UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
quarterly period ended September 30, 2010





o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
transition period from _______ to _______





Commission
File No. 
000-52224





SINO-BON
ENTERTAINMENT, INC.


(Exact
name of Registrant as Specified in its Charter)





Nevada
            
            88-0409166(State
      or other Jurisdiction of
              Incorporation
      or Organization)
            
            (I.R.S.
      Employer Identification No.)





P.O.
Box 031-088, Shennan Zhong Road


Shenzhen
City, P.R. China 518031


(Address
of Principal Executive Offices) (Zip Code)





0086-755-23990959


(Registrant’s
Telephone Number, Including Area Code)





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





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





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




Large
      Accelerated Filer o
              Non-Accelerated
      Filer o
            
            Accelerated
      Filer o
              Smaller
      reporting company x





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





As of
November 12, 2010, there were outstanding 50,000,000 shares of the Registrant’s
Common Stock.











SINO-BON ENTERTAINMENT, INC.





INDEX





PART
I – FINANCIAL INFORMATION





Page





Item
      1.
            Financial Statements
            1Consolidated Balance Sheets
            1Consolidated Statements of Operations and Comprehensive
      Income
            2Consolidated Statements of Stockholders’
    Equity
            4Consolidated Statements of Cash Flows
            5Notes to Consolidated Financial
    Statements
            6Item
      2.
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
            17Item
      3.
            Quantitative And Qualitative Disclosures About Market
      Risks
            26Item
      4T.
            Controls and Procedures
            26PART
      II – OTHER INFORMATIONItem
      1.
            Legal Proceedings
            26Item
      1A.
            Risk Factors
            26Item
      2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            26Item
      3.
            Defaults Upon Senior Securities
            26Item
      5.
            Other Information
            26Item
      6.
            Exhibits
            27SIGNATURES
            28





Index





PARTI.


FINANCIAL
INFORMATION




Item
1. Financial Statements





SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


CONSOLIDATED
BALANCE SHEETS




ASSETS
            
            September
      30, 2010
            
            
            December
      31, 2009CURRENT
      ASSETS:
            
            (Unaudited)
            
            
            (Pro-Forma)
      (Audited)Cash
      and cash equivalents
            
            $
            245,796
            
            
            $
            1,150,533Restricted
      Cash (Note 4)
            
            
            3,641,966
            
            
            
            6,578,898Accounts
      receivable, net (Note 5)
            
            
            15,792,301
            
            
            
            11,244,439Other
      receivable
            
            
            1,438,460
            
            
            
            1,853,294Due
      from related party (Note 11)
            
            
            -
            
            
            
            2,976,599Notes
      receivable
            
            
            29,859
            
            
            
            29,338Inventories
      (Note 6)
            
            
            8,517,155
            
            
            
            3,055,321Trade
      deposit
            
            
            1,266,307
            
            
            
            3,164,109Prepaid
      expenses and other assets
            
            
            79,452
            
            
            
            28,452Total
      current assets
            
            
            31,011,296
            
            
            
            30,080,983NON-CURRENT
      ASSETSLong-term
      investments (Note 7)
            
            
            431,803
            
            
            
            504,881Other
      assets
            
            
            -
            
            
            
            107,826Construction
      in progress
            
            
            250,321
            
            
            
            555,646Property,
      plant and equipment, net (Note 8)
            
            
            6,755,933
            
            
            
            5,592,283Intangible
      assets, net (Note 9)
            
            
            1,804,014
            
            
            
            1,817,420TOTAL
      ASSETS
            
            $
            40,253,367
            
            
            $
            38,659,039LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESShort-term
      bank loan (Note 12)
            
            $
            7,360,296
            
            
            $
            7,525,084Bank's
      acceptance (Note 10)
            
            
            6,627,887
            
            
            
            6,505,554Account
      payables
            
            
            5,871,593
            
            
            
            6,246,184Accrued
      expenses and other payables
            
            
            5,767,041
            
            
            
            4,305,649Due
      to related party - current (Note 11)
            
            
            13,476
            
            
            
            431,349Customer
      deposits
            
            
            1,116,788
            
            
            
            612,841Income
      tax payable
            
            
            157,655
            
            
            
            1,431,313Total
      current liabilities
            
            
            26,914,736
            
            
            
            27,057,974LONG-TERM
      LIABILITIESDue
      to related party (Note 11)
            
            
            1,408,890
            
            
            
            4,321,905TOTAL
      LIABILITIES
            
            
            28,323,626
            
            
            
            31,379,879STOCKHOLDERS'
      EQUITYCapital
      stock, $0.001 par value - 100,000,000 shares authorizedand
      50,000,000 issued (Note 13)
            
            
            50,000
            
            
            
            50,000Additional
      paid-in capital
            
            
            1,367,823
            
            
            
            1,367,823Retained
      earnings
            
            
            9,826,155
            
            
            
            5,939,133Statutory
      reserve
            
            
            485,237
            
            
            
            -Accumulated
      other comprehensive income
            
            
            250,526
            
            
            
            (27,796
            )Stock
      subscription receivable
            
            
            (50,000
            )
            
            
            (50,000
            )Total
      stockholders' equity
            
            
            11,929,741
            
            
            
            7,279,160TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            40,253,367
            
            
            $
            38,659,039





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




1
 Index




SINO-BON ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


CONSOLIDATED
STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009





September
      30, 2010
            
            
            September
      30, 2009(Unaudited)
            
            
            (Unaudited)Sales,
      net
            
            $
            53,275,507
            
            
            $
            29,456,479Cost
      of sales
            
            
            (42,469,608
            )
            
            
            (25,322,887
            )Gross
      profit
            
            
            10,805,899
            
            
            
            4,133,592Operating
      income/(expenses)Other
      income
            
            
            30,864
            
            
            
            20,908Other
      expenses
            
            
            (1,201
            )
            
            
            (26
            )Selling,
      general and administrative expenses
            
            
            (4,949,702
            )
            
            
            (2,152,460
            )Income
      from Operations
            
            
            5,885,860
            
            
            
            2,002,014Other
      income/(expenses)Interest
      income
            
            
            92,635
            
            
            
            81,687Investment
      income
            
            
            5,544
            
            
            
            2,045Non
      operating income
            
            
            171,729
            
            
            
            57,228Non
      operating expenses
            
            
            (3,336
            )
            
            
            (9,132
            )Interest
      expenses
            
            
            (372,616
            )
            
            
            (252,909
            )Income
      before income tax
            
            
            5,779,816
            
            
            
            1,880,933Income
      taxes
            
            
            (1,407,557
            )
            
            
            (658,857
            )Net
      income
            
            $
            4,372,259
            
            
            $
            1,222,076COMPREHENSIVE
      INCOMENet
      Income
            
            $
            4,372,259
            
            
            $
            1,222,076Other
      Comprehensive IncomeForeign
      currency translation adjustment
            
            
            278,322
            
            
            
            156,456TOTAL
      COMPREHENSIVE INCOME
            
            $
            4,650,581
            
            
            $
            1,378,532Earnings  per
      share:Basic
            
            $
            0.09
            
            
            $
            0.02Diluted
            
            $
            0.09
            
            
            $
            0.02Weighted
      average number of shares used in computing earnings per
    share:Basic
            
            
            50,000,000
            
            
            
            50,000,000Diluted
            
            
            50,000,000
            
            
            
            50,000,000





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




2
 Index




SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


CONSOLIDATED
STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME


FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009





September
      30, 2010
            
            
            September
      30, 2009(Unaudited)
            
            
            (Unaudited)Sales,
      net
            
            $
            13,165,463
            
            
            $
            18,421,506Cost
      of sales
            
            
            (10,262,266
            )
            
            
            (14,485,298
            )Gross
      profit
            
            
            2,903,197
            
            
            
            3,936,208Operating
      income/(expenses)Other
      income
            
            
            (2,914
            )
            
            
            12,266Other
      expenses
            
            
            (1,201
            )
            
            
            -Selling,
      general and administrative expenses
            
            
            (2,120,473
            )
            
            
            (1,801,406
            )Income
      from Operations
            
            
            778,609
            
            
            
            2,147,068Other
      income/(expenses)Interest
      income
            
            
            18,007
            
            
            
            22,160Investment
      income
            
            
            29
            
            
            
            (4
            )Non
      operating income
            
            
            61,418
            
            
            
            39,068Non
      operating expenses
            
            
            (17
            )
            
            
            18Interest
      expenses
            
            
            (150,785
            )
            
            
            (120,576
            )Income
      before income tax
            
            
            707,261
            
            
            
            2,087,734Income
      taxes
            
            
            (162,703
            )
            
            
            (658,857
            )Net
      income
            
            $
            544,558
            
            
            $
            1,428,877COMPREHENSIVE
      INCOME/(LOSS)Net
      Income
            
            $
            544,558
            
            
            $
            1,428,877Other
      Comprehensive IncomeForeign
      currency translation adjustment
            
            
            121,529
            
            
            
