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 March 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: 000-32161





CH LIGHTING INTERNATIONAL
CORPORATION


(Exact
name of registrant as specified in its charter)





Delaware
              
              20-3828148(State
      or other jurisdiction of incorporation or
                organization)
              
              (IRS
      Employer Identification No.)





658
Hongyan Road, Economic Development Zone, Shangyu City, Zhejiang
Province,


The
People’s Republic of China 312300





(Address
of principal executive offices)





(011)86 575 8212
7538


(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 oNo o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company 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 May 14, 2009, the registrant had
120,000,000 shares of common stock, par value $0.001 per share, issued and
outstanding.










TABLE
OF CONTENTS





PART
      I FINANCIAL INFORMATION
              
              F-1ITEM
      1. FINANCIAL STATEMENTS
              
              F-1ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION
              
              1ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
              
              12ITEM
      4. CONTROLS AND PROCEDURES
              
              12PART
      II OTHER INFORMATION
              
              15ITEM
      1. LEGAL PROCEEDINGS
              
              15ITEM
      1A. RISK FACTORS
              
              15ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
              
              15ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
              
              15ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
              
              15ITEM
      5. OTHER INFORMATION
              
              15ITEM
      6. EXHIBITS
              
              15SIGNATURES
              
              17










PART
I


FINANCIAL
INFORMATION





ITEM
1. FINANCIAL STATEMENTS





PageUnaudited
      Condensed Consolidated Statements of Operations and Other Comprehensive
      Income
              F-1U
      Unaudited Condensed Consolidated Balance Sheets
              F-2Unaudited
      Condensed Consolidated Statements of Changes in Stockholders’
      Equity
              F-4Unaudited
      Condensed Consolidated Statements of Cash Flows
              F-5Notes
      to Unaudited Condensed Consolidated Financial Statements
              F-7




F-i


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Unaudited
Condensed Consolidated Statements of Operations and
 Other Comprehensive
Income


For the
six months ended March 31, 2009





Three
      months ended
                                        March
      31,
                                      
                                      
                                      Six months ended
                                        March 31,2009
                                      
                                      
                                      2008
                                      
                                      
                                      2009
                                      
                                      
                                      2008Note
                                      
                                      
                                      US$’000
                                      
                                      
                                      US$’000
                                      
                                      
                                      US$’000
                                      
                                      
                                      US$’000Operating
      revenues:Net sales to third
      parties
                                      
                                      
                                      
                                      
                                      
                                      8,165
                                      
                                      
                                      
                                      15,282
                                      
                                      
                                      
                                      24,829
                                      
                                      
                                      
                                      37,141Cost
      of sales
                                      
                                      
                                      
                                      
                                      
                                      (6,123
                                      )
                                      
                                      
                                      (10,395
                                      )
                                      
                                      
                                      (17,110
                                      )
                                      
                                      
                                      (25,348
                                      )Gross
      income
                                      
                                      
                                      
                                      
                                      
                                      2,042
                                      
                                      
                                      
                                      4,887
                                      
                                      
                                      
                                      7,719
                                      
                                      
                                      
                                      11,793Operating
      expenses:Selling,
      marketing and distribution expenses
                                      
                                      
                                      
                                      
                                      
                                      (619
                                      )
                                      
                                      
                                      (350
                                      )
                                      
                                      
                                      (2,473
                                      )
                                      
                                      
                                      (995
                                      )General
      and administrative expenses
                                      
                                      
                                      
                                      
                                      
                                      (822
                                      )
                                      
                                      
                                      (1,824
                                      )
                                      
                                      
                                      (2,049
                                      )
                                      
                                      
                                      (2,685
                                      )Operating
      income
                                      
                                      
                                      
                                      
                                      
                                      601
                                      
                                      
                                      
                                      2,713
                                      
                                      
                                      
                                      3,197
                                      
                                      
                                      
                                      8,113Government
      subsidies income
                                      
                                      3
                                      
                                      
                                      
                                      223
                                      
                                      
                                      
                                      147
                                      
                                      
                                      
                                      1,941
                                      
                                      
                                      
                                      295Other
      income
                                      
                                      
                                      
                                      
                                      
                                      
                                      10
                                      
                                      
                                      
                                      7
                                      
                                      
                                      
                                      20
                                      
                                      
                                      
                                      31Interest
      income
                                      
                                      
                                      
                                      
                                      
                                      
                                      610
                                      
                                      
                                      
                                      102
                                      
                                      
                                      
                                      1,853
                                      
                                      
                                      
                                      243Interest
      expense
                                      
                                      
                                      
                                      
                                      
                                      
                                      (1,004
                                      )
                                      
                                      
                                      (1,393
                                      )
                                      
                                      
                                      (2,092
                                      )
                                      
                                      
                                      (2,246
                                      )Income
      before income taxes and minority interests
                                      
                                      
                                      
                                      
                                      
                                      
                                      440
                                      
                                      
                                      
                                      1,576
                                      
                                      
                                      
                                      4,919
                                      
                                      
                                      
                                      6,436Income
      taxes expenses
                                      
                                      5
                                      
                                      
                                      
                                      36
                                      
                                      
                                      
                                      179
                                      
                                      
                                      
                                      (532
                                      )
                                      
                                      
                                      (523
                                      )Minority
      interests
                                      
                                      
                                      
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Net
      income
                                      
                                      
                                      
                                      
                                      
                                      
                                      476
                                      
                                      
                                      
                                      1,755
                                      
                                      
                                      
                                      4,387
                                      
                                      
                                      
                                      5,913Other
      comprehensive incomeForeign
      currency translation adjustment
                                      
                                      
                                      
                                      
                                      
                                      
                                      34
                                      
                                      
                                      
                                      473
                                      
                                      
                                      
                                      37
                                      
                                      
                                      
                                      836Comprehensive
      income
                                      
                                      
                                      
                                      
                                      
                                      
                                      510
                                      
                                      
                                      
                                      2,228
                                      
                                      
                                      
                                      4,424
                                      
                                      
                                      
                                      6,749Earnings
      per share
                                      
                                      4Shares
                                      
                                      
                                      Shares
                                      
                                      
                                      Shares
                                      
                                      
                                      SharesWeighted
      average number of common stocks outstanding, basic and
    diluted
                                      
                                      
                                      
                                      
                                      
                                      
                                      120,000,000
                                      
                                      
                                      
                                      93,000,000
                                      
                                      
                                      
                                      120,000,000
                                      
                                      
                                      
                                      93,000,000Net
      income per share of common stock outstanding, basic and
                                        diluted
                                      
                                      
                                      
                                      
                                      
                                      
                                      US$
                                        0.004
                                      
                                      
                                      
                                      US$
                                        0.019
                                      
                                      
                                      
                                      US$
                                        0.037
                                      
                                      
                                      
                                      US$
                                        0.064


The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.   F-1




CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Unaudited
Condensed Consolidated Balance Sheets
 As of
March 31, 2009





(Audited)As
      of
                                        March
      31,
                                        2009
                                      
                                      
                                      As
      of
                                        September
      30,
                                        2008Note
                                      
                                      US$’000
                                      
                                      
                                      US$’000ASSETSCurrent
      assets:Cash
      and cash equivalents
                                      
                                      
                                      
                                      
                                      3,305
                                      
                                      
                                      
                                      3,154Restricted
      bank balances
                                      
                                      6
                                      
                                      
                                      39,560
                                      
                                      
                                      
                                      16,314Other
      financial assets
                                      
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      2,918Accounts
      receivable, net
                                      
