SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the quarterly period ended December 31, 2009





OR





o
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT





For
the transition period from ______ to __________





COMMISSION
FILE NUMBER: 333-128532





CHISEN ELECTRIC
CORPORATION


(Exact
name of registrant as specified in its charter)





Nevada
            
            20-2190950(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (IRS
      Employer
              Identification
      No.)





Jingyi
Road, Changxing Economic Development Zone, Changxing, Zhejiang
Province,


The
People’s Republic of China


(Address
of principal executive offices)





(011)
0572-6267666


(Registrant’s
Telephone Number, Including Area Code)





(Former
Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)





Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days. Yes x No o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).  Yes o     No
o





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




Large
      Accelerated Filer o
            Accelerated
      Filer o
            Non-Accelerated
      Filer o
            Smaller
      Reporting Company x





Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.  Yes  o No x





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date:  As of February 10, 2010, the registrant
had 50,000,000 shares of common stock, par value $0.001 per share, issued and
outstanding.







TABLE
OF CONTENTS





PART
      I FINANCIAL INFORMATION
                
                3ITEM
      1. FINANCIAL STATEMENTS
                
                3ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION
                
                6ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
                
                16ITEM
      4. CONTROLS AND PROCEDURES
                
                17PART
      II OTHER INFORMATION
                
                17ITEM
      1. LEGAL PROCEEDINGS
                
                17ITEM
      1A. RISK FACTORS
                
                17ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
                
                17ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
                
                17ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
                
                17ITEM
      5. OTHER INFORMATION
                
                17ITEM
      6. EXHIBITS
                
                18SIGNATURES
                
                21EXHIBIT
      31.1EXHIBIT
      31.2EXHIBIT
      32.1EXHIBIT
      32.2




2


PART
I


FINANCIAL
INFORMATION




ITEM
1. FINANCIAL STATEMENTS





PageUnaudited
      Condensed Consolidated Statements of Operations and Other
      Comprehensive Income
                  
                  F-1Unaudited
      Condensed Consolidated Balance Sheets
                  
                  F-2 – F-3Unaudited
      Condensed Consolidated Statements of Changes in Stockholders’
      Equity
                  
                  F-4Unaudited
      Condensed Consolidated Statements of Cash Flows
                  
                  F-5Notes
      to and Forming Part of Unaudited Condensed Consolidated Financial
      Statements
                  
                  F-6 – F-20




3


Unaudited
      Condensed Consolidated FinancialStatements
      ofChisen
      Electric CorporationFor
      the nine months ended December 31, 2009
 4
  Chisen
Electric Corporation
 
 Index
to Unaudited Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
 
 PageUnaudited
      Condensed Consolidated Statements of Operations and Other Comprehensive
      Income
                              
                              F-1Unaudited
      Condensed Consolidated Balance Sheets
                              
                              F-2
      – F-3Unaudited
      Condensed Consolidated Statements of Changes in Stockholders’
      Equity
                              
                              F-4Unaudited
      Condensed Consolidated Statements of Cash Flows
                              
                              F-5Notes
      to and Forming Part of Unaudited Condensed Consolidated Financial
      Statements
                              
                              F-6
      – F-20
  5
 
 Chisen
Electric Corporation
 
 Unaudited
Condensed Consolidated Statements of Operations and Other
 Comprehensive
Income
 For the
nine months ended December 31, 2009 and 2008
 
 Three months ended
                                              December 31
                                            
                                            
                                            Nine months ended
                                              December 312009
                                            
                                            
                                            2008
                                            
                                            
                                            2009
                                            
                                            
                                            2008Note
                                            
                                            
                                            US$’000
                                            
                                            
                                            US$’000
                                            
                                            
                                            US$’000
                                            
                                            
                                            US$’000Operating revenues:Net
      sales to third parties
                                            
                                            
                                            
                                            
                                            
                                            47,237
                                            
                                            
                                            
                                            23,421
                                            
                                            
                                            
                                            127,104
                                            
                                            
                                            
                                            81,234Cost
      of sales
                                            
                                            
                                            
                                            
                                            
                                            (41,337
                                            )
                                            
                                            
                                            (18,998
                                            )
                                            
                                            
                                            (107,150
                                            )
                                            
                                            
                                            (65,713
                                            )Gross
      income
                                            
                                            
                                            
                                            
                                            
                                            5,900
                                            
                                            
                                            
                                            4,423
                                            
                                            
                                            
                                            19,954
                                            
                                            
                                            
                                            15,521Operating
      expenses:Sales,
      marketing anddistribution
                                            
                                            
                                            
                                            
                                            
                                            (2,677
                                            )
                                            
                                            
                                            (1,328
                                            )
                                            
                                            
                                            (6,630
                                            )
                                            
                                            
                                            (3,770
                                            )General
      and administrative
                                            
                                            
                                            
                                            
                                            
                                            (763
                                            )
                                            
                                            
                                            (1,006
                                            )
                                            
                                            
                                            (2,850
                                            )
                                            
                                            
                                            (2,600
                                            )Operating
      income
                                            
                                            
                                            
                                            
                                            
                                            2,460
                                            
                                            
                                            
                                            2,089
                                            
                                            
                                            
                                            10,474
                                            
                                            
                                            
                                            9,151Other
      income, net
                                            
                                            
                                            
                                            
                                            
                                            464
                                            
                                            
                                            
                                            70
                                            
                                            
                                            
                                            1,189
                                            
                                            
                                            
                                            363Interest
      income
                                            
                                            
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            24
                                            
                                            
                                            
                                            56
                                            
                                            
                                            
                                            173Interest
      expense
                                            
                                            
                                            
                                            
                                            
                                            (399
                                            )
                                            
                                            
                                            (243
                                            )
                                            
                                            
                                            (1,147
                                            )
                                            
                                            
                                            (776
                                            )Income
      before income taxes
                                            
                                            
                                            
                                            
                                            
                                            2,525
                                            
                                            
                                            
                                            1,940
                                            
                                            
                                            
                                            10,572
                                            
                                            
                                            
                                            8,911Income
      taxes expenses
                                            
                                            4
                                            
                                            
                                            
                                            (314
                                            )
                                            
                                            
                                            (315
                                            )
                                            
                                            
                                            (1,439
                                            )
                                            
                                            
                                            (1,594
                                            )Net
      income
                                            
                                            
                                            
                                            
                                            
                                            
                                            2,211
                                            
                                            
                                            
                                            1,625
                                            
                                            
                                            
                                            9,133
                                            
                                            
                                            
                                            7,317Other
      comprehensive incomeForeign
      currency translation adjustment
                                            
                                            
                                            
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (6
                                            )
                                            
                                            
                                            24
                                            
                                            
                                            
                                            258Comprehensive
      income
                                            
                                            
                                            
                                            
                                            
                                            
                                            2,211
                                            
                                            
                                            
                                            1,619
                                            
                                            
                                            
                                            9,157
                                            
                                            
                                            
                                            7,575Shares
                                            
                                            
                                            Shares
                                            
                                            
                                            Shares
                                            
                                            
                                            SharesEarnings
      per shareWeight
      average number of common stock outstanding-
      basic and diluted
                                            
                                            3
                                            
                                            
                                            
                                            50,000,000
                                            
                                            
                                            
                                            50,000,000
                                            
                                            
                                            
                                            50,000,000
                                            
                                            
                                            
                                            50,000,000US$
                                            
                                            
                                            US$
                                            
                                            
                                            US$
                                            
                                            
                                            US$Net
      income per share of common stock outstanding-
      basic and diluted
                                            
                                            
                                            
                                            
                                            
                                            
                                            0.04
                                            
                                            
                                            
                                            0.03
                                            
                                            
                                            
                                            0.18
                                            
                                            
                                            
                                            0.15
  The
condensed consolidated financial statements should be read in conjunction with
the accompanying notes.
  F-1
 
 Chisen
Electric Corporation
 
 Unaudited
Condensed Consolidated Balance Sheets
 As of
December 31, 2009 and March 31, 2009
 
 (Audited)As of
                                      December 31,
                                      2009
                                    
                                    
                                    As of
                                      March 31,
                                      2009Note
                                    
                                    
                                    US$’000
                                    
                                    
                                    US$’000ASSETSCurrent
      assets:Cash
      and cash equivalents
                                    
                                    
                                    
                                    
                                    
                                    4,036
                                    
                                    
                                    
                                    2,620Restricted
      bank balances
                                    
                                    5
                                    
                                    
                                    
                                    23,401
                                    
                                    
                                    
                                    13,878Other
      financial assets
                                    
                                    6
                                    
                                    
                                    
                                    3,804
                                    
                                    
                                    
                                    1,314Accounts
      receivable, net
                                    
                                    
                                    
                                    
                                    
                                    47,074
                                    
                                    
                                    
                                    35,023Other
      receivables
                                    
                                    
                                    
                                    
                                    
                                    450
                                    
                                    
                                    
                                    842Prepayments
                                    
                                    
                                    
                                    
                                    
                                    7,635
                                    
                                    
                                    
                                    862Due
      from related parties
                                    
                                    14(b)
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    474Inventories
                                    
                                    7
                                    
                                    
                                    
                                    26,875
                                    
                                    
                                    
                                    17,135Total
      current assets
                                    
                                    
                                    
                                    
                                    
                                    113,275
                                    
                                    
                                    
                                    72,148Available-for-sale
      financial assets
                                    
                                    8
                                    
                                    
                                    
                                    879
                                    
                                    
                                    
                                    878Long-term
      land lease prepayments, net
                                    
                                    
                                    
                                    
                                    
                                    775
                                    
                                    
                                    
                                    608Property,
      plant and equipment, net
                                    
                                    9
                                    
                                    
                                    
                                    9,538
                                    
                                    
                                    
                                    5,315Total
      assets
                                    
                                    
                                    
                                    
                                    
                                    124,467
                                    
                                    
                                    
                                    78,949
  The
condensed consolidated financial statements should be read in conjunction with
the accompanying notes.
  F-2
 
 Chisen
Electric Corporation
 
 Unaudited
Condensed Consolidated Balance Sheets
 As of
December 31, 2009 and March 31, 2009
 
 (Audited)As of
                                  September 30,
                                  2009
                                
                                
                                As of
                                  March 31,
                                  2009Note
                                
                                
                                US$’000
                                
                                
                                US$’000LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable
                                
                                
                                
                                
                                
                                18,334
                                
                                
                                
                                11,176Notes
      payable
                                
                                10
                                
                                
                                
                                40,221
                                
                                
                                
                                23,343Accrued
      expenses and other liabilities
                                
                                
                                
                                
                                
                                4,223
                                
                                
                                
                                3,769Due
      to related parties
                                
                                14(b)
                                
                                
                                
                                331
                                
                                
                                
                                639Income
      taxes payable
                                
                                
                                
                                
                                
                                314
                                
                                
                                
                                264Short-term
      bank borrowings
                                
                                11
                                
                                
                                
                                32,616
                                
                                
                                
                                20,451Total
      current liabilities
                                
                                
                                
                                
                                
                                96,039
                                
                                
                                
                                59,642Government
      subsidies
                                
                                12
                                
                                
                                
                                150
                                
                                
                                
                                186Deferred
      tax liabilities
                                
                                
                                
                                
                                
                                460
                                
                                
                                
                                460Total
      non-current liabilities
                                
                                
                                
                                
                                
                                610
                                
                                
                                
                                646Total
      liabilities
                                
                                
                                
                                
                                
                                96,649
                                
                                
                                
                                60,288Commitments
      and contingencies
                                
                                15
                                
                                
                                
                                -
                                
                                
                                
                                -Stockholders’
      equity:Preferred
      stock, US$0.001 per value:
                                  10,000,000
      shares authorized and no shares issued and outstanding
                                
                                
                                
                                
                                
                                -
                                
                                
                                
                                -Common
      stock, US$0.001 par value:
                                  100,000,000
      shares authorized50,000,000
      shares issued and outstanding
                                