            (572
            )TOTAL
      COMPREHENSIVE INCOME
            
            $
            666,087
            
            
            $
            1,428,305Earnings per
      share:Basic
            
            $
            0.01
            
            
            $
            0.03Diluted
            
            $
            0.01
            
            
            $
            0.03Weighted
      average number of shares used in computing earnings per
    share:Basic
            
            
            50,000,000
            
            
            
            50,000,000Diluted
            
            
            50,000,000
            
            
            
            50,000,000





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




3
 Index




SINO-BON ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2010


(UNAUDITED)





AccumulatedCommon
      Stock
            
            
            Additional
            
            
            
            
            
            Accumulated
            
            
            Other
            
            
            Stock
            
            
            TotalShares
            
            
            
            
            
            Paid-in
            
            
            Statutory
            
            
            Retained
            
            
            Comprehensive
            
            
            Subscription
            
            
            StockholdersIn
      thousand
            
            
            Amount
            
            
            Capital
            
            
            Reserve
            
            
            earnings
            
            
            Income/(Loss)
            
            
            Receivable
            
            
            EquityBalance,
      January 1, 2009
            
            
            50,000
            
            
            $
            50,000
            
            
            $
            643,037
            
            
            $
            -
            
            
            $
            206,608
            
            
            $
            -42,192
            
            
            $
            -50,000
            
            
            $
            807,453Additional
      Capital
            
            
            
            
            
            
            
            
            
            
            724,786
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            724,786Net
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5,732,525
            
            
            
            
            
            
            
            
            
            
            
            5,732,525Foreign
      currency translationadjustments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            14396
            
            
            
            
            
            
            14396Balance,
      January 1, 2010
            
            
            50,000
            
            
            
            50,000
            
            
            
            1,367,823
            
            
            
            -
            
            
            
            5,939,133
            
            
            
            -27,796
            
            
            
            -50,000
            
            
            
            7,279,160Net
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,372,259
            
            
            
            
            
            
            
            
            
            
            
            4,372,259Statutory
      reserve
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            485,237
            
            
            
            -485,237
            
            
            
            
            
            
            
            
            
            
            
            -Foreign
      currency translationadjustments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            278,322
            
            
            
            
            
            
            278,322Balance,
      September 30, 2010
            
            
            50,000
            
            
            $
            50,000
            
            
            $
            1,367,823
            
            
            $
            485,237
            
            
            $
            9,826,155
            
            
            $
            250,526
            
            
            $
            -50,000
            
            
            $
            11,929,741




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





4
 Index





SINO-BON ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE NINE MONTH ENDED SEPTEMBER 30, 2010 AND 2009





CASH
      FLOWS FROM OPERATING ACTIVITIES:
            
            2010
              (Unaudited)
            
            
            2009
              (Pro
      Forma)
              (Unaudited)Net
      income
            
            $
            4,372,259
            
            
            $
            1,222,076Adjustments
      to reconcile net income to net cash provided byOperating
      activities:Depreciation
            
            
            356,651
            
            
            
            106,172Amortization
            
            
            50,686
            
            
            
            1,486Bad
      debt expense
            
            
            282,965
            
            
            
            153,908Changes
      in operating assets and liabilities:Restricted
      cash
            
            
            3,024,338
            
            
            
            (2,026,015
            )Accounts
      receivable
            
            
            (4,402,440
            )
            
            
            (6,570,919
            )Other
      receivables
            
            
            302,653
            
            
            
            (1,986,569
            )Due
      from related party
            
            
            543,975
            
            
            
            265,636Due
      to related party
            
            
            (852,192
            )
            
            
            4,733,638Trade
      deposit
            
            
            1,889,597
            
            
            
            445,448Prepaid
      expenses and other assets
            
            
            (50,005
            )
            
            
            (44,076
            )Inventories
            
            
            (5,355,140
            )
            
            
            (1,868,972
            )Other
      assets
            
            
            108,681
            
            
            
            (83,367
            )Customer
      deposits
            
            
            488,275
            
            
            
            488,318Accounts
      and other payables
            
            
            891,890
            
            
            
            6,033,535Income
      tax payable
            
            
            (1,286,528
            )
            
            
            581,225Net
      cash provided by operating activities
            
            
            365,665
            
            
            
            1,451,524CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property & equipment
            
            
            (992,792
            )
            
            
            (4,219,016
            )Acquisition
      of land use rights
            
            
            -
            
            
            
            (1,785,687
            )Purchase
      of Intangible assets
            
            
            -
            
            
            
            (12,461
            )Net
      cash used in investing activities
            
            
            (992,792
            )
            
            
            (6,017,164
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Notes
      payable to bank
            
            
            6,592
            
            
            
            2,756,427Proceeds
      of bank loan
            
            
            9,388,491
            
            
            
            2,373,840Prepayment
      of short-term bank loan
            
            
            (9,684,192
            )
            
            
            -Net
      cash provided/(used) by financing activities
            
            
            (289,109
            )
            
            
            5,130,267Effect
      of exchange rate changes on cash and cash equivalents
            
            
            11,499
            
            
            
            778NET
      CHANGE IN CASH AND CASH EQUIVALENTS
            
            
            (904,737
            )
            
            
            565,405CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
            
            
            1,150,533
            
            
            
            201,199CASH
      AND CASH EQUIVALENTS, END OF PERIOD
            
            $
            245,796
            
            
            $
            766,604SUPPLEMENTAL
      DISCLOSURES:Income
      taxes paid
            
            $
            2,652,972
            
            
            $
            32,393Interest
      paid
            
            $
            372,616
            
            
            $252,909





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




5
 Index





SINO-BON ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
1 - CHANGE OF
CORPORATE STRUCTURE AND DESCRIPTION OF BUSINESS




Acquisition
of Sino-Bon Entertainment Inc.





Sino-Bon
Entertainment, Inc. (Sino-Bon), which was formerly known as Sunnyside Acres
Mobile Estates (Sunnyside), was incorporated under Nevada law on November 2,
1992. Sino-Bon Entertainment Inc. (Sino-Bon BVI), was incorporated on February
23, 2010 under the laws of the British Virginia Islands and is a holding company
with subsidiaries engaged in manufacturing entertainment equipment, namely
automatic mahjong machines. On May 7, 2010 (the “Closing Date”), Sunnyside
entered into and closed a share exchange agreement, or the Share Exchange
Agreement, with Sino-Bon BVI, the shareholders of Sino-Bon BVI, and Max Time
Enterprises Limited, a BVI company, pursuant to which Sunnyside acquired 100% of
the issued and outstanding capital stock of Sino-Bon BVI in exchange for
17,000,000 shares of Sunnyside’s Common Stock, which constituted 68.0% of issued
and outstanding capital stock as of and immediately after the consummation of
the transactions contemplated by the Share Exchange Agreement.





As a
result of the acquisition, the consolidated subsidiaries if Sino-Bon include
Sino-Bon BVI, a wholly-owned subsidiary, Atlantic Investment (Group) Limited, or
Atlantic Investment, a wholly-owned subsidiary of Sino-Bon BVI which is
incorporated under the laws of Hong Kong, and (i) Jiangsu Danbom Mechanical
& Electrical Co., Ltd., or “Danbom,” (ii) Jiangsu Danbom Electronic
Technology Co., Ltd., or “Danbom ET,” and (iii) Jiangsu Taicheng Plastic
Products Co., Ltd., or “Taicheng,” each of which is a wholly-owned subsidiary of
Atlantic Investment and is a limited liability company incorporated under the
laws of the People’s Republic of China (“PRC”). Danbom, Danbom ET and Taicheng
are sometimes collectively referred to herein as the “Chinese Operating
Subsidiaries.”





In this
report, the “Company” refers to Sino-Bon and its directly and indirectly owned
subsidiaries.





Atlantic
Investment was incorporated on April 9, 2009 under the laws of Hong Kong.
Atlantic Investment operates through its operating subsidiaries Danbom, Danbom
ET and Taicheng. Danbom was incorporated on January 23, 2007 under the laws of
the PRC. Danbom ET was incorporated on May 10, 2009 under the laws of the PRC.
Taicheng was incorporated on November 20, 2008 under the laws of the
PRC.





On
February 9, 2010, Atlantic Investment entered into an Equity Interest
Acquisition Agreement with the owners of Danbom, Danbom ET and Taicheng
respectively to acquire 100% of the equity interest of Danbom, Danbom ET and
Taicheng for cash consideration.  The transactions were approved by
the Jiangsu Provincial Department of Commerce on March 3, 2010, and the
acquisitions were completed on March 24, 2010, when the Certificates of
Incorporation of Danbom, Danbom ET and Taicheng as a Foreign Invested Enterprise
(FIE) were issued by the Zhen Jiang Administration of Industry and
Commerce.




Nature
of Operations





The
principal business of the Company consists of: (1) the design, manufacturing,
research and development of entertainment equipment, namely automatic Mahjong
tables; and (2) retail and wholesale sales of such entertainment equipment under
our proprietary brands, including “Danbom,” “Aodong,” “Shimeng,” as well as
other brands. The company headquarters and main sales office is located in
Jiangsu Province in China, in the city of Jurong.




