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

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

| Nevada                          |   | 20-2777600          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (IRS Employer       |
| incorporation or organization)  |   | Identification No.) |

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

----

|   | · | Revise the Consolidated Balance Sheet to reclassify advance payments for fixed assets and research and development as non-current assets; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise the Consolidated Statements of Operations and Other Comprehensive Income into two separate statements: Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise the Statements of Operations to present interest expenses separately from interest income; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Reclassify certain line items in the Consolidated Statement of Cash Flows resulting in changes from net cash used in operating activities of $1,429,171 to $3,668,743 for the six months ended December 31, 2010 and from $1,091,519 to $1,677,519 for the six months ended December 31, 2009, and changes from net cash provided by financing activities of $2,158,719 to $4,398,291 for the six months ended December 31, 2010; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 1 – Organization and Nature of Business” to include the description of interest in Dalian Yuansheng; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise Basis of Presentation under “Note 2 – Summary of Significant Accounting Policies” to include consolidation as a critical accounting policy; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 5 – Loans to Unrelated Parties” to identify unrelated parties; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Add a footnote for Bank Loan Security Deposits; |
|--------|--------|-------------------------------------------------|

|   | · | Revise “Note 9 – Advance Payments – Research and Development” to address that these amounts are determined to be recoverable; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 11 – Trade Notes Payable” to include the maturity date of the promissory notes; |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 12 – Short-Term Bank Loans” to include average annual interest rates; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 13 – Loans from Unrelated Parties” to include information regarding maturity date and financial or non-financial covenants associated with the loans; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Add a footnote for Government Subsidy Income; |
|--------|--------|-----------------------------------------------|

|   | · | Revise “Note 14 – Long-Term Bank Loans” to include average annual interest rate; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 16 – Stockholders’ Equity and Related Financing Agreements” to include a summary of intangible assets received for ownership; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revise “Note 17 – Income Taxes” to address the timing of the Company’s payments for income taxes; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | Add a footnote for Restatement to Reflect Correction of Accounting Errors; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Add the words “Restated”, as applicable, to column headings of certain financial tables; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Make several minor, miscellaneous corrections in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Amend and restate, in its entirety, Item 4. “Controls and Procedures,” due to the errors and omissions in the Company’s financial statements, to state that the Company had material weaknesses in its disclosure controls and procedures and internal control over financial reporting at December 31, 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                    |                                                                                        | Page   |
|-------------------------|---------------------------------------------------------------------------------------------|--------|
| PART I                  | FINANCIAL INFORMATION                                                                       |   |
|                    |                                                                                        |   |
| Item 1.                 | Financial Statements.                                                                       | 3      |
|                    |                                                                                        |   |
|                    | Restated Consolidated Balance Sheets                                                        |   |
|                    | As of December 31, 2010 (Unaudited) and June 30, 2010                                       | 5      |
|                    |                                                                                        |   |
|                    | Restated Consolidated Statements of Operations                                              |   |
|                    | For the Three Months and Six Months Ended December 31, 2010 and 2009 (Unaudited)            | 6      |
|                    |                                                                                        |   |
|                    | Restated Consolidated Statements of Comprehensive Income                                    |   |
|                    | For the Three Months and Six Months Ended December 31, 2010 and 2009 (Unaudited)            | 7      |
|                    |                                                                                        |   |
|                    | Restated Consolidated Statements of Cash Flows                                              |   |
|                    | For the Six Months Ended December 31, 2010 and 2009 (Unaudited)                             | 8      |
|                    |                                                                                        |   |
|                    | Notes to Restated Consolidated Financial Statements December 31, 2010 and 2009 (Unaudited)  | 9      |
|                    |                                                                                        |   |
| Item 2.                 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26     |
|                    |                                                                                        |   |
| Item 3.                 | Quantitative and Qualitative Disclosures About Market Risk                                  | 33     |
|                    |                                                                                        |   |
| Item 4.                 | Controls and Procedures.                                                                    | 33     |
|                    |                                                                                        |   |
| PART II                 | OTHER INFORMATION                                                                           | 34     |
|                    |                                                                                        |   |
| Item 6.                 | Exhibits                                                                                    | 34     |
|                    |                                                                                        |   |
| Signatures              | 35                                                                                          |
|                    |                                                                                        |
| Exhibits/Certifications | 36                                                                                          |

----

| Item 1. | Financial Statements |
|---------|----------------------|

----

|                                            | Page   |
|-------------------------------------------------|--------|
|                                            |   |
| Consolidated Balance Sheets                     | 5      |
|                                            |   |
| Consolidated Statements of Operations           | 6      |
|                                            |   |
| Consolidated Statements of Comprehensive Income | 7      |
|                                            |   |
| Consolidated Statements of Cash Flows           | 8      |
|                                            |   |
| Notes to Consolidated Financial Statements      | 9      |

----

|                                                                   |   | December 31, |       |   | June 30, |   |
|------------------------------------------------------------------------|--------|-------------------|------------|--------|---------------|--------|
|                                                                   |   | 2010              |       |   | 2010          |   |
| Assets                                                                 |   | (Restated)        |       |   | (Restated)    |   |
| Current assets:                                                        |   |              |       |   |          |   |
| Cash and cash equivalents                                              |   | $                 | 761,460    |   |          | $      | 1,319,173 |   |
| Restricted cash                                                        |   |              | 3,494,084  |   |          |   | 1,181,095 |   |
| Accounts receivable, net of allowance for doubtful accounts of $85,783 |   |              | 17,292,392 |   |          |   | 9,292,310 |   |
| and $83,295 at December 31, 2010, and June 30, 2010, respectively      |   |              |       |   |          |   |   |   |
| Inventory                                                              |   |              | 5,234,237  |   |          |   | 2,543,789 |   |
| Loans to unrelated parties                                             |   |              | 1,888,835  |   |          |   | 1,054,090 |   |
| Bank loan security deposits                                            |   |              | 1,089,206  |   |          |   | 1,031,100 |   |
| Advance payments                                                       |   |              | 1,521,188  |   |          |   | 399,868 |   |
| Due from related party                                                 |   |              | -          |   |          |   | 472,838 |   |
| Other current assets                                                   |   |              | 1,227,666  |   |          |   | 521,739 |   |
| Total current assets                                                   |   |              | 32,509,068 |   |          |   | 17,816,002 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Property and equipment, net                                            |   |              | 32,394,534 |   |          |   | 31,618,074 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Other assets:                                                          |   |              |       |   |          |   |   |   |
| Intangibles, net                                                       |   |              | 15,485,194 |   |          |   | 15,669,375 |   |
| Advance payments – non-current                                   |   |              | 408,279    |   |          |   | 293,605 |   |
| Advance payments – Research & Development                    |   |              | 2,151,106  |   |          |   | 2,088,714 |   |
| Total other assets                                                     |   |              | 18,044,579 |   |          |   | 18,051,694 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Total assets                                                           |   | $                 | 82,948,181 |   |          | $      | 67,485,770 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Liabilities                                                            |   |              |       |   |          |   |   |   |
| Current liabilities:                                                   |   |              |       |   |          |   |   |   |
| Accounts payable and accrued expenses                                  |   | $                 | 2,770,621  |   |          | $      | 3,119,646 |   |
| Trade notes payable                                                    |   |              | 3,034,000  |   |          |   | - |   |
| Short-term bank loans                                                  |   |              | 9,086,830  |   |          |   | 6,039,300 |   |
| Current portion of long-term bank loans                                |   |              | 758,500    |   |          |   | 294,600 |   |
| Loans from unrelated parties                                           |   |              | 2,220,740  |   |          |   | 370,000 |   |
| Advances from customers                                                |   |              | 1,007,947  |   |          |   | 533,806 |   |
| Income taxes payable                                                   |   |              | 3,120,515  |   |          |   | 1,655,747 |   |
| Other current liabilities                                              |   |              | 1,334,564  |   |          |   | 969,787 |   |
| Total current liabilities                                              |   |              | 23,333,717 |   |          |   | 12,982,886 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Long-term bank loan                                                    |   |              | 14,108,100 |   |          |   | 14,435,400 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Total liabilities                                                      |   |              | 37,441,817 |   |          |   | 27,418,286 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Equity                                                                 |   |              |       |   |          |   |   |   |
| Stockholders’ equity:                                            |   |              |       |   |          |   |   |   |
| Preferred stock, $0.001 par value, 10,000,000 shares authorized,       |   |              | -          |   |          |   | - |   |
| no shares issued or outstanding                                        |   |              |       |   |          |   |   |   |
| Common stock, $0.001 par value, 200,000,000 shares authorized,         |   |              | 29,716     |   |          |   | 29,716 |   |
| 29,715,640 and 29,715,666 shares issued and outstanding at             |   |              |       |   |          |   |   |   |
| December 31, 2010 and June 30, 2010, respectively                      |   |              |       |   |          |   |   |   |
| Additional paid-in capital                                             |   |              | 21,838,047 |   |          |   | 21,838,047 |   |
| Statutory reserves                                                     |   |              | 1,181,189  |   |          |   | 1,181,189 |   |
| Retained earnings                                                      |   |              | 17,994,979 |   |          |   | 13,810,157 |   |
| Accumulated other comprehensive income                                 |   |              | 3,447,965  |   |          |   | 2,166,533 |   |
| Total stockholders’ equity                                       |   |              | 44,491,896 |   |          |   | 39,025,642 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Noncontrolling interest                                                |   |              | 1,014,468  |   |          |   | 1,041,842 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Total equity                                                           |   |              | 45,506,364 |   |          |   | 40,067,484 |   |
|                                                                   |   |              |       |   |          |   |   |   |
| Total liabilities and equity                                           |   | $                 | 82,948,181 |   |          | $      | 67,485,770 |   |