                                      7
                                      
                                      
                                      15,208
                                      
                                      
                                      
                                      18,871Other
      receivables
                                      
                                      
                                      
                                      
                                      4,959
                                      
                                      
                                      
                                      4,093Prepayments
                                      
                                      
                                      
                                      
                                      1,905
                                      
                                      
                                      
                                      2,724Due
      from related parties, current portion
                                      
                                      12(b)
                                      
                                      
                                      19,440
                                      
                                      
                                      
                                      7,058Inventories,
      net
                                      
                                      8
                                      
                                      
                                      15,125
                                      
                                      
                                      
                                      15,303Total
      current assets
                                      
                                      
                                      
                                      
                                      99,502
                                      
                                      
                                      
                                      70,435Long-term
      land lease prepayments, net
                                      
                                      
                                      
                                      
                                      869
                                      
                                      
                                      
                                      887Property,
      plant and equipment, net
                                      
                                      9
                                      
                                      
                                      17,560
                                      
                                      
                                      
                                      16,318Due
      from related parties, long-term portion
                                      
                                      12(b)
                                      
                                      
                                      14,335
                                      
                                      
                                      
                                      27,444Total
      assets
                                      
                                      
                                      
                                      
                                      132,266
                                      
                                      
                                      
                                      115,084LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable
                                      
                                      
                                      
                                      
                                      17,872
                                      
                                      
                                      
                                      22,135Notes
      payable
                                      
                                      
                                      
                                      
                                      1,572
                                      
                                      
                                      
                                      4,519Accrued
      expenses and other liabilities
                                      
                                      
                                      
                                      
                                      1,218
                                      
                                      
                                      
                                      1,024Customer
      deposits
                                      
                                      
                                      
                                      
                                      2,465
                                      
                                      
                                      
                                      3,291Due
      to related parties
                                      
                                      12(b)
                                      
                                      
                                      314
                                      
                                      
                                      
                                      3,626Income
      taxes payable
                                      
                                      
                                      
                                      
                                      434
                                      
                                      
                                      
                                      376Short-term
      bank borrowings
                                      
                                      10(a)
                                      
                                      
                                      75,827
                                      
                                      
                                      
                                      50,849Current
      portion of long-term interest-bearing loans,secured
                                      
                                      10(b)
                                      
                                      
                                      2,897
                                      
                                      
                                      
                                      3,068Total
      current liabilities
                                      
                                      
                                      
                                      
                                      102,599
                                      
                                      
                                      
                                      88,888Long-term
      interest-bearing loans, secured
                                      
                                      10(b)
                                      
                                      
                                      4,679
                                      
                                      
                                      
                                      6,093Government
      subsidies
                                      
                                      
                                      
                                      
                                      91
                                      
                                      
                                      
                                      96Deferred
      tax liabilities
                                      
                                      
                                      
                                      
                                      1,154
                                      
                                      
                                      
                                      688108,523
                                      
                                      
                                      
                                      95,765




The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.  
 F-2


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Unaudited
Condensed Consolidated Balance Sheets
 As of
March 31, 2009





(Audited)As
      of
                                  March
      31,
                                  2009
                                
                                
                                As
      of
                                  September
      30,
                                  2008Note
                                
                                US$’000
                                
                                
                                US$’000Minority
      interests
                                
                                
                                
                                
                                66
                                
                                
                                
                                66Commitments
      and contingencies
                                
                                13
                                
                                
                                -
                                
                                
                                
                                -Stockholders’
      equity:Preferred
      stock, US$0.01 par value:5,000,000
      shares authorized, no share issued
                                
                                
                                
                                
                                -
                                
                                
                                
                                -Common
      stock, US$0.001 par value:500,000,000
      shares authorized as of  March 31, 2009 and September 30,
      2008
                                
                                
                                
                                
                                -
                                
                                
                                
                                -120,000,000
      shares issued and outstanding as of March 31, 2009 and September 30,
      2008
                                
                                
                                
                                
                                120
                                
                                
                                
                                120Additional
      paid-in capital
                                
                                
                                
                                
                                962
                                
                                
                                
                                962Statutory
      reserves
                                
                                
                                
                                
                                871
                                
                                
                                
                                740Accumulated
      other comprehensive income
                                
                                
                                
                                
                                2,161
                                
                                
                                
                                2,124Retained
      earnings
                                
                                
                                
                                
                                19,563
                                
                                
                                
                                15,307Total
      stockholders’ equity
                                
                                
                                
                                
                                23,677
                                
                                
                                
                                19,253Total
      liabilities and stockholders’ equity
                                
                                
                                
                                
                                132,266
                                
                                
                                
                                115,084


The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.   F-3


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Unaudited
Condensed Consolidated Statements of Changes in Stockholders’
Equity
 For the
six months ended March 31, 2009





Preferred
      stock issued
                
                
                Common
      stock issuedNumber
                  of
      shares
                
                
                Amount
                
                
                Number
                  of
      shares
                
                
                Amount
                
                
                Additional
                  paid-in
                  capital
                
                
                Statutory
                  reserves
                
                
                Accumulated
                  other
                  compre-
                  hensive
                  income
                
                
                Retained
                  earnings
                
                
                TotalUS$’000
                
                
                
                
                
                US$’000
                
                
                US$’000
                
                
                US$’000
                
                
                US$’000
                
                
                US$’000
                
                
                US$’000Balance
      as of September 30, 2008 and October 1, 2008
                
                
                -
                
                
                
                -
                
                
                
                120,000,000
                
                
                
                120
                
                
                
                962
                
                
                
                740
                
                
                
                2,124
                
                
                
                15,307
                
                
                
                19,253Net
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,387
                
                
                
                4,387Transfers
      to statutory reserves
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                131
                
                
                
                -
                
                
                
                (131
                )
                
                
                -Foreign
      currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                37
                
                
                
                -
                
                
                
                37Balance
      as of March 31, 2009
                
                
                -
                
                
                
                -
                
                
                
                120,000,000
                
                
                
                120
                
                
                
                962
                
                
                
                871
                
                
                
                2,161
                
                
                
                19,563
                
                
                
                23,677





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.  
 F-4


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Unaudited
Condensed Consolidated Statements of Cash Flows
 For the
six months ended March 31, 2009





Six
      months ended
                                  March
      31,2009
                                
                                
                                2008US$’000
                                
                                
                                US$’000Cash
      flows from operating activitiesNet
      income
                                
                                
                                4,387
                                
                                
                                
                                5,913Adjustments
      to reconcile net income to net cash provided byoperating
      activities:Depreciation of property, plant
      and equipment
                                
                                
                                777
                                
                                
                                
                                578Amortization of long-term land
      lease prepayments
                                
                                
                                19
                                
                                
                                
                                12Recognition of government
      subsidies
                                
                                
                                (6
                                )
                                
                                
                                -Accrued interest
      income
                                
                                
                                (1,492
                                )
                                
                                
                                -Exchange
      differences
                                
                                
                                -
                                
                                
                                
                                79Deferred
    taxation
                                
                                
                                466
                                
                                
                                
                                (239
                                )Changes
      in operating assets and liabilities:Accounts receivable,
      net
                                
                                
                                3,689
                                
                                
                                
                                (5,478
                                )Other
    receivables
                                
                                
                                (860
                                )
                                
                                
                                2,241Prepayments
                                
                                
                                824
                                
                                
                                
                                (1,247
                                )Inventories,
net
                                
                                
                                198
                                
                                
                                