6
 Index




SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)




Note
2 - PRO FORMA
CONSOLIDATED FINANCIALS




In the
body of the financial statements, the pro forma financial statements presented
for the year ended December 31, 2009,  combine the historical
consolidated balance sheets of Sunnyside, Sino-Bon BVI, Atlantic Investment,
Danbom, Danbom ET and Taicheng, the pro forma financial statements presented for
the nine months and three months ended September 30, 2009 combine the historical
statements of operations and comprehensive income of Sino-Bon BVI, Atlantic
Investment, Danbom, Danbom ET and Taicheng, and their respective statements of
cash flows for the nine-month period ended September 30, 2009, giving effect to
the acquisition of Sino-Bon BVI as if the acquisition had taken place on January
1, 2009.




The
Company accounted for the acquisition using the purchase method of
accounting.  The pro forma adjustments are based upon available
information and assumptions that the Company believes are
reasonable.




We
provide the following information to aid you in your analysis of the financial
aspects of the acquisition of Sino-Bon BVI. The fiscal year end of each of
Sino-Bon, Sino-Bon BVI, Atlantic Investment, Danbom, Danbom ET and Taicheng is
December 31.




The pro
forma consolidation financial information is for illustrative purposes
only.  The companies may have performed differently had the
acquisition taken place other than on May 7, 2010, and had they always been
consolidated.  You should not rely on the pro forma consolidated
financial information as being indicative of the historical results that would
have been achieved had the acquisition taken place other than on May 7, 2010,
and had the companies always been consolidated or the future results that the
companies will experience after the acquisition.




Note
3 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES




Basis of
Presentation





The
accompanying audited consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America. The Company's functional currency is the Chinese Renminbi, however the
accompanying audited consolidated financial statements have been translated and
presented in United States Dollars.





Translation
Adjustment





As of
September 30, 2010 and December 31, 2009, the accounts of Danbom, Danbom ET and
Taicheng were maintained, and their financial statements were expressed, in
Chinese Yuan Renminbi (CNY). Such financial statements were translated into U.S.
Dollars (USD) in accordance with the Foreign Currency Matters Topic of the FASB
Accounting Standards Codification (“ASC 830”) with the CNY as the functional
currency. According to the Statement, all assets and liabilities were translated
at the current exchange rate, stockholders equity was translated at the
historical rates and income statement items are translated at the average
exchange rate for the period. The resulting translation adjustments are reported
under other comprehensive income in accordance with the Comprehensive Income
Topic of the FASB Accounting Standard Codification (“ASC 220”). Transaction
gains and losses are reflected in the income statement.





7
 Index





SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
3 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Use of
Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  On an on-going basis, the Company
evaluates its estimates, including, but not limited to, those related to
depreciation, bad debts, income taxes and contingencies.  The Company
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances.  Actual
results could differ from those estimates.





Risks and
Uncertainties





The
Company is subject to substantial risks from, among other things, intense
competition associated with the industry in general, other risks associated with
financing, liquidity requirements, rapidly changing customer requirements,
limited operating history, foreign currency exchange rates and the volatility of
public markets.





Cash and Cash
Equivalents





Cash and
cash equivalents include cash on hand, cash in time deposits, certificates of
deposit and all highly liquid debt instruments with original maturities of three
months or less.





Accounts
Receivable





Accounts
receivable on a consolidated basis consist principally of amounts due from trade
customers.  Credit is extended based on an evaluation of the customer’s
financial condition and collateral is not generally required. Certain credit
sales are made to industries that are subject to cyclical economic
changes.




The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its clients to make required payments are to
cover potential credit losses.  Estimates are based on historical
collection experience, current trends, credit policy and relationship between
accounts receivable and revenues.  In determining these estimates, the
Company examines historical write-offs of its receivables and reviews each
client’s account to identify any specific customer collection issues.  If
the financial condition of its customers were to deteriorate, resulting in an
impairment of their ability to make payment, additional allowances might be
required.  The Company’s failure to accurately estimate the losses for
doubtful accounts and ensure that payments are received on a timely basis could
have a material adverse effect on its business, financial condition, and results
of operations.




Inventory





Inventory
is valued at the lower of cost or market (using the weighted average cost
method). Cost includes all costs to acquire and other costs incurred in bringing
the inventories to their present location and condition.  The Company
evaluates the lower of cost or market of its inventories on a regular basis and
records a provision for loss to reduce the computed weighted-average
cost.




8
 Index




SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
3 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





Property, Plant &
Equipment, Net





Property,
plant and equipment are recorded at cost less accumulated depreciation and
include expenditures for additions and major improvements.  Maintenance and
repairs are charged to operations as incurred.  When assets are retired or
otherwise disposed of, the costs and related accumulated depreciation are
removed from the accounts, and any resulting gain or loss is recognized in
income for the period of disposition.




Depreciation
is computed for financial reporting purposes using the straight-line method over
the estimated useful lives of the assets. The useful lives for property, plant
and equipment are as follows:




Building
            
            5 -
      20 yearsMachinery
            
            5 -
      10 yearsOffice
      Furniture & Equipment
            
            3 -
      5 yearsMotor
      vehicles
            
            5 –
      10 years




Construction in
Progress





Construction
in progress represents direct costs of construction or acquisition and design
fees incurred.  Capitalization of these costs ceases and the
construction in progress is transferred to plant and equipment assets when
substantially all the activities necessary to prepare the assets for their
intended use are completed.  No depreciation is provided until it is
completed and ready for intended use.




If funds
are borrowed to finance construction costs, all associated interest expense will
be capitalized into the cost of the asset. No interest has been capitalized for
construction in progress to date.




Intangibles
Assets





Intangible
assets are amortized using the straight-line method over their estimated period
of benefit. Evaluation of the recoverability of intangible assets is made
annually to take into account events or circumstances that warrant revised
estimates of useful lives or that indicate that impairment exists. All of our
intangible assets are subject to amortization. No impairments of intangible
assets have been identified during any of the periods presented. The intangible
assets consist principally of accounting software and land use rights. According
to the laws of PRC, the government owns all the land in
China.  Companies or individuals are authorized to possess and use the
land only through land use rights granted by the Chinese
government.  Land use rights are amortized using the straight-line
method over the lease term of 50 years.




Fair Value of Financial
Instruments





FASB
Accounting Standards Codification Topic on Fair Value Measurements and
Disclosures (“ASC 820”) requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.




9
 Index




SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)




Note
3 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Revenue
Recognition




Revenues
are recognized upon shipment when title passes.  Shipping costs are
included in cost of sales. The Company believes that recognizing revenue at time
of shipment is appropriate because the Company’s sales policies meet the four
criteria of the SEC’s Staff Accounting Bulletin No. 104, which are:
(i) persuasive evidence that an arrangement exists, (ii) delivery has
occurred, (iii) the seller’s price to the buyer is fixed and determinable,
and (iv) collectability is reasonably assured.




Income
Taxes





The
Company utilizes FASB Accounting Standards Codification Topic on Income Taxes
(“ASC 740”), which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts ateach period end based on
enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. Based on a review of our tax positions, the Company was
not required to record a liability for unrecognized tax benefits as a result of
adopting ASC 740 on January 1, 2007.  Further, there has been no
change during the periods ended September 30, 2010 and December 31,
2009.  Accordingly, we have not accrued any interest and penalties at
September 30, 2010 and December 31, 2009.





Statement of Cash
Flows





In
accordance with FASB Accounting Standards Codification Topic on Statement of
Cash flows (“ASC 230”), cash flows from the Company’s operations are based upon
the local currencies. As a result, amounts related to assets and liabilities
reported on the statement of cash flows will not necessarily agree with changes
in the corresponding balances on the balance sheet.





Concentration of Credit
Risk





Financial
instruments that potentially subject the Company to concentrations of credit
risk are cash, accounts receivable and other receivables arising from its normal
business activities. The Company places its cash in what it believes to be
credit-worthy financial institutions.





The
Company has a diversified customer base, mostly located in China. The Company
controls credit risk related to accounts receivable through credit approvals,
credit limits and monitoring procedures. The Company routinely assesses the
financial strength of its customers and, based upon factors surrounding the
credit risk, establishes an allowance, if required, for uncollectible accounts
and, as a consequence, believes that its accounts receivable credit risk
exposure beyond such allowance is limited.





Reclassification





Certain
prior period amounts have been reclassified to conform to the current
presentation.





10
 Index




SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
4 – RESTRICTED
CASH




Restricted
cash of $3.64 million and $6.58 million as of September 30, 2010 and December
31, 2009, respectively, consists of cash deposited by the Company in a special
bank account, which was created to be in compliance with Bank’s Acceptances paid
by financial institutions for advances to vendors.