                                
                                
                                
                                
                                50
                                
                                
                                
                                50Capital
      reserves
                                
                                
                                
                                
                                
                                144
                                
                                
                                
                                144Statutory
      reserves
                                
                                
                                
                                
                                
                                2,063
                                
                                
                                
                                1,103Accumulated
      other comprehensive income
                                
                                
                                
                                
                                
                                972
                                
                                
                                
                                948Retained
      earnings
                                
                                
                                
                                
                                
                                24,589
                                
                                
                                
                                16,416Total
      stockholders’ equity
                                
                                
                                
                                
                                
                                27,818
                                
                                
                                
                                18,661Total
      liabilities and stockholders’ equity
                                
                                
                                
                                
                                
                                124,467
                                
                                
                                
                                78,949
  The
condensed consolidated financial statements should be read in conjunction with
the accompanying notes.
  F-3
 
 Chisen
Electric Corporation
 
 Unaudited
Condensed Consolidated Statements of Changes in Stockholders'
Equity
 For the
period from April 1, 2009 to December 31, 2009
 
 Common stock issued
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      AccumulatedNumber
                        of shares
                      
                      
                      Amount
                      
                      
                      Capital
                        reserves
                      
                      
                      Statutory
                        reserves
                      
                      
                      Retained
                        earnings
                      
                      
                      other
                        comprehensive
                        income
                      
                      
                      TotalUS$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000Balance
      as of April 1, 2009
                      
                      
                      50,000,000
                      
                      
                      
                      50
                      
                      
                      
                      144
                      
                      
                      
                      1,103
                      
                      
                      
                      16,416
                      
                      
                      
                      948
                      
                      
                      
                      18,661Net
      income
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      9,133
                      
                      
                      
                      -
                      
                      
                      
                      9,133Transfer
      to statutory reserves
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      960
                      
                      
                      
                      (960
                      )
                      
                      
                      -
                      
                      
                      
                      -Foreign
      currency translation adjustment
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      24
                      
                      
                      
                      24Balance
      as of December 31, 2009
                      
                      
                      50,000,000
                      
                      
                      
                      50
                      
                      
                      
                      144
                      
                      
                      
                      2,063
                      
                      
                      
                      24,589
                      
                      
                      
                      972
                      
                      
                      
                      27,818
  The
condensed consolidated financial statements should be read in conjunction with
the accompanying notes.
  F-4
 
 Chisen
Electric Corporation
 
 Unaudited
Condensed Consolidated Statements of Cash Flows
 For the
nine months ended December 31, 2009 and 2008
 
 Nine months ended December 31,2009
                          
                          
                          2008US$’000
                          
                          
                          US$’000Cash
      flows from operating activitiesNet
      income
                          
                          
                          9,133
                          
                          
                          
                          7,317Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      of property, plant and equipment
                          
                          
                          423
                          
                          
                          
                          328Written-off
      of property, plant and equipment
                          
                          
                          6
                          
                          
                          
                          10Amortization
      of long-term land lease prepayments
                          
                          
                          13
                          
                          
                          
                          43Exchange
      differences
                          
                          
                          (17
                          )
                          
                          
                          (333
                          )Provision
      for warranty costs
                          
                          
                          44
                          
                          
                          
                          (305
                          )Government
      grant recognized
                          
                          
                          (36
                          )
                          
                          
                          (35
                          )Deferred
      taxation
                          
                          
                          -
                          
                          
                          
                          457Changes
      in assets and liabilities:Other
      financial assets
                          
                          
                          (2,488
                          )
                          
                          
                          4,105Accounts
      receivable, net
                          
                          
                          (12,008
                          )
                          
                          
                          (11,557
                          )Other
      receivables
                          
                          
                          393
                          
                          
                          
                          80Prepayment
                          
                          
                          (6,771
                          )
                          
                          
                          (1,869
                          )Due
      from related parties
                          
                          
                          474
                          
                          
                          
                          965Inventories
                          
                          
                          (9,719
                          )
                          
                          
                          (6,546
                          )Accounts
      payable
                          
                          
                          7,144
                          
                          
                          
                          4,217Notes
      payable
                          
                          
                          16,849
                          
                          
                          
                          21,884Accrued
      expenses and other liabilities
                          
                          
                          448
                          
                          
                          
                          428Due
      to related parties
                          
                          
                          (309
                          )
                          
                          
                          (4,700
                          )Income
      taxes payable
                          
                          
                          50
                          
                          
                          
                          104Net
      cash provided by operating activities
                          
                          
                          3,629
                          
                          
                          
                          14,593Cash
      flows from investing activitiesPurchase
      of property, plant and equipment
                          
                          
                          (4,689
                          )
                          
                          
                          (911
                          )Additions
      of long-term land lease prepayments
                          
                          
                          (179
                          )
                          
                          
                          (113
                          )Investment
      in restricted bank balances, net
                          
                          
                          (9,507
                          )
                          
                          
                          (4,377
                          )Net
      cash used in investing activities
                          
                          
                          (14,375
                          )
                          
                          
                          (5,401
                          )Cash
      flows from financing activitiesProceeds
      from short-term bank loans
                          
                          
                          25,303
                          
                          
                          
                          17,508Repayment
      of short-term bank loans
                          
                          
                          (13,163
                          )
                          
                          
                          (21,885
                          )Net
      cash provided by (used in) financing activities
                          
                          
                          12,140
                          
                          
                          
                          (4,377
                          )Net
      increase in cash and cash equivalents
                          
                          
                          1,394
                          
                          
                          
                          4,815Cash
      and cash equivalents, beginning of period
                          
                          
                          2,620
                          
                          
                          
                          786Effect
      on exchange rate changes
                          
                          
                          22
                          
                          
                          
                          375Cash
      and cash equivalents, end of period
                          
                          
                          4,036
                          
                          
                          
                          5,976Supplemental
      disclosure of cash flow informationInterest
      received
                          
                          
                          56
                          
                          
                          
                          712Interest
      paid
                          
                          
                          1,085
                          
                          
                          
                          173Tax
      paid
                          
                          
                          1,389
                          
                          
                          
                          1,037Non-cash
      investing activityPurchase
      of property, plant and equipment recorded as payable to
      contractors
                          
                          
                          664
                          
                          
                          
                          31
  The
condensed consolidated financial statements should be read in conjunction with
the accompanying notes.
  F-5
 
 Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
 
 1.
              ORGANIZATION
      AND PRINCIPAL ACTIVITIES
 
 Chisen
Electric Corporation (“Chisen Electric”), formerly known as World Trophy
Oufitters, Inc., was formed as a Nevada corporation on January 13, 2005. Its
common stocks are currently trading on the Over-The-Counter Bulletin Board under
the symbol “CIEC”.
 
 Chisen
Electric is an investment holding company with no operations. The principal
activities of its subsidiaries (together with Chisen Electric, collectively
referred as “the Company”) are the manufacture and sales of sealed lead-acid
battery products and investment holding.
 
 Details
of Chisen Electric’s subsidiaries as of December 31, 2009 are as
follows:
 
 Name
                        
                        Place and
                          date of
                          establishment /
                          incorporation
                        
                        Percentage of
                          effective equity
                          interest / voting
                          right attributable
                          to the Company
                        
                        Principal activitiesFast
      More Limited (“Fast More”)
                        
                        Hong
      Kong
                          December
      17, 2007
                        
                        
                        100
                        %
                        Investment
      holdingChangxing
      Chisen BatteryCo.,
      Limited (“Changxing Chisen”) *
                        
                        Zhejiang,
                          the
      People’s Republic of China (“PRC”)
                          February
      25, 2002
                        
                        
                        100
                        %
                        Manufacture
      and sales of sealed lead-acid battery productsChisen
      Technology Holdings Corporation (“Chisen Technology”)
                        
                        Nevada,
      United States
                          May
      18, 2009
                        
                        
                        100
                        %
                        Inactive
 
 *
                This is a direct translation
      of the name in Chinese for identification purpose only and is not the
      official name in
English.
 
 On
November 12, 2008, Chisen Electric entered into a Share Exchange Agreement
(“Exchange”) with Fast More, Cheer Gold Development Limited (“Cheer Gold”) and
Floster Investment Limited (Floster Investment Limited and together with Cheer
Gold, the “Stockholders”) whereby Chisen Electric acquired all of the issued and
outstanding common stock of Fast More from the Stockholders in exchange for the
issuance by Chisen Electric to the Stockholders of an aggregate 35,000,000
newly-issued shares of Chisen Electric’s common stock, par value of US$0.001
each, representing 70% of Chisen Electric’s common stock issued and outstanding
upon completion of the share exchange (the “Share Exchange
Transaction”).
 
 Prior to
the closing of the Share Exchange Transaction, Chisen Electric implemented a 3
for 1 forward stock split, resulting to the increase of Chisen Electric’s common
stock issued and outstanding from 11,219,400 shares to 33,658,200 shares,
immediately before the completion of the Share Exchange
Transaction.
  F-6
 
 Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  1.
              ORGANIZATION
      AND PRINCIPAL ACTIVITIES
(CONTINUED)
 
 Upon the
completion of the Share Exchange Transaction (including, but not limited to, the
cancellation of the 18,658,200 shares of Chisen Electric’s common stock
concurrent and simultaneous with the consummation of the Share Exchange
Transaction) on November 12, 2008, there were 50,000,000 shares of Chisen
Electric’s common stock issued and outstanding.
 
 The
acquisition by Chisen Electric of Fast More is deemed to be a reverse
acquisition in accordance with generally accepted accounting principles. In
accordance with the Accounting and Financial Reporting Interpretations and
Guidance prepared by the staff of the U.S. Securities and Exchange Commission,
Chisen Electric (the legal acquirer) is considered the accounting acquiree and
Fast More (the legal acquiree) is considered the accounting acquirer. The
consolidated financial statements of the consolidated entity will in substance
be those of Fast More, with the assets and liabilities, and revenues and
expenses, of Chisen Electric being included effective from the date of
completion of Share Exchange Transaction. Chisen Electric is deemed to be a
continuation of business of Fast More. The outstanding common stock of Chisen
Electric prior to the Share Exchange Transaction will be accounting for at their
net book value and no goodwill will be recognized.
 
 In order
to rationalize the corporate structure and prepare for the Share Exchange
Transaction, Fast More and Changxing Chisen (collectively referred to as “the
Fast More Group”) underwent a reorganization (“Reorganization”) prior to the
consummation of the Share Exchange Transaction.
 
 Since the
ultimate beneficial owner of the companies now comprising the Fast More Group
was, all the time prior to the completion of the Reorganization, Mr. Xu Ke
Cheng, the ownership transfer transaction was accounted for as a transfer of
entities under common control in accordance with the FASB Accounting Standards
Codification (“ASC”) Topic 805 “Business Combinations”. Hence, the consolidation
has been accounted for at historical cost and prepared on the basis as if the
Reorganization had become effective as of the beginning of the first period
presented in the accompanying consolidated financial
statements.
  F-7
 
 Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  2.
              PREPARATION
      OF INTERIM FINANCIAL STATEMENTS
  Basis
of presentations
 The
accompanying unaudited condensed consolidated financial statements as of
December 31, 2009 have been prepared based upon Securities and Exchange
Commission rules that permit reduced disclosure for interim periods and include,
in the opinion of management, all adjustments (consisting of normal recurring
adjustments and reclassifications) necessary to present fairly the financial
position, results of operations and cash flows as of December 31, 2009 and for
all periods presented.
  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles in the
United States of America (“USGAAP”) have been condensed or omitted. These
condensed consolidated financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the Chisen
Electric's Form 10-K filed on June 29, 2009 for the year ended March 31, 2009.
The results of operations for both the three months and nine months ended
December 31, 2009 are not necessarily indicative of the operating results to be
expected for the full year.
  The
condensed consolidated financial statements and accompanying notes are presented
in United States dollars and prepared in conformity with USGAAP which requires
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
  Basis
of consolidation
 The
consolidated financial statements include the financial information of Chisen
Electric and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated upon consolidation.
 
