |   |   |   | (12,945,308 | ) |
| Gross      profit                               |   |                                             | 5,871,576   |   |                                             |   | 59,523 |   |   |   | 5,931,099 |   |   |   | 6,653,565 |   |   |   | 683,195 |   |   |   | 7,336,760 |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                        |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and marketing                      |   |                                             | (394,298    | )      |                                             |   | - |   |   |   | (394,298 | ) |   |   | (493,775 | ) |   |   | - |   |   |   | (493,775 | ) |
| General      and administrative                 |   |                                             | (2,020,326  | )      |                                             |   | (252,017 | ) |   |   | (2,272,343 | ) |   |   | (1,445,714 | ) |   |   | (676,662 | ) |   |   | (2,122,376 | ) |
| Total      operating expenses                   |   |                                             | (2,414,624  | )      |                                             |   | (252,017 | ) |   |   | (2,666,641 | ) |   |   | (1,939,489 | ) |   |   | (676,662 | ) |   |   | (2,616,151 | ) |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      from operations                     |   |                                             | 3,456,952   |   |                                             |   | (192,494 | ) |   |   | 3,264,458 |   |   |   | 4,714,076 |   |   |   | 6,533 |   |   |   | 4,720,609 |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income and expenses                  |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance      expenses, net                      |   |                                             | (762,850    | )      |                                             |   | (2,538 | ) |   |   | (765,388 | ) |   |   | (697,918 | ) |   |   | (6,180 | ) |   |   | (704,098 | ) |
| Government      subsidies                       |   |                                             | 2,958,951   |   |                                             |   | 83,628 |   |   |   | 3,042,579 |   |   |   | 659,247 |   |   |   | 31,535 |   |   |   | 690,782 |   |
| Non-operating      income                       |   |                                             | 311,281     |   |                                             |   | 8,644 |   |   |   | 319,925 |   |   |   | 141,973 |   |   |   | (79,233 | ) |   |   | 62,740 |   |
| Non-operating      expenses                     |   |                                             | (691,897    | )      |                                             |   | 292,804 |   |   |   | (399,093 | ) |   |   | (116,774 | ) |   |   | (4,896 | ) |   |   | (121,670 | ) |
| Income      before income taxes                 |   |                                             | 5,272,437   |   |                                             |   | 190,044 |   |   |   | 5,462,481 |   |   |   | 4,700,604 |   |   |   | (52,241 | ) |   |   | 4,648,363 |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                 |   |                                             | (1,381,725  | )      |                                             |   | (121,753 | ) |   |   | (1,503,478 | ) |   |   | (1,726,766 | ) |   |   | 2,537 |   |   |   | (1,724,229 | ) |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                 |   |                                             | 3,890,712   |   |                                             |   | 68,291 |   |   |   | 3,959,003 |   |   |   | 2,973,838 |   |   |   | (49,704 | ) |   |   | 2,924,134 |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income                 |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustment    |   |                                             | 613,660     |   |                                             |   | 1,269,661 |   |   |   | 1,883,321 |   |   |   | 917,124 |   |   |   | (104,957 | ) |   |   | 812,167 |   |
| Total      comprehensive income                 |   | $                                                | 4,504,372   |   |                                             | $      | 1,337,952 |   |   | $ | 5,842,324 |   |   | $ | 3,890,962 |   |   | $ | (154,661 | ) |   | $ | 3,736,301 |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income per common share                |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                          |   | $                                                | 0.09        |   |                                             | $      | - |   |   | $ | 0.09 |   |   | $ | 0.07 |   |   | $ | - |   |   | $ | 0.07 |   |
|                                            |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding |   |                                             |        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                          |   |                                             | 45,000,000  |   |                                             |   | - |   |   |   | 45,000,000 |   |   |   | 45,000,000 |   |   |   | - |   |   |   | 45,000,000 |   |

----

|                                                                                        |   | Year ended November 30, 2008 |                        |   | Year ended November 30, 2007 |   |
|---------------------------------------------------------------------------------------------|--------|--------------------------------------------------|-----------------------------|--------|--------------------------------------------------|--------|
|                                                                                        |   | As PreviouslyReported                       |                        |   | Effect ofRestatement                        |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                  |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                             |   | $                                                | 3,890,712                   |   |                                             | $      | 68,291 |   |   | $ | 3,959,003 |   |   | $ | 2,973,838 |   |   | $ | (49,704 | ) |   | $ | 2,924,134 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts                                                        |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | - |   |   |   | 93,698 |   |   |   | 93,698 |   |
| Depreciation      and amortization                                                          |   |                                             | 2,554,954                   |   |                                             |   | (273,556 | ) |   |   | 2,281,398 |   |   |   | 1,847,819 |   |   |   | 35,329 |   |   |   | 1,883,148 |   |
| Options      issued for services                                                            |   |                                             | 315,000                     |   |                                             |   | - |   |   |   | 315,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      accrued on shareholder loans                                                  |   |                                             | 214,323                     |   |                                             |   | (5,205 | ) |   |   | 209,118 |   |   |   | 392,756 |   |   |   | 430 |   |   |   | 393,186 |   |
| Loss      on disposal of property, plant and equipment                                      |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | 264 |   |   |   | 180 |   |   |   | 444 |   |
| Loss      from long term investments                                                        |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | 17,670 |   |   |   | 1,512 |   |   |   | 19,182 |   |
| Gain      from short term investments                                                       |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | - |   |   |   | (9,668 | ) |   |   | (9,668 | ) |
| Changes      in operating assets and liabilities:                                           |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in certificate of deposit                                          |   |                                             | -                           |   |                                             |   | 94,698 |   |   |   | 94,698 |   |   |   | - |   |   |   | (94,698 | ) |   |   | (94,698 | ) |
| Decrease      (increase) in accounts receivable                                             |   |                                             | (723,446                    | )      |                                             |   | 1,311,937 |   |   |   | 588,491 |   |   |   | (2,309,175 | ) |   |   | (12,528 | ) |   |   | (2,321,703 | ) |
| Increase      in notes receivable                                                           |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | (111,627 | ) |   |   | 111,627 |   |   |   | - |   |
| Increase      in other receivables                                                          |   |                                             | (1,169,247                  | )      |                                             |   | (1,942,661 | ) |   |   | (3,111,908 | ) |   |   | (610,918 | ) |   |   | (307,189 | ) |   |   | (918,107 | ) |
| (Increase)      decrease in advances to suppliers                                           |   |                                             | (3,279,091                  | )      |                                             |   | 218,793 |   |   |   | (3,060,298 | ) |   |   | 1,199,215 |   |   |   | 4,996 |   |   |   | 1,204,211 |   |
| (Increase)      decrease in inventories                                                     |   |                                             | (508,824                    | )      |                                             |   | 160,803 |   |   |   | (348,021 | ) |   |   | 472,142 |   |   |   | - |   |   |   | 472,142 |   |
| Increase      in deferred income                                                            |   |                                             | 1,188,747                   |   |                                             |   | 2,010,312 |   |   |   | 3,199,059 |   |   |   | 1,664,841 |   |   |   | 508,051 |   |   |   | 2,172,892 |   |
| Increase      in accounts payable                                                           |   |                                             | 474,943                     |   |                                             |   | 467,667 |   |   |   | 942,610 |   |   |   | 3,508,079 |   |   |   | (1,086,083 | ) |   |   | 2,421,996 |   |
| (Decrease)      increase in advances from customers                                         |   |                                             | 1,689,854                   |   |                                             |   | (1,919,431 | ) |   |   | (229,577 | ) |   |   | 1,928,308 |   |   |   | (295,734 | ) |   |   | 1,632,574 |   |
| (Decrease)      increase in accrued liabilities and other payables                          |   |                                             | 616,346                     |   |                                             |   | (1,052,519 | ) |   |   | (436,173 | ) |   |   | 2,418,357 |   |   |   | (933,597 | ) |   |   | 1,484,760 |   |
| Net      cash provided by operating activities                                              |   |                                             | 5,264,271                   |   |                                             |   | (860,871 | ) |   |   | 4,403,400 |   |   |   | 13,391,569 |   |   |   | (2,033,378 | ) |   |   | 11,358,191 |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                  |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of property, plant and equipment                                              |   |                                             | (2,357,340                  | )      |                                             |   | (2,194,995 | ) |   |   | (4,552,335 | ) |   |   | (3,783,188 | ) |   |   | (486,432 | ) |   |   | (4,269,620 | ) |
| Increase      in construction in progress                                                   |   |                                             | (4,501,147                  | )      |                                             |   | 3,472,043 |   |   |   | (1,029,104 | ) |   |   | (6,343,383 | ) |   |   | 234,607 |   |   |   | (6,108,776 | ) |
| Payments      made on mining right obligation                                               |   |                                             | (152,614                    | )      |                                             |   | - |   |   |   | (152,614 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Proceeds      from disposal of short term investments                                       |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | - |   |   |   | 61,919 |   |   |   | 61,919 |   |
| Increase      in long term investments                                                      |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | (3,652,647 | ) |   |   | (79,906 | ) |   |   | (3,732,553 | ) |
| Proceeds      from disposal of long term investments                                        |   |                                             | 3,853,884                   |   |                                             |   | (220,476 | ) |   |   | 3,633,408 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in notes receivable                                                           |   |                                             | -                           |   |                                             |   | (2,126,434 | ) |   |   | (2,126,434 | ) |   |   | - |   |   |   | (332,277 | ) |   |   | (332,277 | ) |
| Payments      received on notes receivable                                                  |   |                                             | 2,233,935                   |   |                                             |   | 2,100,782 |   |   |   | 4,334,717 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Cash      received from disposal of fixed assets                                            |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | 22,230 |   |   |   | (22,230 | ) |   |   | - |   |
| Decrease      in deferred charges                                                           |   |                                             | -                           |   |                                             |   | - |   |   |   | - |   |   |   | 35,228 |   |   |   | (35,228 | ) |   |   | - |   |
| Net      cash provided by (used in) investing activities                                    |   |                                             | (923,282                    | )      |                                             |   | 1,030,920 |   |   |   | 107,638 |   |   |   | (13,721,760 | ) |   |   | (659,547 | ) |   |   | (14,381,307 | ) |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                  |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from short term bank loans                                                    |   |                                             | -                           |   |                                             |   | 5,424,000 |   |   |   | 5,424,000 |   |   |   | (1,131,618 | ) |   |   | 10,275,490 |   |   |   | 9,143,872 |   |
| Principal      payments made on short term bank loans                                       |   |                                             | (5,709,457                  | )      |                                             |   | (4,282,121 | ) |   |   | (9,991,578 | ) |   |   | - |   |   |   | (6,531,337 | ) |   |   | (6,531,337 | ) |
| Advance      from shareholders                                                              |   |                                             | 2,239,065                   |   |                                             |   | (214,311 | ) |   |   | 2,024,754 |   |   |   | 3,767,314 |   |   |   | (3,609,853 | ) |   |   | 157,461 |   |
| Repayments      of shareholders loans                                                       |   |                                             | (428,209                    | )      |                                             |   | (713,686 | ) |   |   | (1,141,895 | ) |   |   | - |   |   |   | (424,537 | ) |   |   | (424,537 | ) |
| Repayments      of long term obligation                                                     |   |                                             | (1,712,837                  | )      |                                             |   | (992,828 | ) |   |   | (2,705,665 | ) |   |   | (926,023 | ) |   |   | 926,023 |   |   |   | - |   |
| Net      cash (used in) provided by financing activities                                    |   |                                             | (5,611,438                  | )      |                                             |   | (778,946 | ) |   |   | (6,390,384 | ) |   |   | 1,709,673 |   |   |   | 635,786 |   |   |   | 2,345,459 |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                                |   |                                             | 88,640                      |   |                                             |   | 757,746 |   |   |   | 846,386 |   |   |   | (800,907 | ) |   |   | 2,205,090 |   |   |   | 1,404,183 |   |
| Net      change in cash and cash equivalents                                                |   |                                             | (1,181,809                  | )      |                                             |   | 148,849 |   |   |   | (1,032,960 | ) |   |   | 578,575 |   |   |   | 147,951 |   |   |   | 726,526 |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of year                                           |   |                                             | 1,478,264                   |   |                                             |   | 11,498 |   |   |   | 1,489,762 |   |   |   | 899,689 |   |   |   | (136,453 | ) |   |   | 763,236 |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, end of year                                                 |   | $                                                | 296,455                     |   |                                             | $      | 160,347 |   |   | $ | 456,802 |   |   | $ | 1,478,264 |   |   | $ | 11,498 |   |   | $ | 1,489,762 |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of cash flow information                                       |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                             |                        |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      paid for interest                                                                 |   | $                                                | 771,507                     |   |                                             | $      | (15,548 | ) |   | $ | 755,959 |   |   | $ | 624,305 |   |   | $ |   (11,949 | ) |   | $ | 612,356 |   |
| Cash      paid for income taxes                                                             |   | $                                                |    2,373,379 |   |                                             | $      | - |   |   | $ | 2,373,379 |   |   | $ | 734,485 |   |   | $ |  17,380 |   |   | $ | 751,865 |   |