Note
5 - ACCOUNTS
RECEIVABLE




The
Company’s accounts receivable from unrelated parties as of September 30, 2010
and December 31, 2009 are summarized as follows:




September
      30,
            
            
            December
      31,2010
            
            
            2009Trade
      Receivables
            
            $
            15,955,483
            
            
            $
            11,338,966Less:
      Allowance for doubtful accounts
            
            
            163,182
            
            
            
            94,527Net
      accounts receivable
            
            $
            15,792,301
            
            
            $
            11,244,439





Note
6 - INVENTORIES




Inventories
are stated at the lower of cost or market value.  The inventories are
valued using weighted average method.  As of September 30, 2010 and
December 31, 2009, inventories consist of the following:




September
      30,
            
            
            December
      31,2010
            
            
            2009Raw
      materials and supplies
            
            $
            3,293,053
            
            
            $
            1,643,204Work
      in progress
            
            
            485,391
            
            
            
            151,419Finished
      goods
            
            
            4,738,711
            
            
            
            1,260,698Totals
            
            $
            8,517,155
            
            
            $
            3,055,321




Note
7 – LONG-TERM
INVESTMENTS




Long-term
investments included investments in Jiangsu Danbom Color Printing Co., Ltd.
(Color Printing) and Baohua Credit Union (Baohua).





The
Company owns 31.5% of the total outstanding shares of Color Printing and has
agreed by contract that it may not exercise significant influence over the
management of Color Printing. The Company’s investment in Color Printing was
valued at $431,803 as of September 30, 2010 and December 31, 2009. There was no
investment income with respect to Color Printing for the nine months ended
September 30, 2010 or for the year ended December 31, 2009.





The
Company owned 50,000 shares of Baohua Credit Union. The investment was valued
$73,078 as of December 31, 2009. In September 2010, the Company sold these
shares to third party as book value. The Company’s investment income with
respect to Baohua Credit Union was $5,544 and $2,045 for the nine months ended
September 30, 2010 and 2009, respectively, and $29 and $-4 for the three months
ended September 30, 2010 and 2009, respectively.





11
 Index





SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
8 –PROPERTY, PLANT
& EQUIPMENT, NET





As of
September 30, 2010 and December 31, 2009, Property, Plant & Equipment
consist of the following:




September 30,
      2010
            
            
            December
      31, 2009Building
            
            $
            5,431,359
            
            
            $
            4,335,816Machinery
            
            
            1,588,630
            
            
            
            1,163,154Office
      Furniture & Equipment
            
            
            162,980
            
            
            
            156,328Motor
      vehicles
            
            
            289,970
            
            
            
            262,4237,472,939
            
            
            
            5,917,721Accumulated
      depreciation
            
            
            (717,006
            )
            
            
            (325,438
            )$
            6,755,933
            
            
            $
            5,592,283





Depreciation
expense for the nine months ended September 30, 2010 and 2009 was $356,651 and
$106,172, respectively.  Depreciation expense for the three months
ended September 30, 2010 and 2009 was $99,159 and $42,355,
respectively.




Note
9 – INTANGIBLES
ASSETS




As of
September 30, 2010 and December 31, 2009, intangible assets consist of the
following:




September
      30, 2010
            
            
            December
      31, 2009Accounting
      software
            
            $
            37,845
            
            
            $
            34,845Land
      use rights
            
            
            1,824,969
            
            
            
            1,789,8311,862,814
            
            
            
            1,824,676Accumulated
      amortization
            
            
            58,800
            
            
            
            7,256$
            1,804,014
            
            
            $
            1,817,420




Amortization
expense for the nine months ended September 30, 2010 and 2009 was $50,686 and
$1,486, respectively.




Amortization
expense for the three months ended September 30, 2010 and 2009 was $10,059 and
$512, respectively.





12
 Index





SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
10 – BANK’S
ACCEPTANCE





Bank's Acceptance Bill (BA)
is a commercial bill. Acceptance by the bank deposit to open deposit accounts
were out of tickets to the Bank for examination and approval by the Bank of
acceptance, unconditional guarantee to pay a specified date determined amount to
the payee or bearer. Commercial bills issued on the drawer to drawer acceptance
are the Bank of Credit based on the recognition and support for the
credit. They are related accounts to restricted cash and accounts
payable. The Company paid its portion of vendors by BA, some BAs are secured
100% by restricted cash to guarantee the payment later, and the others are
secured 50% by restricted cash only and 50% by short-term bank loans. The
Company will pay interest on these short-term bank loans. As of September 30,
2010 and December 31, 2009, bank’s acceptance had balances of $6.63 million and
$6.51 million, respectively.




Note
11 – RELATED PARTY
TRANSACTIONS




As of
September 30, 2010 and December 31, 2009, the due from related party account had
balances of $0 and $2.98 million, respectively, and the due to related party
account had balances of $1.42 million and $4.75 million,
respectively.





In July
2009, Danbom purchased fixed assets, including buildings, equipment and current
accounts, and assumed certain liabilities, for a net purchase price of $4.32
million, from a related party shareholder, pursuant to a Purchase Agreement.
There was no interest associated with this transaction. Payment of the balance
of the purchase price, which was approximately $1.42 million as of September 30,
2010, is due on December 31, 2011.




Details
of the assets purchased pursuant to the Purchase Agreement are presented
below.




Accounts
      name
            
            Assets
            
            
            LiabilitiesCash
            
            $
            270,735
            
            
            $Accounts
      receivable
            
            
            3,000,301Other
      receivables
            
            
            3,884,371Advance
      payment
            
            
            2,269,445Inventory
            
            
            1,416,693Fixed
      assets
            
            
            5,804,320Accounts
      payable
            
            
            
            
            
            
            8,337,949Other
      payable
            
            
            
            
            
            
            3,106,307Trade
      deposit
            
            
            
            
            
            
            879,704Total
            
            $
            16,645,865
            
            
            
            12,323,960Due
      to related party
            
            
            
            
            
            $
            4,321,905




Pursuant
to three-party agreement signed on May 5, 2010, Qisheng Yuan cancelled a debt
due from Danbom in the amount of $2,516,846 and Danbom cancelled a debt due from
Qihong Yuan in the same amount.





13
 Index




SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Note
12 –SHORT-TERM BANK
LOAN





As of
September 30, 2010 and December 31, 2009, the Company had short-term bank loans
as follows:




September
      30, 2010Rural
      Credit Cooperative, Loan calls for interest 0.575% per month, with
      principal due in February 2011
            
            $
            686,762Rural
      Credit Cooperative, Loan calls for interest 0.5625% per month, with
      principal due in April 2011
            
            
            298,592Rural
      Credit Cooperative, Loan calls for interest 0.575% per month, with
      principal due in May 2011
            
            
            895,776Rural
      Credit Cooperative, Loan calls for interest 0.575% per month, with
      principal due in June 2011
            
            
            1,000,283Agricultural
      Bank of China, Loan calls for interest 0.398% per month, with principal
      due in October 2010
            
            
            597,185Agricultural
      Bank of China, Loan calls for interest 0.398% per month, with principal
      due in November 2010
            
            
            1,343,665Agricultural
      Bank of China, Loan calls for interest 0.398% per month, with principal
      due in December 2010
            
            
            597,185Agricultural
      Bank of China, Loan calls for interest 0.398% per month, with principal
      due in May 2011
            
            
            1,045,072China
      Construction Bank, Loan calls for interest 0.4448% per month, with
      principal due in May 2011
            
            
            149,296China
      Construction Bank, Loan calls for interest 0.4092% per month, with
      principal due in December 2010
            
            
            746,480$
            7,360,296December
      31, 2009Rural
      Credit Cooperative, Loan calls for interest 0.715% per month, with
      principal due in March 2010
            
            $
            293,376Rural
      Credit Cooperative, Loan calls for interest 0.439% per month, with
      principal due in May 2010
            
            
            1,217,509Rural
      Credit Cooperative, Loan calls for interest 0.439% per month, with
      principal due in March 2010
            
            
            982,808Rural
      Credit Cooperative, Loan calls for interest 2.5% per month, with principal
      due in June 2010
            
            
            1,657,572Agricultural
      Bank of China, Loan calls for interest 0.439% per month, with principal
      due in November 2010
            
            
            733,439Agricultural
      Bank of China, Loan calls for interest 0.439% per month, with principal
      due in July 2010
            
            
            1,760,253China
      Construction Bank Loan, calls for interest 0.439% per month, with
      principal due in May 2010
            
            
            146,688China
      Construction Bank, Loan calls for interest 0.405% per month, with
      principal due in June 2010
            
            
            733,439$
            7,525,084




Notes
13 - COMMON
SHARES





On May 7,
2010, the Company issued 17,000,000 of its common shares to Sino-Bon BVI’s
shareholders in exchange for 100% of the issued and outstanding capital stock of
Sino-Bon BVI.





On July
12, 2010, the Company filed a Certificate of Amendment to its Articles of
Incorporation changing the name of the Corporation from “Sunnyside Acres Mobile
Estates” to “Sino-Bon Entertainment, Inc.,” increasing the authorized shares of
the Company from 25,000,000 shares of common stock to 100,000,000 shares of
common stock, with the same par value of $0.001 per share, and effecting a
two-for-one forward stock split of the outstanding shares of common stock of the
Company.  Prior to the amendment of its articles and forward stock
split, the Company had 25,000,000 shares of its common stock authorized, issued
and outstanding.   Subsequent to the amendment of its articles
and forward stock split, the Company had 100,000,000 shares of common stock
authorized and 50,000,000 shares of common stock issued and
outstanding.