                                4,135Accounts
payable
                                
                                
                                (4,294
                                )
                                
                                
                                1,684Notes payable
                                
                                
                                (2,953
                                )
                                
                                
                                3,258Accrued expenses and other
      accrued liabilities
                                
                                
                                193
                                
                                
                                
                                (1,457
                                )Customer
    deposits
                                
                                
                                (831
                                )
                                
                                
                                169Taxes payable
                                
                                
                                57
                                
                                
                                
                                480Net
      cash provided by operating activities
                                
                                
                                174
                                
                                
                                
                                10,128Cash
      flows from investing activitiesPurchase
      of property, plant and equipment
                                
                                
                                (1,998
                                )
                                
                                
                                (1,964
                                )Investment
      in restricted bank balances, net
                                
                                
                                (23,223
                                )
                                
                                
                                (9,863
                                )Advance
      to related parties, net
                                
                                
                                (1,046
                                )
                                
                                
                                -Net
      cash used in investing activities
                                
                                
                                (26,267
                                )
                                
                                
                                (11,827
                                )Cash
      flows from financing activitiesAdvance
      to related parties, net
                                
                                
                                -
                                
                                
                                
                                (13,897
                                )Capital
      contribution to a subsidiary by its minority shareholder
                                
                                
                                -
                                
                                
                                
                                64Proceeds
      from short-term bank loans
                                
                                
                                21,167
                                
                                
                                
                                15,795Repayment
      of short-term bank loans
                                
                                
                                (22,837
                                )
                                
                                
                                (10,104
                                )Proceeds
      from bills financing, net
                                
                                
                                29,506
                                
                                
                                
                                10,116Repayment
      of long-term interest-bearing loans
                                
                                
                                (1,598
                                )
                                
                                
                                (886
                                )Net
      cash provided by financing activities
                                
                                
                                26,238
                                
                                
                                
                                1,088




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







F-5


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Unaudited
Condensed Consolidated Statements of Cash Flows
 For the
six months ended March 31, 2009





Six
      months ended
                      March
      31,2009
                    
                    
                    2008US$’000
                    
                    
                    US$’000Net
      increase (decrease) in cash and cash equivalents
                    
                    
                    145
                    
                    
                    
                    (611
                    )Cash
      and cash equivalents, at beginning of period
                    
                    
                    3,154
                    
                    
                    
                    5,340Effect
      on exchange rate changes
                    
                    
                    6
                    
                    
                    
                    326Cash
      and cash equivalents, at end of the period
                    
                    
                    3,305
                    
                    
                    
                    5,055Supplemental
      disclosure of cash flow informationInterest
      received
                    
                    
                    361
                    
                    
                    
                    243Interest
      paid
                    
                    
                    2,092
                    
                    
                    
                    2,246Tax
      paid
                    
                    
                    -
                    
                    
                    
                    323Non-cash
      investing activitiesAccrued
      interest income from related parties
                    
                    
                    1,492
                    
                    
                    
                    -Non-cash
      financing activitiesSettlement
      of bills financing with other financial assets
                    
                    
                    2,918
                    
                    
                    
                    -




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







F-6


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009


1.
            ORGANIZATION
      AND PRINCIPAL ACTIVITIES





CH
Lighting International Corporation (“CH Lighting”), formerly known as
Sino-Biotics, Inc., was incorporated on July 6, 2005 under the laws of the State
of Delaware, and adopted its existing name effective on August 25, 2008. Its
common stock is currently trading on the Over-The-Counter Bulletin Board
(“OTCBB”) of NASDAQ under the symbol “CHHN”.





CH
Lighting is an investment holding company with no operations. The principal
activities of its subsidiaries (together with CH Lighting, collectively referred
to as “the Company”) are the manufacture and sale of lighting source products
and lighting electronic products and investment holdings.





Details
of CH Lighting’s subsidiaries as of March 31, 2009 are as follows:





Name
                                      
                                      Place
      and
                                        date
      of
                                        establishment
      /
                                        incorporation
                                      
                                      Percentage
      of
                                        effective
      equity
                                        interest
      / voting
                                        right
                                        attributable
      to
                                        the
      Company
                                      
                                      Principal
      activitiesCH
      International Holdings Limited (“CH International”)
                                      
                                      British
      Virgin Islands
                                      
                                      
                                      100
                                      %
                                      Investment
      holdingZhejiang
      CH Lighting Company Limited (“Zhejiang CH”) *
                                      
                                      Zhejiang,
                                        the
      People’s Republic of China (“PRC”)
                                        September
      27, 2000
                                      
                                      
                                      100
                                      %
                                      Manufacture
      and sales of lighting source productsZhejiang
      CH Lighting Technology Company Limited (“CH Technology”) *
                                      
                                      Zhejiang,
                                        the
      PRC
                                        March
      31, 2003
                                      
                                      
                                      100
                                      %
                                      Manufacture
      and sales of lighting electronic productsZhejiang
      Shaoxing CH Lamps Manufacturing Company Limited (“CH Lamps”)
    *
                                      
                                      Zhejiang,
                                        the
      PRC
                                        December
      13, 1999
                                      
                                      
                                      100
                                      %
                                      Manufacture
      of lighting source productsShangyu
      CH Laboratory Testing Company Limited (“CH Lab”) *
                                      
                                      Zhejiang,
                                        the
      PRC
                                        January
      7, 2008
                                      
                                      
                                      90
                                      %
                                      Laboratory
      testing services of lighting source and electronic
  productsCH
      Lighting (Hong Kong) Limited (“CH Hong Kong”)
                                      
                                      Hong
      Kong
                                        November
      10, 2000
                                      
                                      
                                      100
                                      %
                                      Trading
      of lighting source
products





*
            These
      are direct translations of names in Chinese for identification purposes
      only and are not the official names in
English.






F-7


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





1.
            ORGANIZATION
      AND PRINCIPAL ACTIVITIES
(CONTINUED)





On July
16, 2008, CH Lighting entered into a Share Exchange Agreement (the “Exchange
Agreement”) with CH International and KEG International Limited (“KEG”), a
company incorporated in the British Virgin Islands. Pursuant to the Share
Exchange Agreement, CH Lighting acquired all of the issued and outstanding
common stock of CH International from KEG in exchange for 93,000,000
newly-issued shares of CH Lighting’s common stock, par value of US$0.001,
representing 77.5% of CH Lighting’s common stock issued and outstanding upon
completion of the share exchange (the “Share Exchange
Transaction”).





The
acquisition by CH Lighting of CH International 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,
CH Lighting (the legal acquirer) is considered the accounting acquiree and CH
International (the legal acquiree) is considered the accounting acquirer. The
consolidated financial statements of the consolidated from entity will in
substance be those of CH International, with the assets and liabilities,
revenues and expenses, of CH Lighting being included effective from the date of
completion of Share Exchange Transaction. CH Lighting is deemed to be a
continuation of the business of CH International.





In order
to rationalize the corporate structure and prepare for the Share Exchange
Transaction, CH International and other subsidiaries (collectively referred to
as the “CH International Group”) underwent a reorganization (“Reorganization”)
prior to the consummation of the Share Exchange Transaction.




Since the
ultimate beneficial owner of the companies comprising the CH International Group
was, all the time prior to the completion of the Reorganization, Mr. Zhao Guo
Song (‘Mr. Zhao”), the ownership transfer transaction was accounted for as a
transfer of entities under common control in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 141, “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 unaudited condensed consolidated
financial statements.