----

|                                                     |   | First quarter |      |   | Second quarter |   |      | Third quarter |   |   | Fourth quarter |   |
|----------------------------------------------------------|--------|--------------------|-----------|--------|---------------------|--------|-----------|--------------------|--------|--------|---------------------|--------|
|                                                     |   |               |      |   |                |   |      |               |   |   |                |   |
| 2008      (as restated for all quarters)                 |   |               |      |   |                |   |      |               |   |   |                |   |
| Revenues                                                 |   | $                  | 7,676,301 |   |                | $      | 4,491,787 |               |   | $      | 2,174,909           |   |   | $ | 5,541,100 |   |
| Gross      profit (loss)                                 |   |               | 3,535,531 |   |                |   | 807,245   |               |   |   | (310,611            | )      |   |   | 1,898,934 |   |
| Net      (loss) income                                   |   |               | 1,655,483 |   |                |   | (226,403  | )                  |   |   | (1,026,380          | )      |   |   | 3,556,303 |   |
| (Loss)      earnings per share – basic and diluted |   | $                  | 0.037     |   |                | $      | (0.005    | )                  |   | $      | (0.023              | )      |   | $ | 0.079 |   |
|                                                     |   |               |      |   |                |   |      |               |   |   |                |   |   |   |   |   |
| 2007      (as restated for all quarters)                 |   |               |      |   |                |   |      |               |   |   |                |   |   |   |   |   |
| Revenues                                                 |   | $                  | 3,909,063 |   |                | $      | 4,716,348 |               |   | $      | 4,131,721           |   |   | $ | 7,524,936 |   |
| Gross      profit                                        |   |               | 1,290,809 |   |                |   | 1,667,388 |               |   |   | 506,189             |   |   |   | 3,872,374 |   |
| Net      (loss) income                                   |   |               | 84,998    |   |                |   | 811,121   |               |   |   | (229,510            | )      |   |   | 2,257,525 |   |
| (Loss)      earnings per share – basic and diluted |   | $                  | 0.002     |   |                | $      | 0.018     |               |   | $      | (0.005              | )      |   | $ | 0.050 |   |

|                                                                                                                |   | February 29, 2008 |       |   | May 31, 2008    |   |
|---------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|---------------------------|--------|
|                                                                                                                |   | As PreviouslyReported  |       |   | Effect ofRestatement |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                                                              |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      assets:                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                      |   | $                           | 1,670,253  |   |                      | $      | 13,045 |   |   | $ | 1,683,298 |   |   | $ | 1,618,838 |   |   | $ | 7,468 |   |   | $ | 1,626,306 |   |
| Accounts      receivable, net                                                                                       |   |                        | 5,270,208  |   |                      |   | 111,470 |   |   |   | 5,381,678 |   |   |   | 3,947,609 |   |   |   | 117,637 |   |   |   | 4,065,246 |   |
| Other      receivables                                                                                              |   |                        | 112,754    |   |                      |   | 1,732,679 |   |   |   | 1,845,433 |   |   |   | 1,124,067 |   |   |   | 1,394,886 |   |   |   | 2,518,953 |   |
| Advances      to suppliers                                                                                          |   |                        | 2,713,174  |   |                      |   | (18,420 | ) |   |   | 2,694,754 |   |   |   | 2,326,052 |   |   |   | (98,246 | ) |   |   | 2,227,806 |   |
| Inventories                                                                                                         |   |                        | 245,190    |   |                      |   | 1,915 |   |   |   | 247,105 |   |   |   | 165,953 |   |   |   | 766 |   |   |   | 166,719 |   |
| Total      current assets                                                                                           |   |                        | 10,011,579 |   |                      |   | 1,840,689 |   |   |   | 11,852,268 |   |   |   | 9,182,519 |   |   |   | 1,422,511 |   |   |   | 10,605,030 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      assets:                                                                                                  |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant and equipment                                                                                  |   |                        | 26,159,543 |   |                      |   | 4,109,348 |   |   |   | 30,268,891 |   |   |   | 26,483,107 |   |   |   | 6,008,749 |   |   |   | 32,491,856 |   |
| Construction      in progress                                                                                       |   |                        | 7,953,449  |   |                      |   | 1,316,680 |   |   |   | 9,270,129 |   |   |   | 8,332,760 |   |   |   | 1,987,079 |   |   |   | 10,319,839 |   |
|                                                                                                                |   |                        | 34,112,992 |   |                      |   | 5,426,028 |   |   |   | 39,539,020 |   |   |   | 34,815,867 |   |   |   | 7,995,828 |   |   |   | 42,811,695 |   |
| Less:      accumulated depreciation and amortization                                                                |   |                        | (3,052,883 | )      |                      |   | (526,030 | ) |   |   | (3,578,913 | ) |   |   | (3,509,056 | ) |   |   | (701,816 | ) |   |   | (4,210,872 | ) |
| Net      fixed assets                                                                                               |   |                        | 31,060,109 |   |                      |   | 4,899,998 |   |   |   | 35,960,107 |   |   |   | 31,306,811 |   |   |   | 7,294,012 |   |   |   | 38,600,823 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      assets:                                                                                                  |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      property, net                                                                                       |   |                        | 1,714,064  |   |                      |   | 220,747 |   |   |   | 1,934,811 |   |   |   | 1,704,429 |   |   |   | 267,050 |   |   |   | 1,971,479 |   |
| Mining      right, net                                                                                              |   |                        | 3,017,826  |   |                      |   | 619,151 |   |   |   | 3,636,977 |   |   |   | 2,953,158 |   |   |   | 765,355 |   |   |   | 3,718,513 |   |
| Long      term investments                                                                                          |   |                        | 4,675,276  |   |                      |   | 70,341 |   |   |   | 4,745,617 |   |   |   | 210,394 |   |   |   | 41,545 |   |   |   | 251,939 |   |
| Restricted      cash                                                                                                |   |                        | -          |   |                      |   | 142,123 |   |   |   | 142,123 |   |   |   | - |   |   |   | 145,900 |   |   |   | 145,900 |   |
| Notes      receivable                                                                                               |   |                        | 6,108,219  |   |                      |   | (597,518 | ) |   |   | 5,510,701 |   |   |   | 8,021,829 |   |   |   | (210,670 | ) |   |   | 7,811,159 |   |
| Total      other assets                                                                                             |   |                        | 15,515,385 |   |                      |   | 454,844 |   |   |   | 15,970,229 |   |   |   | 12,889,810 |   |   |   | 1,009,180 |   |   |   | 13,898,990 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                           | 56,587,073 |   |                      | $      | 7,195,531 |   |   | $ | 63,782,604 |   |   | $ | 53,379,140 |   |   | $ | 9,725,703 |   |   | $ | 63,104,843 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                           |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short      term bank loans                                                                                          |   | $                           | -          |   |                      | $      | 9,843,212 |   |   | $ | 9,843,212 |   |   | $ | - |   |   | $ | 10,086,455 |   |   | $ | 10,086,455 |   |
| Notes      payable                                                                                                  |   |                        | 10,010,958 |   |                      |   | (10,010,958 | ) |   |   | - |   |   |   | 10,613,855 |   |   |   | (10,613,855 | ) |   |   | - |   |
| Accounts      payable                                                                                               |   |                        | 9,624,269  |   |                      |   | 141,400 |   |   |   | 9,765,669 |   |   |   | 7,312,467 |   |   |   | 1,210,609 |   |   |   | 8,523,076 |   |
| Advance      from customers                                                                                         |   |                        | 2,989,024  |   |                      |   | (1,014,425 | ) |   |   | 1,974,599 |   |   |   | 2,738,373 |   |   |   | (1,209,576 | ) |   |   | 1,528,797 |   |
| Accrued      liabilities                                                                                            |   |                        | 1,704,505  |   |                      |   | (1,492,193 | ) |   |   | 212,312 |   |   |   | 1,749,333 |   |   |   | (1,541,532 | ) |   |   | 207,801 |   |
| Other      payables                                                                                                 |   |                        | 5,652,118  |   |                      |   | (2,948,482 | ) |   |   | 2,703,636 |   |   |   | 5,756,192 |   |   |   | (2,921,172 | ) |   |   | 2,835,020 |   |
| Shareholder      loans                                                                                              |   |                        | 6,948,473  |   |                      |   | 1,583,356 |   |   |   | 8,531,829 |   |   |   | 6,999,407 |   |   |   | 1,705,586 |   |   |   | 8,704,993 |   |
| Current      portion of deferred income                                                                             |   |                        | -          |   |                      |   | 365,063 |   |   |   | 365,063 |   |   |   | - |   |   |   | 382,035 |   |   |   | 382,035 |   |
| Total      current liabilities                                                                                      |   |                        | 36,929,347 |   |                      |   | (3,533,027 | ) |   |   | 33,396,320 |   |   |   | 35,169,627 |   |   |   | (2,901,450 | ) |   |   | 32,268,177 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long      Term Obligation                                                                                           |   |                        | 1,623,399  |   |                      |   | 626,478 |   |   |   | 2,249,877 |   |   |   | 1,721,166 |   |   |   | 584,310 |   |   |   | 2,305,476 |   |
| Deferred      income                                                                                                |   |                        | 2,203,317  |   |                      |   | 984,733 |   |   |   | 3,188,050 |   |   |   | 2,203,612 |   |   |   | 1,025,057 |   |   |   | 3,228,669 |   |
| Total      liabilities                                                                                              |   |                        | 40,756,063 |   |                      |   | (1,921,816 | ) |   |   | 38,834,247 |   |   |   | 39,094,405 |   |   |   | (1,292,083 | ) |   |   | 37,802,322 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity:                                                                                    |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |                        | 45,000     |   |                      |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |   |   | - |   |   |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |                        | 8,655,805  |   |                      |   | - |   |   |   | 8,655,805 |   |   |   | 8,655,805 |   |   |   | - |   |   |   | 8,655,805 |   |
| Paid      in capital – stock options                                                                          |   |                        | 315,000    |   |                      |   | - |   |   |   | 315,000 |   |   |   | 315,000 |   |   |   | - |   |   |   | 315,000 |   |
| Retained      earnings                                                                                              |   |                        | 8,135,147  |   |                      |   | (1,689,022 | ) |   |   | 6,446,125 |   |   |   | 7,598,447 |   |   |   | (1,485,965 | ) |   |   | 6,112,482 |   |
| Statutory      reserves                                                                                             |   |                        | 1,203,557  |   |                      |   | 5,561,426 |   |   |   | 6,764,983 |   |   |   | 1,203,557 |   |   |   | 5,668,666 |   |   |   | 6,872,223 |   |
| Accumulated      other comprehensive income                                                                         |   |                        | (2,523,499 | )      |                      |   | 5,244,943 |   |   |   | 2,721,444 |   |   |   | (3,533,074 | ) |   |   | 6,835,085 |   |   |   | 3,302,011 |   |
| Total      stockholders’ equity                                                                               |   |                        | 15,831,010 |   |                      |   | 9,117,347 |   |   |   | 24,948,357 |   |   |   | 14,284,735 |   |   |   | 11,017,786 |   |   |   | 25,302,521 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                           | 56,587,073 |   |                      | $      | 7,195,531 |   |   | $ | 63,782,604 |   |   | $ | 53,379,140 |   |   | $ | 9,725,703 |   |   | $ | 63,104,843 |   |