----

|                                                     |   | For the Three Months Ended |       |   | For the Six Months Ended |   |
|----------------------------------------------------------|--------|------------------------------------------------|------------|--------|----------------------------------------------|--------|
|                                                     |   | December 31,                              |       |   | December 31,                            |   |
|                                                     |   | 2010                                           |       |   | 2009                                         |   |   | 2010 |   |   | 2009 |   |
|                                                     |   | (Restated)                                     |       |   | (Restated)                                   |   |   | (Restated) |   |   | (Restated) |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |
| Sales                                                    |   | $                                              | 14,871,164 |   |                                         | $      | 7,126,044 |   |   | $ | 30,801,975 |   |   | $ | 12,609,703 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales                                            |   |                                           | 10,954,272 |   |                                         |   | 5,235,323 |   |   |   | 22,625,032 |   |   |   | 9,098,097 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                             |   |                                           | 3,916,892  |   |                                         |   | 1,890,721 |   |   |   | 8,176,943 |   |   |   | 3,511,606 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                      |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                                         |   |                                           | 149,643    |   |                                         |   | 14,828 |   |   |   | 188,250 |   |   |   | 36,701 |   |
| General and administrative expenses                      |   |                                           | 1,032,259  |   |                                         |   | 442,264 |   |   |   | 2,043,879 |   |   |   | 1,030,549 |   |
| Total operating expenses                                 |   |                                           | 1,181,902  |   |                                         |   | 457,092 |   |   |   | 2,232,129 |   |   |   | 1,067,250 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                                   |   |                                           | 2,734,990  |   |                                         |   | 1,433,629 |   |   |   | 5,944,814 |   |   |   | 2,444,356 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expenses):                                 |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Government subsidy                                       |   |                                           | 180,155    |   |                                         |   | 304,704 |   |   |   | 316,642 |   |   |   | 354,658 |   |
| Interest income                                          |   |                                           | 1,462      |   |                                         |   | 3,728 |   |   |   | 9,966 |   |   |   | 3,728 |   |
| Interest expense                                         |   |                                           | (494,852   | )      |                                         |   | (8,923 | ) |   |   | (889,754 | ) |   |   | (141,232 | ) |
| Other income (expenses)                                  |   |                                           | 107,024    |   |                                         |   | (403,138 | ) |   |   | 138,145 |   |   |   | (397,441 | ) |
| Total other income (expenses)                            |   |                                           | (206,211   | )      |                                         |   | (103,629 | ) |   |   | (425,001 | ) |   |   | (180,287 | ) |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Income before provision for income tax                   |   |                                           | 2,528,779  |   |                                         |   | 1,330,000 |   |   |   | 5,519,813 |   |   |   | 2,264,069 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income tax                                 |   |                                           | 614,895    |   |                                         |   | 336,819 |   |   |   | 1,422,030 |   |   |   | 585,723 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                               |   |                                           | 1,913,884  |   |                                         |   | 993,181 |   |   |   | 4,097,783 |   |   |   | 1,678,346 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Less: Net loss attributable to noncontrolling            |   |                                           | (22,681    | )      |                                         |   | (963 | ) |   |   | (87,038 | ) |   |   | (6,121 | ) |
| interest                                                 |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to BEFUT International Co., Ltd. |   |                                           | 1,936,565  |   |                                         |   | 994,144 |   |   |   | 4,184,821 |   |   |   | 1,684,467 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                                 |   | $                                              | 0.07       |   |                                         | $      | 0.03 |   |   | $ | 0.14 |   |   | $ | 0.06 |   |
| Diluted earnings per share                               |   | $                                              | 0.07       |   |                                         | $      | 0.03 |   |   | $ | 0.14 |   |   | $ | 0.06 |   |
|                                                     |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares                 |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| outstanding:                                             |   |                                           |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                    |   |                                           | 29,715,640 |   |                                         |   | 29,511,277 |   |   |   | 29,715,640 |   |   |   | 29,511,277 |   |
| Diluted                                                  |   |                                           | 29,786,677 |   |                                         |   | 30,280,532 |   |   |   | 29,771,813 |   |   |   | 30,280,532 |   |

----

|                                                                      |   | For the Three Months Ended |      |   | For the Six Months Ended |   |
|---------------------------------------------------------------------------|--------|------------------------------------------------|-----------|--------|----------------------------------------------|--------|
|                                                                      |   | December 31,                              |      |   | December 31,                            |   |
|                                                                      |   | 2010                                           |      |   | 2009                                         |   |   | 2010 |   |   | 2009 |   |
|                                                                      |   | (Restated)                                     |      |   | (Restated)                                   |   |   | (Restated) |   |   | (Restated) |   |
|                                                                      |   |                                           |      |   |                                         |   |   |   |   |   |   |   |
| Net income                                                                |   | $                                              | 1,913,884 |   |                                         | $      | 993,181 |   |   | $ | 4,097,783 |   |   | $ | 1,678,346 |   |
|                                                                      |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income                                                |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                   |   |                                           | 598,078   |   |                                         |   | 264 |   |   |   | 1,341,096 |   |   |   | 92,590 |   |
|                                                                      |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                      |   |                                           | 2,511,962 |   |                                         |   | 993,445 |   |   |   | 5,438,879 |   |   |   | 1,770,936 |   |
|                                                                      |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Less: comprehensive income (loss) attributable to noncontrolling interest |   |                                           | (22,177   | )      |                                         |   | (962 | ) |   |   | (27,374 | ) |   |   | 38,399 |   |
|                                                                      |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income attributable to BEFUT International Co., Ltd.        |   | $                                              | 2,534,139 |   |                                         | $      | 994,407 |   |   | $ | 5,466,253 |   |   | $ | 1,732,537 |   |

----

|                                                                   |   | For the Six Months Ended |       |
|------------------------------------------------------------------------|--------|----------------------------------------------|------------|
|                                                                   |   | December 31,                            |       |
|                                                                   |   | 2010                                         |       |   | 2009 |   |
|                                                                   |   | (Restated)                                   |       |   | (Restated) |   |
| Cash flows from operating activities:                                  |   |                                         |       |   |   |   |
| Net Income                                                             |   | $                                            | 4,097,783  |   |   | $ | 1,678,346 |   |
| Adjustments to reconcile net income to net cash provided by            |   |                                         |       |   |   |   |   |   |
| (used in) operating activities:                                        |   |                                         |       |   |   |   |   |   |
| Depreciation and amortization                                          |   |                                         | 1,583,652  |   |   |   | 718,680 |   |
| Changes in current assets and current liabilities:                     |   |                                         |       |   |   |   |   |   |
| Restricted Cash                                                        |   |                                         | (2,239,572 | ) |   |   | 586,000 |   |
| Accounts receivable                                                    |   |                                         | (7,894,969 | ) |   |   | (53,500 | ) |
| Inventory                                                              |   |                                         | (2,574,960 | ) |   |   | (1,000,998 | ) |
| Advance payments                                                       |   |                                         | (1,066,359 | ) |   |   | (197,666 | ) |
| Other current assets                                                   |   |                                         | (2,258,178 | ) |   |   | (1,032,681 | ) |
| Accounts payable and accrued expenses                                  |   |                                         | (176,022   | ) |   |   | 1,637,214 |   |
| Trade notes payable                                                    |   |                                         | 2,983,200  |   |   |   | (1,173,120 | ) |
| Advances from customers                                                |   |                                         | 450,523    |   |   |   | (174,496 | ) |
| Income taxes payable                                                   |   |                                         | 1,391,612  |   |   |   | 585,724 |   |
| Other taxes payable                                                    |   |                                         | 248,962    |   |   |   | (163,417 | ) |
| Other current liabilities                                              |   |                                         | 1,785,585  |   |   |   | 267,433 |   |
| Total adjustments                                                      |   |                                         | (7,766,526 | ) |   |   | (827 | ) |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Net cash provided by (used in) operating activities                    |   |                                         | (3,668,743 | ) |   |   | 1,677,519 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Cash flows from investing activities:                                  |   |                                         |       |   |   |   |   |   |
| Due from related party                                                 |   |                                         | 478,809    |   |   |   | - |   |
| Additions to property and equipment                                    |   |                                         | (755,610   | ) |   |   | (1,594,161 | ) |
| Additions to construction in progress                                  |   |                                         | (39,808    | ) |   |   | (2,442,107 | ) |
| Advance payment for fixed assets                                       |   |                                         | (104,131   | ) |   |   | (8,011,520 | ) |
| Acquisition of intangible assets                                       |   |                                         | (5,964     | ) |   |   | (6,452 | ) |
| Long-term investment                                                   |   |                                         | -          |   |   |   | 2,933 |   |
| Loans to unrelated parties                                             |   |                                         | (789,809   | ) |   |   | 1,521,543 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Net cash used in investing activities                                  |   |                                         | (1,216,513 | ) |   |   | (10,529,764 | ) |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Cash flows from financing activities:                                  |   |                                         |       |   |   |   |   |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Bank loan security deposits                                            |   |                                         | (26,849    | ) |   |   | (163,877 | ) |
| Loans from unrelated party                                             |   |                                         | 1,819,753  |   |   |   | 2,274,251 |   |
| Proceeds of short-term bank loans                                      |   |                                         | 8,975,000  |   |   |   | - |   |
| Repayment of short-term bank loans                                     |   |                                         | (6,130,476 | ) |   |   | (2,786,160 | ) |
| Repayment of long-term bank loans                                      |   |                                         | (298,320   | ) |   |   | 14,664,000 |   |
| Capital contribution from noncontrolling interest for BEFUT Zhong Xing |   |                                         | 59,183     |   |   |   | 43,992 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Net cash provided by financing activities                              |   |                                         | 4,398,291  |   |   |   | 14,032,206 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Effect of foreign currency translation on cash                         |   |                                         | (70,748    | ) |   |   | (4,369 | ) |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Net increase (decrease)  in cash and cash equivalents        |   |                                         | (557,713   | ) |   |   | 5,175,592 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Cash and cash equivalents – beginning                            |   |                                         | 1,319,173  |   |   |   | 210,301 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| Cash and cash equivalents – ending                               |   | $                                            | 761,460    |   |   | $ | 5,385,893 |   |