 Recently
issued accounting pronouncements
 In June
2009, the FASB issued ASC Topic 105, “the FASB Accounting Standards
Codification” (“ASC”). ASC would become the source of authoritative US GAAP
recognized by the FASB to be applied by nongovernmental entities. Once the ASC
is in effect, all of its content would carry the same level of authority. The
ASC becomes effective for interim and annual periods ending on or after
September 15, 2009. The Company adopted the ASC in the second quarter of fiscal
2010. The adoption of the ASC did not have an effect on the Company’s financial
position and results of operations. However, because the ASC completely replaces
existing standards, it affects the way U.S. GAAP is referenced within the
consolidated financial statements and accounting policies.
  F-8
 
 Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  2.
              PREPARATION
      OF INTERIM FINANCIAL STATEMENTS
(CONTINUED)
 
 Recently
issued accounting pronouncements (Continued)
 In June
2009, the FASB issued ASC Topic 860, Accounting for Transfers of Financial
Assets – an amendment of FASB Statement No.140.  ASC Topic 860
requires entities to provide more information about sales of securitized
financial assets and similar transactions, particularly if the seller retains
some risk to the assets.  The statement eliminates the concept of a
qualifying special-purpose entity, changes the requirements for the
de-recognition of financial assets, and calls upon sellers of the assets to make
additional disclosures about them.  ASC Topic 860 is effective as for
an entity’s first annual reporting period that begins after November 15,
2009.  The Company does not expect the adoption of ASC Topic 860 will
have a material impact on the Company’s consolidated financial
statements.
 
 In June
2009, the FASB issued ASC Topic 810, Amendments to FASB Interpretation No.
46(R).  ASC Topic 810 amends Interpretation No.46(R) to require
enhanced disclosures that will provide users of financial statements with more
transparent information about an enterprise’s involvement in a variable interest
entity.  ASC Topic 810 is effective for an entity’s first fiscal
period that begins after November 15, 2009.  The Company does not
expect the adoption of ASC Topic 810 will have a material impact on the
Company’s consolidated financial statements.
 
 In August
2009, the FASB issued Accounting Standards Updates (“ASU”) 2009-05, Fair Value
Measurements and Disclosures (ASC Topic 820): Measuring Liabilities at Fair
Value, effective for the first reporting period after issuance. This Update
provides clarification that in circumstances in which a quoted price in an
active market for the identical liability is not available, a reporting entity
is required to measure fair value using the quoted price of the identical
liability or similar liabilities when traded as an asset or another valuation
technique that is consistent with the principles of ASC Topic 820. The adoption
of Update 2009-05 did not have any affect on the Company financial
statements.
 
 In
September 2009, the FASB issued ASU 2009-12, Fair Value Measurements and
Disclosures (ASC Topic 820): Investments in Certain Entities That Calculate Net
Asset Value per Share (or Its Equivalent), effective for interim and annual
periods ending after September 15, 2009. This Update provides amendments to ASC
Subtopic 820-10, Fair Value Measurements and Disclosure - Overall, for the fair
value measurement of investments in certain entities that calculate net asset
value per share (or its equivalent). The adoption of the provisions of Update
2009-12 did not have any affect on the Company financial
statements.
  F-9
 
 Chisen
Electric Corporation
  Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
 
 3.
              EARNINGS
      PER SHARE
 
 Basic
earnings per share is computed by dividing income available to common
stockholders by the weighted-average number of common stocks outstanding during
the year. Diluted earnings per share is computed similar to basic earnings per
share except that the denominator is increased to include the number of
additional common stocks that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.
There were no potentially dilutive securities for both the three months and nine
months ended December 31, 2009 and 2008.
 
 Upon the
completion of the Share Exchange Transaction, the number of Chisen Electric’s
common stock issued and outstanding, taken into account of the 3 for 1 forward
split as detailed in Note 1 was increased to 50,000,000 shares and was applied
retrospectively for the calculation of earnings per share.
 
 4.
              INCOME
      TAXES
 
 Chisen
Electric had a net operating loss carry-forward for income tax reporting
purposes that might be offset against future taxable income. These net operating
loss carry-forwards are severely limited when Chisen Electric experiences a
change in control.  Therefore, following the Exchange as mentioned in
Note 1 in November 2008, the amount available to offset future taxable income is
limited. No tax benefit has been reported in the financial statements, because
Chisen Electric believes that it is more-likely-than-not that the carry-forwards
will finally expire and therefore cannot be used.  Accordingly, the
potential tax benefits of the loss carry-forwards are offset by a valuation
allowance of the same amount.
 
 Chisen
Electric’s subsidiaries are subject to income taxes on an entity basis on income
arising in or derived from the tax jurisdictions in which each entity domiciles
and operates.
 
 Hong Kong
Profits Tax has not been provided as Fast More had no assessable profit for the
period.
 
 Changxing
Chisen is subject to state and local enterprise income taxes in the PRC at a
standard rate of 25%. Changxing Chisen received official designation by the
local tax authority as a foreign invested enterprise engaged in manufacturing
activities and is confirmed by the local tax authority that it is exempted from
enterprise income tax for two years commencing from the first profitable year in
2006, followed by a 50% reduction for the next three years.
 
 Dividends
payable by a foreign invested enterprise in the PRC to its foreign investors in
Hong Kong are subject to a 5% withholding tax.
   F-10
  Chisen
Electric Corporation
  Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  4.
              INCOME
      TAXES (CONTINUED)
 
 (a)
              Income
      tax expenses are comprised of the
following:
  Three months ended
                        December 31
                      
                      
                      Nine months ended
                        December 312009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000Current
      taxes arising in the PRC:-
      For the period
                      
                      
                      314
                      
                      
                      
                      232
                      
                      
                      
                      1,439
                      
                      
                      
                      1,137Deferred
      taxes arising in the PRC:-
      For the period
                      
                      
                      -
                      
                      
                      
                      83
                      
                      
                      
                      -
                      
                      
                      
                      457314
                      
                      
                      
                      315
                      
                      
                      
                      1,439
                      
                      
                      
                      1,594
  The FASB
Accounting Standards Codification Topic 740, “Accounting for Uncertainty in
Income Taxes – an interpretation of FASB Statement No. 109” (“ASC 740”) issued
by the FASB clarifies the accounting and disclosure for uncertainty in tax
positions, as defined, and prescribes the measurement process and a minimum
recognition threshold for a tax position, taken or expected to be taken in a tax
return, that is required to be met before being recognized in the financial
statements. Under ASC 740, the Company must recognize the tax benefit from an
uncertain position only if it is more-likely-than-not the tax position will be
sustained on examination by the taxing authority, based on the technical merits
of the position. The tax benefits recognized in the financial statements
attributable to such position are measured based on the largest benefit that has
a greater than 50% likelihood of being realized upon the ultimate resolution of
the position.
  Subject
to the provision of ASC 740, the Company has analyzed its filing positions in
all of the domestic and foreign jurisdictions where it is required to file
income tax returns. As of December 31, 2009, the Company has identified the
following jurisdictions as “major” tax jurisdictions, as defined, in which it is
required to file income tax returns: United States, Hong Kong and the PRC. Based
on the evaluations noted above, the Company has concluded that there are no
significant uncertain tax positions requiring recognition in its consolidated
financial statements.
  As of
December 31, 2009, the Company had no unrecognized tax benefits or accruals for
the potential payment or interest and penalties. The Company’s policy is to
record interest and penalties in this connection as a component of the provision
for income tax expense. For the nine months ended December 31, 2009 and 2008, no
interest or penalties were recorded.
   F-11
  Chisen
Electric Corporation
  Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  4.
              INCOME
      TAXES (CONTINUED)
  (b)
              Reconciliation
      from the expected income tax expenses calculated with reference to the
      statutory tax rate in the PRC of 25% (2008: 25%) is as
      follows:
 
 Three months ended
                        December 31
                      
                      
                      Nine months ended
                        December 312009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000Expected
      income tax expenses
                      
                      
                      631
                      
                      
                      
                      483
                      
                      
                      
                      2,643
                      
                      
                      
                      2,235Effect
      on tax incentives / holiday
                      
                      
                      (328
                      )
                      
                      
                      (235
                      )
                      
                      
                      (1,420
                      )
                      
                      
                      (1,103
                      )Non-deductible
      items
                      
                      
                      25
                      
                      
                      
                      55
                      
                      
                      
                      197
                      
                      
                      
                      117Withholding
      tax
                      
                      
                      -
                      
                      
                      
                      83
                      
                      
                      
                      -
                      
                      
                      
                      457Others
                      
                      
                      (14
                      )
                      
                      
                      (71
                      )
                      
                      
                      19
                      
                      
                      
                      (112
                      )Income
      tax expenses
                      
                      
                      314
                      
                      
                      
                      315
                      
                      
                      
                      1,439
                      
                      
                      
                      1,594
  5.
              RESTRICTED
      BANK BALANCES
 
 Restricted
bank balances as of December 31, 2009 and March 31, 2009 represented
time deposits with original maturity between three and twelve months. As of
December 31, 2009 and March 31, 2009, all restricted bank balances were pledged
for the issue of notes payable as disclosed in Note 10 below.
 
 6.
              OTHER
      FINANCIAL ASSETS
 
 Other
financial assets represented notes receivable from customers for the settlement
of accounts receivable balances. As of December 31, 2009 and March
31, 2009, all notes receivable were guaranteed by established banks in the
PRC and had maturities of 6 months or less from the date of issue.
   F-12
  Chisen
Electric Corporation
  Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  7.
              INVENTORIES
 (Audited)As of
                          December 31,
                          2009
                        
                        
                        As of
                          March 31,
                          2009Inventories consisted of the following:
                        
                        US$’000
                        
                        
                        US$’000Raw
      materials
                        
                        
                        3,357
                        
                        
                        
                        4,269Work-in-progress
      and semi-finished goods
                        
                        
                        17,489
                        
                        
                        
                        9,370Finished
      goods
                        
                        
                        6,029
                        
                        
                        
                        3,49626,875
                        
                        
                        
                        17,135
  8.
              AVAILABLE-FOR-SALE
      FINANCIAL ASSETS
 
 Available-for-sale
      financial assets as of December 31, 2009 and March 31, 2009 represented
      investment in unlisted equity securities and are recorded at cost. The
      management has estimated that the recoverable amount of the assets exceed
      their carrying value.
 
 9.
              PROPERTY,
      PLANT AND EQUIPMENT, NET
 (Audited)As of
                        December 31
                        2009
                      
                      
                      As of
                        March 31,
                        2009Property, plant and equipment is summarized as follows:
                      
                      US$’000
                      
                      
                      US$’000Buildings
                      
                      
                      2,661
                      
                      
                      
                      2,632Plant
      and machinery
                      
                      
                      3,524
                      
                      
                      
                      2,386Motor
      vehicles
                      
                      
                      944
                      
                      
                      
                      807Furniture,
      fixtures and office equipment
                      
                      
                      1,208
                      
                      
                      
                      427Construction-in-progress
                      
                      
                      2,926
                      
                      
                      
                      36511,263
                      
                      
                      
                      6,617Accumulated
      depreciation
                      
                      
                      (1,725
                      )
                      
                      
                      (1,302
                      )9,538
                      
                      
                      
                      5,315
 
 Depreciation
expenses were US$153,000 and US$122,000 for the three months ended December 31,
2009 and 2008, respectively, and US$423,000 and US$328,000 for the nine months
ended December 31, 2009 and 2008, respectively.
 