----

|                                                                                                                |   | August 31, 2008 |       |   | November 30, 2008 |   |
|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                |   | AsPreviouslyReported      |       |   | Effect ofRestatement   |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                                                              |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      assets:                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                      |   | $                         | 1,916,319  |   |                        | $      | 6,098 |   |   | $ | 1,922,417 |   |   | $ | 296,455 |   |   | $ | 160,347 |   |   | $ | 456,802 |   |
| Accounts      receivable, net                                                                                       |   |                      | 3,435,595  |   |                        |   | 10,933 |   |   |   | 3,446,528 |   |   |   | 4,724,882 |   |   |   | (1,718,426 | ) |   |   | 3,006,456 |   |
| Other      receivables                                                                                              |   |                      | 1,298,796  |   |                        |   | 1,513,274 |   |   |   | 2,812,070 |   |   |   | 2,128,642 |   |   |   | 2,204,906 |   |   |   | 4,333,548 |   |
| Advances      to suppliers                                                                                          |   |                      | 2,527,039  |   |                        |   | (110,215 | ) |   |   | 2,416,824 |   |   |   | 4,637,041 |   |   |   | (1,886,505 | ) |   |   | 2,750,536 |   |
| Inventories                                                                                                         |   |                      | 257,808    |   |                        |   | 820 |   |   |   | 258,628 |   |   |   | 685,985 |   |   |   | (185,831 | ) |   |   | 500,154 |   |
| Total      current assets                                                                                           |   |                      | 9,435,557  |   |                        |   | 1,420,910 |   |   |   | 10,856,467 |   |   |   | 12,473,005 |   |   |   | (1,425,509 | ) |   |   | 11,047,496 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      assets:                                                                                                  |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant and equipment                                                                                  |   |                      | 26,497,448 |   |                        |   | 5,929,523 |   |   |   | 32,426,971 |   |   |   | 33,668,657 |   |   |   | 4,897,462 |   |   |   | 38,566,119 |   |
| Construction      in progress                                                                                       |   |                      | 9,546,388  |   |                        |   | 2,487,129 |   |   |   | 12,033,517 |   |   |   | 10,710,321 |   |   |   | (901,091 | ) |   |   | 9,809,230 |   |
|                                                                                                                |   |                      | 36,043,836 |   |                        |   | 8,416,652 |   |   |   | 44,460,488 |   |   |   | 44,378,978 |   |   |   | 3,996,371 |   |   |   | 48,375,349 |   |
| Less:      accumulated depreciation and amortization                                                                |   |                      | (3,972,245 | )      |                        |   | (260,932 | ) |   |   | (4,233,177 | ) |   |   | (4,700,282 | ) |   |   | (77,934 | ) |   |   | (4,778,216 | ) |
| Net      fixed assets                                                                                               |   |                      | 32,071,591 |   |                        |   | 8,155,720 |   |   |   | 40,227,311 |   |   |   | 39,678,696 |   |   |   | 3,918,437 |   |   |   | 43,597,133 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      assets:                                                                                                  |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      property, net                                                                                       |   |                      | 1,694,794  |   |                        |   | 298,514 |   |   |   | 1,993,308 |   |   |   | 1,979,029 |   |   |   | (156 | ) |   |   | 1,978,873 |   |
| Mining      right, net                                                                                              |   |                      | 2,888,491  |   |                        |   | 889,961 |   |   |   | 3,778,452 |   |   |   | 3,468,906 |   |   |   | 447,507 |   |   |   | 3,916,413 |   |
| Long      term investments                                                                                          |   |                      | 210,394    |   |                        |   | 45,783 |   |   |   | 256,177 |   |   |   | 255,776 |   |   |   | - |   |   |   | 255,776 |   |
| Restricted      Cash                                                                                                |   |                      | -          |   |                        |   | 148,627 |   |   |   | 148,627 |   |   |   | - |   |   |   | 148,668 |   |   |   | 148,668 |   |
| Notes      receivable                                                                                               |   |                      | 557,254    |   |                        |   | (333,279 | ) |   |   | 223,975 |   |   |   | 2,832,107 |   |   |   | (29,257 | ) |   |   | 2,802,850 |   |
| Total      other assets                                                                                             |   |                      | 5,350,933  |   |                        |   | 1,049,606 |   |   |   | 6,400,539 |   |   |   | 8,535,818 |   |   |   | 566,762 |   |   |   | 9,102,580 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                         | 46,858,081 |   |                        | $      | 10,626,236 |   |   | $ | 57,484,317 |   |   | $ | 60,687,519 |   |   | $ | 3,059,690 |   |   | $ | 63,747,209 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                           |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short      term bank loans                                                                                          |   | $                         | -          |   |                        | $      | 4,688,507 |   |   | $ | 4,688,507 |   |   | $ | 5,558,888 |   |   | $ | - |   |   | $ | 5,558,888 |   |
| Notes      payable                                                                                                  |   |                      | 5,257,839  |   |                        |   | (5,257,839 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Accounts      payable                                                                                               |   |                      | 5,976,305  |   |                        |   | 1,230,507 |   |   |   | 7,206,812 |   |   |   | 7,780,928 |   |   |   | 1,608,689 |   |   |   | 9,389,617 |   |
| Advance      from customers                                                                                         |   |                      | 5,019,393  |   |                        |   | (1,230,509 | ) |   |   | 3,788,884 |   |   |   | 4,675,139 |   |   |   | (1,324,480 | ) |   |   | 3,350,659 |   |
| Accrued      liabilities                                                                                            |   |                      | 1,466,734  |   |                        |   | (1,252,044 | ) |   |   | 214,690 |   |   |   | 291,373 |   |   |   | 35,238 |   |   |   | 326,611 |   |
| Other      payables                                                                                                 |   |                      | 5,842,413  |   |                        |   | (3,393,142 | ) |   |   | 2,449,271 |   |   |   | 5,958,701 |   |   |   | (5,029,238 | ) |   |   | 929,463 |   |
| Shareholder      loans                                                                                              |   |                      | 6,689,139  |   |                        |   | 1,830,934 |   |   |   | 8,520,073 |   |   |   | 10,208,965 |   |   |   | 509,198 |   |   |   | 10,718,163 |   |
| Current      portion of deferred income                                                                             |   |                      | -          |   |                        |   | 388,461 |   |   |   | 388,461 |   |   |   | - |   |   |   | 581,903 |   |   |   | 581,903 |   |
| Total      current liabilities                                                                                      |   |                      | 30,251,823 |   |                        |   | (2,995,125 | ) |   |   | 27,256,698 |   |   |   | 34,473,994 |   |   |   | (3,618,690 | ) |   |   | 30,855,304 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long      Term Obligation                                                                                           |   |                      | 1,752,613  |   |                        |   | 591,641 |   |   |   | 2,344,254 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Deferred      income                                                                                                |   |                      | 2,181,417  |   |                        |   | 1,051,974 |   |   |   | 3,233,391 |   |   |   | 3,018,568 |   |   |   | 1,771,480 |   |   |   | 4,790,048 |   |
| Total      liabilities                                                                                              |   |                      | 34,185,853 |   |                        |   | (1,351,510 | ) |   |   | 32,834,343 |   |   |   | 37,492,562 |   |   |   | (1,847,210 | ) |   |   | 35,645,352 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity:                                                                                    |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |                      | 45,000     |   |                        |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |   |   | - |   |   |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |                      | 8,655,805  |   |                        |   | - |   |   |   | 8,655,805 |   |   |   | 8,655,805 |   |   |   | - |   |   |   | 8,655,805 |   |
| Paid      in capital – stock options                                                                          |   |                      | 315,000    |   |                        |   | - |   |   |   | 315,000 |   |   |   | 315,000 |   |   |   | - |   |   |   | 315,000 |   |
| Retained      earnings                                                                                              |   |                      | 6,562,827  |   |                        |   | (1,491,085 | ) |   |   | 5,071,742 |   |   |   | 9,952,516 |   |   |   | (1,406,730 | ) |   |   | 8,545,786 |   |
| Statutory      reserves                                                                                             |   |                      | 1,203,557  |   |                        |   | 5,683,026 |   |   |   | 6,886,583 |   |   |   | 1,819,915 |   |   |   | 5,148,926 |   |   |   | 6,968,841 |   |
| Accumulated      other comprehensive income                                                                         |   |                      | (4,109,961 | )      |                        |   | 7,785,805 |   |   |   | 3,675,844 |   |   |   | 2,406,721 |   |   |   | 1,164,704 |   |   |   | 3,571,425 |   |
| Total      stockholders’ equity                                                                               |   |                      | 12,672,228 |   |                        |   | 11,977,746 |   |   |   | 24,649,974 |   |   |   | 23,194,957 |   |   |   | 4,906,900 |   |   |   | 28,101,857 |   |
|                                                                                                                |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                         | 46,858,081 |   |                        | $      | 10,626,236 |   |   | $ | 57,484,317 |   |   | $ | 60,687,519 |   |   | $ | 3,059,690 |   |   | $ | 63,747,209 |   |