14
 Index





SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)





Notes
14 – INCOME
TAXES





We are
subject to United States tax at a tax rate of 35%. No provision for income taxes
in the United States has been made as we have no income taxable in the United
States.





As an
offshore company, Sino-Bon BVI, a BVI corporation, is exempt from income taxes
according to the Article 242 of the BVI Business Companies Act 2004 (“Exemptions
from Tax”).





Accordance
with the relevant tax laws and regulations of Hong Kong, Atlantic Investment, a
Hong Kong company, is exempt from Hong Kong income tax since all the profits
were derived from subsidiaries in PRC. The income tax rate in Hong Kong is
17.5%.





The
Company, through its Chinese operating subsidiaries, is governed by the
Income Tax Laws of the PRC. Under the Provisional Taxation Regulation of the
PRC, income tax is payable at a rate of 25% of their taxable income. Operations
in the PRC have incurred net accumulated operating income for income tax
purposes. Provisions for income taxes for the nine months ended September 30,
2010 and 2009 were $1,407,557 and $658,857, respectively, and $162,703 and
$658,857 for the three months ended September 30, 2010 and 2009,
respectively.





Note
15 - OTHER
COMPREHENSIVE INCOME





Balances
of related after-tax components comprising accumulated other comprehensive
income, included in stockholders equity, as of September 30, 2010 and
December 31, 2009 are as follows:





Foreign Currency
            
            
            Accumulated OtherTranslation
            
            
            ComprehensiveAdjustment
            
            
            IncomeBalance
      December 31, 2008
            
            $
            (42,192
            )
            
            $
            (42,192
            )Changes
      for year ended December 31, 2009
            
            
            14,396
            
            
            
            14,396Balance
      December 31, 2009
            
            
            (27,796
            )
            
            
            (27,796
            )Changes
      for nine months ended September 30, 2010
            
            
            278,322
            
            
            
            282,238Balance
      at September 30, 2010
            
            $
            250,526
            
            
            $
            254,442





15
 Index





SINO-BON
ENTERTAINMENT, INC.


(f/k/a
SUNNYSIDE ACRES MOBILE ESTATES)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010


(UNAUDITED)




Note
16 – EARNINGS PER
SHARE





Basic and
diluted earnings per share have been calculated as follows:




Nine
      months ended
            
            
            Nine
      months ended
            
            
            Three
      months ended
            
            
            Three
      months ended30-Sep-10
            
            
            30-Sep-09
            
            
            30-Sep-10
            
            
            30-Sep-09Net
      income attributed to holder of common shares
            
            $
            4,372,259
            
            
            $
            1,222,076
            
            
            $
            544,558
            
            
            $
            1,428,877Weighted-average
      number of common shares outstanding—basic
            
            
            50,000,000
            
            
            
            50,000,000
            
            
            
            50,000,000
            
            
            
            50,000,000Weighted-average
      number of common shares outstanding—diluted
            
            
            50,000,000
            
            
            
            50,000,000
            
            
            
            50,000,000
            
            
            
            50,000,000Basic
      earnings per share
            
            $
            0.09
            
            
            $
            0.02
            
            
            $
            0.01
            
            
            $
            0.03Diluted
      earnings per share
            
            $
            0.09
            
            
            $
            0.02
            
            
            $
            0.01
            
            
            $
            0.03





Note
17 – COMMITMENTS





The
Company leases factory facilities under 3-year arrangements from April 1, 2009.
The Company has future minimum lease obligations as of September 30, 2010 as
follows:


2011
            
            $
            126,8262012
            
            
            60,8482013
            
            
            19,428Total
            
            $
            207,102





Rental
expense for the nine months ended September 30, 2010 and 2009 was $75,434 and
$42,739, respectively.


Rental
expense for the three months ended September 30, 2010 and 2009 was $21,787 and
$20,345, respectively.





Note
18 –SUBSEQUENT
EVENTS





For the
nine months ended September 30, 2010, the Company has evaluated subsequent
events for potential recognition and disclosure through the date of the
financial statement issuance.





16
 Index




Item2.
 Management's Discussion and Analysis of Financial Condition and Results of
Operations.





The
following discussion and analysis should be read in conjunction with our
unaudited condensed consolidated financial statements and notes thereto included
in this Quarterly Report on Form 10-Q and our audited consolidated financial
statements and notes thereto included in our Current Report on Form 8-K filed
with the SEC on May 7, 2010.





Note
Regarding Forward-Looking Statements





This
quarterly report on Form 10-Q contains forward-looking statements within the
meaning of the U.S. federal securities laws.  These statements relate
to future events or our future financial performance and involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially
different from those expressed or implied by the forward-looking
statements.  In some cases, you can identify forward-looking
statements by terminology such as “may,” “likely,” “will,” “should,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue”
or the negative of these terms or other comparable terminology.  These
forward-looking statements are subject to a number of risks that could cause
them to differ from our expectations. These include, but are not limited to,
risks relating to:





•
            Our
      financial condition and results of operations, including expectations and
      projections related to our future performance and
      profitability;





•
            The
      impact that a downturn or negative changes in the market for entertainment
      equipment may have on sales;





•
            Our
      ability to obtain additional capital in future years to fund our planned
      expansion;





•
            Economic,
      political, regulatory, legal and foreign exchange risks associated with
      our operations;





•
            Prices
      for our primary raw materials, including steel, copper and
      plastics;





•
            Changes
      in consumer behavior in China;





•
            The
      loss of key members of our senior management and our qualified sales
      personnel; and





•
            The
      impact of general economic conditions in the PRC and other market and
      economic challenges on our
business.





You
should not place undue reliance on these forward-looking statements, which are
based on our current views and assumptions.  In evaluating these
statements, you should specifically consider various factors, including the
foregoing risks and those outlined under “Risk Factors” in our Current Report on
Form 8-K as filed with the SEC on May 7, 2010.  Many of these factors
are beyond our control.   Our forward-looking statements
represent estimates and assumptions only as of the date of this quarterly report
on Form 10-Q.  Except as required by law, we undertake no obligation
to update any forward-looking statement to reflect events or circumstances
occurring after the date of this quarterly report on Form 10-Q.





Company
Overview





Sino-Bon
Entertainment, Inc. was originally incorporated under the laws of the State of
Nevada on November 2, 1992 under the name “Sunnyside Acres Mobile
Estates.”  On July 12, 2010, we amended our Articles of Incorporation
to change the name of the company to “Sino-Bon Entertainment, Inc.,” increase
the Company’s number of authorized shares of common stock from 25,000,000 to
100,000,000, and effect a two-for-one forward stock split of the outstanding
shares of common stock of the Company.  All references to the
“Company,” “we,” “our,” and “us” refer to Sino-Bon Entertainment, Inc. and its
subsidiaries.





17
 Index




On May 7,
2010, we completed a reverse acquisition transaction through a share exchange
with Sino-Bon Entertainment Inc., a British Virgin Islands holding company
(“Sino-Bon BVI”), and its shareholders, or the “Shareholders”, whereby we
acquired 100% of the issued and outstanding capital stock of Sino-Bon BVI in
exchange for 17,000,000 shares of our Common Stock which constituted 68.0% of
our issued and outstanding capital stock as of and immediately after the
consummation of the reverse acquisition.  As a result of the reverse
acquisition, Sino-Bon BVI became our wholly-owned subsidiary and the former
shareholders of Sino-Bon BVI became our controlling stockholders.  The
share exchange transaction with Sino-Bon BVI and the Shareholders, or Share
Exchange, was treated as a reverse acquisition for accounting purposes, with
Sino-Bon BVI as the acquirer and Sunnyside Acres Mobile Estates as the acquired
party.





As a
result of our acquisition of Sino-Bon BVI, we now own all of the issued and
outstanding capital stock of Sino-Bon BVI, which in turn owns all of the issued
and outstanding capital stock of Atlantic Investment (Group) Ltd. (“Atlantic
Investment”), which in turn owns all of the issued and outstanding capital stock
of Jiangsu Danbom Mechanical & Electrical Co., Ltd (“Danbom”), and its two
affiliated contractual suppliers, Jiangsu Danbom Electronic Technology Co., Ltd.
(“Danbom ET”) and Jiangsu Taicheng Plastic Products Co., Ltd. (“Taicheng” and,
together with Danbom and Danbom ET, the “Chinese Operating
Subsidiaries”).





Danbom is
a leading manufacturer of entertainment equipment in China, namely automatic
Mahjong tables.  Demand for our products is being driven primarily by
increased urbanization, the surge in middle-class household income, improved
living conditions in general and the fast growing entertainment market in
China.  We have also benefited greatly from China’s strong economic
growth and social development in recent years.