F-8


CH
Lighting International Corporation
 (formerly
Sino-Biotics, Inc.)
 
 Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009




2.
            PREPARATION
      OF INTERIM FINANCIAL STATEMENTS




Basis
of presentations




The
unaudited condensed consolidated financial statements of the Company have been
prepared by the management pursuant to the accounting principles generally
accepted in the United States of America (“GAAP”) for interim financial
reporting and the rules and regulations of the Securities and Exchange
Commission (“SEC”). Accordingly, certain information and note disclosures
normally included in annual financial statements prepared in accordance with
GAAP have been condensed or omitted, although the management believes that the
disclosures made are adequate to make the information not
misleading.




To
prepare the financial statements in conformity with GAAP, the management must
make estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of these financial statements and the reported
amounts of income and expenses during the reporting period. Actual amounts may
differ from these estimated amounts. In the opinion of the management, these
unaudited condensed consolidated financial statements include all adjustments
(consisting of normal recurring adjustments and reclassifications) necessary for
a fair presentation of the Company’s financial position as of March 31, 2009,
the results of operations for both the three months and six months ended March
31, 2009 and 2008 and cash flows for the six months ended March 31, 2009 and
2008.




The
results of operations and cash flows for the six months ended March 31, 2009 and
2008 are not necessarily indicative of the operating results and cash flows to
be expected for the full year. These condensed consolidated financial statements
should be read in conjunction with the audited financial statements and notes
thereto included in the Company’s Form-10K for the year ended September 30, 2008
filed on December 29, 2008.




Basis
of consolidation




The
unaudited condensed consolidated financial statements include the financial
information of CH Lighting and its subsidiaries. All significant inter-company
accounts and transactions have been eliminated upon consolidation.




Recently
issued accounting pronouncements


There are
no new accounting pronouncements for which adoption is expected to have a
material effect on the Company’s financial statements.






F-9


CH Lighting International
Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





3.
            GOVERNMENT
      SUBSIDIES INCOME





The
government subsidies income as granted and received was recognized as income
because no specific condition was attached to the grant.





4.
            EARNINGS
      PER SHARE





Basic
earnings per share are computed by dividing income available to common
stockholders by the weighted-average number of common stocks outstanding during
the period. Diluted earnings per share is computed similarly to basic earnings
per share calculation 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 the six months ended
March 31, 2009 and 2008.





5.
            INCOME
      TAXES




Interpretation
No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB
Statement No. 109” (“FIN 48”) 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 FIN 48, the Company must
recognize the tax benefit from an uncertain position only if it is
more-likely-than-not that 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 FIN 48, 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 March 31, 2009, the Company has identified the jurisdictions
as “major” tax jurisdictions, as defined, in which it is required to file income
tax returns.  These are 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
March 31, 2009, the Company had no unrecognized tax benefits or accruals for the
potential payment of 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 six months ended March 31, 2009 and 2008, no
interest or penalties were recorded.







F-10


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





5.
            INCOME
      TAXES (CONTINUED)





(a)
            Income
      tax (credits) expenses comprise the
following:





Three
      months ended
                                    March
      31,
                                  
                                  
                                  Six months ended
                                    March 31,2009
                                  
                                  
                                  2008
                                  
                                  
                                  2009
                                  
                                  
                                  2008US$’000
                                  
                                  
                                  US$’000
                                  
                                  
                                  US$’000
                                  
                                  
                                  US$’000Current
      taxes arising in Hong Kong and the PRC:For
      the period
                                  
                                  
                                  (168
                                  )
                                  
                                  
                                  178
                                  
                                  
                                  
                                  66
                                  
                                  
                                  
                                  762Deferred
      taxes arising in Hong Kong and the PRC:For
      the period
                                  
                                  
                                  132
                                  
                                  
                                  
                                  (357
                                  )
                                  
                                  
                                  466
                                  
                                  
                                  
                                  (239
                                  )(36
                                  )
                                  
                                  
                                  (179
                                  )
                                  
                                  
                                  532
                                  
                                  
                                  
                                  523




(b)
            Reconciliation
      from the expected income tax expenses calculated with reference to the
      average statutory tax rate in the PRC of 25% and 29% for the six months
      ended March 31, 2009 and 2008 respectively is as
  follows:




Three
      months ended
                                            March
      31,
                                          
                                          
                                          Six months ended
                                            March 31,2009
                                          
                                          
                                          2008
                                          
                                          
                                          2009
                                          
                                          
                                          2008US$’000
                                          
                                          
                                          US$’000
                                          
                                          
                                          US$’000
                                          
                                          
                                          US$’000Expected
      income tax expenses
                                          
                                          
                                          109
                                          
                                          
                                          
                                          262
                                          
                                          
                                          
                                          1,229
                                          
                                          
                                          
                                          1,866Difference
      in tax rates in the countries that the Company operates
                                          
                                          
                                          5
                                          
                                          
                                          
                                          12
                                          
                                          
                                          
                                          5
                                          
                                          
                                          
                                          14Effect
      on tax incentives / holiday
                                          
                                          
                                          (96
                                          )
                                          
                                          
                                          (60
                                          )
                                          
                                          
                                          (286
                                          )
                                          
                                          
                                          (1,348
                                          )Tax-exempted
      / Non-deductible items
                                          
                                          
                                          (208
                                          )
                                          
                                          
                                          (379
                                          )
                                          
                                          
                                          (915
                                          )
                                          
                                          
                                          5Withholding
      tax
                                          
                                          
                                          154
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          499
                                          
                                          
                                          
                                          -Others
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (14
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (14
                                          )Income
      tax (credits) expenses
                                          
                                          
                                          (36
                                          )
                                          
                                          
                                          (179
                                          )
                                          
                                          
                                          532
                                          
                                          
                                          
                                          523







F-11


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





6.
            RESTRICTED
      BANK BALANCES





The
restricted bank balances as of March 31, 2009 and September 30, 2008 represented
time deposits with original maturity between three and twelve months to secure
banking facilities granted by various financial institutions are as
follows:





As
      of
                    March
      31,
                    2009
                  
                  
                  (Audited)
                    As
      of
                    September
      30,
                    2008US$’000
                  
                  
                  US$’000Notes
      payable
                  
                  
                  1,043
                  
                  
                  
                  4,519Bills
      financing
                  
                  
                  33,331
                  
                  
                  
                  7,367Banking
      facilities granted to a related party
                  
                  
                  5,186
                  
                  
                  
                  4,42839,560
                  
                  
                  
                  16,314




7.
            ACCOUNTS
      RECEIVABLES, NET





Accounts
receivable are presented net of an allowance for doubtful accounts of US$560,000
and US$337,000 as of March 31, 2009 and September 30, 2008,
respectively.