----

----

----

|            |   | December 31, |      |   | June 30, |   |
|-----------------|--------|-------------------|-----------|--------|---------------|--------|
|            |   | 2010              |      |   | 2010          |   |
|            |   |              |      |   |          |   |
| Raw materials   |   | $                 | 2,339,670 |   |          | $      | 1,093,193 |   |
| Work in process |   |              | 365,680   |   |          |   | 323,275 |   |
| Finished goods  |   |              | 2,528,887 |   |          |   | 1,127,321 |   |
|            |   |              |      |   |          |   |   |   |
| Total           |   | $                 | 5,234,237 |   |          | $      | 2,543,789 |   |

|                                           |   | December 31, |      |   | June 30, |   |
|------------------------------------------------|--------|-------------------|-----------|--------|---------------|--------|
|                                           |   | 2010              |      |   | 2010          |   |
| Bank loan security deposits – short-term |   | $                 | 785,806   |   |          | $      | 736,500 |   |
| Bank loan security deposits – long-term  |   |              | 303,400   |   |          |   | 294,600 |   |
| Total                                          |   | $                 | 1,089,206 |   |          | $      | 1,031,100 |   |

|                           |   | December 31, |       |   | June 30, |   |
|--------------------------------|--------|-------------------|------------|--------|---------------|--------|
|                           |   | 2010              |       |   | 2010          |   |
|                           |   |              |       |   |          |   |
| Buildings                      |   | $                 | 20,475,630 |   |          | $      | 19,877,285 |   |
| Machinery and equipment        |   |              | 13,679,454 |   |          |   | 12,673,324 |   |
| Office equipment and furniture |   |              | 173,121    |   |          |   | 100,927 |   |
| Vehicles                       |   |              | 521,273    |   |          |   | 466,380 |   |
| Subtotal                       |   |              | 34,849,478 |   |          |   | 33,117,916 |   |
| Less: Accumulated depreciation |   |              | 2,495,322  |   |          |   | 1,499,842 |   |
|                           |   |              | 32,354,156 |   |          |   | 31,618,074 |   |
| Add: Construction in progress  |   |              | 40,378     |   |          |   | - |   |
| Total                          |   | $                 | 32,394,534 |   |          | $      | 31,618,074 |   |

----

|                           |   | December 31, |       |   | June 30, |   |
|--------------------------------|--------|-------------------|------------|--------|---------------|--------|
|                           |   | 2010              |       |   | 2010          |   |
|                           |   |              |       |   |          |   |
| Software                       |   | $                 | 29,326     |   |          | $      | 22,684 |   |
| Trademark                      |   |              | 86,469     |   |          |   | 83,961 |   |
| Land use rights                |   |              | 5,669,469  |   |          |   | 5,505,028 |   |
| Patent                         |   |              | 11,947,892 |   |          |   | 11,601,348 |   |
| Subtotal                       |   |              | 17,733,156 |   |          |   | 17,213,021 |   |
| Less: Accumulated amortization |   |              | 2,247,962  |   |          |   | 1,543,646 |   |
| Total                          |   | $                 | 15,485,194 |   |          | $      | 15,669,375 |   |

|             |   | December 31, |      |   | June 30, |   |
|------------------|--------|-------------------|-----------|--------|---------------|--------|
|             |   | 2010              |      |   | 2010          |   |
|             |   |              |      |   |          |   |
| Accounts payable |   | $                 | 2,705,013 |   |          | $      | 3,009,646 |   |
| Accrued expenses |   |              | 65,608    |   |          |   | 110,000 |   |
|             |   |              |      |   |          |   |   |   |
| Total            |   | $                 | 2,770,621 |   |          | $      | 3,119,646 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | December 31, |      |   | June 30, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|---------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2010              |      |   | 2010          |   |
| On September 16, 2009, the Company obtained a loan from Harbin Bank, the principal and accrued interest of which was paid in full by September 15, 2010. The interest was calculated using an annual fixed interest rate of 6.372% and paid monthly. The loan was secured by the Company’s property and equipment.                                                                                                                                                                                                                      |   | $                 | -         |   |          | $      | 2,946,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On October 30, 2009, the Company obtained a loan from Bank of Dalian, the principal and accrued interest of which was paid in full by October 29, 2010. The interest was calculated using an annual fixed interest rate of 6.903% and paid monthly. The loan is guaranteed by Dalian Fangyuan Financial Guarantee Co. ,Ltd., an unaffiliated third party.                                                                                                                                                                                     |   | $                 | -         |   |          | $      | 2,356,800 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On June 25, 2010, the Company obtained a loan from the Bank of East Asia, the principal of which was paid in full by December 25, 2010. The interest was calculated using an annual fixed interest rate of 6.318%, and paid monthly. The loan was guaranteed by the Company’s accounts receivables.                                                                                                                                                                                                                                     |   | $                 | -         |   |          | $      | 736,500 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On September 14, 2010, the Company obtained a loan from Harbin Bank with a maturity date of September 13, 2011. The interest is paid monthly at a variable rate equal to 30% per annum above the floating base interest for loans of the same term issued by the People’s Bank of China, the PRC’s central bank. The average annual interest rate for the three months ended December 31, 2010 was approximately 7.228%. The loan is secured by the Company’s property and equipment.                                       |   | $                 | 3,034,000 |   |          | $      | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On October 21, 2010, the Company obtained a loan from the Dalian Economic Development Zone Xinhui Town Bank with a maturity date of October 20, 2011. The interest is paid monthly at a variable rate equal to 50% per annum above the floating base interest for loans of the same term issued by the People’s Bank of China. The average annual interest rate for the three months ended December 31, 2010 was approximately 8.34%. The loan is secured by the Company’s inventory.                                             |   | $                 | 1,501,830 |   |          | $      | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On November 11, 2010, the Company obtained a loan from the Bank of Dalian with a maturity date of November 10, 2011. The interest is paid monthly at  a variable rate equal to 30% per annum above the floating base interest for loans of the same term issued by the  People’s Bank of China,. The average annual interest rate for the three months ended December 31, 2010 was approximately 7.228%. The loan is guaranteed by Dalian Zhongdingxin Investment Guarantee Co., Ltd., an unaffiliated third party. |   | $                 | 1,517,000 |   |          | $      | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On November 23, 2010, the Company obtained a loan from the Bank of Dalian with a maturity date of November 22, 2011. The interest is paid monthly at a variable rate equal to 10% per annum above the floating base interest for loans of the same term issued by the People’s Bank of China. The average annual interest rate for the three months ended December 31, 2010 was approximately 6.116%. The loan is guaranteed by Dalian Tiansi Joint Guarantee Co., Ltd., an unaffiliated third party.                                   |   | $                 | 1,517,000 |   |          | $      | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| On December 30, 2010, the Company obtained a loan from the Bank of East Asia with a maturity date of June 30, 2011. The interest is paid monthly at a variable rate equal to 30% per annum above the floating base interest for loans of the same term issued  by the  People’s Bank of China. The average annual interest rate for the three months ended December 31, 2010 was approximately 6.63%. The loan is secured by the Company’s accounts receivables.                                              |   | $                 | 1,517,000 |   |          | $      | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |      |   |          |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                 | 9,086,830 |   |          | $      | 6,039,300 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | December 31, |       |   | June 30, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|---------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2010              |       |   | 2010          |   |
| On November 2, 2009, Dalian Befut entered into a Loan Agreement with the PRC National Development Bank Joint Equity Corporation (“NDB”) pursuant to which Dalian Befut borrowed RMB100,000,000 (approximately $14,670,000) from NDB (the “Loan”), The term of the Loan is seven years, with a maturity date of November 1, 2016. The interest rate is a variable rate equal to 5% per annum above the floating base interest for loans of the same term promulgated by the  People’s Bank of China. The average annual interest rate for the three months ended December 31, 2010 was approximately 6.258%.The Loan was designated to finance the construction of Dalian Befut’s planned specialty cable production lines with a production capacity of 4,000 KM. The Loan was secured by, among other liens, a first priority lien on Dalian Befut’s land use right and its building property ownership and guaranteed by, among other guarantees, Mr. Hongbo Cao and Mr. Tingmin Li, Dalian BEFUT’s two major shareholders. |   | $                 | 14,866,600 |   |          | $      | 14,730,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |              |       |   |          |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                 | 14,866,600 |   |          | $      | 14,730,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |              |       |   |          |   |   |   |
| Less: Current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |              | 758,500    |   |          |   | 294,600 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |              |       |   |          |   |   |   |
| Total noncurrent portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                 | 14,108,100 |   |          | $      | 14,435,400 |   |