Our
principal business consists of: (1) the design, manufacturing, research and
development of entertainment equipment, namely automatic Mahjong tables; and (2)
retail and wholesale sales of such entertainment equipment under our proprietary
brands, including “Danbom,” “Aodong,” “Shimeng,” as well as other
brands.  Our products are sold in our regional sales centers and in
over 1,000 independently owned chain stores in the regions of Guangzhou,
Shenzhen, Sichuan, Henan and Hunan.  Our products are also brought to
market through our extensive distribution network of 21 authorized independent
distributors as well as through five giant special electronics retailers
selected to sell Danbom branded equipment on our behalf.  Our company
headquarters and main sales office is located in Jiangsu Province in China, in
the city of Jurong.





Principal
Factors Affecting Our Financial Performance





Our
operating results are primarily affected by the following factors:





·
            Growth in
      the Chinese Economy - We operate our facilities in China and derive
      almost all of our revenues from sales to customers in
      China.  Economic conditions in China, therefore, affect
      virtually all aspects of our operations, including the demand for our
      products, the availability and prices of our raw materials and our other
      expenses.  China has experienced significant economic growth,
      achieving a compound annual growth rate of over 10% in gross domestic
      product from 1996 through 2008.  China is expected to experience
      continued growth in all areas of investment and consumption, even in the
      face of a global economic recession.  However, China has not
      been entirely immune to the global economic slowdown and is experiencing a
      slowing of its growth rate.  In addition, the Chinese government
      has recently retreated from its economically stimulative
      policies.





·
            Supply and
      Demand in the Steel, Copper and Plastic Market – We are subject to
      macroeconomic factors dictating the supply and demand of raw material
      commodities in the PRC.  Steel, copper and plastics are our
      major raw materials and these commodity prices have been volatile in the
      past, and while they have stabilized since the first quarter of 2009, our
      revenues and earnings could be dramatically affected by increases and
      decreases in these raw material
costs.





·
            Consumer
      Behavior Changes in China– Sales of our products, entertainment
      equipment, are driven primarily by China’s increased urbanization, the
      surge in middle-class household income, improved living conditions in
      general and fast growing entertainment markets in China. Changes in the
      Chinese consumer’s behavior will greatly affect our product sales and
      financial performance.





18
 Index




Taxation





United
States, BVI and Hong Kong





We are
subject to United States tax at a tax rate of 35%. No provision for income taxes
in the United States has been made as we have no income taxable in the United
States.





Sino-Bon
BVI was incorporated in the British Virgin Islands on February 23,
2010.  As an offshore company, it is exempt from income taxes
according to the Article 242 of the BVI Business Companies Act 2004 (“Exemptions
from Tax”), which states that (a) a company, (b) all dividends, interest, rents,
royalties, compensations and other amounts paid by a company, and (c) capital
gains realized with respect to any shares, debt obligations or other securities
of a company, are exempt from all provisions of the Income Tax
Ordinance.





Atlantic
Investment was incorporated in Hong Kong on September 10, 2009.  In
accordance with the relevant tax laws and regulations of Hong Kong, a company,
irrespective of its residential status, is subject to tax on all profits
(excluding profits arising from the sale of capital assets) arising in or
derived from Hong Kong.  No tax is levied on profits arising abroad,
even if they are remitted to Hong Kong.  Therefore, Atlantic
Investment is exempt from Hong Kong income tax since all the profits were
derived from subsidiaries in the PRC.  The income tax rate in Hong
Kong is 17.5%.





People’s
Republic of China





Income
Taxes:





The
Company through its subsidiaries is governed by the Income Tax Laws of the
PRC.  Operations in the PRC have incurred net accumulated operating
income for income tax purposes.  Provisions for income taxes amounted
to $1,407,557 and $658,857 for the nine months ended September 30, 2010 and
2009, respectively.





ASC 740,
Accounting for Income Taxes (“ASC 740”), requires that deferred tax assets be
evaluated for future realization and reduced by a valuation allowance to the
extent we believe a portion is more likely will not be realized. We consider
many factors when assessing the likelihood of future realization of our deferred
tax assets, including our recent cumulative earnings experience and expectations
of future taxable income by taxing jurisdiction, the carry-forward periods
available to us for tax reporting purposes, and other relevant
factors.





Effective
January 1, 2007, we adopted the provisions of FASB Accounting Standards
Codification Topic 740, Accounting for Uncertainty in Income
Taxes.  ASC 740 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements. The standard
prescribes a recognition and measurement method for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. The standard also provides guidance on recognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition.  We consider many factors when evaluating and estimating
our tax positions and tax benefits, which may require periodic adjustments and
which may not accurately forecast actual outcomes.





Based on
a review of our tax positions, the Company was not required to record a
liability for unrecognized tax benefits as a result of adopting ASC 740 on
January 1, 2007.  Further, there has been no change during the years
ended December 31, 2009 and 2008.  Accordingly, we have not accrued
any interest and penalties through September 30, 2010.





Value
Added Taxes:





The
Company is subject to value added tax (“VAT”) for selling merchandise. The
applicable VAT rate is 17% for products sold in the PRC. The amount of VAT
liability is determined by applying the applicable tax rate to the invoiced
amount of goods sold (output VAT) less VAT paid on purchases made with the
relevant supporting invoices (input VAT). Under the commercial practice of the
PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be
issued subsequent to the date on which revenue is recognized, and there may be a
considerable delay between the date on which the revenue is recognized and the
date on which the tax invoice is issued. In the event that the PRC tax
authorities dispute the date on which revenue is recognized for tax purposes,
the PRC tax office has the right to assess a penalty, which can range from zero
to five times the amount of the taxes which are determined to be late or
deficient.  According to PRC tax laws, any potential tax penalty
payable on late or deficient payments of this tax could be between zero and five
times the amount of the late or deficient tax payable, and will be expensed as a
period expense if and when a determination has been made by the taxing
authorities that a penalty is due.  As of September 30, 2010 and
December 31, 2009, the Company accrued $0 and $517,851.42, respectively, of
unpaid value-added taxes.





19
 Index




Our
future effective income tax rate depends on various factors, such as tax
legislation, the geographic composition of our pre-tax income and non-tax
deductible expenses incurred. Our management carefully monitors these legal
developments and will punctually adjust our effective income tax rate when
necessary.





Results
of Operations





Comparison of Three Months
Ended September 30, 2010 and September 30, 2009 (Unaudited)





The
following table sets forth key components of our results of operations for the
three months ended September 30, 2010 compared to the three months ended
September 30, 2009.




For
      three months ended September 30, 2010
            
            
            For
      three months ended September 30, 2009
            
            
            $
      Change
            
            
            %
      Change(Unaudited)
            
            
            (Pro
      Forma Unaudited)Sales,
      net
            
            $
            13,165,463
            
            
            $
            18,421,506
            
            
            $
            (5,256,043
            )
            
            
            -28.53
            %Cost
      of sales
            
            
            (10,262,266
            )
            
            
            (14,485,298
            )
            
            
            4,223,032
            
            
            
            -29.15
            %Gross
      profit
            
            
            2,903,197
            
            
            
            3,936,208
            
            
            
            (1,033,011
            )
            
            
            -26.24
            %Operating
      income/(expenses)Other
      income
            
            
            (2,914
            )
            
            
            12,266
            
            
            
            (15,180
            )
            
            
            -123.76
            %Other
      expenses
            
            
            (1,201
            )
            
            
            -
            
            
            
            (1,201
            )
            
            
            -100.00
            %Selling,
      general and administrative expenses
            
            
            (2,120,473
            )
            
            
            (1,801,406
            )
            
            
            (319,067
            )
            
            
            17.71
            %Income
      from Operations
            
            
            778,609
            
            
            
            2,147,068
            
            
            
            (1,368,459
            )
            
            
            -63.74
            %Other
      income/(expenses)Interest
      income
            
            
            18,007
            
            
            
            22,160
            
            
            
            (4,153
            )
            
            
            -18.74
            %Investment
      income
            
            
            29
            
            
            
            (4
            )
            
            
            33
            
            
            
            -825.00
            %Non
      operating income
            
            
            61,418
            
            
            
            39,068
            
            
            
            22,350
            
            
            
            57.21
            %Non
      operating expenses
            
            
            (17
            )
            
            
            18
            
            
            
            (35
            )
            
            
            -194.44
            %Interest
      expenses
            
            
            (150,785
            )
            
            
            (120,576
            )
            
            
            (30,209
            )
            
            
            25.05
            %Profit
      before income tax
            
            
            707,261
            
            
            
            2,087,734
            
            
            
            (1,380,473
            )
            
            
            -66.12
            %Income
      taxes
            
            
            (162,703
            )
            
            
            (658,857
            )
            
            
            496,154
            
            
            
            -75.31
            %Net
      income
            
            $
            544,558
            
            
            $
            1,428,877
            
            
            $
            (884,319
            )
            
            
            -61.89
            %Other
      Comprehensive IncomeForeign
      currency translation adjustment
            
            
            121,529
            
            
            
            (572
            )
            
            
            122,101
            
            
            
            -21346.33
            %TOTAL
      COMPREHENSIVE INCOME
            
            $
            666,087
            
            
            $
            1,428,305
            
            
            $
            (762,218
            )
            
            
            -53.37
            %





20
 Index




Net
Sales.  Sales are mainly derived from the various types of
automatic mahjong tables manufactured by Danbom and sold to the Chinese domestic
market.