 The
Company has pledged certain buildings as collaterals against general banking
facilities granted to Changxing Chisen, details of which are disclosed in Note
11.
   F-13
  Chisen
Electric Corporation
  Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  10.
              NOTES
      PAYABLE
 
 All notes
payable issued by the Company were interest-free, guaranteed by banks, repayable
within six months from date of issue and collateralized by restricted bank
balances as set out in Note 5 and certain land lease prepayments and buildings
as set out in Note 11 below.
 
 In
addition, various parties have issued guarantee against these notes payable as
follows:
 
 (Audited)As of
                        December 31,
                        2009
                      
                      
                      As of
                        March 31,
                        2009US$’000
                      
                      
                      US$’000Corporate
      and personal guarantees issued by related parties (Note
    14(d))
                      
                      
                      13,895
                      
                      
                      
                      8,034Corporate
      guarantees issued by third parties
                      
                      
                      2,925
                      
                      
                      
                      2,922
  11.
              SHORT-TERM
      BANK BORROWINGS
  Short-term
bank loans represent amounts due to various banks which are due within 12
months, and these loans can normally be renewed with the banks upon
expiry/maturity.
  The loans
and the notes payable as set out in Note 10 are collateralized by land lease
prepayments and buildings of the Company with carrying values as
follows:
 (Audited)As of
                          December 31,
                          2009
                        
                        
                        As of
                          March 31,
                          2009US$’000
                        
                        
                        US$’000Land
      use rights
                        
                        
                        596
                        
                        
                        
                        608Buildings
                        
                        
                        1,978
                        
                        
                        
                        2,0692,574
                        
                        
                        
                        2,677
  F-14
  Chisen
Electric Corporation
  Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  11.
              SHORT-TERM
      BANK BORROWINGS (CONTINUED)
  Various
parties have also issued guarantee against these short-term bank loans as
follows:
  (Audited)As of
                        December 31,
                        2009
                      
                      
                      As of
                        March 31,
                        2009US$’000
                      
                      
                      US$’000Corporate
      and personal guarantees issued by related parties (Note
    14(d))
                      
                      
                      28,228
                      
                      
                      
                      16,069Corporate
      guarantees issued by third parties
                      
                      
                      2,779
                      
                      
                      
                      4,381
  The
weighted average annual interest rates of the short-term bank loans were 5.23%
and 7.9% as of December 31, 2009 and March 31, 2009 respectively.
 
 12.
              GOVERNMENT
      SUBSIDIES
 
 During
the year ended March 31, 2008, the Company received a government grant of
approximately US$231,000 for the purpose of subsidising its acquisition of
property, plant and equipment, of which approximately US$12,000 and US$12,000
was credited to the statement of operations for the three months ended December
31, 2009 and 2008 respectively, and US$36,000 and US$35,000 were credited to the
statements of operations for the nine months ended December 31, 2009 and 2008
respectively.
 
 13.
              FINANCIAL
      INSTRUMENTS
 
 The
carrying amounts of cash and cash equivalents, restricted bank balances, other
financial assets, accounts receivable and payable, deposits, prepayment and
other receivables, notes payable, accrued expenses and other liabilities, amount
due from/to related parties and short-term borrowings are assumed to approximate
their fair value due to the short-term maturity of these balances.
  F-15
  Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  14.
              RELATED
      PARTY TRANSACTIONS
  (a)
              Names
      and relationship of related
parties:
 
 Name of related party
                                    
                                    Existing relationships with the CompanyMr.
      Xu Kecheng
                                    
                                    Director
      and controlling stockholder of Chisen ElectricZhejiang
      Chisen Glass Company Limited (“Chisen Glass”)*
                                    
                                    A
      company controlled by a close family member of Mr. Xu
    KechengMr.
      Xu Keyong
                                    
                                    A
      close family member of Mr. Xu KechengMs.
      Zhou Fang Qin
                                    
                                    Spouse
      of Mr. Xu KechengChangxing
      Chisen Xinguangyuan Company Limited (“Xinguangyuan”)*
                                    
                                    A
      company controlled by a close family member of Mr. Xu
    KechengZhejiang
      Ai Ge Organism Products Company Limited (“Ai Ge
Organism”)*
                                    
                                    A
      company controlled by Mr. Xu KechengZhejiang
      Changxing Nuo Wan Te Ke Glass Company Limited (“Nuo Wan Te
      Ke”)*
                                    
                                    A
      company controlled by a close family member of Mr. Xu
    KechengZhejiang
      Changxing Ruilang Electronic Company Limited (“Ruilang
      Electronic”)*
                                    
                                    A
      company controlled by a close family member of Mr. Xu
    Kecheng
  *
              These
      are direct translations of the name in Chinese for identification purpose
      only and are not official names in
English.
  F-16
  Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  14.
              RELATED
      PARTY TRANSACTIONS (CONTINUED)
  (b)
              Summary
      of balances with related parties:
 (Audited)As of
                            December 31,
                            2009
                          
                          
                          As of
                            March 31,
                            2009US$’000
                          
                          
                          US$’000Due
      from related parties:Ms.
      Zhou Fang Qin
                          
                          
                          -
                          
                          
                          
                          195Chisen
      Glass
                          
                          
                          -
                          
                          
                          
                          278Xinguangyuan
                          
                          
                          -
                          
                          
                          
                          1-
                          
                          
                          
                          474Due
      to related parties:Ms.
      Zhou Fang Qin
                          
                          
                          8
                          
                          
                          
                          -Chisen
      Glass
                          
                          
                          4
                          
                          
                          
                          -Mr.
      Xu Keyong
                          
                          
                          24
                          
                          
                          
                          24Ai
      Ge Organism
                          
                          
                          292
                          
                          
                          
                          602Nuo
      Wan Te Ke
                          
                          
                          3
                          
                          
                          
                          13331
                          
                          
                          
                          639
  All
amounts due from / to related parties represent unsecured advances which are
interest-free and repayable on demand.
  (c)
              Summary
      of related party transactions:
 
 Name ofrelatedparty
                                
                                Nature of
                                  transactions
                                
                                Three months ended
                                  December 31
                                
                                
                                Nine months ended
                                  December 312009
                                
                                
                                2008
                                
                                
                                2009
                                
                                
                                2008US$’000
                                
                                
                                US$’000
                                
                                
                                US$’000
                                
                                
                                US$’000Chisen
      Glass
                                
                                Acquisition
      of motor vehicle
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                160Ruilang
      Electronic
                                
                                Acquisition
      of and land buildings
                                
                                
                                2,925
                                
                                
                                
                                -
                                
                                
                                
                                2,925
                                
                                
                                
                                -
  F-17
  Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  14.
              RELATED
      PARTY TRANSACTIONS (CONTINUED)
  (d)
              Other
      arrangements:
  .
              As
      of December 31, 2009, Chisen Glass provided guarantees, in aggregate,
      amounting to US$10,676,000 and US$2,194,000 to secure the short-term bank
      loans and notes payable of the
Company.
  .
              As
      of December 31, 2009, Chisen Glass, Mr. Xu Kecheng and Ms. Zhou Fang Qin
      provided guarantees, in the aggregate, amounting to US$3,656,000 to secure
      the notes payable of the Company.
  .
              As
      of December 31, 2009, Xinguangyuan and Mr. Xu Kecheng provided guarantees,
      in aggregate, amounting to US$5,850,000 and US$5,850,000 to secure the
      short-term bank loans and notes payable of the Company,
      respectively.
  .
              As
      of December 31, 2009, Xinguangyuan provided guarantees, in aggregate,
      amounting to US$1,463,000 and US$2,194,000 to secure the short-term bank
      loans and notes payable of the Company,
  respectively.
  .
              As
      of December 31, 2009, Xinguangyuan, Mr. Xu Kecheng and a third party
      provided guarantees, in aggregate, amounting to US$8,775,000 to secure the
      short-term bank loans of the
Company.
  .
              As
      of December 31, 2009, US$1,463,000 of the Company’s short-term bank loans
      was collateralized by a guarantee provided by Mr. Xu
    Kecheng.
 
 15.
              COMMITMENTS
      AND CONTINGENCIES
 
 (a)
              Operating
      lease commitments
 
 The
following table summarizes the approximate future minimum rental payments under
non-cancelable operating leases in effect as of December 31, 2009 and March 31,
2009:
 
 (Audited)As of
                          December 31,
                          2009
                        
                        
                        As of
                          March 31,
                          2009US$’000
                        
                        
                        US$’000Within
      one year
                        
                        
                        520
                        
                        
                        
                        185One
      to two years
                        
                        
                        546
                        
                        
                        
                        205Two
      to three years
                        
                        
                        573
                        
                        
                        
                        202Three
      to four years
                        
                        
                        508
                        
                        
                        
                        212Four
      to five years
                        
                        
                        91
                        
                        
                        
                        54Total
                        
                        
                        2,238
                        
                        
                        
                        858
  F-18
  Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  15.
              COMMITMENTS
      AND CONTINGENCIES (CONTINUED)
 
 (b)
              Capital
      commitments
 
 As of
December 31, 2009 and March 31, 2009, the Company had capital expenditure
commitments for construction projects and purchase of fixed assets of
approximately US$nil and US$423,000, respectively.
 
 16.
              PROVISION
      FOR WARRANTY
 
 Estimated
warranty costs are recognised at the time when the Company sells its products
and are included in sales, marketing and distribution expenses. The Company uses
historical failure rates and costs to repair product defects during the warranty
period to estimate the provision for warranty costs. The provision made is
reviewed periodically in light of actual experience. The reconciliation of the
changes in the warranty obligation is as follows:
 
 Three months ended
                        December 31
                      
                      
                      Nine months ended
                        December 312009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000Beginning
      balance
                      
                      
                      192
                      
                      
                      
                      114
                      
                      
                      
                      121
                      
                      
                      
                      413Exchange
      realignment
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1
                      
                      
                      
                      -Accrual
      for warranties issued during the period
                      
                      
                      46
                      
                      
                      
                      36
                      
                      
                      
                      151
                      
                      
                      
                      172Utilised
      during the period
                      
                      
                      (42
                      )
                      
                      
                      (42
                      )
                      
                      
                      (77
                      )
                      
                      
                      (477
                      )Closing
      balance
                      
                      
                      196
                      
                      
                      
                      108
                      
                      
                      
                      196
                      
                      
                      
                      108
 
 17.
              RETIREMENT
      PLAN COSTS
 
 Contributions
to defined contribution retirement schemes are charged to general and
administrative expenses in the consolidated statements of operations and other
comprehensive income as and when the related employee services are provided.
Retirement plan costs were US$66,000 and US$33,000 for the three months ended
December 31, 2009 and 2008 respectively, and US$305,000 and US$98,000 for the
nine months ended December 31, 2009 and 2008 respectively.
 
 18.
              SEGMENTAL
      INFORMATION
 
 During
the three months and nine months ended December 31, 2009 and 2008, all revenue
of the Company represented income from sales of sealed lead-acid battery and
therefore no financial information by business segment is presented.
Furthermore, as all income is derived from the PRC, no geographical segment is
presented.
  F-19
  Chisen
Electric Corporation
 
 Notes
to and Forming Part of
 Unaudited
Condensed Consolidated Financial Statements
 For the
nine months ended December 31, 2009
  19.
              SUBSEQUENT
      EVENTS
 
 In
      accordance with the provision of the FASB Accounting Standards
      Codification Topic 855 issued by the FASB, the Company has evaluated all
      events or transactions that occurred after December 31, 2009 up through
      February 12, 2010, the date the Company issued these financial statements.
      During this period the Company did not have any material subsequent events
      that impacted the Company’s consolidated financial
    statements.
  F-20




ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION




Forward
Looking Statements




The
following discussion of our financial condition and results of operations of
Chisen Electric Corporation (formerly known as World Trophy Outfitters, Inc.,
and the term “World
Trophy” is used when discussing the operations of the Company prior to
November 12, 2008 and the “Registrant” when
discussing its operations after November 12, 2008) is based upon and should be
read in conjunction with our consolidated financial statements and their related
notes included in this report. This report contains forward-looking statements.
Generally, the words “believes”, “anticipates”, “may”, “will”, “should”,
“expect”, “intend”, “estimate”, “continue” and similar expressions or the
negative thereof or comparable terminology are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, including the matters set forth in this report or other reports
or documents we file with the SEC from time to time, which could cause actual
results or outcomes to differ materially from those projected. Undue reliance
should not be placed on these forward-looking statements which speak only as of
the date hereof. We undertake no obligation to update these forward-looking
statements.