----

|                                                                                                                |   | February 28, 2007 |       |   | May 31, 2007    |   |
|---------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|---------------------------|--------|
|                                                                                                                |   | As PreviouslyReported  |       |   | Effect ofRestatement |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                                                              |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      assets:                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                      |   | $                           | 809,621    |   |                      | $      | 1,225 |   |   | $ | 810,846 |   |   | $ | 599,402 |   |   | $ | 2,078 |   |   | $ | 601,480 |   |
| Notes      and interest receivable                                                                                  |   |                        | 1,667,805  |   |                      |   | (1,667,805 | ) |   |   | - |   |   |   | 1,808,641 |   |   |   | (1,808,641 | ) |   |   | - |   |
| Accounts      receivable, net                                                                                       |   |                        | 3,089,257  |   |                      |   | 379,124 |   |   |   | 3,468,381 |   |   |   | 4,310,200 |   |   |   | 470,870 |   |   |   | 4,781,070 |   |
| Other      receivables                                                                                              |   |                        | 3,372,962  |   |                      |   | (1,542,473 | ) |   |   | 1,830,489 |   |   |   | 3,641,376 |   |   |   | (1,813,612 | ) |   |   | 1,827,764 |   |
| Advances      to suppliers                                                                                          |   |                        | 3,476,391  |   |                      |   | (138,498 | ) |   |   | 3,337,893 |   |   |   | 3,608,575 |   |   |   | 90,648 |   |   |   | 3,699,223 |   |
| Inventories                                                                                                         |   |                        | 590,219    |   |                      |   | 893 |   |   |   | 591,112 |   |   |   | 538,406 |   |   |   | 1,866 |   |   |   | 540,272 |   |
| Total      current assets                                                                                           |   |                        | 13,006,255 |   |                      |   | (2,967,534 | ) |   |   | 10,038,721 |   |   |   | 14,506,600 |   |   |   | (3,056,791 | ) |   |   | 11,449,809 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      assets:                                                                                                  |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant and equipment                                                                                  |   |                        | 22,153,665 |   |                      |   | 1,415,627 |   |   |   | 23,569,292 |   |   |   | 22,353,077 |   |   |   | 1,705,746 |   |   |   | 24,058,823 |   |
| Construction      in progress                                                                                       |   |                        | 1,488,826  |   |                      |   | 345,876 |   |   |   | 1,834,702 |   |   |   | 2,129,038 |   |   |   | 681,649 |   |   |   | 2,810,687 |   |
|                                                                                                                |   |                        | 23,642,491 |   |                      |   | 1,761,503 |   |   |   | 25,403,994 |   |   |   | 24,482,115 |   |   |   | 2,387,395 |   |   |   | 26,869,510 |   |
| Less:      accumulated depreciation and amortization                                                                |   |                        | (1,433,692 | )      |                      |   | (99,415 | ) |   |   | (1,533,107 | ) |   |   | (1,823,855 | ) |   |   | (132,698 | ) |   |   | (1,956,553 | ) |
| Net      fixed assets                                                                                               |   |                        | 22,208,799 |   |                      |   | 1,662,088 |   |   |   | 23,870,887 |   |   |   | 22,658,260 |   |   |   | 2,254,697 |   |   |   | 24,912,957 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      assets:                                                                                                  |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      property, net                                                                                       |   |                        | 1,752,604  |   |                      |   | 64,834 |   |   |   | 1,817,438 |   |   |   | 1,742,969 |   |   |   | 85,595 |   |   |   | 1,828,564 |   |
| Mining      right, net                                                                                              |   |                        | 3,276,497  |   |                      |   | 173,772 |   |   |   | 3,450,269 |   |   |   | 3,211,829 |   |   |   | 258,668 |   |   |   | 3,470,497 |   |
| Long      term investments                                                                                          |   |                        | 226,255    |   |                      |   | 1,605,591 |   |   |   | 1,831,846 |   |   |   | 228,287 |   |   |   | 1,627,161 |   |   |   | 1,855,448 |   |
| Notes      receivable                                                                                               |   |                        | -          |   |                      |   | 129,182 |   |   |   | 129,182 |   |   |   | - |   |   |   | 130,692 |   |   |   | 130,692 |   |
| Long      term prepaid expenses                                                                                     |   |                        | -          |   |                      |   | 2,612,937 |   |   |   | 2,612,937 |   |   |   | - |   |   |   | 2,904,849 |   |   |   | 2,904,849 |   |
| Total      other assets                                                                                             |   |                        | 5,255,356  |   |                      |   | 4,586,316 |   |   |   | 9,841,672 |   |   |   | 5,183,085 |   |   |   | 5,006,965 |   |   |   | 10,190,050 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                           | 40,470,410 |   |                      | $      | 3,280,870 |   |   | $ | 43,751,280 |   |   | $ | 42,347,945 |   |   | $ | 4,204,871 |   |   | $ | 46,552,816 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                           |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short      term bank loans                                                                                          |   | $                           | -          |   |                      | $      | 6,459,114 |   |   | $ | 6,459,114 |   |   | $ | - |   |   | $ | 6,534,581 |   |   | $ | 6,534,581 |   |
| Notes      payable                                                                                                  |   |                        | 6,392,021  |   |                      |   | (6,392,021 | ) |   |   | - |   |   |   | 6,392,021 |   |   |   | (6,392,021 | ) |   |   | - |   |
| Accounts      payable                                                                                               |   |                        | 4,575,511  |   |                      |   | 6,925 |   |   |   | 4,582,436 |   |   |   | 5,688,323 |   |   |   | 19,716 |   |   |   | 5,708,039 |   |
| Advance      from customers                                                                                         |   |                        | 2,409,584  |   |                      |   | (861,409 | ) |   |   | 1,548,175 |   |   |   | 2,819,229 |   |   |   | (1,157,915 | ) |   |   | 1,661,314 |   |
| Accrued      liabilities                                                                                            |   |                        | 1,069,612  |   |                      |   | (699,854 | ) |   |   | 369,758 |   |   |   | 1,147,691 |   |   |   | (957,564 | ) |   |   | 190,127 |   |
| Other      payables                                                                                                 |   |                        | 1,879,784  |   |                      |   | (516,713 | ) |   |   | 1,363,071 |   |   |   | 1,804,420 |   |   |   | (598,697 | ) |   |   | 1,205,723 |   |
| Shareholder      loans                                                                                              |   |                        | 8,319,974  |   |                      |   | 1,057,106 |   |   |   | 9,377,080 |   |   |   | 8,400,806 |   |   |   | 1,213,336 |   |   |   | 9,614,142 |   |
| Current      portion of deferred income                                                                             |   |                        | -          |   |                      |   | 75,060 |   |   |   | 75,060 |   |   |   | - |   |   |   | 76,775 |   |   |   | 76,775 |   |
| Total      current liabilities                                                                                      |   |                        | 24,646,486 |   |                      |   | (871,792 | ) |   |   | 23,774,694 |   |   |   | 26,252,490 |   |   |   | (1,261,789 | ) |   |   | 24,990,701 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long      Term Obligation                                                                                           |   |                        | 2,040,720  |   |                      |   | 542,926 |   |   |   | 2,583,646 |   |   |   | 2,040,720 |   |   |   | 573,112 |   |   |   | 2,613,832 |   |
| Deferred      income                                                                                                |   |                        | -          |   |                      |   | 1,143,329 |   |   |   | 1,143,329 |   |   |   | - |   |   |   | 1,687,848 |   |   |   | 1,687,848 |   |
| Total      liabilities                                                                                              |   |                        | 26,687,206 |   |                      |   | 814,463 |   |   |   | 27,501,669 |   |   |   | 28,293,210 |   |   |   | 999,171 |   |   |   | 29,292,381 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity:                                                                                    |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |                        | 45,000     |   |                      |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |   |   | - |   |   |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |                        | 8,655,805  |   |                      |   | - |   |   |   | 8,655,805 |   |   |   | 8,655,805 |   |   |   | - |   |   |   | 8,655,805 |   |
| Retained      earnings                                                                                              |   |                        | 4,839,385  |   |                      |   | (1,282,941 | ) |   |   | 3,556,444 |   |   |   | 5,324,638 |   |   |   | (1,172,177 | ) |   |   | 4,152,461 |   |
| Statutory      reserves                                                                                             |   |                        | 853,982    |   |                      |   | 4,306,062 |   |   |   | 5,160,044 |   |   |   | 734,982 |   |   |   | 4,640,166 |   |   |   | 5,375,148 |   |
| Accumulated      other comprehensive income                                                                         |   |                        | (610,968   | )      |                      |   | (556,714 | ) |   |   | (1,167,682 | ) |   |   | (705,690 | ) |   |   | (262,289 | ) |   |   | (967,979 | ) |
| Total      stockholders’ equity                                                                               |   |                        | 13,783,204 |   |                      |   | 2,466,407 |   |   |   | 16,249,611 |   |   |   | 14,054,735 |   |   |   | 3,205,700 |   |   |   | 17,260,435 |   |
|                                                                                                                |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                           | 40,470,410 |   |                      | $      | 3,280,870 |   |   | $ | 43,751,280 |   |   | $ | 42,347,945 |   |   | $ | 4,204,871 |   |   | $ | 46,552,816 |   |

----

|                                                                                                                |   | August 31, 2007  |       |   | November 30, 2007 |   |
|---------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                |   | As PreviouslyReported |       |   | Effect ofRestatement   |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                                                              |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      assets:                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                      |   | $                          | 1,202,818  |   |                        | $      | 4,585 |   |   | $ | 1,207,403 |   |   | $ | 1,478,264 |   |   | $ | 11,498 |   |   | $ | 1,489,762 |   |
| Certificate      of deposit                                                                                         |   |                       | -          |   |                        |   | - |   |   |   | - |   |   |   | - |   |   |   | 94,698 |   |   |   | 94,698 |   |
| Notes      and interest receivable                                                                                  |   |                       | 3,963,264  |   |                        |   | (3,963,264 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Accounts      receivable, net                                                                                       |   |                       | 2,196,419  |   |                        |   | 551,507 |   |   |   | 2,747,926 |   |   |   | 3,683,819 |   |   |   | (81,170 | ) |   |   | 3,602,649 |   |
| Other      receivables                                                                                              |   |                       | 3,920,191  |   |                        |   | (1,959,421 | ) |   |   | 1,960,770 |   |   |   | 914,451 |   |   |   | 307,189 |   |   |   | 1,221,640 |   |
| Advances      to suppliers                                                                                          |   |                       | 3,395,382  |   |                        |   | (109,855 | ) |   |   | 3,285,527 |   |   |   | 1,180,386 |   |   |   | - |   |   |   | 1,180,386 |   |
| Inventories                                                                                                         |   |                       | 417,447    |   |                        |   | 1,591 |   |   |   | 419,038 |   |   |   | 152,133 |   |   |   | - |   |   |   | 152,133 |   |
| Total      current assets                                                                                           |   |                       | 15,095,521 |   |                        |   | (5,474,857 | ) |   |   | 9,620,664 |   |   |   | 7,409,053 |   |   |   | 332,215 |   |   |   | 7,741,268 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      assets:                                                                                                  |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant and equipment                                                                                  |   |                       | 23,301,502 |   |                        |   | 2,165,867 |   |   |   | 25,467,369 |   |   |   | 28,987,311 |   |   |   | 40,601 |   |   |   | 29,027,912 |   |
| Construction      in progress                                                                                       |   |                       | 3,241,240  |   |                        |   | 235,191 |   |   |   | 3,476,431 |   |   |   | 7,626,021 |   |   |   | 4 |   |   |   | 7,626,025 |   |
|                                                                                                                |   |                       | 26,542,742 |   |                        |   | 2,401,058 |   |   |   | 28,943,800 |   |   |   | 36,613,332 |   |   |   | 40,605 |   |   |   | 36,653,937 |   |
| Less:      accumulated depreciation and amortization                                                                |   |                       | (2,232,083 | )      |                        |   | (181,943 | ) |   |   | (2,414,026 | ) |   |   | (2,903,646 | ) |   |   | (30,441 | ) |   |   | (2,934,087 | ) |
| Net      fixed assets                                                                                               |   |                       | 24,310,659 |   |                        |   | 2,219,115 |   |   |   | 26,529,774 |   |   |   | 33,709,686 |   |   |   | 10,164 |   |   |   | 33,719,850 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      assets:                                                                                                  |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      property, net                                                                                       |   |                       | 1,733,334  |   |                        |   | 110,520 |   |   |   | 1,843,854 |   |   |   | 1,872,366 |   |   |   | (485 | ) |   |   | 1,871,881 |   |
| Mining      right, net                                                                                              |   |                       | 3,147,161  |   |                        |   | 359,670 |   |   |   | 3,506,831 |   |   |   | 3,347,484 |   |   |   | 184,923 |   |   |   | 3,532,407 |   |
| Long      term investments                                                                                          |   |                       | 214,861    |   |                        |   | 3,599,754 |   |   |   | 3,814,615 |   |   |   | 3,889,182 |   |   |   | 2 |   |   |   | 3,889,184 |   |
| Restricted      Cash                                                                                                |   |                       | -          |   |                        |   | 132,517 |   |   |   | 132,517 |   |   |   | - |   |   |   | 136,453 |   |   |   | 136,453 |   |
| Notes      receivable                                                                                               |   |                       | -          |   |                        |   | 3,114,779 |   |   |   | 3,114,779 |   |   |   | 4,790,480 |   |   |   | 220,653 |   |   |   | 5,011,133 |   |
| Total      other assets                                                                                             |   |                       | 5,095,356  |   |                        |   | 7,317,240 |   |   |   | 12,412,596 |   |   |   | 13,899,512 |   |   |   | 541,546 |   |   |   | 14,441,058 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                   |   | $                          | 44,501,536 |   |                        | $      | 4,061,498 |   |   | $ | 48,563,034 |   |   | $ | 55,018,251 |   |   | $ | 883,925 |   |   | $ | 55,902176 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                     |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                           |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short      term bank loans                                                                                          |   | $                          | -          |   |                        | $      | 9,276,192 |   |   | $ | 9,276,192 |   |   | $ | 10,552,091 |   |   | $ | (1,082,266 | ) |   | $ | 9,469,825 |   |
| Notes      payable                                                                                                  |   |                       | 9,032,297  |   |                        |   | (9,032,297 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Accounts      payable                                                                                               |   |                       | 4,021,991  |   |                        |   | 825 |   |   |   | 4,022,816 |   |   |   | 6,011,492 |   |   |   | 734,030 |   |   |   | 6,745,522 |   |
| Advance      from customers                                                                                         |   |                       | 3,241,437  |   |                        |   | (1,749,328 | ) |   |   | 1,492,109 |   |   |   | 2,721,869 |   |   |   | (295,734 | ) |   |   | 2,426,135 |   |
| Accrued      liabilities                                                                                            |   |                       | 1,431,692  |   |                        |   | (1,178,934 | ) |   |   | 252,758 |   |   |   | 1,754,584 |   |   |   | (1,341,210 | ) |   |   | 413,374 |   |
| Other      payables                                                                                                 |   |                       | 2,090,887  |   |                        |   | (515,745 | ) |   |   | 1,575,142 |   |   |   | 4,746,160 |   |   |   | (3,598,945 | ) |   |   | 1,147,215 |   |
| Shareholder      loans                                                                                              |   |                       | 6,574,868  |   |                        |   | 1,271,870 |   |   |   | 7,846,738 |   |   |   | 7,568,227 |   |   |   | 1,308,788 |   |   |   | 8,877,015 |   |
| Current      portion of long term obligation                                                                        |   |                       | -          |   |                        |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,082,266 |   |   |   | 1,082,266 |   |
| Current      portion of deferred income                                                                             |   |                       | -          |   |                        |   | 104,680 |   |   |   | 104,680 |   |   |   | - |   |   |   | 188,505 |   |   |   | 188,505 |   |
| Total      current liabilities                                                                                      |   |                       | 26,393,172 |   |                        |   | (1,822,737 | ) |   |   | 24,570,435 |   |   |   | 33,354,423 |   |   |   | (3,004,566 | ) |   |   | 30,349,857 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long      Term Obligation                                                                                           |   |                       | 2,040,720  |   |                        |   | 609,621 |   |   |   | 2,650,341 |   |   |   | 1,623,399 |   |   |   | - |   |   |   | 1,623,399 |   |
| Deferred      income                                                                                                |   |                       | -          |   |                        |   | 2,118,582 |   |   |   | 2,118,582 |   |   |   | 1,664,841 |   |   |   | 319,546 |   |   |   | 1,984,387 |   |
| Total      liabilities                                                                                              |   |                       | 28,433,892 |   |                        |   | 905,466 |   |   |   | 29,339,358 |   |   |   | 36,642,663 |   |   |   | (2,685,020 | ) |   |   | 33,957,643 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity:                                                                                    |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock: authorized 200,000,000 shares of $0.001 par value; 45,000,000      shares issued and outstanding |   |                       | 45,000     |   |                        |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |   |   | - |   |   |   | 45,000 |   |
| Additional      paid-in capital                                                                                     |   |                       | 10,596,408 |   |                        |   | (1,940,603 | ) |   |   | 8,655,805 |   |   |   | 8,655,805 |   |   |   | - |   |   |   | 8,655,805 |   |
| Retained      earnings                                                                                              |   |                       | 5,601,224  |   |                        |   | (1,812,752 | ) |   |   | 3,788,472 |   |   |   | 6,692,664 |   |   |   | (986,142 | ) |   |   | 5,706,522 |   |
| Statutory      reserves                                                                                             |   |                       | 734,982    |   |                        |   | 4,774,645 |   |   |   | 5,509,627 |   |   |   | 1,189,058 |   |   |   | 4,660,044 |   |   |   | 5,849,102 |   |
| Accumulated      other comprehensive income                                                                         |   |                       | (909,970   | )      |                        |   | 2,134,742 |   |   |   | 1,224,772 |   |   |   | 1,793,061 |   |   |   | (104,957 | ) |   |   | 1,688,104 |   |
| Total      stockholders’ equity                                                                               |   |                       | 16,067,644 |   |                        |   | 3,156,032 |   |   |   | 19,223,676 |   |   |   | 18,375,588 |   |   |   | 3,568,945 |   |   |   | 21,944,533 |   |
|                                                                                                                |   |                       |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   | $                          | 44,501,536 |   |                        | $      | 4,061,498 |   |   | $ | 48,563,034 |   |   | $ | 55,018,251 |   |   | $ | 883,925 |   |   | $ | 55,902,176 |   |