Total net
sales were $13.16 million and $18.42 million for the three months ended
September 30, 2010 and 2009, respectively, representing a decrease of $5.26
million or 28.53% year over year.  In September 2010, in order to
maintain and keep expanding our sales market, we decided to recall a series of
low-quality eight-outlet mahjong tables which was estimated
to result
in a reduction of net sales of approximately $3 million during
the quarter ended September 30, 2010. The Company intends to
direct more resources into research and development to produce new products with
more added value and higher sales prices. The management believes that the
Company’s net sales and net income should improve in the near
future.





Cost of
Sales. Cost of sales for the three months ended September 30, 2010
decreased to $10.26 million from $14.48 million for the three months ended
September 30, 2009, a $4.22 million or 29.15% decrease, consistent with the
decrease in revenues.





Gross Profit and
Gross Margin.Our gross profit decreased from $3.93 million in the three months ended
September 30, 2009 to $2.90 million in the three months ended September 30,
2010.  The decrease was consistent with the decrease in revenues. Gross
profit margins as a percentage of net revenue increased from 21.37% during the
period in 2009 to 22.05% in 2010.  The increase was attributable to
cost savings and improved production efficiency.





Selling, General
and Administrative Expenses.  Our selling, general and
administrative expenses increased to $2.12 million in the three months ended
September 30, 2010 from $1.80 million in the same period in 2009. This increase
was attributable to the increase in the scope of our operations and increased
expenses, including consulting and audit expenses, which resulted from the Share
Exchange transaction and Sino-Bon becoming a public company.





Interest
Income/(Expenses).Interest income decreased to $18,007 for the three
months ended September 30, 2010, compared with $22,160 for the three months
ended September 30, 2009.  Interest expense increased to $150,785 for
the three months ended September 30, 2010, compared with $120,576 for the three
months ended September 30, 2009, due to the Company’s increased short term
borrowing activities in 2010.  The proceeds from borrowings financed
the Company’s business operations.





Income
Taxes. Income tax decreased to $162,703 in the three months ended
September 30, 2010 from $658,857 in the same period in 2009.  The
decrease was due to a decrease in income, as our income tax rate remained
constant at 25%.





Net
Income.  Net income for the three months ended September 30,
2010 decreased by $0.88 million, to $0.55 million from $1.43 million for the
three months ended September 30, 2009.  The decrease was consistent
with the decrease in gross profit as mentioned above.




21
 Index




Comparison of Nine Months
Ended September 30, 2010 and September 30, 2009 (Unaudited)





The
following table sets forth key components of our results of operations for the
nine months ended September 30, 2010 compared to the nine months ended September
30, 2009.




For
      nine months ended September 30, 2010
            
            
            For
      nine months ended September 30, 2009
            
            
            $
      Change
            
            
            %
      Change(unaudited)
            
            
            (pro
      forma)Sales,
      net
            
            $
            53,275,507
            
            
            $
            29,456,479
            
            
            $
            23,819,028
            
            
            
            80.86
            %Cost
      of sales
            
            
            (42,469,608
            )
            
            
            (25,322,887
            )
            
            
            (17,146,721
            )
            
            
            67.71
            %Gross
      profit
            
            
            10,805,899
            
            
            
            4,133,592
            
            
            
            6,672,307
            
            
            
            161.42
            %Operating
      income/(expenses)Other
      income
            
            
            30,864
            
            
            
            20,908
            
            
            
            9,956
            
            
            
            47.62
            %Other
      expenses
            
            
            (1,201
            )
            
            
            (26
            )
            
            
            (1,175
            )
            
            
            4519.23
            %Selling,
      general and administrative expenses
            
            
            (4,949,702
            )
            
            
            (2,152,460
            )
            
            
            (2,797,242
            )
            
            
            129.96
            %Income
      from Operations
            
            
            5,885,860
            
            
            
            2,002,014
            
            
            
            3,883,846
            
            
            
            194.00
            %Other
      income/(expenses)Interest
      income
            
            
            92,635
            
            
            
            81,687
            
            
            
            10,948
            
            
            
            13.40
            %Investment
      income
            
            
            5,544
            
            
            
            2,045
            
            
            
            3,499
            
            
            
            171.10
            %Non
      operating income
            
            
            171,729
            
            
            
            57,228
            
            
            
            114,501
            
            
            
            200.08
            %Non
      operating expenses
            
            
            (3,336
            )
            
            
            (9,132
            )
            
            
            5,796
            
            
            
            -63.47
            %Interest
      expenses
            
            
            (372,616
            )
            
            
            (252,909
            )
            
            
            (119,707
            )
            
            
            47.33
            %Profit
      before income tax
            
            
            5,779,816
            
            
            
            1,880,933
            
            
            
            3,898,883
            
            
            
            207.28
            %Income
      taxes
            
            
            (1,407,557
            )
            
            
            (658,857
            )
            
            
            (748,700
            )
            
            
            113.64
            %Net
      income
            
            $
            4,372,259
            
            
            $
            1,222,076
            
            
            $
            3,150,183
            
            
            
            257.77
            %Other
      Comprehensive IncomeForeign
      currency translation adjustment
            
            
            278,322
            
            
            
            156,456
            
            
            
            121,866
            
            
            
            77.89
            %TOTAL
      COMPREHENSIVE INCOME
            
            $
            4,650,581
            
            
            $
            1,378,532
            
            
            $
            3,272,049
            
            
            
            237.36
            %





Net
Sales.  Sales are mainly derived from the various types of
automatic mahjong tables manufactured by Danbom and sold to the Chinese domestic
market.





Total net
sales were $53.28 million and $29.46 million for the nine months ended September
30, 2010 and 2009, respectively, representing an increase of $23.82 million or
80.86% year over year.  In July 2009, Danbom purchased fixed assets,
including buildings, equipment, and current accounts, and assumed certain
liabilities, with a net value of $4.32 million from a related party of its
former shareholder, pursuant to an asset purchase agreement.  The
company thus expanded its production capacity and output significantly through
this acquisition.  In September 2010, in order to maintain and keep
expanding our sales market, we decided to recall a series of low-quality
eight-outlet mahjong tables which was estimatedto
result
in a reduction of net sales of approximately $3 million during
the quarter ended September 30, 2010. The Company intends to direct more
resources into research and development to produce new products with more added
value and higher sales prices. Despite these headwinds, the
Company’s sales in the nine months of 2010 were still significantly greater than
in the same period in the preceding year, and the management believes that the
Company’s net sales and net income should improve in the near
future.





Cost of
Sales. Cost of sales for the nine months ended September 30, 2010
increased to $42.47 million from $25.32 million for the nine months ended
September 30, 2009, a $17.15 million or 67.71% increase, consistent with the
increase in revenues.





22
 Index




Gross Profit and
Gross Margin.Our gross profit increased from $4.13 million in the nine months ended
September 30, 2009 to $10.81 million in the nine months ended September 30,
2010.  Gross profit margins as a percentage of net revenue increased from
14.03% during the period in 2009 to 20.28% in 2010.  The increase was
consistent with the economic scale effects caused by our increases in
production, product lines and revenues.





Selling, General
and Administrative Expenses.  Our selling, general and
administrative expenses increased to $4.95 million in the nine months ended
September 30, 2010 from $2.15 million in the same period in 2009. This increase
was attributable to the increase in the scope of our operations and increased
expenses, including consulting and audit expenses, which resulted from the Share
Exchange transaction and Sino-Bon becoming a public company.





Interest
Income/(Expenses).Interest income increased to $92,635 for the nine
months ended September 30, 2010, compared with $81,687 for the nine months ended
September 30, 2009.  Interest expense increased to $372,616 for the
nine months ended September 30, 2010, compared with $252,909 for the nine months
ended September 30, 2009, due to the Company’s increased short term borrowing
activities in 2010.  The proceeds from borrowings financed the
Company’s business operations.





Income
Taxes. Income tax increased to $1.41 million in the nine months ended
September 30, 2010 from $0.66 million in the same period in 2009.  The
increase was due to an increase in income, as our income tax rate remained
constant at 25%.





Net
Income.  Net income for the nine months ended September 30,
2010 increased by $3.15 million, to $4.37 million from $1.22 million for the
nine months ended September 30, 2009.  The increase was consistent
with the increase in gross profit as mentioned above.





Liquidity
and Capital Resources





As of
September 30, 2010, the Company had cash and cash equivalents of $245,796,
primarily consisting of cash on hand and demand deposits. The following table
provides detailed information about our net cash flow for the nine months ended
September 30, 2010 and 2009.