Exchange
Agreement





On
November 12, 2008 (the “Closing Date”), World
Trophy entered into a Share Exchange Agreement (the “Exchange Agreement”)
with Fast More Limited, a Hong Kong investment holding company (“Fast More”), Cheer
Gold Development Limited, a company organized under the laws of Samoa (“Cheer Gold”) and
Floster Investment Limited, a company organized under the laws of Samoa (“Floster” and together
with Cheer Gold, the “Stockholders”). As a
result of the share exchange, the World Trophy acquired all of the issued and
outstanding securities of Fast More from the Stockholders in exchange for
Thirty-Five Million (35,000,000) newly-issued shares of the World Trophy’s
common stock, par value $0.001 per share (“Common Stock”), of
which Thirty-Two Million Nine Hundred Thousand (32,900,000) shares were issued
to Cheer Gold and Two Million One Hundred Thousand (2,100,000) shares were
issued to Floster. As of the Closing Date, the Stockholders collectively
beneficially own seventy percent (70%) of the voting capital stock of the
Company, 65.8% of which is owned by Cheer Gold and 4.2% of which is owned by
Floster. As a result of the Exchange, Fast More became a wholly-owned subsidiary
of World Trophy.





Effective
February 2, 2009, the Registrant amended its Articles of Incorporation to change
its name from “World Trophy Outfitters, Inc.” to “Chisen Electric Corporation”.
The following is disclosure regarding the Registrant, Fast More and Fast More’s
wholly-owned and chief operating subsidiary, Changxing Chisen Electric Co., Ltd.
(hereinafter referred to as “CCEC”, and together
with Fast More and the Registrant, the “Company”), the
principal business activities of which consist of the manufacture and sale of
sealed lead-acid battery products primarily in the electric bicycle
market.





Prior
Operations of World Trophy





World
Trophy was formed as a Nevada corporation on January 13, 2005, and had been in
the business of selling big game hunting packages to high end clients who sought
to hunt with the top tier big game outfitters.  Its main product sold was
hunting trips, which included the hunting license and guide fees.  World
Trophy purchased and resold several hunting trips, selling them at a profit or
for a mark-up. World Trophy also provided incidental advisory services to
purchasers of hunting trips by helping these clients select an appropriate hunt,
with no additional fees charged for these services.





During
the year ended March 31, 2008, World Trophy sold its entire inventory of big
game hunts, but was unsuccessful in developing a profitable business.
 World Trophy ceased its operations and became a development stage company
effective April 1, 2008. Prior to the Exchange, World Trophy focused its efforts
on seeking a business opportunity and had been in the process of locating and
negotiating with business entities for the merger of a target company into World
Trophy.




The
Registrant’s Common Stock is currently traded on the Over-The-Counter Bulletin
Board under the symbol “CIEC”. Immediately prior to the Exchange, World Trophy
was considered a “blank check” development stage company with US$51,039 in
assets and a net loss of US$(27,977) for the three (3) months ended September
30, 2008.  On the Closing Date, the Registrant did not have any
liabilities.





Current
Operations of the Company




Fast More
is an investment holding company incorporated in Hong Kong on December 17, 2007
with limited liability. CCEC was founded in Huzhou, Zhejiang Province in China
in 2002. On February 16, 2008, Fast More acquired the 51%, 9% and 40% equity
interests in CCEC from Mr. Xu Kecheng, Mr. Xu Keyong and BEME International Co.,
Ltd., respectively, for RMB6,502,500 (approximately US$926,000), RMB1,147,500
(approximately US$164,000) and RMB 5,100,000 (approximately US$726,000),
respectively. Upon the completion of these acquisition transactions, CCEC became
the wholly-owned and chief operating subsidiary of Fast More.  Since
the ultimate beneficial owner of Fast More was, at all times, the substantial
stockholder of CCEC (Mr. Xu Kecheng), the ownership transfer transaction was
accounted for as a transfer of entities under common control in accordance with
the FASB Accounting Standards Codification (“ASC”) Topic 805.




6


On May
18, 2009, the Registrant incorporated Chisen Technology Holdings Corporation in
Nevada as its wholly-owned subsidiary.  Chisen Technology Holdings
Corporation is authorized to do business in the State of Washington and as of
Feburary 12, 2010, this entity has no operations.





Summary
of the Company’s Current Business




The
Company is a leading lead-acid motive battery producer in China's personal
transportation device market. Our motive battery products are sold under our own
brand name and are predominantly used in electric bicycles and distributed and
sold in China. Electric bicycles become increasingly popular. Among all types of
battery for electric bicycles, the lead-acid motive battery is the preferred
choice for electric bicycle manufacturers in China because of its cost
efficiency.




Today,
the Company manufactures over 14,000,000 batteries each year, has more than
2,000 employees and is one of China's largest manufacturers of lead-acid
batteries for electric-powered bicycles (LABEBs). For each of the Company’s
fiscal years ended March 31, 2009 and 2008, sales revenues were US$109,020,000
and US$65,387,000, respectively, and our net income during the same periods
amounted to US$8,880,000 and US$6,701,000, respectively.  Sales
revenues were US$127,104,000 and US$81,234,000 for the nine months ended
December 31, 2009 and 2008, respectively, and our net income during the same
periods amounted to US$9,133,000and US$7,137,000,
respectively.





The
Company is located at Changxing Economic Development Zone at the bank of the
Taihu Lake in Zhejiang Province, in close proximity to major national
transportation systems, including National Highways 104 and 318, the Shanghai –
Jiangsu – Zhejiang – Anhui – Hangzhou – Nanjing Expressway, the Changxing –
Huzhou – Shanghai Channel, the Xuancheng – Hangzhou Railway and the Xinyi –
Changxing Railway. The Company’s corporate offices are located at Jingyi Road,
Changxing Economic Development Zone, Changxing, Zhejiang Province, The People’s
Republic of China.




The
Company’s Products




Description
of our Lead-Acid Motive Batteries




The key
components of a lead-acid motive battery include electrode plates and fiberglass
dividing plates. The electrode plates are coated with oxidized lead and alloy
lead. Pairs of positively charged electrode plates and negatively charged
electrode plates each separated by a fiberglass dividing plate are bound
together by metal strip and installed into the plastic casing of a lead-acid
motive battery. The battery is then filled with sulfuric acid and charged with
electricity. The number and the size of electrode plates required to be
installed in a lead-acid motive battery will depend on the required level of its
storage capacity and the power output.




We
produce and offer ten (10) models of lead-acid motive battery products for sale
and are mainly engaged in the production of the following models of lead-acid
motive battery products for electric bicycles:





Product
                    
                    Dimentions (LxWxH)
                    
                    Weight
                      (kg)
                    
                    
                    Power
                      Output
                      (w)
                    
                    
                    Estimated
                      Hours
                      Required
                      Per
                      Charging
                      (1)
                    
                    
                    Estimated
                      Minutes
                      of Use
                      Per
                      Charging
                      (min)(2)
                    
                    
                    Estimated
                      Travel
                      Distance Per
                      Charging (km)6-DZM-10Ah
                    
                    151×99×98
                    
                    
                    4.2
                    
                    
                    
                    60
                    
                    
                    
                    10
                    h
                    
                    
                    135-145
                    
                    
                    
                    45-506-DZM-12Ah
                    
                    151×99×102
                    
                    
                    4.3
                    
                    
                    
                    72
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    45-506-DZM-16Ah
                    
                    151×99×118
                    
                    
                    5.6
                    
                    
                    
                    96
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    50-606-DZM-17Ah
                    
                    181×76×166
                    
                    
                    6.3
                    
                    
                    
                    102
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    50-606-DZM-20Ah
                    
                    181×76×170
                    
                    
                    7.0
                    
                    
                    
                    120
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    60-708-DZM-16Ah
                    
                    200×100×118
                    
                    
                    7.4
                    
                    
                    
                    128
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    60-708-DZM-18Ah
                    
                    250×100×128
                    
                    
                    9.0
                    
                    
                    
                    144
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    60-708-DZM-20Ah
                    
                    250×100×128
                    
                    
                    9.05
                    
                    
                    
                    160
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    60-706-DZM-24Ah
                    
                    175×165×125
                    
                    
                    9.5
                    
                    
                    
                    144
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    70-806-DZM-25Ah
                    
                    250×78×118
                    
                    
                    8.85
                    
                    
                    
                    150
                    
                    
                    
                    10
                    h
                    
                    
                    120-130
                    
                    
                    
                    70-80




7





(1)
Estimated hours required per charging refers to the estimated number of hours
required for charging the battery from nil to full storage
capacity.




(2)
Estimated hours of use per charging refer to the estimated maximum number of
hours for which the battery is able to be used on each occasion when it is
charged to its full storage capacity.





All the
lead-acid motive battery products produced by us are re-chargeable and can be
recharged approximately 500 times. They are standardized and can be used in
electric bicycles, electric motorcycles and electric cars produced by different
manufacturers.





Pictures
of Our Products




6-DZM-10AH
              
              6-DZM-12AH





6-DZM-16AH
                
                6-DZM-17AH




8




6-DZM-20AH
              
              8-DZM-18AH/8-DZM-20AH6-DZM-24AH
              
              6-DZM-25AH8-DZM-16AH




Distribution
Methods




We sell
our lead-acid motive battery products principally to manufacturers of electric
bicycles. However, with the growing retail market for replacement of battery
products, i.e. our secondary market, we have also strengthened our efforts in
the sales of battery products to sales representatives and exclusive
distributors which are strategically located in 27 provinces, autonomous regions
and directly-administered municipalities in China. Chisen currently has
exclusive sales agreements with distributors at the provincial and county level,
and employs sales representatives in each province across China to help
distributors to further distribute products from counties to towns. We have
established and maintained long-term relationships with distributors who we
believe have local business experience and established regional sales
networks.  Our largest distributors are located in Zhumadian, Henan
Province, Tangshan, Hebei Province, Haimen, Jiangsu Province and Yancheng,
Jiangsu Province.




9


Market Share




Zhejiang
is the main province of producing LABEBs, the output of which accounted for
approximately half of the total domestic output of LABEBs in China. According to
the China Battery Industry Association, in 2008, total output of the top ten
(10) enterprises operating in Zhejiang accounted for approximately 50 million
LABEBs of the approximate 100 million sold across China in the personal
transportation market. According to market research results of Adfaith
Consulting Co., Ltd., for the year ended March 31, 2009, our sales of lead-acid
battery products in China represented approximately 6% of the total market size
(in terms of sales revenue) of the lead-acid motive battery products for
electric bicycles in China.





The table
below shows the three top manufacturers of LABEBs in China, and their revenues
during fiscal year ended March 31, 2009:




Battery Manufacturer
                            
                            Production Location
                            
                            Revenues in 2009
                              (approximate)
                              US$(Million)
                            
                            
                            Market ShareTianneng Power
      International
                            
                            Changxing,
      Zhejiang
                            
                            
                            376.97
                            
                            
                            
                            22
                            %Zhejiang
      Chaowei Power Co., Ltd.
                            
                            Changxing,
      Zhejiang
                            
                            
                            222.69
                            
                            
                            
                            13
                            %CHISEN
                            
                            Changxing,
      Zhejiang
                            
                            
                            109.02
                            
                            
                            
                            6
                            %




Revenues
generated by the Company in China accounted for 100% of the Company’s revenues
in the fiscal years ended March 31, 2009 and 2008 and 100% and 100% of the
Company’s revenues for the nine months ended December 31, 2009 and 2008,
respectively.