8.
            INVENTORIES,
      NET




Inventories consisted of the
following:


As
      of
                  March
      31,
                  2009
                
                
                (Audited)
                  As
      of
                  September
      30,
                  2008US$’000
                
                
                US$’000Raw
      materials
                
                
                2,873
                
                
                
                3,397Work-in-progress
      and semi-finished goods
                
                
                3,090
                
                
                
                2,277Finished
      goods
                
                
                9,162
                
                
                
                9,62915,125
                
                
                
                15,303







F-12


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





9.
            PROPERTY,
      PLANT AND EQUIPMENT, NET





Property, plant and equipment are
summarized as follows:





As
      of
                  March
      31,
                  2009
                
                
                (Audited)
                  As
      of
                  September
      30,
                  2008US$’000
                
                
                US$’000Buildings
                
                
                6,883
                
                
                
                6,869Plant
      and machinery
                
                
                10,879
                
                
                
                9,729Motor
      vehicles
                
                
                1,001
                
                
                
                1,000Furniture,
      fixtures and office equipment
                
                
                1,182
                
                
                
                1,167Construction-in-progress
                
                
                3,394
                
                
                
                2,54823,339
                
                
                
                21,313Accumulated
      depreciation
                
                
                (5,779
                )
                
                
                (4,995
                )17,560
                
                
                
                16,318




10.
            BANK
      BORROWINGS AND OTHER LOANS




Bank
borrowings and other loans are comprised of the following:




Note
                              
                              
                              As
      of
                                March
      31,
                                2009
                              
                              
                              (Audited)
                                As
      of
                                September
      30,
                                2008US$’000
                              
                              
                              US$’000Short-term
      bank borrowings
                              
                              10(a)
                              
                              
                              
                              75,827
                              
                              
                              
                              50,849Long-term
      interest-bearing loans
                              
                              10(b)
                              
                              
                              
                              7,576
                              
                              
                              
                              9,16183,403
                              
                              
                              
                              60,010







F-13


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009




10.
            BANK
      BORROWINGS AND OTHER LOANS
(CONTINUED)




(a)
            Short-term
      bank borrowings




Short-term
bank borrowings are comprised of the following:


Note
                          
                          
                          As
      of
                            March
      31,
                            2009
                          
                          
                          (Audited)
                            As
      of
                            September
      30,
                            2008US$’000
                          
                          
                          US$’000Short-term
      bank loans
                          
                          10(a)(i)
                          
                          
                          
                          35,731
                          
                          
                          
                          38,814Bill
      financings
                          
                          10(a)(ii)
                          
                          
                          
                          40,096
                          
                          
                          
                          12,03575,827
                          
                          
                          
                          50,849




(i)
            Short-term
      bank loans




Short-term
bank loans represent amounts due to various banks which are due within 12
months.  These loans can normally be renewed with the banks upon
expiration/maturity.




The loans
are collateralized by land use rights and buildings of the Company with carrying
values as follows:


As
      of
                    March
      31,
                    2009
                  
                  
                  (Audited)
                    As
      of
                    September
      30,
                    2008US$’000
                  
                  
                  US$’000Land
      use rights
                  
                  
                  869
                  
                  
                  
                  887Buildings
                  
                  
                  5,484
                  
                  
                  
                  5,6406,353
                  
                  
                  
                  6,527




Various
parties have also issued guarantees against these short-term bank loans as
follows:





As
      of
                    March
      31,
                    2009
                  
                  
                  (Audited)
                    As
      of
                    September
      30,
                    2008US$’000
                  
                  
                  US$’000Personal
      guarantees issued by related parties
                  
                  
                  1,461
                  
                  
                  
                  13,858Corporate
      guarantees issued by unrelated parties
                  
                  
                  29,128
                  
                  
                  
                  30,922




The
weighted average annual interest rates of the short-term bank loans were 7.08%
and 6.41% as of March 31, 2009 and September 30, 2008,
respectively.







F-14


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009




10.
            BANK
      BORROWINGS AND OTHER LOANS
(CONTINUED)




(a)
            Short-term
      bank borrowings (Continued)




(ii)
            Bill
      financings




Bill
financings represent amounts due to various banks which are repayable within six
months from the date of issue. The bills are guaranteed by related parties and
secured by restricted bank balances and other financial assets of the Company
with carrying values as follows:


As
      of
                    March
      31,
                    2009
                  
                  
                  (Audited)
                    As
      of
                    September
      30,
                    2008US$’000
                  
                  
                  US$’000Restricted
      bank balances
                  
                  
                  33,331
                  
                  
                  
                  7,367Other
      financial assets
                  
                  
                  -
                  
                  
                  
                  2,918Personal
      guarantees issued by related parties
                  
                  
                  3,213
                  
                  
                  
                  -36,544
                  
                  
                  
                  10,285




The
weighted average annual interest rates of the bill financings were 1.97% and
5.69% as of March 31, 2009 and September 30, 2008 respectively.




(b)
            Long-term
      interest-bearing loans





Long-term
interest-bearing loans are secured by machineries with net book values of
US$3,771,000 and US$3,929,000 as of March 31, 2009 and September 30, 2008,
respectively, and guaranteed by a third party and certain related
parties.





The
long-term interest-bearing loans are repayable as follows:


As
      of
                    March
      31,
                    2009
                  
                  
                  (Audited)
                    As
      of
                    September
      30,
                    2008US$’000
                  
                  
                  US$’000Not
      exceeding 1 year
                  
                  
                  2,897
                  
                  
                  
                  3,068More
      than 1 year but not exceeding 5 years
                  
                  
                  4,679
                  
                  
                  
                  6,0937,576
                  
                  
                  
                  9,161Portion
      classified as current liabilities
                  
                  
                  (2,897
                  )
                  
                  
                  (3,068
                  )Long-term
      portion
                  
                  
                  4,679
                  
                  
                  
                  6,093




The
weighted average annual interest rates of the long-term interest-bearing loans
were 5.11% and 6.69% as of March 31, 2009 and September 30, 2008
respectively.







F-15


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009




11.
            FINANCIAL
      INSTRUMENTS




The
Company’s financial instruments include cash and cash equivalents, restricted
bank balances, other financial assets, accounts receivable/payable, other
receivables/payables, prepayments, notes payable, accrued expenses and other
liabilities, customer deposits, amount due from/to related parties and bank
borrowings and other loans. The management has estimated that the carrying
amount of those current financial instruments approximates their fair value due
to their short-term nature. The fair value of those non-current financial
instruments, as estimated based on the current rates offered to the Company for
debt of similar terms and maturities, was not materially different from their
carrying value as of March 31, 2009 and September 30, 2008.





12.
            RELATED
      PARTY BALANCES




(a)
            Names
      and relationship of related
parties:




Name
                            
                            Existing relationships with the
      CompanyMr.
      Zhao
                            
                            Director
      and controlling stockholder of CH LightingMs.
      Gan Cai Ying (“Ms. Gan”)
                            
                            Director
      of CH Lighting and spouse of Mr. ZhaoShangyu
      Chenhui Childcare Products Company Limited (“CH Childcare”)
    *
                            
                            Under
      common control of Mr. ZhaoShaoxing
      Umbrella Factory (“SX Umbrella”) *
                            
                            Under
      common control of Mr. ZhaoShangyu
      Hecheng Plastic and Metal Products Company Limited
      (“Hecheng”)*
                            
                            Under
      common control of Mr. ZhaoShangyu
      Henghui Electronic Products Manufacturing Company Limited (“Henghui”)
      *
                            
                            Under
      common control of Mr. ZhaoZhejiang
      Chenhui Yingbao Childcare Products Company Limited (“Yingbao Childcare”)
      *
                            
                            Under
      common control of Mr.
Zhao




*
              These
      are direct translations of names in Chinese for identification purposes
      only and are not the official names in
English.