----

|                                               |   | Three months ended February 29, 2008 |       |   | Three months ended May 31, 2008 |   |
|----------------------------------------------------|--------|---------------------------------------------------------------|------------|--------|----------------------------------------------------------|--------|
|                                               |   | As PreviouslyReported                                    |       |   | Effect ofRestatement                                |   |   | Restated |   |   | AsPreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                           |   | $                                                             | 7,706,030  |   |                                                     | $      | (29,729 | ) |   | $ | 7,676,301 |   |   | $ | 4,487,945 |   |   | $ | 3,842 |   |   | $ | 4,491,787 |   |
| Cost      of revenues                              |   |                                                          | (4,352,202 | )      |                                                     |   | 211,432 |   |   |   | (4,140,770 | ) |   |   | (3,799,029 | ) |   |   | 114,487 |   |   |   | (3,684,542 | ) |
| Gross      profit                                  |   |                                                          | 3,353,828  |   |                                                     |   | 181,703 |   |   |   | 3,535,531 |   |   |   | 688,916 |   |   |   | 118,329 |   |   |   | 807,245 |   |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                           |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and marketing                         |   |                                                          | (158,629   | )      |                                                     |   | (30,290 | ) |   |   | (188,919 | ) |   |   | (52,948 | ) |   |   | (45,728 | ) |   |   | (98,676 | ) |
| General      and administrative                    |   |                                                          | (807,200   | )      |                                                     |   | (173,960 | ) |   |   | (981,160 | ) |   |   | (664,888 | ) |   |   | 203,504 |   |   |   | (461,384 | ) |
| Options      issued for services                   |   |                                                          | (315,000   | )      |                                                     |   | 315,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      operating expenses                      |   |                                                          | (1,280,829 | )      |                                                     |   | 110,750 |   |   |   | (1,170,079 | ) |   |   | (717,836 | ) |   |   | 157,776 |   |   |   | (560,060 | ) |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      income from operations                 |   |                                                          | 2,072,999  |   |                                                     |   | 292,453 |   |   |   | 2,365,452 |   |   |   | (28,920 | ) |   |   | 276,105 |   |   |   | 247,185 |   |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income and expenses                     |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-operating      income                          |   |                                                          | 97,192     |   |                                                     |   | (32,633 | ) |   |   | 64,559 |   |   |   | 55,855 |   |   |   | 33,053 |   |   |   | 88,908 |   |
| Finance      expenses, net                         |   |                                                          | (197,960   | )      |                                                     |   | 209 |   |   |   | (197,751 | ) |   |   | (292,783 | ) |   |   | 9,830 |   |   |   | (282,953 | ) |
| Government      subsidies                          |   |                                                          |       |   |                                                     |   | 44,921 |   |   |   | 44,921 |   |   |   |   |   |   |   | 27,419 |   |   |   | 27,419 |   |
| Non-operating      expenses                        |   |                                                          | (64,549    | )      |                                                     |   | 35,776 |   |   |   | (28,773 | ) |   |   | (103,269 | ) |   |   | (35,879 | ) |   |   | (139,148 | ) |
| (Loss      ) income before income taxes            |   |                                                          | 1,907,682  |   |                                                     |   | 340,726 |   |   |   | 2,248,408 |   |   |   | (369,117 | ) |   |   | 310,528 |   |   |   | (58,589 | ) |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                    |   |                                                          | (592,692   | )      |                                                     |   | (233 | ) |   |   | (592,925 | ) |   |   | (167,583 | ) |   |   | (231 | ) |   |   | (167,814 | ) |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income                             |   |                                                          | 1,314,990  |   |                                                     |   | 340,493 |   |   |   | 1,655,483 |   |   |   | (536,700 | ) |   |   | 310,297 |   |   |   | (226,403 | ) |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income                    |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Foreign      currency translation adjustment |   |                                                          | (972,550   | )      |                                                     |   | 2,018,099 |   |   |   | 1,045,549 |   |   |   | (1,009,575 | ) |   |   | 1,582,659 |   |   |   | 573,084 |   |
| Total      comprehensive (loss) income             |   | $                                                             | 342,440    |   |                                                     | $      | 2,358,592 |   |   | $ | 2,701,032 |   |   | $ | (1,546,275 | ) |   | $ | 1,892,956 |   |   | $ | 346,681 |   |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income per common  share |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                             |   | $                                                             | 0.029      |   |                                                     | $      | 0.008 |   |   | $ | 0.037 |   |   | $ | (0.012 | ) |   | $ | 0.007 |   |   | $ | (0.005 | ) |
|                                               |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding    |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                             |   |                                                          | 45,000,000 |   |                                                     |   | - |   |   |   | 45,000,000 |   |   |   | 45,000,000 |   |   |   | - |   |   |   | 45,000,000 |   |

----

|                                            |   | Three months ended August 31, 2008 |       |   | Three months ended November 30, 2008 |   |
|-------------------------------------------------|--------|-------------------------------------------------------------|------------|--------|---------------------------------------------------------------|--------|
|                                            |   | As PreviouslyReported                                  |       |   | Effect ofRestatement                                     |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                        |   | $                                                           | 2,173,319  |   |                                                          | $      | 1,590 |   |   | $ | 2,174,909 |   |   | $ | 5,195,499 |   |   | $ | 345,601 |   |   | $ | 5,541,100 |   |
| Cost      of revenues                           |   |                                                        | (2,453,152 | )      |                                                          |   | (32,368 | ) |   |   | (2,485,520 | ) |   |   | (3,086,834 | ) |   |   | (555,332 | ) |   |   | (3,642,166 | ) |
| Gross      profit (loss)                        |   |                                                        | (279,833   | )      |                                                          |   | (30,778 | ) |   |   | (310,611 | ) |   |   | 2,108,665 |   |   |   | (209,731 | ) |   |   | 1,898,934 |   |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                        |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and marketing                      |   |                                                        | (22,738    | )      |                                                          |   | (1,022 | ) |   |   | (23,760 | ) |   |   | - |   |   |   | (82,943 | ) |   |   | (82,943 | ) |
| General      and administrative                 |   |                                                        | (423,078   | )      |                                                          |   | 63,607 |   |   |   | (359,471 | ) |   |   | (285,143 | ) |   |   | (185,185 | ) |   |   | (470,328 | ) |
| Total      operating expenses                   |   |                                                        | (445,816   | )      |                                                          |   | 62,585 |   |   |   | (383,231 | ) |   |   | (285,143 | ) |   |   | (268,128 | ) |   |   | (553,271 | ) |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      income from operations              |   |                                                        | (725,649   | )      |                                                          |   | 31,807 |   |   |   | (693,842 | ) |   |   | 1,823,522 |   |   |   | (477,859 | ) |   |   | 1,345,663 |   |
|                                            |   |
| Other      income and expenses                  |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-operating      income                       |   |                                                        | 63,838     |   |                                                          |   | (23,603 | ) |   |   | 40,235 |   |   |   | 3,244,288 |   |   |   | (3,118,065 | ) |   |   | 126,223 |   |
| Finance      expenses, net                      |   |                                                        | (277,399   | )      |                                                          |   | (9,724 | ) |   |   | (287,123 | ) |   |   | (185,649 | ) |   |   | 186,182 |   |   |   | 533 |   |
| Government      subsidies                       |   |                                                        | -          |   |                                                          |   | 950 |   |   |   | 950 |   |   |   | - |   |   |   | 2,969,289 |   |   |   | 2,969,289 |   |
| Non-operating      expenses                     |   |                                                        | (31,403    | )      |                                                          |   | 9,890 |   |   |   | (21,513 | ) |   |   | (177,676 | ) |   |   | (30,078 | ) |   |   | (207,754 | ) |
| (Loss)      income before income taxes          |   |                                                        | (970,613   | )      |                                                          |   | 9,320 |   |   |   | (961,293 | ) |   |   | 4,704,485 |   |   |   | (470,531 | ) |   |   | 4,233,954 |   |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                 |   |                                                        | (65,007    | )      |                                                          |   | (80 | ) |   |   | (65,087 | ) |   |   | (556,443 | ) |   |   | (121,209 | ) |   |   | (677,652 | ) |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income                          |   |                                                        | (1,035,620 | )      |                                                          |   | 9,240 |   |   |   | (1,026,380 | ) |   |   | 4,148,042 |   |   |   | (591,740 | ) |   |   | 3,556,302 |   |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income                 |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustment    |   |                                                        | (576,887   | )      |                                                          |   | 950,720 |   |   |   | 373,833 |   |   |   | 3,172,672 |   |   |   | (3,277,091 | ) |   |   | (104,419 | ) |
| Total      comprehensive (loss) income          |   | $                                                           | (1,612,507 | )      |                                                          | $      | 959,960 |   |   | $ | (652,547 | ) |   | $ | 7,320,714 |   |   | $ | (3,868,831 | ) |   | $ | 3,451,883 |   |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income per common share         |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                          |   | $                                                           | (0.023     | )      |                                                          | $      | - |   |   | $ | (0.023 | ) |   | $ | 0.092 |   |   | $ | (0.013 | ) |   | $ | 0.079 |   |
|                                            |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                          |   |                                                        | 45,000,000 |   |                                                          |   | - |   |   |   | 45,000,000 |   |   |   | 45,000,000 |   |   |   | - |   |   |   | 45,000,000 |   |