|                                                               |   | For the Six Months Ended December 31 |    |
|--------------------------------------------------------------------|--------|--------------------------------------------------------------------|---------|
|                                                               |   | 2010                                                               |    |   | 2009 |   |
| Newly Identified Municipal Technical Center Subsidy                |   | $                                                                  | 74,580  |   |   | $ | - |   |
| Appropriation of Technology Innovation Subsidy                     |   |                                                               | 215,089 |   |   |   | - |   |
| "Famous Trademark" subsidy                                         |   |                                                               |    |   |   |   | 293,280 |   |
| Value added tax refund for employing physically-challenged workers |   |                                                               | 26,973  |   |   |   | 61,378 |   |
| Total                                                              |   | $                                                                  | 316,642 |   |   | $ | 354,658 |   |

----

|                                         |   | For the Three Months Ended December 31, |             |
|----------------------------------------------|--------|-----------------------------------------|------------------|
|                                         |   | 2010                                    |             |   | 2009 |   |
|                                         |   |                                    |             |   |   |   |
| Net income                                   |   | $                                       | 1,936,565        |   |   | $ | 994,144 |   |
|                                         |   |                                    |             |   |   |   |   |   |
| Weighted average common shares               |   |                                    |             |   |   |   |   |   |
| (denominator for basic earnings per share)   |   |                                    |  29,715,640 |   |   |   |  29,511,277 |   |
|                                         |   |                                    |             |   |   |   |   |   |
| Effect of dilutive securities:               |   |                                    | 71,037           |   |   |   | 769,255 |   |
|                                         |   |                                    |             |   |   |   |   |   |
| Weighted average common shares               |   |                                    |             |   |   |   |   |   |
| (denominator for diluted earnings per share) |   |                                    |  29,786,677 |   |   |   |  30,280,532 |   |
|                                         |   |                                    |             |   |   |   |   |   |
| Basic earnings per share                     |   | $                                       | 0.07             |   |   | $ | 0.03 |   |
| Diluted earnings per share                   |   | $                                       | 0.07             |   |   | $ | 0.03 |   |

|                                         |   | For the Six Months Ended December 31, |             |
|----------------------------------------------|--------|---------------------------------------|------------------|
|                                         |   | 2010                                  |             |   | 2009 |   |
|                                         |   |                                  |             |   |   |   |
| Net income                                   |   | $                                     | 4,184,821        |   |   | $ | 1,684,467 |   |
|                                         |   |                                  |             |   |   |   |   |   |
| Weighted average common shares               |   |                                  |             |   |   |   |   |   |
| (denominator for basic earnings per share)   |   |                                  |  29,715,640 |   |   |   |  29,511,277 |   |
|                                         |   |                                  |             |   |   |   |   |   |
| Effect of dilutive securities:               |   |                                  | 56,173           |   |   |   | 769,255 |   |
|                                         |   |                                  |             |   |   |   |   |   |
| Weighted average common shares               |   |                                  |             |   |   |   |   |   |
| (denominator for diluted earnings per share) |   |                                  |  29,771,813 |   |   |   |  30,280,532 |   |
|                                         |   |                                  |             |   |   |   |   |   |
| Basic earnings per share                     |   | $                                     | 0.14             |   |   | $ | 0.06 |   |
| Diluted earnings per share                   |   | $                                     | 0.14             |   |   | $ | 0.06 |   |

----

----

|                             |   | For the Three Months Ended December 31, |    |
|----------------------------------|--------|-----------------------------------------|---------|
|                             |   | 2010                                    |    |   | 2009 |   |
|                             |   |                                    |    |   |   |   |
| Current – PRC              |   | $                                       | 614,895 |   |   | $ | 336,819 |   |
| Deferred                         |   |                                    | -       |   |   |   | - |   |
| Total provision for income taxes |   | $                                       | 614,895 |   |   | $ | 336,819 |   |

|                             |   | For the Six Months Ended December 31, |      |
|----------------------------------|--------|--------------------------------------------|-----------|
|                             |   | 2010                                       |      |   | 2009 |   |
|                             |   |                                       |      |   |   |   |
| Current – PRC              |   | $                                          | 1,422,030 |   |   | $ | 585,723 |   |
| Deferred                         |   |                                       | -         |   |   |   | - |   |
| Total provision for income taxes |   | $                                          | 1,422,030 |   |   | $ | 585,723 |   |

|                                                                                 |   | For the Six Months Ended December 31, |            |
|--------------------------------------------------------------------------------------|--------|--------------------------------------------|-----------------|
|                                                                                 |   | 2010                                       |            |   | 2009 |   |
| Computed tax @ statutory rate of 25%                                                 |   |                                       |            |   |   |   |
| ($5,519,813*25% and $2,264,069*25% for June 30, 2010                                 |   |                                       |            |   |   |   |
| and 2009, respectively)                                                              |   | $                                          | 1,379,953       |   |   | $ | 566,017 |   |
|                                                                                 |   |                                       |            |   |   |   |   |   |
| Entertainment expense add-back                                                       |   |                                       | 5,202           |   |   |   | 6,594 |   |
| Government subsidy income                                                            |   |                                       | (11,418         | ) |   |   | - |   |
| Deductions permitted for salaries paid to physically-challenged employees            |   |                                       | (8,774          | ) |   |   | (8,202 | ) |
| Additional deductions permitted for R&D costs                                    |   |                                       | (32,629         | ) |   |   | - |   |
| Current year losses from PRC subsidiaries                                            |   |                                       | 60,663          |   |   |   | - |   |
| Current year losses from U.S. parent holding company not subject to PRC income taxes |   |                                       | 29,033          |   |   |   | 21,314 |   |
|                                                                                 |   |                                       |            |   |   |   |   |   |
| Total provision for income taxes                                                     |   |                                       |            |   |   |   |   |   |
| Computed tax @ statutory rate of 25%                                                 |   | $                                     | 1,422,030  |   |   |  $ | 585,723  |   |

----

|                       |   | Six Months Ended December 31, |    |
|----------------------------|--------|-------------------------------|---------|
|                       |   | 2010                          |    |   | 2009 |   |
|                       |   |                          |    |   |   |   |
| Cash paid for interest     |   | $                             | 357,993 |   |   | $ | 137,504 |   |
| Cash paid for income taxes |   | $                             | -       |   |   | $ | - |   |