F-16


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





12.
            RELATED
      PARTY BALANCES (CONTINUED)




(b)           Summary
of balances with related parties:


As
      of
                  March
      31,
                  2009
                
                
                (Audited)
                  As
      of
                  September
      30,
                  2008US$’000
                
                
                US$’000Due
      from related parties:Ms.
      Gan
                
                
                2,031
                
                
                
                636CH
      Childcare
                
                
                154
                
                
                
                154Henghui
                
                
                21,160
                
                
                
                26,352Yingbao
      Childcare
                
                
                9,049
                
                
                
                7,360Hecheng
                
                
                1,381
                
                
                
                -33,775
                
                
                
                34,502




The
amounts due from related parties represent unsecured advances which were
interest-free up to July 15, 2008 and repayable on demand. From July 16, 2008
onwards, the amounts carry variable interest at the 1-3 Years Lending Rate
offered by the People’s Bank of China plus 0.5% per annum. Interest shall be
paid annually. During the six months ended March 31, 2009, interest income of
US$1,492,000 was recognized in the unaudited condensed consolidated statements
of operations and comprehensive income. The Company plans to collect the
outstanding amounts due as of March 31, 2009 gradually over the next two years.
The estimated amount to be collected after one year is approximately
US$14,335,000 (As of September
30, 2008, US$27,444,000 was outstanding).





As
      of
                  March
      31,
                  2009
                
                
                (Audited)
                  As
      of
                  September
      30,
                  2008US$’000
                
                
                US$’000Due
      to related parties:Mr.
      Zhao
                
                
                289
                
                
                
                3,203SX
      Umbrella
                
                
                25
                
                
                
                25Hecheng
                
                
                -
                
                
                
                398314
                
                
                
                3,626




The
amounts due to related parties represent unsecured advances which are
interest-free and repayable on demand.







F-17


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





13.
            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 March 31, 2009 and September 30,
2008:




As
      of
                    March
      31,
                    2009
                  
                  
                  (Audited)
                    As
      of
                    September
      30,
                    2008US$’000
                  
                  
                  US$’000Within
      one year
                  
                  
                  32
                  
                  
                  
                  21One
      to two years
                  
                  
                  15
                  
                  
                  
                  15Two
      to three years
                  
                  
                  15
                  
                  
                  
                  15Three
      to four years
                  
                  
                  15
                  
                  
                  
                  15Four
      to five years
                  
                  
                  15
                  
                  
                  
                  15Over
      five years
                  
                  
                  10
                  
                  
                  
                  3Total
                  
                  
                  102
                  
                  
                  
                  84





(b)
            Capital
      commitments





As of
March 31, 2009 and September 30, 2008, the Company had capital expenditure
commitments for construction projects and purchase of machinery of approximately
US$10,114,000 and US$3,343,000 respectively.





(c)
            Contingencies





As of
March 31, 2009 and September 30, 2008, the Company had provided corporate
guarantees of approximately US$4,382,000 and US$5,106,000, respectively, for
revolving bank loans and notes drawn by an unrelated company incorporated in the
PRC (“Company A”).





The
guarantee for Company A arose from the mutual negotiation between Zhejiang CH
and Company A. Associated with the corporate guarantee, Company A also provided
a cross guarantee for the bank facilities of Zhejiang CH. The guarantee was for
bank loans and notes drawn by Company A and will be terminated upon the mutual
agreement of Zhejiang CH and Company A. If Company A defaults on the repayment
of its bank loans or notes when they fall due, Zhejiang CH is required to repay
the outstanding balance. There is no recourse or collateralization provision in
the guarantee. As of March 31, 2009, the guarantee that provided for the bank
loans and notes drawn by Company A was approximately RMB30,000,000 or
US$4,382,000 or US$0.04 per share of common stock outstanding (As of September 30, 2008:
RMB35,000,000 or US$5,106,000 or US$0.05 per share of common stock
outstanding), which is also the maximum potential amount of future
payments under the guarantee as of March 31, 2009 and September 30,
2008.







F-18


CH
Lighting International Corporation


(formerly
Sino-Biotics, Inc.)





Notes
to and Forming Part of Unaudited Condensed Consolidated Financial
Statements
 For the
six months ended March 31, 2009





13.
            COMMITMENTS
      AND CONTINGENCIES (CONTINUED)





(c)
            Contingencies
      (Continued)





However,
default by Company A is considered remote by the management. Based on the
information available to the management, the fair values of the guarantees
granted by the Company are considered not material and therefore no liability
for the guarantor’s obligation under the guarantee was recognized as of March
31, 2009 and September 30, 2008.





14.
            RETIREMENT
      PLAN COSTS





Contributions
to defined contribution retirement schemes are charged to general and
administrative expenses in the unaudited condensed consolidated statements of
operations and comprehensive income as and when the related employee services
are provided as follows:





Three
      months ended
                        March
      31,
                      
                      
                      Six months ended
                        March 31,2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000
                      
                      
                      US$’000Contributions
      to defined contribution retirement schemes
                      
                      
                      39
                      
                      
                      
                      18
                      
                      
                      
                      81
                      
                      
                      
                      70





15.
            SEGMENT
      INFORMATION





For the
six months ended March 31, 2009 and 2008, revenue of the Company represented net
sales of lighting source and lighting electronics products. No financial
information by business segment is presented.








Three
      months ended
                                        March
      31,
                                      
                                      
                                      Six months ended
                                        March 31,2009
                                      
                                      
                                      2008
                                      
                                      
                                      2009
                                      
                                      
                                      2008US$’000
                                      
                                      
                                      US$’000
                                      
                                      
                                      US$’000
                                      
                                      
                                      US$’000China,
      including Hong Kong
                                      
                                      
                                      3,932
                                      
                                      
                                      
                                      7,424
                                      
                                      
                                      
                                      13,319
                                      
                                      
                                      
                                      22,243Europe
                                      
                                      
                                      2,041
                                      
                                      
                                      
                                      1,652
                                      
                                      
                                      
                                      4,395
                                      
                                      
                                      
                                      2,901Middle
      East
                                      
                                      
                                      762
                                      
                                      
                                      
                                      2,211
                                      
                                      
                                      
                                      4,265
                                      
                                      
                                      
                                      4,023Korea
                                      
                                      
                                      734
                                      
                                      
                                      
                                      2,239
                                      
                                      
                                      
                                      1,569
                                      
                                      
                                      
                                      4,875United
      States
                                      
                                      
                                      61
                                      
                                      
                                      
                                      195
                                      
                                      
                                      
                                      137
                                      
                                      
                                      
                                      407Africa
                                      
                                      
                                      83
                                      
                                      
                                      
                                      76
                                      
                                      
                                      
                                      83
                                      
                                      
                                      
                                      263Others
                                      
                                      
                                      552
                                      
                                      
                                      
                                      1,485
                                      
                                      
                                      
                                      1,061
                                      
                                      
                                      
                                      2,429Total
                                      
                                      
                                      8,165
                                      
                                      
                                      
                                      15,282
                                      
                                      
                                      
                                      24,829
                                      
                                      
                                      
                                      37,141





Revenue
is attributed to countries based on location of customers.





All
long-lived assets are located at China, including Hong
Kong.


F-19


ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  Forward
Looking Statements
  The
following discussion of the financial condition and results of operations of CH
Lighting International Corporation (the “Company”) is based
upon and should be read in conjunction with our unaudited condensed 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.
  Prior
Operations of the Company
  The
Company’s predecessor, Innovative Coatings, a Georgia corporation, ceased
operations in June 2003.  On August 1, 2003, ICC Holdings Corp. was formed
as a wholly-owned subsidiary of Innovative Coatings.  Also on August 1,
2003, Instachem Systems was formed as a wholly-owned subsidiary of ICC Holdings
Corp. and ICC Merger Corp. was formed as a wholly-owned subsidiary of Instachem
Systems.  On August 11, 2003, ICC Holdings Corp. merged with its parent
company, Innovative Coatings, to change its U.S. state of incorporation from
Georgia to Oklahoma.  On August 12, 2003, ICC Merger Corp. bought ICC
Holdings Corp. A new corporation with ownership unrelated to the above,
Sino-Biotics, Inc. was formed in Delaware on July 6, 2005.  On July 18,
2005, Instachem Systems sold ICC Merger Corp. to an individual for $500.
 On July 19, 2005, Sino-Biotics, Inc. bought Instachem Systems. As a result
of the above, the pre-existing creditors of the original operating entity,
Innovative Coatings, were spun off through the sale of ICC Merger in July
2005.
 