In the
calendar years ended December 31, 2009 and 2008, Chisen’s battery production
reached 12.5 million units and 7 million units, respectively.





Competitive
Business Conditions and Market Trends




We
believe that in the next several years, due to the intensifying global
environmental concerns, there will be increased development of the electric
bicycle. At present, due to the fact that the use of electric bicycles is very
much in line with the energy-saving and environmental protection policy
initiated by the Chinese government, the development of electric vehicles won
its support. The electric bicycle, as an environment-friendly and convenient
personal transportation vehicle, bears the advantages of convenience,
non-pollution, safety and less energy. According to market research results of
Adfaith Consulting Co., Ltd., during the five years from 2004 to 2008, the
market sales of electric vehicles in China tripled, with the number of electric
vehicles totally amounting to 67,700,000 in 2008. In accordance with the
measured data of the electric vehicle market demand in China, it is estimated
that the market demand of electric vehicle will exceed 138,000,000 in
2013.





With
respect to new product trends in the market, Europe, the United States and Japan
use primarily a lithium battery whereas India and most of the countries of
Southeast Asia use primarily a lead-acid battery. In 2008, according to the
industry magazine Business E-Bicycle, approximately 90% of the electric bikes in
China used lead-acid motive battery products. However, with technological
advancements, it is a general market trend to develop motive battery products
that are more environmentally friendly with increased power output and less
weight. There can be no assurance that manufacturers of electric bikes will
continue to use lead-acid motive battery products as the principal source of
motive power for electric bikes. In the event that the market prefers to use
other forms of battery products and if we are not able to develop new motive
battery products to meet the future demand, our business could be adversely
affected.




In 2008,
the top electric bicycle brand in terms of production was Xinri, followed by
Yadea, Taimei, Supaiqi, Lvyuan, Aucma, Bidewen and Hongdu. Each of these
companies is a relatively small enterprise. We believe that continued industrial
integration and brand concentration will continue to increase and that these
famous brands will rapidly increase their market share.  We also
believe that brands will become more diversified by an increasing influence of
well-known brands on the market. Chisen has established long-term strategic
relationships with important electric bicycle manufacturers, including Xinri,
Yadea, Taimei, Supaiqi. Xinri’s electric bicycle was honored to serve at the
Beijing 2008 Olympic Games and at the Paralympic Games, and Chisen was chosen as
the only manufacturer to supply environmentally friendly batteries to Xinri for
its electric bicycle. Based on this, in the next several years, we will strive
to create an international first-class brand and become the leader in providing
“green” energy in the electric bicycle marketplace. Simultaneously, through
constant research and development of new chemical energy technologies, we
believe Chisen will provide energy-savings and highly-effective energy solutions
to our customers for the purpose of improving the quality of human life and a
sustainable ecological environment.




10


Competition




Our chief
competitors are Tianneng Power International Ltd. (“Tianneng”) and
Zhejiang Chaowei Power Co., Ltd (“Chaowei”). These
companies were the first into the battery industry. For example, Tianneng ranks
first in terms of sales volume, and its capital stock is listed on The Stock
Exchange of Hong Kong Limited. Taige Power Supply Co., Ltd. and Xinnuoli Power
Supply Co., Ltd., as the OEM customers of Tianneng, were separated from Tianneng
and officially set up their own brands in 2008, which has since somewhat
impacted the capabilities of Tianneng and the overall industry competition
structure.





Chaowei
has a lot of after-sales service stores. However, Tianneng and Chaowei also do
not have close cooperation with any of the top electric bicycle manufacturers in
China. Although Chisen entered into its battery industry later than some of its
competitors, Chisen has achieved success in establishing long-term strategic
cooperation with a top electric bicycle manufacturer. The Company has
established long-term strategic cooperation with many famous electric bicycle
manufacturers in China, such as Xinri, Yadea, Taimei, Xinkelin and
Lvyuan.




Cooperative
Partnership




In April
2008, CCEC set up the Zhejiang Changxing Chisen Physical-Chemical Power Supply
Research and Development Center at the College of Chemistry and Chemical
Engineering at Xiamen University in order to research and develop new products.
Xiamen University is a first class comprehensive University in China with 9
graduate schools, 120 research institutions and cooperative inter-university
ties to over 100 institutions worldwide. A copy of Chisen’s Agreement with the
Research and Development Center is referenced hereto as Exhibit
10.1.





Chisen
has established long-term strategic relationships with important electric
bicycle manufacturers, including Xinri, Yadea, Taimei, Supaiqi.  The
Company also established strategic cooperation partnership with suppliers and
vendors by means of supply chain integration to control procurement cost and
quality. Moreover, a supplier’s assessment system has been set up to ensure the
quality stability of direct materials.





Development
Strategy of the Company




With a
leading position in the LABEB battery product market in China, our product
research and development capability and our cooperative partnership, we believe
we are well positioned to capture additional business opportunities in China's
personal transportation device market. In light of those prevailing economic
trends of developing alternative transportation devices, aiming to reduce the
reliance on oil and gas and producing lesser emissions, we intend to explore the
motive battery market for electric-powered motorcycles and electric cars.
Leveraging our experience and expertise in producing lead-acid motive battery
products for electric bicycles, our product mix has been expanded to include
lead-acid back-up batteries, Lithium iron motive batteries, Lithium iron back-up
battery products and complementary electrical equipment, such as chargers,
controllers and motors, for different types of personal transportation devices.
It is our goal to become the largest battery developer producer with a
first-class sales and service network in China.





The top
five lead-acid motive battery manufacturers in 2008 accounted for 45% of the
total market share with the Company, representing approximately 6% of the total
market share, taking the third place in this industry.  The Company
has taken the following measures to set up its position as one of the leaders in
the industry: (1) the Company invested in an automatic production line with the
maximum daily production capacity increasing by 120% compared with that in
2008; (2) the Company is actively seeking an acquisition target to expand
its market share and develop its production capacity.





Results
of Operations for the Nine (9) Months Ended December 31, 2009 Compared with the
Nine (9) Months Ended December 31, 2008





The
following table sets forth a summary of certain key components of our results of
operations for the periods indicated, in dollars and as a percentage of
revenues.




For The Nine (9) Months Ended December 31 (Unaudited)2009
                
                
                2008
                
                
                2009
                
                
                2008Revenues
                
                $
                127,104,000
                
                
                $
                81,234,000
                
                
                
                100.00
                %
                
                
                100.00
                %Cost
      of sales
                
                $
                107,150,000
                
                
                $
                65,713,000
                
                
                
                84.30
                %
                
                
                80.89
                %Gross
      income
                
                $
                19,954,000
                
                
                $
                15,521,000
                
                
                
                15.70
                %
                
                
                19.11
                %Sales,
      marketing and distribution
                
                $
                6,630,000
                
                
                $
                3,770,000
                
                
                
                5.22
                %
                
                
                4.64
                %General
      and administrative expenses
                
                $
                2,850,000
                
                
                $
                2,600,000
                
                
                
                2.24
                %
                
                
                3.20
                %Operating
      income
                
                $
                10,474,000
                
                
                $
                9,151,000
                
                
                
                8.24
                %
                
                
                11.26
                %Other
      income, net
                
                $
                1,189,000
                
                
                $
                363,000
                
                
                
                0.94
                %
                
                
                0.45
                %Interest
      Income
                
                $
                56,000
                
                
                $
                173,000
                
                
                
                0.04
                %
                
                
                0.21
                %Net
      Income from Operations before Interest and Tax Expenses
                
                $
                11,719,000
                
                
                $
                9,687,000
                
                
                
                9.22
                %
                
                
                11.92
                %Interest
      expenses
                
                $
                1,147,000
                
                
                $
                776,000
                
                
                
                0.90
                %
                
                
                0.96
                %Income
      before income taxes
                
                $
                10,572,000
                
                
                $
                8,911,000
                
                
                
                8.32
                %
                
                
                10.97
                %Income
      taxes expenses
                
                $
                1,439,000
                
                
                $
                1,594,000
                
                
                
                1.13
                %
                
                
                1.96
                %Net
      income
                
                $
                9,133,000
                
                
                $
                7,317,000
                
                
                
                7.19
                %
                
                
                9.01
                %Other
      comprehensive income
                
                $
                24,000
                
                
                $
                258,000
                
                
                
                0.02
                %
                
                
                0.32
                %Comprehensive
      income
                
                $
                9,157,000
                
                
                $
                7,575,000
                
                
                
                7.20
                %
                
                
                9.32
                %




11





Revenues





Revenues
for the nine (9) months ended December 31, 2009 and 2008 were US$127,104,000 and
US$81,234,000, respectively. The increase in revenues of 56% was mainly
attributable to the continuing strong sales of our battery products as a result
of rapid growth in the electric bicycle market in the PRC and our increased
production capacity. Sales volume increased by 93% was mainly due to the
increase of demands from original customers and the demands from new customers
we developed during this period. On the other hand, there was a decrease in
average unit selling price by approximately 18% in response to the decrease in
average major raw material costs. The effect of the decrease in average selling
price was offset by the significant increase in sales volume.  As
such, overall sales increased by 56%.  For the total year outlook, the
trend of cost variations on the major direct materials and ongoing competitions
will continue for the remaining year.  As such, we expect that the
average selling price would continue the current trend of
fluctuation.





Cost
of Sales





Cost of
sales for the nine (9) months ended December 31, 2009 and 2008 was
US$107,150,000 and US$65,713,000, respectively, and cost rates were 84.30% and
80.89%, respectively.  In response to the decrease in average cost of
materials by 9% and the fierce market competition, the average selling price
also decreased by a large extent of 18%, thus the cost rate increased by
3.41%.





Depreciation
and Amortization





Depreciation
expense was US$423,000 and US$328,000 for the nine (9) months ended December 31,
2009 and 2008, respectively. The increase in depreciation expense was mainly
attributable to the new machines and equipment acquired during the fifteen (15)
months period from October 1, 2008 to December 31, 2009 for which the same
depreciation method applied.





Sales,
Marketing and Distribution





Sales, marketing and distribution were
US$6,630,000 and US$3,770,000for the nine (9) months
ended December 31, 2009 and 2008, respectively.  The increase of
US$2,860,000 was mainly driven by the increases in transportation expenses,
advertising expenses, sales commission, staff salaries, after-sale related
expenses and travelling expenses by US$706,000, US$213,000, US$985,000,
US$359,000, US$289,000 and US$240,000, respectively.





General
and Administrative Expenses





General
and administrative expenseswere US$2,850,000 and
US$2,600,000for
the nine (9) months ended December 31, 2009 and 2008, respectively and mainly
consisted of staff salaries, staff welfare, social security contributions, legal
and professional fees, depreciation expenses, research and development expenses
and other taxes. The increase in general and administrative expenses was mainly
due to increases in employees’ salaries and welfare and social security
contribution of approximately US$340,000 and US$96,000, respectively, which were
driven by the increase in number of staff and the salary rate.




12


Other
Income, Net





Net other
income was US$1,189,000 and US$363,000 for the nine (9) months ended December
31, 2009 and 2008, respectively. The increase of US$826,000 was mainly
attributable to the increase in government subsidies and sales of raw
materials.





Net
Income from Operations before Interest and Tax Expenses





Net
income from operations before interest and tax expense was US$11,719,000 and
US$9,687,000, for the nine (9) months ended December 31, 2009 and 2008,
respectively. The increase of US$2,032,000 was mainly attributable to the
increase in sales volume, thus resulting in an increase in the gross income for
the nine (9) months ended December 31, 2009.