----

|                                                           |   | December 31, |             |   | December 31, |   |             | Effect of |   |
|----------------------------------------------------------------|--------|--------------|------------------|--------|--------------|--------|------------------|-----------|--------|
|                                                           |   | 2010         |             |   | 2010         |   |             | Change    |   |
| Assets                                                         |   | (Restated)   |             |   | (Originally) |   |             |      |   |
| Current assets:                                                |   |         |             |   |         |   |             |      |   |
| Cash and cash equivalents                                      |   | $            | 761,460          |   |         | $      | 761,460          |      |   |   |   |
| Restricted cash                                                |   |         | 3,494,084        |   |         |   | 3,494,084        |      |   |   |   |
| Accounts receivable, net of allowance for  doubtful  |   |         |             |   |         |   |             |      |   |   |   |
| accounts of $85,783 at December 31, 2010,                      |   |         |  17,292,392 |   |         |   |  17,292,392 |      |   |   |   |
| Inventory                                                      |   |         | 5,234,237        |   |         |   | 5,234,237        |      |   |   |   |
| Loans to unrelated parties                                     |   |         | 1,888,835        |   |         |   | 1,888,835        |      |   |   |   |
| Bank loan security deposits                                    |   |         | 1,089,206        |   |         |   | 1,089,206        |      |   |   |   |
| Advance payments                                               |   |         | 1,521,188        |   |         |   | 1,929,467        |      |   |   | (408,279 | ) |
| Due from related party                                         |   |         | -                |   |         |   | -                |      |   |   |   |   |
| Other current assets                                           |   |         | 1,227,666        |   |         |   | 1,227,666        |      |   |   |   |   |
| Total current assets                                           |   |         | 32,509,068       |   |         |   | 32,917,347       |      |   |   | (408,279 | ) |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Property and equipment, net                                    |   |         | 32,394,534       |   |         |   | 32,394,534       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Other assets:                                                  |   |         |             |   |         |   |             |      |   |   |   |   |
| Intangibles, net                                               |   |         | 15,485,194       |   |         |   | 15,485,194       |      |   |   |   |   |
| Advance payments – non-current                           |   |         | 408,279          |   |         |   | -                |      |   |   | 408,279 |   |
| Advance payments – Research & Development            |   |         | 2,151,106        |   |         |   | 2,151,106        |      |   |   |   |   |
| Total other assets                                             |   |         | 18,044,579       |   |         |   | 17,636,300       |      |   |   | 408,279 |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Total assets                                                   |   | $            | 82,948,181       |   |         | $      | 82,948,181       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Liabilities                                                    |   |         |             |   |         |   |             |      |   |   |   |   |
| Current liabilities:                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Accounts payable and accrued expenses                          |   | $            | 2,770,621        |   |         | $      | 2,770,621        |      |   |   |   |   |
| Trade notes payable                                            |   |         | 3,034,000        |   |         |   | 3,034,000        |      |   |   |   |   |
| Short-term bank loans                                          |   |         | 9,086,830        |   |         |   | 9,086,830        |      |   |   |   |   |
| Current portion of long-term bank loans                        |   |         | 758,500          |   |         |   | 758,500          |      |   |   |   |   |
| Loans from unrelated parties                                   |   |         | 2,220,740        |   |         |   | 2,220,740        |      |   |   |   |   |
| Advances from customers                                        |   |         | 1,007,947        |   |         |   | 1,007,947        |      |   |   |   |   |
| Income taxes payable                                           |   |         | 3,120,515        |   |         |   | 3,120,515        |      |   |   |   |   |
| Other current liabilities                                      |   |         | 1,334,564        |   |         |   | 1,334,564        |      |   |   |   |   |
| Total current liabilities                                      |   |         | 23,333,717       |   |         |   | 23,333,717       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Long-term bank loan                                            |   |         | 14,108,100       |   |         |   | 14,108,100       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Total liabilities                                              |   |         | 37,441,817       |   |         |   | 37,441,817       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Equity                                                         |   |         |             |   |         |   |             |      |   |   |   |   |
| Stockholders’ equity:                                    |   |         |             |   |         |   |             |      |   |   |   |   |
| Common stock, $0.001 par value, 200,000,000 shares authorized, |   |         |             |   |         |   |             |      |   |   |   |   |
| 29,715,640 and 29,715,666 shares issued and outstanding at     |   |         |             |   |         |   |             |      |   |   |   |   |
| December 31, 2010 and June 30, 2010, respectively              |   |         | 29,716      |   |         |   |  29,716     |      |   |   |   |   |
| Additional paid-in capital                                     |   |         | 21,838,047       |   |         |   | 21,838,047       |      |   |   |   |   |
| Statutory reserves                                             |   |         | 1,181,189        |   |         |   | 1,181,189        |      |   |   |   |   |
| Retained earnings                                              |   |         | 17,994,979       |   |         |   | 17,994,979       |      |   |   |   |   |
| Accumulated other comprehensive income                         |   |         | 3,447,965        |   |         |   | 3,447,965        |      |   |   |   |   |
| Total stockholders’ equity                               |   |         | 44,491,896       |   |         |   | 44,491,896       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Noncontrolling interest                                        |   |         | 1,014,468        |   |         |   | 1,014,468        |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Total equity                                                   |   |         | 45,506,364       |   |         |   | 45,506,364       |      |   |   |   |   |
|                                                           |   |         |             |   |         |   |             |      |   |   |   |   |
| Total liabilities and equity                                   |   | $            | 82,948,181       |   |         | $      | 82,948,181       |      |   |   |   |   |

----

|                                                          |   | For the Three Months Ended December 31,2010 |       |   | For the Three Months Ended December 31,2010 |   |       | Effect of Change |   |
|---------------------------------------------------------------|--------|---------------------------------------------|------------|--------|---------------------------------------------|--------|------------|------------------|--------|
|                                                          |   | (Restated)                                  |       |   | (Originally)                                |   |       |             |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |
| Sales                                                         |   | $                                           | 14,871,164 |   |                                        | $      | 14,871,164 |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Cost of sales                                                 |   |                                        | 10,954,272 |   |                                        |   | 10,954,272 |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Gross profit                                                  |   |                                        | 3,916,892  |   |                                        |   | 3,916,892  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Operating expenses:                                           |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Selling expenses                                              |   |                                        | 149,643    |   |                                        |   | 149,643    |             |   |   |   |
| General and administrative expenses                           |   |                                        | 1,032,259  |   |                                        |   | 1,032,259  |             |   |   |   |
| Total operating expenses                                      |   |                                        | 1,181,902  |   |                                        |   | 1,181,902  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Income from operations                                        |   |                                        | 2,734,990  |   |                                        |   | 2,734,990  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Other income (expenses):                                      |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Government subsidy                                            |   |                                        | 180,155    |   |                                        |   | 180,155    |             |   |   |   |
| Interest Income                                               |   |                                        | 1,462      |   |                                        |   | -          |             |   |   | 1,462 |   |
| Interest expense                                              |   |                                        | (494,852   | )      |                                        |   | (493,390   | )                |   |   | (1,462 | ) |
| Other income (expenses)                                       |   |                                        | 107,024    |   |                                        |   | 107,024    |             |   |   |   |   |
| Total other income (expenses)                                 |   |                                        | (206,211   | )      |                                        |   | (206,211   | )                |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Income before provision for income tax                        |   |                                        | 2,528,779  |   |                                        |   | 2,528,779  |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Provision for income tax                                      |   |                                        | 614,895    |   |                                        |   | 614,895    |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Net income                                                    |   |                                        | 1,913,884  |   |                                        |   | 1,913,884  |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Less: Net loss attributable to noncontrolling interest   |   |                                        | (22,681    | )      |                                        |   | (22,681    | )                |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Net income attributable to BEFUT International Co., Ltd. |   |                                        | 1,936,565  |   |                                        |   | 1,936,565  |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Basic earnings per share                                      |   | $                                           | 0.07       |   |                                        | $      | 0.07       |             |   |   |   |   |
| Diluted earnings per share                                    |   | $                                           | 0.07       |   |                                        | $      | 0.07       |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Weighted average number of common shares                      |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| outstanding:                                                  |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Basic                                                         |   |                                        | 29,715,640 |   |                                        |   | 29,715,640 |             |   |   |   |   |
| Diluted                                                       |   |                                        | 29,786,677 |   |                                        |   | 29,786,677 |             |   |   |   |   |

----

|                                                          |   | For the Three Months Ended December 31,2009 |       |   | For the Three Months Ended December 31,2009 |   |       | Effect of Change |   |
|---------------------------------------------------------------|--------|---------------------------------------------|------------|--------|---------------------------------------------|--------|------------|------------------|--------|
|                                                          |   | (Restated)                                  |       |   | (Originally)                                |   |       |             |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |
| Sales                                                         |   | $                                           | 7,126,044  |   |                                        | $      | 7,126,044  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Cost of sales                                                 |   |                                        | 5,235,323  |   |                                        |   | 5,235,323  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Gross profit                                                  |   |                                        | 1,890,721  |   |                                        |   | 1,890,721  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Operating expenses:                                           |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Selling expenses                                              |   |                                        | 14,828     |   |                                        |   | 14,828     |             |   |   |   |
| General and administrative expenses                           |   |                                        | 442,264    |   |                                        |   | 442,264    |             |   |   |   |
| Total operating expenses                                      |   |                                        | 457,092    |   |                                        |   | 457,092    |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Income from operations                                        |   |                                        | 1,433,629  |   |                                        |   | 1,433,629  |             |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Other income (expenses):                                      |   |                                        |       |   |                                        |   |       |             |   |   |   |
| Government subsidy                                            |   |                                        | 304,704    |   |                                        |   | 304,704    |             |   |   |   |
| Interest Income                                               |   |                                        | 3,728      |   |                                        |   | -          |             |   |   | 3,728 |   |
| Interest expense                                              |   |                                        | (8,923     | )      |                                        |   | (5,195     | )                |   |   | (3,728 | ) |
| Other income (expenses)                                       |   |                                        | (403,138   | )      |                                        |   | (403,138   | )                |   |   |   |   |
| Total other income (expenses)                                 |   |                                        | (103,629   | )      |                                        |   | (103,629   | )                |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Income before provision for income tax                        |   |                                        | 1,330,000  |   |                                        |   | 1,330,000  |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Provision for income tax                                      |   |                                        | 336,819    |   |                                        |   | 336,819    |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Net income                                                    |   |                                        | 993,181    |   |                                        |   | 993,181    |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Less: Net loss attributable to noncontrolling interest        |   |                                        | (963       | )      |                                        |   | (963       | )                |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Net income attributable to BEFUT International Co., Ltd. |   |                                        | 994,144    |   |                                        |   | 994,144    |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Basic earnings per share                                      |   | $                                           | 0.03       |   |                                        | $      | 0.03       |             |   |   |   |   |
| Diluted earnings per share                                    |   | $                                           | 0.03       |   |                                        | $      | 0.03       |             |   |   |   |   |
|                                                          |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Weighted average number of common shares                      |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| outstanding:                                                  |   |                                        |       |   |                                        |   |       |             |   |   |   |   |
| Basic                                                         |   |                                        | 29,511,277 |   |                                        |   | 29,511,277 |             |   |   |   |   |
| Diluted                                                       |   |                                        | 30,280,532 |   |                                        |   | 30,280,532 |             |   |   |   |   |