 The
Share Exchange Transaction
 
 On July
16, 2008 (the “Closing
Date”), Sino-Biotics, Inc. entered into a Share Exchange Agreement (the
“Exchange
Agreement”) with CH International Holdings Limited, a British Virgin
Islands investment holding company (“CH International”)
and KEG International Limited, a British Virgin Islands company and the sole
stockholder of CH International (the “Stockholder”). As a
result of the share exchange, Sino-Biotics, Inc. acquired all of the issued and
outstanding securities of CH International from the Stockholder in exchange for
Ninety-Three Million (93,000,000) newly-issued shares of Sino-Biotics, Inc.’s
common stock, par value $0.001 per share (“Common Stock”),
representing seventy-seven and one half percent (77.5%) of the issued and
outstanding Common Stock as of the Closing Date (the “Exchange”).  As
a result of the Exchange, CH International became a wholly-owned subsidiary of
Sino-Biotics, Inc.
  From
its inception through the closing of the Exchange, the Company has not had any
operations. Prior to the Exchange, the Company was considered a “blank check”
company with US$500 in assets and with a net loss of approximately US$80,227 for
the fiscal year ending September 30, 2007.  As of March 31, 2008, the
Company had approximately US$21,900 in liabilities. As of July 16, 2008, the
Company did not have any liabilities.
 
 CH
International, the wholly-owned and chief operating subsidiary of the Company,
is an international investment holding company founded in the British Virgin
Islands on April 30, 2004.  CH International’s wholly-owned operating
subsidiaries are as follows: (a) Zhejiang Shaoxing CH Lamps Manufacturing
Company (“CH
Lamps”), a company organized under the People’s Republic of China (the
“PRC”) on
December 13, 1999; (b) Zhejiang CH Lighting Company Limited (“CH Lighting PRC”), a
company organized under the laws of the PRC on September 27, 2000; (c) CH
Lighting (Hong Kong) Limited, a company organized under the laws of Hong Kong on
November 10, 2000 and a wholly-owned subsidiary of CH Lighting PRC (“CH Hong Kong”); and
(d) Zhejiang CH Lighting Technology Company Limited, a company organized under
the laws of the PRC on March 31, 2003 (“CH
Technology”).
  - 1
-
 CH
International also owns ninety percent (90%) of Shangyu CH Laboratory Testing
Company Limited, a company organized under the laws of the PRC on January 7,
2008 (“CH Lab”,
and together with CH International, CH Lamps, CH Lighting PRC, CH Hong Kong and
CH Technology, the “Group”).
  Our
Common Stock is currently traded on the Over-The-Counter Bulletin Board (“OTCBB”) and on the
Pink Sheets under the symbol “CHHN.OB”.
  Current
Operations of the Company (General Development of Business)
  Introduction
 
 CH Lamps
manufactures and sells fluorescent lamp tubes, bulbs, luminaries and other
decorative products. CH Lighting PRC currently manufactures and sells lighting
products and luminaries (light fitting parts).  In order to increase
our sales volume in the international market and upon approval by the PRC’s
Ministry of Commerce in November 2005, CH Lighting PRC purchased CH Hong Kong,
which is mainly engaged in the export trade and information technology
services.  CH Technology manufactures and sells sterilized electronic
appliances, lighting equipment and luminaries.  CH Lab was established
on January 7, 2008 in the PRC and currently provides laboratory testing services
for lighting sources and electronic products.
 
 Summary
of Current Business of the Company
  The Company is dedicated to developing,
manufacturing and selling healthy, energy-efficient, environmentally-friendly
(green) and innovative high-end products and relevant services in the
fluorescent lighting field. The Company offers ten (10) series and over 1,000
types of products, including “special light” sources, “general light” sources
and luminaries for the home and for businesses (office buildings), and lighting
electronics. The Company is one of the leading producers in China’s “special
light” market, including product innovation, specification and sales. Currently,
the Company has the product series most collected in the “Government Purchasing
List of Energy-Saving Products” in China (a list of compulsory purchase items by
which the Chinese government enforces the procurement of energy-efficient
products by governmentaldepartments
and local authorities).
  The volume of production and sales of
linear fluorescent lamps totaled 1.2 billion and 1.5 billion setsin China in 2006 and
2007, respectively.  In 2006, the Company accounted for eight percent
(8%) of the market share of China’s linear fluorescent lamp market, ranking
third among total linear fluorescent lamp manufacturers in China, and according
to the China Association of Lighting Industry, the Company’s T5 fluorescent lamp
model was and currently is the best selling product in the Chinese
market.
  The Company has three (3) major
production facilities: CH Lighting PRC, CH Lamps and CH Technology, collectively
covering 62,000m2, with
floor area of 70,000m2, having
fifteen (15) automatic light source production lines, capable of producing 120
million light sources and 17 million sets of  luminaries
annually.
  The Company has also established a
Special Light Source Research Center in 2003 and a Light Source and Fitting
Inspection and Development Laboratory in January 2008, of which the latter has
been declared a state-accredited laboratory. Furthermore, the Company employs an
external consulting team composed of over 21 professors and experts in the
industry. The Company has 132 patents (including 25 patents pending) and is a
participant as well as contributor to various China Lighting Industry
Standards.
  The Company has 32 established offices
in China and has cooperative agreements with over 450 distributors in the
Chinese market and over 300 foreign customers in the international market. The
Company has established agents in Saudi Arabia and Belgium that distribute
self-owned brands in the Middle East and in the European markets.  The
Company is currently in the process of establishing agents in the United
States.
  
 - 2
-
 
 Description
of Company Business Segments
  The
Company is dedicated to developing, manufacturing and selling healthy,
energy-saving, green and innovative high-end products and relevant services in
the fluorescent lighting field. The Company sets very high and strict quality
and environmental standards for all of our products.  Our revenues are
mostly generated from the sales of our products in China and
abroad.  For the most part, our sales are seasonal, with the first
calendar quarter being the low season, in light of the Chinese New Year
festivities, and the fourth calendar quarter being our peak season.
  We are not required to carry
significant amounts of inventory to meet rapid delivery requirements of our
foreign customers as most of our foreign sales are “made to order” products.
However, we are required to carry significantamounts of inventory to
meet rapid delivery requirements of our domestic (Chinese)
customers.  We have not experience serious problems with the quality
of our products, therefore we do not provide extra warranties or guarantees to
our customers unless they return the goods because of issues with
quality.  The Company has standard payment terms and for the most
part, it does not provide payment extensions to customers.
 
 Our revenues from the sale of our
products were US$14,047,000 for fiscal year 2005 (100% of all revenues),
US$15,225,000 for fiscal year 2006 (100% of all revenues), US$32,379,000 for
fiscal year 2007 (100% of all revenues) and US$90,864,000 for fiscal year 2008
(100% of all revenues). A list of our products and services can be found in our
Annual Report on Form 10-K as filed with the SEC on December 29, 2008 and on our
website at http://chlighting.com.
 