For
      nine months ended September 30, 2010 (Unaudited)
            
            
            For
      nine months ended September 30, 2009
              (Pro
      Forma Unaudited)Net
      Cash Provided (Used) by Operating Activities
            
            $
            365,665
            
            
            $
            1,451,524Net
      Cash Provided by (Used in) Investing Activities
            
            
            (992,792
            )
            
            
            (6,017,164
            )Net
      Cash Flows from Financing Activities
            
            
            (289,109
            )
            
            
            5,130,267Effect
      on Change of Exchange Rate
            
            
            11,499
            
            
            
            778Increase
      (decrease) in Cash and Cash Equivalents
            
            
            (904,737
            )
            
            
            565,405Cash
      and Cash Equivalents - Beginning of Period
            
            
            1,150,533
            
            
            
            201,199Cash
      and Cash Equivalents - End of Period
            
            $
            245,796
            
            
            $
            766,604





Operating
activities





Net cash
provided by operating activities was $365,665 for the nine months ended
September 30, 2010, as compared to $1,451,524 net cash provided by operating
activities for the same period in 2009.  The change is attributable to
the increase in net income for the current period, the decrease of $1,889,597
intrade deposits and
the decrease of $3,024,338 inrestricted cash, and was
offset by the increase of $5,355,140 in inventories, increase of $4,402,440 in
accounts receivable and decreases of $1,286,528 in income tax
payable.  Our primary cash flows
from net income were realized through the sale of automatic mahjong
tables.





23
 Index




Investing
activities





Net cash
used by investing activities for the nine months ended September 30, 2010 was
$992,792, consisting mainly of the funds for the acquisition of fixed assets,
including buildings and equipment to support the growth of our business. For the
nine months ended September 30, 2009, the Company utilized $6,017,164 in
investing activities.





Financing
activities





Net
cash used by financing activities for the nine months ended September 30,
2010 was $289,109, as compared to $5,130,267 net cash provided by financing
activities during the same period of 2009.  These financing activities
were borrowings and repayments of bank loans.





As of
September 30, 2010, the Company had various outstanding short-term bank loans
due in less than one year totaling $7,360,296.  For more detail
regarding the amount and term of these short-term bank loans, see Note 12 to the
consolidated financial statements contained herein.  In the past, the
Company has typically renewed these short-term bank loans prior to their
repayment.  To the extent any of these short-term bank loans are not
renewed, we expect to fund their repayment from current cash balances, cash from
operations and/or other bank borrowings.





As of
September 30, 2010, the Company had no significant capital commitments for the
next 12 months.





We
believe that our cash on hand and cash flow from operations will meet our
present cash needs.  We may, however, in the future, require
additional cash resources due to changed business conditions, implementation of
our strategy to ramp up our marketing efforts and increase brand awareness, or
acquisitions we may decide to pursue.  If our own financial resources
are insufficient to satisfy our capital requirements, we may seek to sell
additional equity or debt securities or obtain additional credit facilities. The
sale of additional equity securities could result in dilution to our
stockholders. The incurrence of indebtedness would result in increased debt
service obligations and could require us to agree to operating and financial
covenants that would restrict our operations. Financing may not be available in
amounts or on terms acceptable to us, if at all.  Any failure by us to
raise additional funds on terms favorable to us, or at all, could limit our
ability to expand our business operations and could harm our overall business
prospects.





Inflation





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





Seasonality





The
fiscal quarter ended September 30 is typically the slowest quarter for sales in
the automatic Mahjong table industry in China.  Sales typically
improve somewhat during the fourth quarter and are strongest in the first
quarter of the calendar year.





Off
Balance Sheet Arrangements





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





Significant Accounting
Policies





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires our management to make
assumptions, estimates and judgments that affect the amounts reported, including
the notes thereto, and related disclosures of commitments and contingencies, if
any.  We have identified certain accounting policies that are
significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and
results of operation.  Critical accounting policies are those that are
most important to the portrayal of our financial conditions and results of
operations and require management’s difficult, subjective, or complex judgment,
often as a result of the need to make estimates about the effect of matters that
are inherently uncertain and may change in subsequent
periods.  Certain accounting estimates are particularly sensitive
because of their significance to financial statements and because of the
possibility that future events affecting the estimate may differ significantly
from management’s current judgments.  We believe the following
critical accounting policies involve the most significant estimates and
judgments used in the preparation of our financial statements:





24
 Index




Revenue
Recognition





Revenues
are recognized upon shipment when title passes.  Shipping costs are
included in cost of sales. The Company believes that recognizing revenue at time
of shipment is appropriate because the Company’s sales policies meet the four
criteria of the SEC’s Staff Accounting Bulletin No. 104, which are:
(i) persuasive evidence that an arrangement exists, (ii) delivery has
occurred, (iii) the seller’s price to the buyer is fixed and determinable,
and (iv) collectability is reasonably assured.





Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  On an on-going basis, the Company
evaluates its estimates, including, but not limited to, those related to
depreciation, bad debts, income taxes and contingencies.  The Company
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances.  Actual
results could differ from those estimates.





Accounts
Receivable





Accounts
receivable on a consolidated basis consist principally of amounts due from trade
customers.  Credit is extended based on an evaluation of the customer’s
financial condition and collateral is not generally required. Certain credit
sales are made to industries that are subject to cyclical economic
changes.





The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its clients to make required payments are to
cover potential credit losses.  Estimates are based on historical
collection experience, current trends, credit policy and relationship between
accounts receivable and revenues.  In determining these estimates, the
Company examines historical write-offs of its receivables and reviews each
client’s account to identify any specific customer collection issues.  If
the financial condition of its customers were to deteriorate, resulting in an
impairment of their ability to make payment, additional allowances might be
required.  The Company’s failure to accurately estimate the losses for
doubtful accounts and ensure that payments are received on a timely basis could
have a material adverse effect on its business, financial condition, and results
of operations.





Inventory





Inventory
is valued at the lower of cost or market (using the weighted average cost
method). Cost includes all costs to acquire and other costs incurred in bringing
the inventories to their present location and condition.  The Company
evaluates the lower of cost or market of its inventories on a regular basis and
records a provision for loss to reduce the computed weighted-average
cost.





Translation
Adjustment





As of
September 30, 2010 and December 31, 2009, the accounts of Danbom, Danbom ET and
Taicheng were maintained, and their financial statements were expressed, in
Chinese Yuan Renminbi (CNY). Such financial statements were translated into U.S.
Dollars (USD) in accordance with the Foreign Currency Matters Topic of the FASB
Accounting Standards Codification (“ASC 830”) with the CNY as the functional
currency. According to the Statement, all assets and liabilities were translated
at the current exchange rate, stockholders equity was translated at the
historical rates and income statement items are translated at the average
exchange rate for the period. The resulting translation adjustments are reported
under other comprehensive income in accordance with the Comprehensive Income
Topic of the FASB Accounting Standard Codification (“ASC 220”). Transaction
gains and losses are reflected in the consolidated statements of operations and
comprehensive income.





25
 Index




Recent
Accounting Pronouncements





The
Company does not expect the adoption of any recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position or cash flows.





Item3.
 Quantitative and Qualitative Disclosure About Market
Risks.





Not
applicable.





Item4T.
 Controls and Procedures.





(a)
            Evaluation
      of Disclosure Controls and
Procedures.





As
required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities
Exchange Act of 1934, the Company's principal executive officer and principal
financial officer have evaluated the Company's disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as
of the end of the period covered by this Quarterly Report on Form 10-Q. Based on
this evaluation these officers have concluded that as of the end of the period
covered by this Quarterly Report on Form 10-Q, our disclosure controls and
procedures were effective and were adequate to insure that the information
required to be disclosed by the Company in reports it files or submits under the
Exchange Act were recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms.





(b)
            Changes
      in Internal Control Over Financial
Reporting.





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





PARTII - OTHER INFORMATION





Item 1.  Legal
Proceedings.





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





Item1A.  Risk
Factors.





There
have been no material changes to the risk factors previously disclosed under
Item 2.01 of the Company’s Current Report on Form 8-K, as filed with the United
States Securities and Exchange Commission on May 7, 2010.





Item2.
 Unregistered Sales of Equity Securities and Use of
Proceeds.





None.





Item3.
 Defaults Upon Senior Securities.





None

..





Item5.  Other
Information.





None

..





26
 Index




Item6.
 Exhibits.





Exhibits:




3.1
            Articles
      of Incorporation (as amended to date) (incorporated by reference to
      Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, as filed with
      the Securities and Exchange Commission on August 19,
  2010).3.2
            Bylaws
      (incorporated by reference to Exhibit 3.2 to the Company’s registration
      statement on Form 10-SB, as filed with the Securities and Exchange
      Commission on September 15, 2006).





31.1*
            Certification
      pursuant to Section 302 of Sarbanes Oxley Act of
  2002.





31.2*
            Certification
      pursuant to Section 302 of Sarbanes Oxley Act of 2002.32.1*
            Certification
      pursuant to Section 906 of Sarbanes Oxley Act of
  2002.





32.2*
            Certification
      pursuant to Section 906 of Sarbanes Oxley Act of
  2002.





________________


*Filed herewith.





27
 Index





SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





Dated:
 November 15, 2010





SINO-BON
      ENTERTAINMENT, INC.By:
            /s/
      Xiaowei (Simon) SongXiaowei
      (Simon) Song
              Chief
      Executive Officer





By:
            /s/
      Liang (Jacky) YanLiang
      (Jacky) Yan
              Chief
      Financial Officer