|                                                                        |   | Three months ended February 28, 2007 |       |   | Three months ended May 31, 2007 |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------|------------|--------|----------------------------------------------------------|--------|
|                                                                        |   | As PreviouslyReported                                    |       |   | Effect ofRestatement                                |   |   | Restated |   |   | AsPreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                    |   | $                                                             | 4,406,688  |   |                                                     | $      | (497,625 | ) |   | $ | 3,909,063 |   |   | $ | 4,774,850 |   |   | $ | (58,502 | ) |   | $ | 4,716,348 |   |
| Cost      of revenues                                                       |   |                                                          | (2,539,706 | )      |                                                     |   | (78,548 | ) |   |   | (2,618,254 | ) |   |   | (3,009,373 | ) |   |   | (39,587 | ) |   |   | (3,048,960 | ) |
| Gross      profit (loss)                                                    |   |                                                          | 1,866,982  |   |                                                     |   | (576,173 | ) |   |   | 1,290,809 |   |   |   | 1,765,477 |   |   |   | (98,089 | ) |   |   | 1,667,388 |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                                                    |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and marketing                                                  |   |                                                          | (58,250    | )      |                                                     |   | (37,618 | ) |   |   | (95,868 | ) |   |   | (93,689 | ) |   |   | (18,924 | ) |   |   | (112,613 | ) |
| General      and administrative                                             |   |                                                          | (456,617   | )      |                                                     |   | (339,538 | ) |   |   | (796,155 | ) |   |   | (479,619 | ) |   |   | 262,642 |   |   |   | (216,977 | ) |
| Total      operating expenses                                               |   |                                                          | (514,867   | )      |                                                     |   | (377,156 | ) |   |   | (892,023 | ) |   |   | (573,308 | ) |   |   | 243,718 |   |   |   | (329,590 | ) |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      from operations                                                 |   |                                                          | 1,352,115  |   |                                                     |   | (953,329 | ) |   |   | 398,786 |   |   |   | 1,192,169 |   |   |   | 145,629 |   |   |   | 1,337,798 |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income and expenses                                              |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance      expenses, net                                                  |   |                                                          | (454,575   | )      |                                                     |   | 247,701 |   |   |   | (206,874 | ) |   |   | (474,618 | ) |   |   | 278,052 |   |   |   | (196,566 | ) |
| Government      subsidies                                                   |   |                                                          | -          |   |                                                     |   | - |   |   |   | - |   |   |   | - |   |   |   | 65,980 |   |   |   | 65,980 |   |
| Non-operating      income                                                   |   |                                                          | 8,248      |   |                                                     |   | (2,068 | ) |   |   | 6,180 |   |   |   | 73,095 |   |   |   | (38,169 | ) |   |   | 34,926 |   |
| Non-operating      expenses                                                 |   |                                                          | (19,461    | )      |                                                     |   | 1,454 |   |   |   | (18,007 | ) |   |   | (20,885 | ) |   |   | (8,784 | ) |   |   | (29,669 | ) |
| Income      before income taxes                                             |   |                                                          | 886,327    |   |                                                     |   | (706,242 | ) |   |   | 180,085 |   |   |   | 769,761 |   |   |   | 442,708 |   |   |   | 1,212,469 |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                                             |   |                                                          | (92,844    | )      |                                                     |   | (2,243 | ) |   |   | (95,087 | ) |   |   | (403,508 | ) |   |   | 2,160 |   |   |   | (401,348 | ) |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                             |   |                                                          | 793,483    |   |                                                     |   | (708,485 | ) |   |   | 84,998 |   |   |   | 366,253 |   |   |   | 444,868 |   |   |   | 811,121 |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income                                             |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustment                                |   |                                                          | (23,740    | )      |                                                     |   | (2,019,879 | ) |   |   | (2,043,619 | ) |   |   | (94,722 | ) |   |   | 294,425 |   |   |   | 199,703 |   |
| Total      comprehensive (loss) income                                      |   | $                                                             | 769,743    |   |                                                     | $      | (2,728,364 | ) |   | $ | (1,958,621 | ) |   | $ | 271,531 |   |   | $ | 739,293 |   |   | $ | 1,010,824 |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income per common share                                            |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                                                      |   | $                                                             | 0.018      |   |                                                     | $      | (0.016 | ) |   | $ | 0.002 |   |   | $ | 0.008 |   |   | $ | 0.010 |   |   | $ | 0.018 |   |
|                                                                        |   |                                                          |       |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding basic and      diluted |   |                                                          | 45,000,000 |   |                                                     |   | - |   |   |   | 45,000,000 |   |   |   | 45,000,000 |   |   |   | - |   |   |   | 45,000,000 |   |

----

|                                                                   |   | Three months ended August 31, 2007 |       |   | Three months ended November 30, 2007 |   |
|------------------------------------------------------------------------|--------|-------------------------------------------------------------|------------|--------|---------------------------------------------------------------|--------|
|                                                                   |   | As PreviouslyReported                                  |       |   | Effect ofRestatement                                     |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                               |   | $                                                           | 4,104,862  |   |                                                          | $      | 26,859 |   |   | $ | 4,131,721 |   |   | $ | 6,964,633 |   |   | $ | 560,303 |   |   | $ | 7,524,936 |   |
| Cost      of revenues                                                  |   |                                                        | (3,608,947 | )      |                                                          |   | (16,585 | ) |   |   | (3,625,532 | ) |   |   | (4,439,442 | ) |   |   | 786,880 |   |   |   | (3,652,562 | ) |
| Gross      profit (loss)                                               |   |                                                        | 495,915    |   |                                                          |   | 10,274 |   |   |   | 506,189 |   |   |   | 2,525,191 |   |   |   | 1,347,183 |   |   |   | 3,872,374 |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                                               |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and marketing                                             |   |                                                        | (47,680    | )      |                                                          |   | (10,706 | ) |   |   | (58,386 | ) |   |   | - |   |   |   | (226,908 | ) |   |   | (226,908 | ) |
| General      and administrative                                        |   |                                                        | (477,130   | )      |                                                          |   | 76,855 |   |   |   | (400,275 | ) |   |   | (326,504 | ) |   |   | (382,465 | ) |   |   | (708,969 | ) |
| Total      operating expenses                                          |   |                                                        | (524,810   | )      |                                                          |   | 66,149 |   |   |   | (458,661 | ) |   |   | (326,504 | ) |   |   | (609,373 | ) |   |   | (935,877 | ) |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      income from operations                                     |   |                                                        | (28,895    | )      |                                                          |   | 76,423 |   |   |   | 47,528 |   |   |   | 2,198,687 |   |   |   | 737,810 |   |   |   | 2,936,497 |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income and expenses                                         |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance      expenses, net                                             |   |                                                        | (104,808   | )      |                                                          |   | (9,096 | ) |   |   | (113,904 | ) |   |   | - |   |   |   | (189,116 | ) |   |   | (189,116 | ) |
| Government      subsidies                                              |   |                                                        | -          |   |                                                          |   | 455 |   |   |   | 455 |   |   |   | - |   |   |   | 624,347 |   |   |   | 624,347 |   |
| Non-operating      income                                              |   |                                                        | 94,546     |   |                                                          |   | (62,067 | ) |   |   | 32,479 |   |   |   | 404,697 |   |   |   | (415,542 | ) |   |   | (10,845 | ) |
| Non-operating      expenses                                            |   |                                                        | (45,822    | )      |                                                          |   | 14,384 |   |   |   | (31,438 | ) |   |   | - |   |   |   | (40,194 | ) |   |   | (40,194 | ) |
| (Loss)      income before income taxes                                 |   |                                                        | (84,979    | )      |                                                          |   | 20,099 |   |   |   | (64,880 | ) |   |   | 2,603,384 |   |   |   | 717,305 |   |   |   | 3,320,689 |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                                        |   |                                                        | (164,546   | )      |                                                          |   | (84 | ) |   |   | (164,630 | ) |   |   | (1,065,868 | ) |   |   | 2,704 |   |   |   | (1,063,164 | ) |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income                                                 |   |                                                        | (249,525   | )      |                                                          |   | 20,015 |   |   |   | (229,510 | ) |   |   | 1,537,516 |   |   |   | 720,009 |   |   |   | 2,257,525 |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income                                        |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustment                           |   |                                                        | (176,227   | )      |                                                          |   | 2,368,978 |   |   |   | 2,192,751 |   |   |   | 1,239,866 |   |   |   | (776,535 | ) |   |   | 463,331 |   |
| Total      comprehensive (loss) income                                 |   | $                                                           | (425,752   | )      |                                                          | $      | 2,388,993 |   |   | $ | 1,963,241 |   |   | $ | 2,777,382 |   |   | $ | (56,526 | ) |   | $ | 2,720,856 |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net      (loss) income per common share                          |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic      and diluted                                                 |   | $                                                           | (0.006     | )      |                                                          | $      | 0.001 |   |   | $ | (0.005 | ) |   | $ | 0.034 |   |   | $ | 0.016 |   |   | $ | 0.050 |   |
|                                                                   |   |                                                        |       |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding basic      and diluted |   |                                                        | 45,000,000 |   |                                                          |   | - |   |   |   | 45,000,000 |   |   |   | 45,000,000 |   |   |   | - |   |   |   | 45,000,000 |   |