----

|                                                        |   | For the Six Months Ended December 31,2010 |       |   | For the Six Months Ended December 31,2010 |   |       | Effect of Change |   |
|-------------------------------------------------------------|--------|------------------------------------------------|------------|--------|------------------------------------------------|--------|------------|------------------|--------|
|                                                        |   | (Restated)                                     |       |   | (Originally)                                   |   |       |             |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |
| Sales                                                       |   | $                                              | 30,801,975 |   |                                           | $      | 30,801,975 |             |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Cost of sales                                               |   |                                           | 22,625,032 |   |                                           |   | 22,625,032 |             |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Gross profit                                                |   |                                           | 8,176,943  |   |                                           |   | 8,176,943  |             |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Operating expenses:                                         |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Selling expenses                                            |   |                                           | 188,250    |   |                                           |   | 188,250    |             |   |   |   |
| General and administrative expenses                         |   |                                           | 2,043,879  |   |                                           |   | 2,043,879  |             |   |   |   |
| Total operating expenses                                    |   |                                           | 2,232,129  |   |                                           |   | 2,232,129  |             |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Income from operations                                      |   |                                           | 5,944,814  |   |                                           |   | 5,944,814  |             |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Other income (expenses):                                    |   |                                           |       |   |                                           |   |       |             |   |   |   |
| Government subsidy                                          |   |                                           | 316,642    |   |                                           |   | 316,642    |             |   |   |   |
| Interest Income                                             |   |                                           | 9,966      |   |                                           |   | -          |             |   |   | 9,966 |   |
| Interest expense                                            |   |                                           | (889,754   | )      |                                           |   | (879,788   | )                |   |   | (9,966 | ) |
| Other income (expenses)                                     |   |                                           | 138,145    |   |                                           |   | 138,145    |             |   |   |   |   |
| Total other income (expenses)                               |   |                                           | (425,001   | )      |                                           |   | (425,001   | )                |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Income before provision for income tax                      |   |                                           | 5,519,813  |   |                                           |   | 5,519,813  |             |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Provision for income tax                                    |   |                                           | 1,422,030  |   |                                           |   | 1,422,030  |             |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Net income                                                  |   |                                           | 4,097,783  |   |                                           |   | 4,097,783  |             |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Less: Net loss attributable to noncontrolling interest |   |                                           | (87,038    | )      |                                           |   | (87,038    | )                |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Net income attributable to BEFUT International Co., Ltd.    |   |                                           | 4,184,821  |   |                                           |   | 4,184,821  |             |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Basic earnings per share                                    |   | $                                              | 0.14       |   |                                           | $      | 0.14       |             |   |   |   |   |
| Diluted earnings per share                                  |   | $                                              | 0.14       |   |                                           | $      | 0.14       |             |   |   |   |   |
|                                                        |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Weighted average number of common shares                    |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| outstanding:                                                |   |                                           |       |   |                                           |   |       |             |   |   |   |   |
| Basic                                                       |   |                                           | 29,715,640 |   |                                           |   | 29,715,640 |             |   |   |   |   |
| Diluted                                                     |   |                                           | 29,771,813 |   |                                           |   | 29,771,813 |             |   |   |   |   |

----

|                                                     |   | For the Six Months Ended December 31,2009 |       |   | For the Six Months Ended December 31,2009 |   |       | Effect ofChange |   |
|----------------------------------------------------------|--------|-------------------------------------------|------------|--------|-------------------------------------------|--------|------------|-----------------|--------|
|                                                     |   | (Restated)                                |       |   | (Originally)                              |   |       |            |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |
| Sales                                                    |   | $                                         | 12,609,703 |   |                                      | $      | 12,609,703 |            |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Cost of sales                                            |   |                                      | 9,098,097  |   |                                      |   | 9,098,097  |            |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Gross profit                                             |   |                                      | 3,511,606  |   |                                      |   | 3,511,606  |            |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Operating expenses:                                      |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Selling expenses                                         |   |                                      | 36,701     |   |                                      |   | 36,701     |            |   |   |   |
| General and administrative expenses                      |   |                                      | 1,030,549  |   |                                      |   | 1,030,549  |            |   |   |   |
| Total operating expenses                                 |   |                                      | 1,067,250  |   |                                      |   | 1,067,250  |            |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Income from operations                                   |   |                                      | 2,444,356  |   |                                      |   | 2,444,356  |            |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Other income (expenses):                                 |   |                                      |       |   |                                      |   |       |            |   |   |   |
| Government subsidy                                       |   |                                      | 354,658    |   |                                      |   | 354,658    |            |   |   |   |
| Interest income                                          |   |                                      | 3,728      |   |                                      |   | -          |            |   |   | 3,728 |   |
| Interest expense                                         |   |                                      | (141,332   | )      |                                      |   | (137,504   | )               |   |   | (3,728 | ) |
| Other income (expenses)                                  |   |                                      | (397,441   | )      |                                      |   | (397,441   | )               |   |   |   |   |
| Total other income (expenses)                            |   |                                      | (180,287   | )      |                                      |   | (180,287   | )               |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Income before provision for income tax                   |   |                                      | 2,264,069  |   |                                      |   | 2,264,069  |            |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Provision for income tax                                 |   |                                      | 585,723    |   |                                      |   | 585,723    |            |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Net income                                               |   |                                      | 1,678,346  |   |                                      |   | 1,678,346  |            |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Less: Net loss attributable to noncontrolling interest   |   |                                      | (6,121     | )      |                                      |   | (6,121     | )               |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Net income attributable to BEFUT International Co., Ltd. |   |                                      | 1,684,467  |   |                                      |   | 1,684,467  |            |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Basic earnings per share                                 |   | $                                         | 0.06       |   |                                      | $      | 0.06       |            |   |   |   |   |
| Diluted earnings per share                               |   | $                                         | 0.06       |   |                                      | $      | 0.06       |            |   |   |   |   |
|                                                     |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Weighted average number of common shares                 |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| outstanding:                                             |   |                                      |       |   |                                      |   |       |            |   |   |   |   |
| Basic                                                    |   |                                      | 29,511,277 |   |                                      |   | 29,511,277 |            |   |   |   |   |
| Diluted                                                  |   |                                      | 30,280,532 |   |                                      |   | 30,280,532 |            |   |   |   |   |