Interest
Expense, Net





Net
interest expensewas US$1,091,000 and
US$603,000for the
nine (9) months ended December 31, 2009 and 2008, respectively. Net interest
expense increased by US$488,000 during these periods due to the combined result
of the increase of interest expense from the addition of short term bank loans,
as well as the decrease of the interest income from restricted bank balances for
the nine (9) months ended December 31, 2009, compared to the (9) months ended
December 31, 2008.





Net
Income





Net income was US$9,133,000 and
US$7,317,000for
the nine (9) months ended December 31, 2009 and 2008, respectively. The increase
in net incomeof
US$1,816,000 was mainly attributable to the continuing strong sales of our
battery products.





Results
of Operations for the Three (3) Months Ended December 31, 2009 Compared with the
Three (3) Months Ended December 31, 2008




The
following table sets forth a summary of certain key components of our results of
operations for the periods indicated, in dollars and as a percentage of
revenues.





For The Three (3) Months Ended December 31 (Unaudited)2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008Revenues
                      
                      $
                      47,237,000
                      
                      
                      $
                      23,421,000
                      
                      
                      
                      100.00
                      %
                      
                      
                      100.00
                      %Cost
      of sales
                      
                      $
                      41,337,000
                      
                      
                      $
                      18,998,000
                      
                      
                      
                      87.51
                      %
                      
                      
                      81.12
                      %Gross
      income
                      
                      $
                      5,900,000
                      
                      
                      $
                      4,423,000
                      
                      
                      
                      12.49
                      %
                      
                      
                      18.88
                      %Sales,
      marketing and distribution
                      
                      $
                      2,677,000
                      
                      
                      $
                      1,328,000
                      
                      
                      
                      5.67
                      %
                      
                      
                      5.67
                      %General
      and administrative expenses
                      
                      $
                      763,000
                      
                      
                      $
                      1,006,000
                      
                      
                      
                      1.62
                      %
                      
                      
                      4.30
                      %Operating
      income
                      
                      $
                      2,460,000
                      
                      
                      $
                      2,089,000
                      
                      
                      
                      5.21
                      %
                      
                      
                      8.92
                      %Other
      income, net
                      
                      $
                      464,000
                      
                      
                      $
                      70,000
                      
                      
                      
                      0.98
                      %
                      
                      
                      0.30
                      %Interest
      Income
                      
                      $
                      0
                      
                      
                      $
                      24,000
                      
                      
                      
                      0.00
                      %
                      
                      
                      0.10
                      %Net
      Income from Operations before Interest and Tax Expenses
                      
                      $
                      2,924,000
                      
                      
                      $
                      2,183,000
                      
                      
                      
                      6.19
                      %
                      
                      
                      9.32
                      %Interest
      expenses
                      
                      $
                      399,000
                      
                      
                      $
                      243,000
                      
                      
                      
                      0.84
                      %
                      
                      
                      1.04
                      %Income
      before income taxes
                      
                      $
                      2,525,000
                      
                      
                      $
                      1,940,000
                      
                      
                      
                      5.35
                      %
                      
                      
                      8.28
                      %Income
      taxes expenses
                      
                      $
                      314,000
                      
                      
                      $
                      315,000
                      
                      
                      
                      0.66
                      %
                      
                      
                      1.35
                      %Net
      income
                      
                      $
                      2,211,000
                      
                      
                      $
                      1,625,000
                      
                      
                      
                      4.68
                      %
                      
                      
                      6.94
                      %Other
      comprehensive income
                      
                      $
                      -0
                      
                      
                      $
                      -6,000
                      
                      
                      
                      0.00
                      %
                      
                      
                      -0.03
                      %Comprehensive
      income
                      
                      $
                      2,211,000
                      
                      
                      $
                      1,619,000
                      
                      
                      
                      4.68
                      %
                      
                      
                      6.91
                      %




Revenues





Revenues
for the three (3) months ended December 31, 2009 and 2008 were US$47,237,000 and
US$23,421,000, respectively. The increase in revenues of 102% was mainly
attributable to the continuing strong sales of our battery products as a result
of rapid growth in the electric bicycle market in the PRC and our increased
production capacity. Sales volume increased by 117% was mainly due to the
increase of demands from original customers and the demands from new customers
we developed during this period. On the other hand, there was a decrease in
average unit selling price by approximately 6% due to the change in product mix
and  the effect of the restriction imposed on the pricing system of
the battery industry. The effect of the decrease in average selling price was
offset by the significant increase in sales volume.  As such, overall
sales increased by 102%. For the total year outlook, we expect that the trend of
cost variations on the major direct materials and ongoing competitions will
continue for the remaining year.  As such, we also expect that the
average selling price would continue the current trend of
fluctuation.




13


Cost
of Sales





Cost of
sales for the three (3) months ended December 31, 2009 and 2008 was
US$41,337,000 and US$18,998,000, respectively, and cost rates were 87.51% and
81.12%, respectively. The unfavorable increase of the cost rates by 6.39% was
mainly due to the combing effect of the decrease of average selling price in
response to the fierce competition and the increase in the cost of major raw
materials.





Depreciation
and Amortization





Depreciation
expense was US$153,000 and US$122,000 for the three (3) months ended December
31, 2009 and 2008, respectively. The increase in depreciation expense was mainly
attributable to the new machines and equipments acquired during the fifteen (15)
months period from October 1, 2008 to December 31, 2009 for which the same
depreciation method applied.





Sales,
Marketing and Distribution





Sales, marketing and distribution were
US$2,677,000 and US$1,328,000for the three (3) months
ended December 31, 2009 and 2008, respectively.  The increase of
US$1,349,000 was mainly driven by the increases in transportation expenses,
advertising expenses, sales commission, staff salaries, after-sale related
expenses and travelling expense by US$346,000, US$64,000, US$540,000, US$96,000,
US$166,000 and US$92,000, respectively.





General
and Administrative Expenses





General
and administrative expenseswere US$763,000 and
US$1,006,000for
the three (3) months ended December 31, 2009 and 2008, respectively, and mainly
consisted of staff salaries, staff welfare, social security contributions,
depreciation expenses, research and development expenses, legal and professional
fees, other taxes and motor vehicle expenses. The decrease in general and
administrative expenses was mainly due to the strengthened expense control being
exercised in response to the decrease in gross income rate resulted from the
fierce market competition, reclassification of certain expenses to cost of sales
and sales, marketing and distribution expenses in order to more accurately
reflect its true nature.





Other
Income, Net





Net other
income was US$464,000 and US$70,000 for the three (3) months ended December 31,
2009 and 2008, respectively. The increase of US$394,000 was mainly attributable
to the increase in government subsidies and the increase in income from sales of
raw materials.





Net
Income from Operations before Interest and Tax Expenses




Net
income from operations before interest and tax expense was US$2,924,000 and
US$2,183,000, for the three (3) months ended December 31, 2009 and 2008,
respectively. The favorable variance of US$741,000 was mainly due to the
increase in sales volume, thus resulting in an increase in the gross income for
the three (3) months ended December 31, 2009.





Interest
Expense, Net





Net
interest expensewas US$399,000 and
US$219,000for the
three (3) months ended December 31, 2009 and 2008, respectively. Net interest
expense increased by US$180,000 during these periods due to the combined result
of the increase of interest expense from the addition of short term bank loans,
as well as the decrease of the interest income from restricted bank balances for
the three (3) months ended December 31, 2009, compared to the three (3) months
ended December 31, 2008.





Net
Income





Net income was US$2,211,000 and
US$1,625,000for
the three (3) months ended December 31, 2009 and 2008, respectively. The
increase in net incomeof US$586,000 was due to
the proceeds from the continuing strong sales of our battery
products.




14


Liquidity
and Capital Resources





We generally finance our operations
through operating profit and borrowings from banks.  During the
reporting period, we arranged a number of bank loans to satisfy our financing
needs. As of the date of this report, we have not experienced any difficulty in
raising funds by bank loans, and we have not experienced any liquidity problems
in settling our payables in the normal course of business and repaying our bank
loans when they fall due.





The
following table sets forth the summary of our cash flows, in dollar, for the
periods indicated:





Nine (9) Months Ended December 31
                  (Unaudited)2009
                
                
                2008Net
      cash provided by operating activities
                
                $
                3,629,000
                
                
                $
                14,593,000Net
      cash used in investing activities
                
                $
                (14,375,000
                )
                
                $
                (5,401,000
                )Net
      cash provided by (used in) financing activities
                
                $
                12,140,000
                
                
                $
                (4,377,000
                )Net
      increase in cash and cash equivalents
                
                $
                1,394,000
                
                
                $
                4,815,000Effect
      of exchange rate changes on cash
                
                $
                22,000
                
                
                $
                375,000Cash
      and cash equivalents at beginning of period
                
                $
                2,620,000
                
                
                $
                786,000Cash
      and cash equivalents at end of period
                
                $
                4,036,000
                
                
                $
                5,976,000





Operating
Activities





Net cash
provided by operating activities was approximately US$3,629,000 for the nine (9)
months ended December 31, 2009, as compared to approximately US$14,593,000 for
the nine (9) months ended December 31, 2008. This decrease was mainly due to the
combined result of increase in account payables and notes payable; offset by the
decrease in other financial assets, accounts receivable, inventories and
prepayments to raw materials suppliers.





Investing
Activities





Net cash
used in investing activities were approximately US$14,375,000 for the nine (9)
months ended December 31, 2009, as compared to approximately US$5,401,000 for
the nine (9) months ended December 31, 2008. The increase was mainly due to the
increase in investment in restricted bank balance and acquisition of land,
buildings and equipment.





Financing
Activities





Net cash
provided by financing activities was approximately US$12,140,000 for the nine
(9) months ended December 31, 2009, as compared to net cash used in financing
activities of approximately US$4,377,000 for the nine (9) months ended December
31, 2008. The increase was mainly due to the addition of short-term bank
borrowings and the decrease in repayment of short-term bank loans.





Working
Capital





Our
working capital increased by approximately US$4,730,000 to approximately
US$17,276,000 as of December 31, 2009, as compared to the working capital of
approximately US$12,506,000 as of March 31, 2009.  This increase is
primarily due to an increase in our cash and cash equivalents, restricted bank
balances, other financial assets, account receivables, prepayments and
inventories by approximately US$41,993,000, offset by an increase in our
short-term bank loans, accounts payable, notes payable, accrued expenses and
other liabilities of approximately US$36,655,000. The increase in accounts
receivable was the result of the increase of sales volume. Inventory carrying
levels have been increased for semi-finished goods and finished goods as well as
replacement batteries. This has been done to meet the projected demand of
US$30,565,000 in Q42009/10, which is a US$2,779,000 increase over Q42008/09. The
increased inventory consists of 80% standard products and 20% replacement
batteries. The increase in short-term bank loans and notes payable was the
result of our financing arrangement.





Off-Balance Sheet
Arrangements




We do not
have any outstanding derivative financial instruments, off-balance sheet
guarantees, interest rate swap transactions of foreign currency forward
contracts. Furthermore, we do not have any retained or contingent interest in
assets transferred to an unconsolidated entity that serves as credit, liquidity
or market risk support to such entity. We do not have any variable interest in
an unconsolidated entity that provides financing, liquidity, market risk or
credit support to us or that engages in leasing, hedging or research and
development services with us.




15


ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Interest
Rates Risk




Our
exposure to interest rate risk for changes in interest rates relates primarily
to the interest-bearing bank loans and interest income generated by the bank
deposits. We have not used any derivative financial instruments in our
investment portfolio or for cash management purposes. Interest-earning
instruments carry a degree of interest rate risk. We have not been exposed nor
do we anticipate being exposed to material risks due to changes in interest
rates. Nevertheless, our future interest expense or interest income may expect
to be decreased due to changes in interest rates in the PRC.





Foreign
Exchange Rates Risk




We do not
hold any derivative instruments and do not engage in any hedging activities.
Because most of our purchases and sales are made in RMB, any exchange rate
change affecting the value of the RMB relative to the U.S. dollar could have an
effect on our financial results as reported in U.S. dollars. If the RMB were to
depreciate against the U.S. dollar, amounts reported in U.S. dollars would be
correspondingly reduced. If the RMB were to appreciate against the U.S. dollar,
amounts reported in U.S. dollars would be correspondingly
increased.