----

|                                                                                        |   | Three months ended February 29, 2008 |       |   | Six months ended May 31, 2008 |   |
|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|------------|--------|--------------------------------------------------------|--------|
|                                                                                        |   | As PreviouslyReported                                    |       |   | Effect ofRestatement                              |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                  |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                             |   | $                                                             | 1,314,990  |   |                                                   | $      | 340,493 |   |   | $ | 1,655,483 |   |   | $ | 778,290 |   |   | $ | 650,790 |   |   | $ | 1,429,080 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                          |   |                                                          | 558,571    |   |                                                   |   | 18,901 |   |   |   | 577,472 |   |   |   | 1,089,047 |   |   |   | 53,489 |   |   |   | 1,142,536 |   |
| Decrease      in deferred charges                                                           |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | 487 |   |   |   | (487 | ) |   |   | - |   |
| Options      issued for services                                                            |   |                                                          | 315,000    |   |                                                   |   | - |   |   |   | 315,000 |   |   |   | 315,000 |   |   |   | - |   |   |   | 315,000 |   |
| Interest      accrued on shareholder loans                                                  |   |                                                          | -          |   |                                                   |   | 102,724 |   |   |   | 102,724 |   |   |   | - |   |   |   | 209,143 |   |   |   | 209,143 |   |
| Changes      in operating assets and liabilities:                                           |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in certificate of deposit                                          |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | 94,698 |   |   |   | 94,698 |   |
| Decrease      (increase) in accounts receivable                                             |   |                                                          | (1,586,389 | )      |                                                   |   | (196,374 | ) |   |   | (1,782,763 | ) |   |   | (263,790 | ) |   |   | (204,973 | ) |   |   | (468,763 | ) |
| Increase      in note receivable                                                            |   |                                                          | (1,317,736 | )      |                                                   |   | 1,317,736 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in other receivables                                                          |   |                                                          | 801,697    |   |                                                   |   | (1,425,490 | ) |   |   | (623,793 | ) |   |   | (209,616 | ) |   |   | (8,086,269 | ) |   |   | (8,295,885 | ) |
| (Increase)      decrease in advances to suppliers                                           |   |                                                          | (1,532,788 | )      |                                                   |   | 990,367 |   |   |   | (542,421 | ) |   |   | (1,145,666 | ) |   |   | 589,451 |   |   |   | (556,215 | ) |
| (Increase)      decrease in inventories                                                     |   |                                                          | (93,057    | )      |                                                   |   | (1,915 | ) |   |   | (94,972 | ) |   |   | (13,820 | ) |   |   | (766 | ) |   |   | (14,586 | ) |
| Increase      in deferred income                                                            |   |                                                          | 538,476    |   |                                                   |   | 841,745 |   |   |   | 1,380,221 |   |   |   | 538,770 |   |   |   | 899,042 |   |   |   | 1,437,812 |   |
| Increase      in accounts payable                                                           |   |                                                          | 2,878,747  |   |                                                   |   | (795,567 | ) |   |   | 2,083,180 |   |   |   | 566,945 |   |   |   | (255,830 | ) |   |   | 311,115 |   |
| (Decrease)      increase in advances from customers                                         |   |                                                          | 267,155    |   |                                                   |   | (718,691 | ) |   |   | (451,536 | ) |   |   | 16,504 |   |   |   | (913,842 | ) |   |   | (897,338 | ) |
| (Decrease)      increase in accrued liabilities and other payables                          |   |                                                          | 590,679    |   |                                                   |   | 61,593 |   |   |   | 652,272 |   |   |   | 739,581 |   |   |   | 39,564 |   |   |   | 779,145 |   |
| Net      cash provided by operating activities                                              |   |                                                          | 2,735,345  |   |                                                   |   | 535,522 |   |   |   | 3,270,867 |   |   |   | 2,411,732 |   |   |   | (6,925,990 | ) |   |   | (4,514,258 | ) |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                  |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of property, plant and equipment                                              |   |                                                          | -          |   |                                                   |   | (1,551,451 | ) |   |   | (1,551,451 | ) |   |   | (231,167 | ) |   |   | (2,739,540 | ) |   |   | (2,970,707 | ) |
| Proceeds      received on sales of fixed assets                                             |   |                                                          | 92,397     |   |                                                   |   | (92,397 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in construction in progress                                                   |   |                                                          | (656,069   | )      |                                                   |   | 432,002 |   |   |   | (224,067 | ) |   |   | (1,035,380 | ) |   |   | 716,108 |   |   |   | (319,272 | ) |
| Decrease      in deferred charges                                                           |   |                                                          | 487        |   |                                                   |   | (487 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in long term investments                                                      |   |                                                          | (812,235   | )      |                                                   |   | 812,235 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Proceeds      from disposal of long term investments                                        |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,336,495 |   |   |   | 4,336,495 |   |
| Increase      in notes receivable                                                           |   |                                                          | -          |   |                                                   |   | (309,354 | ) |   |   | (309,354 | ) |   |   | - |   |   |   | (309,354 | ) |   |   | (309,354 | ) |
| Payments      received on notes receivable                                                  |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | 1,153,201 |   |   |   | 3,181,516 |   |   |   | 4,334,717 |   |
| Net      cash provided by (used in) investing activities                                    |   |                                                          | (1,375,420 | )      |                                                   |   | (709,452 | ) |   |   | (2,084,872 | ) |   |   | (113,346 | ) |   |   | 5,185,225 |   |   |   | 5,071,879 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                  |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from short term bank loans                                                    |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,881,844 |   |   |   | 2,881,844 |   |
| Principal      payments made on short term bank loans                                       |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,881,844 | ) |   |   | (2,881,844 | ) |
| Increase      on notes payable                                                              |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | (560,426 | ) |   |   | 560,426 |   |   |   | - |   |
| Advance      from shareholders                                                              |   |                                                          | 345,747    |   |                                                   |   | (205,130 | ) |   |   | 140,617 |   |   |   | 396,681 |   |   |   | (256,064 | ) |   |   | 140,617 |   |
| Repayment      of notes payable                                                             |   |                                                          | (541,133   | )      |                                                   |   | 541,133 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Repayments      of shareholders loans                                                       |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | (144,092 | ) |   |   | (144,092 | ) |
| Repayments      of long term obligation                                                     |   |                                                          | -          |   |                                                   |   | (562,469 | ) |   |   | (562,469 | ) |   |   | - |   |   |   | (562,469 | ) |   |   | (562,469 | ) |
| Net      cash (used in) provided by financing activities                                    |   |                                                          | (195,386   | )      |                                                   |   | (226,466 | ) |   |   | (421,852 | ) |   |   | (163,745 | ) |   |   | (402,199 | ) |   |   | (565,944 | ) |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                                |   |                                                          | (972,550   | )      |                                                   |   | 303,511 |   |   |   | (669,039 | ) |   |   | (1,994,067 | ) |   |   | 2,138,934 |   |   |   | 144,867 |   |
| Net      change in cash and cash equivalents                                                |   |                                                          | 191,989    |   |                                                   |   | (96,885 | ) |   |   | 95,104 |   |   |   | 140,574 |   |   |   | (4,030 | ) |   |   | 136,544 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period                                         |   |                                                          | 1,478,264  |   |                                                   |   | 11,498 |   |   |   | 1,489,762 |   |   |   | 1,478,264 |   |   |   | 11,498 |   |   |   | 1,489,762 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                               |   | $                                                             | 1,670,253  |   |                                                   | $      | (85,387 | ) |   | $ | 1,584,866 |   |   | $ | ,618,838 |   |   | $ | 7,468 |   |   | $ | 1,626,306 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of cash flow information                                       |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      paid for interest                                                                 |   |                                                          | -          |   |                                                   | $      | 223,929 |   |   | $ | 223,929 |   |   |   | - |   |   | $ | 452,601 |   |   | $ | 452,601 |   |
| Cash      paid for income taxes                                                             |   |                                                          | -          |   |                                                   | $      | 1,398,152 |   |   | $ | 1,398,152 |   |   |   | - |   |   | $ | 1,780,122 |   |   | $ | 1,780,122 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of non-cash investing and financing      activities:           |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property      and equipment disposed and exchanged for reduction in      payables      |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Property,      plant and equipment purchased with financing                                 |   |                                                          | -          |   |                                                   | $      | 936,967 |   |   | $ | 936,967 |   |   |   | - |   |   | $ | 1,466,439 |   |   | $ | 1,466,439 |   |

----

|                                                                                        |   | Nine months ended August 31, 2008 |       |
|---------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|------------|
|                                                                                        |   | As PreviouslyReported                                 |       |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                  |   |                                                       |       |   |   |   |   |   |   |
| Net      income                                                                             |   | $                                                          | (257,330   | ) |   | $ | 660,030 |   |   | $ | 402,700 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                          |   |                                                       | 1,626,538  |   |   |   | 111,703 |   |   |   | 1,738,241 |   |
| Options      issued for services                                                            |   |                                                       | 315,000    |   |   |   | - |   |   |   | 315,000 |   |
| Interest      accrued on shareholder loans                                                  |   |                                                       | -          |   |   |   | 317,352 |   |   |   | 317,352 |   |
| Changes      in operating assets and liabilities:                                           |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in certificate of deposit                                          |   |                                                       | -          |   |   |   | 94,698 |   |   |   | 94,698 |   |
| Decrease      (increase) in accounts receivable                                             |   |                                                       | 248,224    |   |   |   | (99,966 | ) |   |   | 148,258 |   |
| Increase      in other receivables                                                          |   |                                                       | (384,345   | ) |   |   | (1,206,085 | ) |   |   | (1,590,430 | ) |
| (Increase)      decrease in advances to suppliers                                           |   |                                                       | (1,346,653 | ) |   |   | 720,584 |   |   |   | (626,069 | ) |
| (Increase)      decrease in inventories                                                     |   |                                                       | (105,675   | ) |   |   | (820 | ) |   |   | (106,495 | ) |
| Increase      in deferred income                                                            |   |                                                       | 516,575    |   |   |   | 932,385 |   |   |   | 1,448,960 |   |
| Increase      in accounts payable                                                           |   |                                                       | (769,217   | ) |   |   | (325,216 | ) |   |   | (1,094,433 | ) |
| (Decrease)      increase in advances from customers                                         |   |                                                       | 2,297,524  |   |   |   | (1,806,105 | ) |   |   | 491,419 |   |
| (Decrease)      increase in accrued liabilities and other payables                          |   |                                                       | 543,203    |   |   |   | (11,054 | ) |   |   | 532,149 |   |
| Net      cash provided by operating activities                                              |   |                                                       | 2,683,844  |   |   |   | (612,494 | ) |   |   | 2,071,350 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                  |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Purchase      of property, plant and equipment                                              |   |                                                       | (245,508   | ) |   |   | (3,723,088 | ) |   |   | (3,968,596 | ) |
| Increase      in construction in progress                                                   |   |                                                       | (2,249,008 | ) |   |   | 1,906,266 |   |   |   | (342,742 | ) |
| Decrease      in deferred charges                                                           |   |                                                       | 487        |   |   |   | (487 | ) |   |   | - |   |
| Increase      in long term investments                                                      |   |                                                       | 3,652,647  |   |   |   | (3,652,647 | ) |   |   | - |   |
| Proceeds      from disposal of long term investments                                        |   |                                                       | -          |   |   |   | 4,336,495 |   |   |   | 4,336,495 |   |
| Increase      in notes receivable                                                           |   |                                                       | -          |   |   |   | (309,354 | ) |   |   | (309,354 | ) |
| Payments      received on notes receivable                                                  |   |                                                       | 4,233,229  |   |   |   | 101,488 |   |   |   | 4,334,717 |   |
| Net      cash provided by (used in) investing activities                                    |   |                                                       | 5,391,847  |   |   |   | (1,341,327 | ) |   |   | 4,050,520 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                  |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Proceeds      from short term bank loans                                                    |   |                                                       | -          |   |   |   | 2,881,844 |   |   |   | 2,881,844 |   |
| Principal      payments made on short term bank loans                                       |   |                                                       | -          |   |   |   | (8,449,446 | ) |   |   | (8,449,446 | ) |
| Advance      from shareholders                                                              |   |                                                       | 396,681    |   |   |   | (256,064 | ) |   |   | 140,617 |   |
| Repayments      of shareholders loans                                                       |   |                                                       | (310,269   | ) |   |   | (273,371 | ) |   |   | (583,640 | ) |
| Borrowing      under notes payable                                                          |   |                                                       | (431,210   | ) |   |   | 431,210 |   |   |   | - |   |
| Repayments      of notes payable                                                            |   |                                                       | (4,733,826 | ) |   |   | 4,733,826 |   |   |   | - |   |
| Repayments      of long term obligation                                                     |   |                                                       | -          |   |   |   | (562,469 | ) |   |   | (562,469 | ) |
| Net      cash (used in) provided by financing activities                                    |   |                                                       | (5,078,624 | ) |   |   | (1,494,470 | ) |   |   | (6,573,094 | ) |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                                |   |                                                       | (2,559,012 | ) |   |   | 3,442,891 |   |   |   | 883,879 |   |
| Net      change in cash and cash equivalents                                                |   |                                                       | 438,055    |   |   |   | (5,400 | ) |   |   | 432,655 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period                                         |   |                                                       | 1,478,264  |   |   |   | 11,498 |   |   |   | 1,489,762 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                               |   | $                                                          | 1,916,319  |   |   | $ | 6,098 |   |   | $ | 1,922,417 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of cash flow information                                       |   |                                                       |       |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      paid for interest                                                                 |   |                                                       | -          |   |   | $ | 631,594 |   |   | $ | 631,594 |   |
| Cash      paid for income taxes                                                             |   |                                                       | -          |   |   | $ | 1,792,968 |   |   | $ | 1,792,968 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of non-cash investing and financing      activities:           |   |                                                       |       |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Property      and equipment disposed and exchanged for reduction in      payables      |   |                                                       | -          |   |   |   | - |   |   |   | - |   |
| Property,      plant and equipment purchased with financing                                 |   |                                                       | -          |   |   | $ | 1,555,723 |   |   | $ | 1,555,723 |   |