----

|                                                                   |   | For the Six Months Ended December 31,2010 |       |   | For the Six Months Ended December 31,2010 |   |       | Effect of Change |   |
|------------------------------------------------------------------------|--------|-------------------------------------------|------------|--------|-------------------------------------------|--------|------------|------------------|--------|
|                                                                   |   | (Restated)                                |       |   | (Originally)                              |   |       |             |   |
| Cash flows from operating activities:                                  |   |                                      |       |   |                                      |   |       |             |   |
| Net Income                                                             |   | $                                         | 4,097,783  |   |                                      | $      | 4,097,783  |             |   |   |   |
| Adjustments to reconcile net income to net cash provided by            |   |                                      |       |   |                                      |   |       |             |   |   |   |
| (used in) operating activities:                                        |   |                                      |       |   |                                      |   |       |             |   |   |   |
| Depreciation and amortization                                          |   |                                      | 1,583,652  |   |                                      |   | 1,583,652  |             |   |   |   |
| Changes in current assets and current liabilities:                     |   |                                      |       |   |                                      |   |       |             |   |   |   |
| Restricted Cash                                                        |   |                                      | (2,239,572 | )      |                                      |   | -          |             |   |   | (2,239,572 | ) |
| Accounts receivable                                                    |   |                                      | (7,894,969 | )      |                                      |   | (7,894,969 | )                |   |   |   |   |
| Inventory                                                              |   |                                      | (2,574,960 | )      |                                      |   | (2,574,960 | )                |   |   |   |   |
| Advance payments                                                       |   |                                      | (1,066,359 | )      |                                      |   | (1,066,359 | )                |   |   |   |   |
| Other current assets                                                   |   |                                      | (935,345   | )      |                                      |   | (935,345   | )                |   |   |   |   |
| Accounts payable and accrued expenses                                  |   |                                      | (176,022   | )      |                                      |   | (176,022   | )                |   |   |   |   |
| Trade notes payable                                                    |   |                                      | 2,983,200  |   |                                      |   | 2,983,200  |             |   |   |   |   |
| Advances from customers                                                |   |                                      | 450,523    |   |                                      |   | 450,523    |             |   |   |   |   |
| Income taxes payable                                                   |   |                                      | 1,391,612  |   |                                      |   | 1,391,612  |             |   |   |   |   |
| Other current liabilities                                              |   |                                      | 711,714    |   |                                      |   | 711,714    |             |   |   |   |   |
| Total adjustments                                                      |   |                                      | (7,766,526 | )      |                                      |   | (5,526,954 | )                |   |   | (2,239,572 | ) |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Net cash provided by (used in) operating activities                    |   |                                      | (3,668,743 | )      |                                      |   | (1,429,171 | )                |   |   | (2,239,572 | ) |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Cash flows from investing activities:                                  |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Due from related party                                                 |   |                                      | 478,809    |   |                                      |   | 478,809    |             |   |   |   |   |
| Additions to property and equipment                                    |   |                                      | (755,610   | )      |                                      |   | (755,610   | )                |   |   |   |   |
| Additions to construction in progress                                  |   |                                      | (39,808    | )      |                                      |   | (39,808    | )                |   |   |   |   |
| Advance payment for fixed assets                                       |   |                                      | (104,131   | )      |                                      |   | (104,131   | )                |   |   |   |   |
| Acquisition of intangible assets                                       |   |                                      | (5,964     | )      |                                      |   | (5,964     | )                |   |   |   |   |
| Long-term investment                                                   |   |                                      | -          |   |                                      |   | -          |             |   |   |   |   |
| Loans to unrelated parties                                             |   |                                      | (789,809   | )      |                                      |   | (789,809   | )                |   |   |   |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Net cash used in investing activities                                  |   |                                      | (1,216,513 | )      |                                      |   | (1,216,513 | )                |   |   |   |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Cash flows from financing activities:                                  |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Restricted cash                                                        |   |                                      | -          |   |                                      |   | (2,239,572 | )                |   |   | 2,239,572 |   |
| Bank loan security deposits                                            |   |                                      | (26,849    | )      |                                      |   | (26,849    | )                |   |   |   |   |
| Loans from unrelated party                                             |   |                                      | 1,819,753  |   |                                      |   | 1,819,753  |             |   |   |   |   |
| Proceeds of short-term bank loans                                      |   |                                      | 2,844,524  |   |                                      |   | 2,844,524  |             |   |   |   |   |
| Repayments of long-term bank loans                                     |   |                                      | (298,320   | )      |                                      |   | (298,320   | )                |   |   |   |   |
| Capital contribution from noncontrolling interest for BEFUT Zhong Xing |   |                                      | 59,183     |   |                                      |   | 59,183     |             |   |   |   |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Net cash provided by financing activities                              |   |                                      | 4,398,291  |   |                                      |   | 2,158,719  |             |   |   | 2,239,572 |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Effect of foreign currency translation on cash                         |   |                                      | (70,748    | )      |                                      |   | (70,748    | )                |   |   |   |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Net increase (decrease)  in cash and cash equivalents        |   |                                      | (557,713   | )      |                                      |   | (557,713   | )                |   |   |   |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Cash and cash equivalents – beginning                            |   |                                      | 1,319,173  |   |                                      |   | 1,319,173  |             |   |   |   |   |
|                                                                   |   |                                      |       |   |                                      |   |       |             |   |   |   |   |
| Cash and cash equivalents – ending                               |   | $                                         | 761,460    |   |                                      | $      | 761,460    |             |   |   |   |   |

----

|                                                                                                   |   | For the Six Months Ended December 31,2009 |        |   | For the Six Months Ended December 31,2009 |   |        | Effect of Change |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-------------|--------|-------------------------------------------|--------|-------------|------------------|--------|
|                                                                                                   |   | (Restated)                                |        |   | (Orginally)                               |   |        |             |   |
| Cash flows from operating activities:                                                                  |   |                                      |        |   |                                      |   |        |             |   |
| Net Income                                                                                             |   | $                                         | 1,678,346   |   |                                      | $      | 1,678,346   |             |   |   |   |
| Adjustments to reconcile net income to net cash provided by  (used in) operating activities: |   |                                      |        |   |                                      |   |        |             |   |   |   |
| Depreciation and amortization                                                                          |   |                                      | 718,680     |   |                                      |   | 718,680     |             |   |   |   |
| Changes in current assets and current liabilities:                                                     |   |                                      |        |   |                                      |   |        |             |   |   |   |
| Restricted Cash                                                                                        |   |                                      | 586,000     |   |                                      |   | -           |             |   |   | 586,000 |   |
| Accounts receivable                                                                                    |   |                                      | (53,500     | )      |                                      |   | (53,500     | )                |   |   |   |   |
| Inventory                                                                                              |   |                                      | (1,000,998  | )      |                                      |   | (1,000,998  | )                |   |   |   |   |
| Advance payments                                                                                       |   |                                      | (197,666    | )      |                                      |   | (197,666    | )                |   |   |   |   |
| Other current assets                                                                                   |   |                                      | (1,032,681  | )      |                                      |   | (1,032,681  | )                |   |   |   |   |
| Accounts payable and accrued expenses                                                                  |   |                                      | 1,637,214   |   |                                      |   | 1,637,214   |             |   |   |   |   |
| Trade notes payable                                                                                    |   |                                      | (1,173,120  | )      |                                      |   | (1,173,120  | )                |   |   |   |   |
| Advances from customers                                                                                |   |                                      | (174,496    | )      |                                      |   | (174,496    | )                |   |   |   |   |
| Income taxes payable                                                                                   |   |                                      | 585,724     |   |                                      |   | 585,724     |             |   |   |   |   |
| Other current liabilities                                                                              |   |                                      | 104,016     |   |                                      |   | 104,016     |             |   |   |   |   |
| Total adjustments                                                                                      |   |                                      | (827        | )      |                                      |   | (586,827    | )                |   |   | 586,000 |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Net cash provided by (used in) operating activities                                                    |   |                                      | 1,677,519   |   |                                      |   | 1,091,519   |             |   |   | 586,000 |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Cash flows from investing activities:                                                                  |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Due from related party                                                                                 |   |                                      | -           |   |                                      |   | -           |             |   |   |   |   |
| Additions to property and equipment                                                                    |   |                                      | (1,594,161  | )      |                                      |   | (1,594,161  | )                |   |   |   |   |
| Additions to construction in progress                                                                  |   |                                      | (2,442,107  | )      |                                      |   | (2,442,107  | )                |   |   |   |   |
| Advance payment for fixed assets                                                                       |   |                                      | (8,011,520  | )      |                                      |   | (8,011,520  | )                |   |   |   |   |
| Acquisition of intangible assets                                                                       |   |                                      | (6,452      | )      |                                      |   | (6,452      | )                |   |   |   |   |
| Long-term investment                                                                                   |   |                                      | 2,933       |   |                                      |   | 2,933       |             |   |   |   |   |
| Loans to unrelated parties                                                                             |   |                                      | 1,521,543   |   |                                      |   | 1,521,543   |             |   |   |   |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Net cash used in investing activities                                                                  |   |                                      | (10,529,764 | )      |                                      |   | (10,529,764 | )                |   |   |   |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Cash flows from financing activities:                                                                  |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Restricted cash                                                                                        |   |                                      | -           |   |                                      |   | 586,000     |             |   |   | (586,000 | ) |
| Bank loan security deposits                                                                            |   |                                      | (163,877    | )      |                                      |   | (163,877    | )                |   |   |   |   |
| Loans from unrelated party                                                                             |   |                                      | 2,274,251   |   |                                      |   | 2,274,251   |             |   |   |   |   |
| Proceeds (repayment) of short-term bank loans                                                          |   |                                      | (2,786,160  | )      |                                      |   | (2,786,160  | )                |   |   |   |   |
| Proceeds (repayment) of long-term bank loans                                                           |   |                                      | 14,664,000  |   |                                      |   | 14,664,000  |             |   |   |   |   |
| Capital contribution from noncontrolling interest for BEFUT Zhong Xing                                 |   |                                      | 43,992      |   |                                      |   | 43,992      |             |   |   |   |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Net cash provided by financing activities                                                              |   |                                      | 14,032,206  |   |                                      |   | 14,618,206  |             |   |   | (586,000 | ) |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Effect of foreign currency translation on cash                                                         |   |                                      | (4,369      | )      |                                      |   | (4,369      | )                |   |   |   |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Net increase (decrease)  in cash and cash equivalents                                        |   |                                      | 5,175,592   |   |                                      |   | 5,175,592   |             |   |   |   |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Cash and cash equivalents – beginning                                                            |   |                                      | 210,301     |   |                                      |   | 210,301     |             |   |   |   |   |
|                                                                                                   |   |                                      |        |   |                                      |   |        |             |   |   |   |   |
| Cash and cash equivalents – ending                                                               |   | $                                         | 5,385,893   |   |                                      | $      | 5,385,893   |             |   |   |   |   |