Contractual
Obligations




Payments Due By PeriodContractual Obligations (US$)
                
                Total
                
                
                Less than
                  1 year
                
                
                1-3
                  years
                
                
                3-5
                  years
                
                
                More than
                  5 yearsBank
      Indebtedness
                
                (SEE
      TABLE BELOW)Other
      IndebtednessCapital
      Lease ObligationsOperating
      Lease Obligations
                
                (SEE
      TABLE BELOW)Purchase
      Obligations
                
                (SEE
      TABLE BELOW)Other
      Long-Term Liabilities Reflected on the Company’s Balance Sheet under US
      GAAPTotal:




Bank indebtedness (US$)
                  
                  December 31, 2009
                  
                  
                  March31,2009Short-term
      bank borrowings
                  
                  US$
                  32,616,000
                  
                  
                  US$
                  20,451,000Notes
      payable (within (1) year)
                  
                  US$
                  40,221,000
                  
                  
                  US$
                  23,343,000Total
                  
                  US$
                  72,837,000
                  
                  
                  US$
                  43,794,000
  Purchase Obligations (US$)
                    
                    December31, 2009
                    
                    
                    March
                      31, 2009Purchase
      of machinery (within one (1) year)
                    
                    US$
                    0
                    
                    
                    US$
                    423,000Total
                    
                    US$
                    0
                    
                    
                    US$
                    423,000
  Operating Lease Obligations
      (US$)
                  
                  December31, 2009
                  
                  
                  March
                    31, 2009Within one
      (1) year
                  
                  US$
                  520,000
                  
                  
                  US$
                  185,0001-3
      years
                  
                  US$
                  1,119,000
                  
                  
                  US$
                  407,0003-5
      years
                  
                  US$
                  599,000
                  
                  
                  US$
                  266,000Over
      five (5) years
                  
                  
                  -
                  
                  
                  
                  -Total
                  
                  US$
                  2,238,000
                  
                  
                  US$
                  858,000




16


ITEM
4. CONTROLS AND PROCEDURES




Disclosure
Controls and Procedures




Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rule 13a-15(e) under the Exchange
Act. Based on this evaluation, our management, including our principal executive
officer and our principal financial officer, concluded that our disclosure
controls and procedures were effective as of the fiscal quarter covered by this
report, to ensure that information required to be disclosed by us in the reports
filed or submitted by us under the Exchange Act (i) is recorded, processed,
summarized and reported within the time period specified in SEC rules and forms,
and (ii) is accumulated and communicated to our management, including our
principal executive officer and our principal financial officer, as appropriate
to allow appropriate decisions on a timely basis regarding required
disclosure.





Changes In Internal
Controls




There was
no change in the Company’s internal control over financial reporting that was
identified in connection with such evaluation that occurred during the period
covered by this report that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.





PART
II


OTHER
INFORMATION




ITEM
1. LEGAL PROCEEDINGS




In the
normal course of business, we are named as defendant in lawsuits in which claims
are asserted against us. In our opinion, the liabilities, if any, which may
ultimately result from such lawsuits, are not expected to have a material
adverse effect on our financial position, results of operations or cash flows.
As of December 31, 2009, there was no pending or outstanding material litigation
with the Company.





ITEM
1A. RISK FACTORS




Not
required for a "smaller reporting company".




ITEM
2. UREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




During
the quarter ended December 31, 2009, the Company had no unregistered sales of
equity securities.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES




None.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS




None.




ITEM
5. OTHER INFORMATION




On
November 13, 2009, the Company held its 2009 annual meeting for the purpose of
re-electing the Company’s seven directors and ratifying the re-appointment of
the Company’s independent registered public accounting firm (Mazars CPA Limited)
for the fiscal year ending March 31, 2010.  At the meeting, the seven
directors were re-elected and Mazars CPA Limited was re-appointed for the fiscal
year ending March 31, 2010.




17




ITEM
6. EXHIBITS




(a) Exhibits




EXHIBIT
                                          NO.
                                        
                                        DESCRIPTION
                                        
                                        LOCATION2.1
                                        
                                        Share
      Exchange Agreement, dated November 12, 2008, by and among World Trophy
      Outfitters, Inc., Fast More Limited, Cheer Gold Development Ltd. and
      Floster Investment Limited
                                        
                                        Incorporated
      by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K as
      filed with the SEC on November 12, 20083.1
                                        
                                        Articles
      of Incorporation of World Trophy Outfitters, Inc.
                                        
                                        Incorporated
      by reference to Exhibit 3(i).1 to the Registrant’s Registration Statement
      on Form SB-2 as filed with the SEC on September 23,
20053.2
                                        
                                        Certificate
      of Amendment to Articles of Incorporation of Chisen Electric Corporation
      (name change)
                                        
                                        Incorporated
      by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as
      filed with the SEC on February 4, 20093.3
                                        
                                        Amended
      and Restated Bylaws of Chisen Electric Corporation
                                        
                                        Incorporated
      by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K as
      filed with the SEC on February 4, 20093.4
                                        
                                        Certificate
      of Incorporation of Fast More Limited, dated December 17,
    2007
                                        
                                        Incorporated
      by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K as
      filed with the SEC on November 12, 20083.5
                                        
                                        Memorandum
      and Articles of Association of Fast More Limited, dated as of December 17,
      2007
                                        
                                        Incorporated
      by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K as
      filed with the SEC on November 12, 20083.6
                                        
                                        Certificate
      of Incorporation of Changxing Chisen Electric Co., Ltd.
                                        
                                        Incorporated
      by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K as
      filed with the SEC on November 12, 20083.7
                                        
                                        Articles
      of Associations of Changxing Chisen Electric Co., Ltd.
                                        
                                        Incorporated
      by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K as
      filed with the SEC on November 12, 200810.1
                                        
                                        Agreement
      on Establishment of Changxing Chisen Physical Chemistry Power Research and
      Development Center, dated April 30, 2008
                                        
                                        Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.2
                                        
                                        Form
      of Labor Contract
                                        
                                        Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.3
                                        
                                        Lease
      Agreement, dated March 30, 2008, by and between Changxing Chisen Electric
      Co., Ltd. and Changxing Xiangyi Industrial Park Investment Co.,
      Ltd.
                                        
                                        Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.4
                                        
                                        Contract
      For Loan on Guarantee, by and among Zhejiang Changxing Agricultural
      Cooperative Bank, Changxing Chisen Electric Co., Ltd. and Zhejiang Chisen
      Galss Co., Ltd.
                                        
                                        Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.5
                                        
                                        Renminbi
      Loan Contract, dated January 11, 2008, by and between Changxing Chisen
      Electric Co., Ltd. and China Construction Bank Corporation (Changxing
      Branch)
                                        
                                        Incorporated
      by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.6
                                        
                                        Renminbi
      Loan Contract, dated April 11, 2008, by and between Changxing Chisen
      Electric Co., Ltd. and China Construction Bank Corporation (Changxing
      Branch)
                                        
                                        Incorporated
      by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12,
2008




18





10.7
                
                Renminbi
      Loan Contract, dated March 31, 2008, by and between Changxing Chisen
      Electric Co., Ltd. and Bank of China (Hong Kong) Limited Shanghan
      Branch
                
                Incorporated
      by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.8
                
                Loan
      Contract (Short Term), dated August 15, 2008, by and between Changxing
      Chisen Electric Co., Ltd. and Bank of China Changxing
    Branch
                
                Incorporated
      by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.9
                
                Acceptance
      Agreement, dated August 25, 2008, by and between Changxing Chisen Electric
      Co., Ltd. and Industrial Bank Co., Ltd. Hangzhou Branch
                
                Incorporated
      by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.10
                
                Acceptance
      Agreement of Commercial Bill, dated September 18, 2008, by and between
      Changxing Chisen Electric Co., Ltd. and China Bank Co., Ltd. Changxing
      Branch
                
                Incorporated
      by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.11
                
                Acceptance
      Agreement of Commercial Bill, dated July 29, 2008, by and between
      Changxing Chisen Electric Co., Ltd. and China Construction Bank Changxing
      Branch Co., Ltd.
                
                Incorporated
      by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.12
                
                Acceptance
      Agreement of Commercial Bill, dated September 9, 2008, by and between
      Changxing Chisen Electric Co., Ltd. and China Construction Bank Changxing
      Branch Co., Ltd.
                
                Incorporated
      by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.13
                
                Components
      Purchase Contract, effective as of January 1, 2008, by and between
      Changxing Chisen Electric Co., Ltd. and Jiansu Xinri Electric Bicycle Co.,
      Ltd.
                
                Incorporated
      by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.14
                
                Supply
      Contract, dated April 22, 2008, by and between Changxing Chisen Electric
      Co., Ltd. and Jiangsu Yadea Science & Technology Development Co.,
      Ltd.
                
                Incorporated
      by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.15
                
                Sales
      Contract of Battery, dated November 10, 2007, by and between Changxing
      Chisen Electric Co., Ltd. and Hu Qinzhong, Yancheng Office
                
                Incorporated
      by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200810.16
                
                Sales
      Contract of Battery, dated February 17, 2008, by and between Changxing
      Chisen Electric Co., Ltd. and Song Chunwei
                
                Incorporated
      by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200814.1
                
                Code
      of Ethics
                
                Incorporated
      by reference to Exhibit 14.1 to the Company’s Current Report on Form 8-K
      as filed with the SEC on February 4, 200917
                
                Resignation
      of Mathew Evans, dated November 12, 2008
                
                Incorporated
      by reference to Exhibit 17 to the Company’s Current Report on Form 8-K as
      filed with the SEC on November 12, 200821
                
                List
      of Subsidiaries of World Trophy Outfitters, Inc.
                
                Incorporated
      by reference to Exhibit 21 to the Company’s Quarterly Report on Form
      10-Q as filed with the SEC on November 16,
    200931.1
                
                Certifications
      of the Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                
                Provided
      herewith




19





31.2
                
                Certifications
      of the Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                
                Provided
      herewith32.1
                
                Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
      the Sarbanes-Oxley Act Of 2002
                
                Provided
      herewith32.2
                
                Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
      the Sarbanes-Oxley Act Of 2002
                
                Provided
      herewith99.1
                
                Audited
      Consolidated Financial Statements of Fast More Limited and its Subsidiary
      for the Fiscal Years Ended March 31, 2008 and 2007
                
                Incorporated
      by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200899.2
                
                Unaudited
      Condensed and Consolidated Financial Statements of Fast More Limited and
      its Subsidiary for the Three (3) Months Ended June 30, 2008 and
      2007
                
                Incorporated
      by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200899.3
                
                Unaudited
      Pro Forma Financial Statements of Fast More Limited for the three (3)
      month period ended June 30, 2008 and the two years ended March 31,
      2008.
                
                Incorporated
      by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K
      as filed with the SEC on November 12, 200899.4
                
                Audit
      Committee Charter, dated January 15, 2009
                
                Incorporated
      by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
      as filed with the SEC on February 4, 200999.5
                
                Compensation
      Committee Charter, dated January 15, 2009
                
                Incorporated
      by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K
      as filed with the SEC on February 4, 200999.6
                
                Corporate
      Governance and Nominating Committee Charter, dated January 15,
      2009
                
                Incorporated
      by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K
      as filed with the SEC on February 4,
2009




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SIGNATURES




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




Date: February
      11, 2010
                By:
                /s/
      Xu KechengName:
      Xu KechengIts:
      President, Chief Executive Officer and Principal Executive
      Officer




Date: February
      11, 2010
                By:
                /s/He
      ZhiweiName:
      He ZhiweiIts:
      Chief Financial Officer, Principal Financial and Accounting
      Officer




21