----

|                                                                                        |   | Three months ended February 28, 2007 |       |   | Six months ended May 31, 2007 |   |
|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|------------|--------|--------------------------------------------------------|--------|
|                                                                                        |   | As PreviouslyReported                                    |       |   | Effect ofRestatement                              |   |   | Restated |   |   | As PreviouslyReported |   |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                  |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                             |   | $                                                             | 1,046,064  |   |                                                   | $      | (961,066 | ) |   | $ | 84,998 |   |   | $ | 685,847 |   |   | $ | (789,728 | ) |   | $ | 896,119 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts                                                        |   |                                                          | -          |   |                                                   |   | 89,428 |   |   |   | 89,428 |   |   |   | - |   |   |   | 89,428 |   |   |   | 89,428 |   |
| Depreciation      and amortization                                                          |   |                                                          | 477,993    |   |                                                   |   | (3,405 | ) |   |   | 474,588 |   |   |   | 942,458 |   |   |   | (26,334 | ) |   |   | 916,124 |   |
| Decrease      in deferred charges                                                           |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | 35,715 |   |   |   | (35,715 | ) |   |   | - |   |
| Interest      accrued on shareholder loans                                                  |   |                                                          | -          |   |                                                   |   | 123,284 |   |   |   | 123,284 |   |   |   | - |   |   |   | 250,787 |   |   |   | 250,787 |   |
| Loss      on disposal of property, plant and equipment                                      |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | (566 | ) |   |   | (566 | ) |
| Loss      from long term investments                                                        |   |                                                          | 1,807      |   |                                                   |   | 117 |   |   |   | 1,924 |   |   |   | (223 | ) |   |   | (24 | ) |   |   | (247 | ) |
| Changes      in operating assets and liabilities:                                           |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in accounts receivable                                             |   |                                                          | 1,589,599  |   |                                                   |   | (3,772,764 | ) |   |   | (2,183,165 | ) |   |   | 368,656 |   |   |   | (3,865,566 | ) |   |   | (3,496,910 | ) |
| Increase      in note receivable                                                            |   |                                                          | (293,161   | )      |                                                   |   | 293,161 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in other receivables                                                          |   |                                                          | (3,172,858 | )      |                                                   |   | 1,645,902 |   |   |   | (1,526,956 | ) |   |   | (3,337,843 | ) |   |   | 1,813,612 |   |   |   | (1,524,231 | ) |
| (Increase)      decrease in advances to suppliers                                           |   |                                                          | (993,361   | )      |                                                   |   | 1,006,289 |   |   |   | 12,928 |   |   |   | (1,228,974 | ) |   |   | (1,019,394 | ) |   |   | (209,580 | ) |
| (Increase)      decrease in inventories                                                     |   |                                                          | 34,056     |   |                                                   |   | (893 | ) |   |   | 33,163 |   |   |   | 85,869 |   |   |   | (1,866 | ) |   |   | 84,003 |   |
| Increase      in deferred income                                                            |   |                                                          | -          |   |                                                   |   | 1,218,389 |   |   |   | 1,218,389 |   |   |   | - |   |   |   | 1,764,623 |   |   |   | 1,764,623 |   |
| Increase      in accounts payable                                                           |   |                                                          | 1,338,068  |   |                                                   |   | (457,118 | ) |   |   | 880,950 |   |   |   | 2,450,880 |   |   |   | (528,095 | ) |   |   | 1,922,785 |   |
| (Decrease)      increase in advances from customers                                         |   |                                                          | 1,616,023  |   |                                                   |   | (861,409 | ) |   |   | 754,614 |   |   |   | 2,025,668 |   |   |   | (1,157,915 | ) |   |   | 867,753 |   |
| (Decrease)      increase in accrued liabilities and other payables                          |   |                                                          | (1,385,369 | )      |                                                   |   | 2,507,039 |   |   |   | 1,121,670 |   |   |   | (1,382,654 | ) |   |   | 2,176,486 |   |   |   | 793,832 |   |
| Net      cash provided by operating activities                                              |   |                                                          | 258,861    |   |                                                   |   | 826,954 |   |   |   | 1,085,815 |   |   |   | 1,645,399 |   |   |   | 708,521 |   |   |   | 2,353,919 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                  |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of property, plant and equipment                                              |   |                                                          | (213,676   | )      |                                                   |   | (482,972 | ) |   |   | (696,648 | ) |   |   | (413,088 | ) |   |   | (566,723 | ) |   |   | (979,811 | ) |
| Increase      in construction in progress                                                   |   |                                                          | (217,648   | )      |                                                   |   | (99,805 | ) |   |   | (317,453 | ) |   |   | (1,109,846 | ) |   |   | (183,592 | ) |   |   | (1,293,438 | ) |
| Proceeds      from disposal of short term investments                                       |   |                                                          | -          |   |                                                   |   | 12,918 |   |   |   | 12,918 |   |   |   | - |   |   |   | 12,918 |   |   |   | 12,918 |   |
| Increase      in long term investments                                                      |   |                                                          | -          |   |                                                   |   | (1,618,625 | ) |   |   | (1,618,625 | ) |   |   | - |   |   |   | (1,618,625 | ) |   |   | (1,618,625 | ) |
| Deposit      on land                                                                        |   |                                                          | 35,715     |   |                                                   |   | (35,715 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Payments      received on notes receivable                                                  |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | (433,997 | ) |   |   | 433,997 |   |   |   | - |   |
| Net      cash provided by (used in) investing activities                                    |   |                                                          | (395,609   | )      |                                                   |   | (2,224,197 | ) |   |   | (2,619,808 | ) |   |   | (1,956,931 | ) |   |   | (1,922,025 | ) |   |   | (3,878,955 | ) |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                  |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from short term bank loans                                                    |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,613,832 |   |   |   | 2,613,832 |   |
| Principal      payments made on short term bank loans                                       |   |                                                          | -          |   |                                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,613,832 | ) |   |   | (2,613,832 | ) |
| Advance      from shareholders                                                              |   |                                                          | 585,632    |   |                                                   |   | (585,632 | ) |   |   | - |   |   |   | 666,461 |   |   |   | (666,461 | ) |   |   | - |   |
| Repayments      of long term obligation                                                     |   |                                                          | (508,702   | )      |                                                   |   | 508,702 |   |   |   | - |   |   |   | (508,702 | ) |   |   | 508,702 |   |   |   | - |   |
| Net      cash (used in) provided by financing activities                                    |   |                                                          | 76,930     |   |                                                   |   | (76,930 | ) |   |   | - |   |   |   | 157,759 |   |   |   | (157,759 | ) |   |   | - |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                                |   |                                                          | (30,250    | )      |                                                   |   | 1,611,852 |   |   |   | 1,581,602 |   |   |   | (146,515 | ) |   |   | 1,509,795 |   |   |   | 1,363,280 |   |
| Net      change in cash and cash equivalents                                                |   |                                                          | (90,068    | )      |                                                   |   | 137,677 |   |   |   | 47,609 |   |   |   | (300,288 | ) |   |   | 138,532 |   |   |   | (161,756 | ) |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period                                         |   |                                                          | 899,689    |   |                                                   |   | (136,453 | ) |   |   | 763,236 |   |   |   | 899,689 |   |   |   | (136,453 | ) |   |   | 763,236 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                               |   | $                                                             | 809,621    |   |                                                   | $      | 1,224 |   |   | $ | 810,845 |   |   | $ | 599,401 |   |   | $ | 2,079 |   |   | $ | 601,480 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of cash flow information                                       |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      paid for interest                                                                 |   | $                                                             | -          |   |                                                   | $      | 131,223 |   |   | $ |  131,223 |   |   | $ | - |   |   | $ |   248,950 |   |   | $ | 248,950 |   |
| Cash      paid for income taxes                                                             |   | $                                                             | -          |   |                                                   | $      | 218,965 |   |   | $ |  218,965 |   |   | $ | - |   |   | $ |   508,708 |   |   | $ | 508,708 |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of non-cash investing and financing      activities:           |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                          |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property      and equipment disposed and exchanged for reduction in      payables      |   | $                                                             | -          |   |                                                   | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ |  9,148 |   |   | $ |  9,148 |   |
| Property,      plant and equipment purchased with financing                                 |   | $                                                             | -          |   |                                                   | $      | 464,043 |   |   | $ |   464,043 |   |   | $ | - |   |   | $ |  547,811 |   |   | $ | 547,811 |   |

----

|                                                                                        |   | Nine months ended August 31, 2007 |       |
|---------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|------------|
|                                                                                        |   | As PreviouslyReported                                 |       |   | Effect ofRestatement |   |   | Restated |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                  |   |                                                       |       |   |   |   |   |   |   |
| Net      income                                                                             |   | $                                                          | 1,436,322  |   |   | $ | (769,713 | ) |   | $ | 666,609 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Allowance      for doubtful accounts                                                        |   |                                                       | -          |   |   |   | 89,428 |   |   |   | 89,428 |   |
| Depreciation      and amortization                                                          |   |                                                       | 1,424,991  |   |   |   | (55,673 | ) |   |   | 1,369,318 |   |
| Interest      accrued on shareholder loans                                                  |   |                                                       | -          |   |   |   | 297,099 |   |   |   | 297,099 |   |
| Loss      on disposal of property, plant and equipment                                      |   |                                                       | -          |   |   |   | (566 | ) |   |   | (566 | ) |
| Loss      from long term investments                                                        |   |                                                       | 13,203     |   |   |   | 1,013 |   |   |   | 14,216 |   |
| Gain      from short term investments                                                       |   |                                                       | -          |   |   |   | (9,326 | ) |   |   | (9,326 | ) |
| Changes      in operating assets and liabilities:                                           |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in certificate of deposit                                          |   |                                                       | -          |   |   |   | (92,762 | ) |   |   | (92,762 | ) |
| Decrease      (increase) in accounts receivable                                             |   |                                                       | 2,482,437  |   |   |   | (3,947,481 | ) |   |   | (1,465,044 | ) |
| Increase      in other receivables                                                          |   |                                                       | (1,540,590 | ) |   |   | (116,647 | ) |   |   | (1,657,237 | ) |
| (Increase)      decrease in advances to suppliers                                           |   |                                                       | (3,091,849 | ) |   |   | 2,892,860 |   |   |   | (198,989 | ) |
| (Increase)      decrease in inventories                                                     |   |                                                       | (206,828   | ) |   |   | (1,591 | ) |   |   | 205,237 |   |
| Increase      in deferred income                                                            |   |                                                       | -          |   |   |   | 2,223,262 |   |   |   | 2,223,262 |   |
| Increase      in accounts payable                                                           |   |                                                       | 784,548    |   |   |   | (1,023,107 | ) |   |   | (238,559 | ) |
| (Decrease)      increase in advances from customers                                         |   |                                                       | 2,447,874  |   |   |   | (1,749,326 | ) |   |   | 698,548 |   |
| (Decrease)      increase in accrued liabilities and other payables                          |   |                                                       | (812,186   | ) |   |   | 2,038,068 |   |   |   | 1,225,882 |   |
| Net      cash provided by operating activities                                              |   |                                                       | 3,351,578  |   |   |   | (224,462 | ) |   |   | 3,127,116 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                  |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Purchase      of property, plant and equipment                                              |   |                                                       | (1,361,513 | ) |   |   | 188,418 |   |   |   | (1,173,095 | ) |
| Increase      in construction in progress                                                   |   |                                                       | (1,723,991 | ) |   |   | (235,191 | ) |   |   | (1,959,182 | ) |
| Proceeds      from disposal of short term investments                                       |   |                                                       | -          |   |   |   | 61,919 |   |   |   | 61,919 |   |
| Decrease      in deferred charges                                                           |   |                                                       | 35,715     |   |   |   | (35,715 | ) |   |   | - |   |
| Increase      in long term investments                                                      |   |                                                       | -          |   |   |   | (3,606,380 | ) |   |   | (3,606,380 | ) |
| Increase      in notes receivable                                                           |   |                                                       | (2,588,620 | ) |   |   | 2,588,620 |   |   |   | - |   |
| Payments      received on notes receivable                                                  |   |                                                       | -          |   |   |   | - |   |   |   | - |   |
| Net      cash provided by (used in) investing activities                                    |   |                                                       | (5,638,409 | ) |   |   | (1,038,329 | ) |   |   | (6,676,738 | ) |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                  |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Proceeds      from short term bank loans                                                    |   |                                                       | -          |   |   |   | 5,264,173 |   |   |   | 5,264,173 |   |
| Principal      payments made on short term bank loans                                       |   |                                                       | -          |   |   |   | (2,613,832 | ) |   |   | (2,613,832 | ) |
| Borrowing      under notes payable                                                          |   |                                                       | 2,640,276  |   |   |   | (2,640,276 | ) |   |   | - |   |
| Proceeds      from capital contributions                                                    |   |                                                       | 1,940,603  |   |   |   | (1,940,603 | ) |   |   | - |   |
| Advance      from shareholders                                                              |   |                                                       | (1,159,477 | ) |   |   | 1,185,980 |   |   |   | 26,503 |   |
| Repayments      of shareholders loans                                                       |   |                                                       | -          |   |   |   | (26,503 | ) |   |   | (26,503 | ) |
| Repayments      of long term obligation                                                     |   |                                                       | (508,702   | ) |   |   | 508,702 |   |   |   | - |   |
| Net      cash (used in) provided by financing activities                                    |   |                                                       | 2,912,700  |   |   |   | (262,359 | ) |   |   | 2,650,341 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                                |   |                                                       | (322,742   | ) |   |   | 1,573,428 |   |   |   | 1,250,686 |   |
| Net      change in cash and cash equivalents                                                |   |                                                       | 303,127    |   |   |   | 48,278 |   |   |   | 351,405 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period                                         |   |                                                       | 899,689    |   |   |   | (136,453 | ) |   |   | 763,236 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                               |   | $                                                          | 1,202,816  |   |   | $ | (88,175 | ) |   | $ | 1,114,641 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of cash flow information                                       |   |                                                       |       |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Cash      paid for interest                                                                 |   |                                                       | -          |   |   | $ | 416,309 |   |   | $ | 416,309 |   |
| Cash      paid for income taxes                                                             |   |                                                       | -          |   |   | $ | 642,243 |   |   | $ | 642,243 |   |
|                                                                                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosure of non-cash investing and financing      activities:           |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Property      and equipment disposed and exchanged for reduction in      payables      |   |                                                       | -          |   |   | $ | 9,148 |   |   | $ | 9,148 |   |
| Property,      plant and equipment purchased with financing                                 |   |                                                       | -          |   |   | $ | 1,023,932 |   |   | $ | 1,023,932 |   |

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