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

| Item                                                  |   | Three-monthsendedDecember31, 2010 |       |   | Three-monthsendedDecember31, 2009 |   |       | %Change |   |   | Six monthsendedDecember31, 2010 |   |   | Six monthsendedDecember31, 2009 |       |   | %Change |   |
|-------------------------------------------------------|--------|----------------------------------------|------------|--------|----------------------------------------|--------|------------|---------|--------|--------|-------------------------------------------|--------|--------|-------------------------------------------|------------|--------|---------|--------|
| Sales                                                 |   | $                                      | 14,871,164 |   |                                   | $      | 7,126,044  |    |   |   | 109                                       | %      |   | $                                         | 30,801,975 |   |    | $      | 12,609,703 |   |   |   | 144 | % |
| Cost of sales                                         |   | $                                      | 10,954,272 |   |                                   | $      | 5,235,323  |    |   |   | 109                                       | %      |   | $                                         | 22,625,032 |   |    | $      | 9,098,097 |   |   |   | 149 | % |
| Gross profit                                          |   | $                                      | 3,916,892  |   |                                   | $      | 1,890,721  |    |   |   | 107                                       | %      |   | $                                         | 8,176,943  |   |    | $      | 3,511,606 |   |   |   | 133 | % |
| Total operating expenses                              |   | $                                      | 1,181,902  |   |                                   | $      | 457,092    |    |   |   | 159                                       | %      |   | $                                         | 2,232,129  |   |    | $      | 1,067,250 |   |   |   | 109 | % |
| Total other income/(expenses)                         |   | $                                      | (206,211   | )      |                                   | $      | (103,629   | )       |   |   | (99                                       | )%     |   | $                                         | (425,001   | )      |    | $      | (180,287 | ) |   |   | (136 | )% |
| Net income                                            |   | $                                      | 1,913,884  |   |                                   | $      | 993,181    |    |   |   | 93                                        | %      |   | $                                         | 4,097,783  |   |    | $      | 1,678,346 |   |   |   | 144 | % |
| Gross profit margin                                   |   |                                   | 26.34      | %      |                                   |   | 26.53      | %       |   |   | (0.19                                     | )%     |   |                                      | 26.55      | %      |    |   | 27.85 | % |   |   | (1.30 | )% |
| Basic earnings per share                              |   | $                                      | 0.07       |   |                                   | $      | 0.03       |    |   |   | 133                                       | %      |   | $                                         | 0.14       |   |    | $      | 0.06 |   |   |   | 133 | % |
| Diluted earnings per share                            |   |                                   | 0.07       |   |                                   |   | 0.03       |    |   |   | 133                                       | %      |   |                                      | 0.14       |   |    |   | 0.06 |   |   |   | 133 | % |
| Weighted average number of common shares outstanding: |   |                                   |       |   |                                   |   |       |    |   |   |                                      |   |   |                                      |       |   |    |   |   |   |   |   |   |   |
| Basic                                                 |   |                                   | 29,715,640 |   |                                   |   | 29,511,277 |    |   |   | 0.69                                      | %      |   |                                      | 29,715,640 |   |    |   | 29,511,277 |   |   |   | 0.69 | % |
| Diluted                                               |   |                                   | 29,786,677 |   |                                   |   | 30,280,532 |    |   |   | -1.63                                     | %      |   |                                      | 29,771,813 |   |    |   | 30,280,532 |   |   |   | -1.68 | % |

----

----

----

| (dollars in thousands, except ratios) |   | December 31,2010 |   |   | June 30,2010 |   |
|-----------------------------------------------------------|--------|-----------------------|--------|--------|-------------------|--------|
|                                                      |   |                  |   |   |              |   |
| Cash and cash equivalents and restricted cash             |   | $                     | 4,256  |   |              | $      | 2,500 |   |
|                                                      |   |                  |   |   |              |   |   |   |
| Working capital                                           |   | $                     | 9,175  |   |              | $      | 4,833 |   |
|                                                      |   |                  |   |   |              |   |   |   |
| Ratio of current assets to current liabilities            |   | 1.4:1                 |   |   | 1.4 :1            |   |

|                                           |   | For the six months ended |   |
|-----------------------------------------------------|--------|----------------------------------------------|--------|
| (dollars in thousands)                    |   | December 31, 2010                  |   |   | December 31, 2009 |   |
| Net cash provided by (used in) operating activities |   | $                                            | (3,669 | ) |   | $ | 1,678 |   |
| Net cash used in investing activities               |   | $                                            | (1,217 | ) |   | $ | (10,530 | ) |
| Net cash provided by financing activities           |   | $                                            | 4,398  |   |   | $ | 14,032 |   |
| Net increase (decrease) in cash, cash equivalents   |   | $                                            | (558   | ) |   | $ | 5,176 |   |

----

| Creditors                                     |   | Loan Amount |       | Interest Rate |   | Term     |     | Maturity Date |
|-----------------------------------------------|--------|------------------|------------|--------------------|--------|----------|----------|--------------------|
|                                          |   |             |       |               |   |     |     |               |
| Harbin Bank                                   |   | $                | 3,034,000  |               | 7.55   | % * | 1 year   |               | 09/13/11 |
|                                          |   |             |       |               |   |     |     |               |   |
| Bank of Dalian                                |   | $                | 3,034,000  |               | 7.55   | % * | 1 year   |               | 11/22/11 |
|                                          |   |             |       |               |   |     |     |               |   |
| Dalian Economic Zone Xinhui Town Bank         |   | $                | 1,501,830  |               | 8.72   | % + | 1 year   |               | 10/20/11 |
|                                          |   |             |       |               |   |     |     |               |   |
| Bank of East Asia                             |   | $                | 1,517,000  |               | 7.55   | % * | 6 months |               | 06/30/11 |
|                                          |   |             |       |               |   |     |     |               |   |
| PRC Development Bank Joint Equity Corporation |   | $                | 14,866,600 |               | 6.72   | % # | 7 years  |               | 11/01/16 |

|         |   | December 31,2010 |      |   | June 30, 2010 |   |
|-------------------|--------|-----------------------|-----------|--------|-------------------------|--------|
| Category          |   |                  |      |   |                    |   |
| Raw materials     |   | $                     | 2,339,670 |   |                    | $      | 1,093,193 |   |
| Work-in-process   |   |                  | 365,680   |   |                    |   | 323,275 |   |
| Finished goods    |   |                  | 2,528,887 |   |                    |   | 1,127,321 |   |
| Total inventories |   | $                     | 5,234,237 |   |                    | $      | 2,543,789 |   |

----

|   | A. | The total equity investment at risk in the legal entity to be consolidated is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, including equity holders; or |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | As a group, holders of the equity investment at risk lack any one of the following characteristics of a controlling financial interest: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | The power, through voting rights or similar rights to direct the activities of an entity that most significantly impact that entity’s economic performance. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The obligation to absorb the expected losses of the legal entity. Such an obligation does not exist if the shareholders/investors are directly or indirectly protected from losses or are guaranteed a return on their investment by the legal entity itself or by other parties involved with the legal entity. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3. | The right to receive expected residual returns of the legal entity. Such right is not considered to be present if the residual returns are capped by the legal entity's governing documents or by other arrangements with other variable interest holders or the legal entity itself. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|---------|------------------------------------------------------------|

| Item 4. | Controls and Procedures |
|---------|-------------------------|

|   | • | Establishing policies and procedures of transaction level and type to improve our internal control environment; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | • | Implementing a financial closing process check list including major book closure steps to perform consolidation and reviews; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | • | Recruiting qualified accounting professionals with sufficient US GAAP knowledge to enhance the quality of our financial reporting preparation. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 6. | Exhibits |
|---------|----------|

----

|                     | BEFUT INTERNATIONAL CO., LTD.                                  |
|--------------------------|----------------------------------------------------------------|
|                     |                                                           |
| Date: September 16, 2011 | By:                                                            | /s/ Hongbo Cao |
|                     | Name: Hongbo Cao                                               |
|                     | Title: President and Chief Executive Officer                   |
|                     | (principal executive officer)                                  |
|                     |                                                           |
| Date: September 16, 2011 | By:                                                            | /s/ Mei Yu |
|                     | Name: Mei Yu                                                   |
|                     | Title: Chief Financial Officer                                 |
|                     | (principal financial officer and principal accounting officer) |

----

| No.    |   | Description                                                                                         |
|--------|--------|-----------------------------------------------------------------------------------------------------|
|   |   |                                                                                                |
| 31.1   |   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                |
| 31.2   |   | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                |
| 32.1   |   | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                |
| 32.2   |   | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

----