 Enterprise
Marketing Strategy and Methods of Distribution
 
 Domestic
Marketing Strategy
  The Company owns patents for special
lighting lamps and currently holds a leading position in the Chinese domestic
market. The Company’s sale of products has yielded positive results since 2006
when it entered the Chinese market. Set forth below are some key features of the
Company’s domestic marketing strategy:
  ·
                Effective
      and Professional Sales Team. The Company is aware of the
      importance of effective and professional sales teams.  As a
      result, we recruit dynamic and enthusiastic personnel .  We
      offer a very competitive package and we provide full-scale trainings to
      continuously enhance our personnel’s performance. In addition to
      day-to-day sales training, the Company’s domestic marketing center holds
      Marketing Training Camp, hiring renowned teachers from Beijing and other
      places throughout the country to provide training courses designed to
      build a cohesive, creative, strong team with effective marketing
      skills.
 ·
                    Expansion of Sales Network.The Company aims to continue to
      expand its domestic market share and improve points of sales. At present,
      it has 32 offices and has relationships with more than 450
      distributors.
 ·
                        Energy Savings and Emission
      Reduction.The Company aims to participate
      actively in government projects involving replacement and procurement of
      green lighting, group procurement of enterprises and institutions and
      bidding for major projects. The Company plans to establish contacts with
      provincial and municipal governments to promote its energy-saving
      products. Through the Company’s implementation of a corresponding discount
      policy, the Company plans to increase the intensity of cultivation in the
      market, making the design and concepts of its products fully recognized by
      channel partners, consumer groups and lighting designers. At the same
      time, consistent with national policies of energy-savings and emissions
      reduction, the Company shall fully utilize its advantage in advanced
      lighting technology to enhance development with innovative lighting
      design, to provide complimentary products and to accelerate the upgrading
      of products. The Company plans to continue to maintain extensive
      cooperation with key branded enterprises to ensure increasing orders from
      old customers and to develop new
  customers.
 ·
                            Strengthen Brand Promotion.In order to continuously enhance
      our customers’ awareness, the Company aims to continue to collaborate with
      various media sources to promote its brand. It has established strategic
      cooperation with CCTV2 (China Television) and with the print media as well
      as purchased large-scale outdoor advertising on the Shanghai-Hangzhou and
      Hangzhou - Ningbo Expressways. The Company also plans to continue to
      maintain its professional website (http://chlighting.com), search engines and exhibitions
      in China and abroad to develop new customer groups. Furthermore, the
      Company plans to continue to employ the top products planning corporation
      in China (Guangzhou Zhonghe Jiuding Planning Company) as the Company’s
      products promotion planning
  consultant.
  - 3
-
 International
Marketing Strategy
  ·
                    Participating
      in International Lighting Fair.The Company currently
      participates in more than 10 exhibitions abroad annually, such as
      international lighting fairs in Hong Kong, Frankfurt, Nuremberg, New York,
      Las Vegas and Italy and plans to continue to do so. The Company continues
      to improve its influence and to expand its sales in the international
      market. The purpose of participation in the exhibitions is not only to
      contact new customers but also to exhibit the strength of the Company and
      its brand image.·
                    International Market District
      Management.The
      global market of the Company is divided into several regions, including
      Europe, America, Asia and the Middle East. There is a sales team
      responsible for the promotion of our products and negotiation of the
      business arrangements in each regional market. The Company plans to adopt
      specific strategies and practices for each of the regional
      markets.·
                    Brand Enterprise (Manufacturer)
      Cooperation.There
      are two (2) methods employed with respect to the manufacturing of our
      products. The first is “ODM”, whereby the structure, appearance and
      technical aspects of our products are developed and designed by the
      Company.  However after the completion of their development and
      production, such products are sold with trademarks of certain clients.
      These products are usually mass produced in accordance with the placement
      of orders by such clients. The other method is “OEM”, whereby our products
      are made in cooperation with certain third party enterprises such as GE
      Lighting, Sylvania, and other large multinational groups. For example, our
      plant growth lamp co-developed by the Company and Huazhong Agricultural
      University is sold in Europe, the United States and Australia. We have
      established cooperation with a number of large enterprises such as
      Interpet, Arcardia of Britain, Croci SpA of Italy, PENN-PLAX and SUNPARK
      of United States, AVK LIGHTING of Australia and Narva of Germany to
      develop the global market for plant growth
      lamps.
 Product
Sales Strategy (Domestic and International Sales)
 Domestic
Sales through
Distributors
 
 The Company entered the high-tech
domestic Chinese lighting market in 2006. Currently, 32 offices exist in China,
forming a three-level sales network in counties, cities and provinces, with
point-of-sale locations across the country.  These contribute toward
an efficient marketing system. Each office is responsible for providing
professional services to its local dealers and consumers. The Company has
implemented a regional distribution system in the Chinese domestic market,
establishing long-term cooperative relationships with approximately 450
distributors. The Company builds up composite-end sales channels including
franchise stores, lighting centers and counters to increase its market
competitiveness.
  International
Sales through Distributors
 
 The Company also implements its
distribution system in the international market. In the Middle East, the Company
has a regional agent in Saudi Arabia that is solely responsible for the product
in the local Middle East market.  In the European market, the Company
has a regional agent in Belgium who is in charge of regional marketing. The
Group has also set up a branch in Hong Kong responsible for marketing the
businesses to the Asia-Pacific region.
 
 - 4
-
 Domestic
Replacement Market
 
 In 2007,
the size of China's domestic for the T8 halogen powder lamp was 1 billion lamps.
Currently, as a result of the requirements for energy savings and emissions
reduction policies, T8 halogen powder lamps are one of the main products which
should be replaced. The total replacement market for T8 halogen powder lamps,
which have an average useful life of about 2 years, is estimated to be not less
than 2 billion sets per year. If 10% of the lamps are to be replaced, the
replacement market would be at least 200 million per year. Users that are
pressing for replacement of such lamps in China include manufacturing
enterprises, large-scale commercial enterprises (especially supermarket chains
and large stores), colleges and universities, primary and secondary schools and
other educational institutions, hospitals, railway stations, airports, libraries
and other public buildings and facilities, government agencies, institutions and
office buildings.
  Our
T5-integrated conversion stand product (also known as the “Power-Saving
Treasure”) is most suitable to replace the T8 halogen powder lamp and ballast
without changing the original lamps, and can provide significant energy-saving
benefits to users. It can be used as the energy-saving replacement for units,
enterprises, schools, stores, supermarkets and hospitals.
 
 Since the
Company offers energy-saving lighting products such as the “Power-Saving
Treasure”, we believe that we have the competitive edge in the replacement
market and the marketing model of “contract energy management” (as described
below). The participation and engagement of the Company in energy-saving
lighting rebuilding (and replacement) projects is an important growth point for
the development of the Company. The Company has already begun to provide
replacement services for users.  This has given us positive
evaluations and a good reputation in the field of energy-saving lighting since
2005. Typical users include the following:
  ·
                      Government Offices. In
      October 2007, the Company was the first domestic enterprise appointed by
      Zhongnanhai (General Office of the State Council) to rebuild energy-saving
      lighting systems at the central and state agencies held by the Government
      Offices Administration of the State Council. The first group of users
      included: Zhongnanhai (General Office of the State Council), the Ministry
      of Finance, Ministry of Commerce, Ministry of Information Industry, State
      General Administration of Quality Supervision and Inspection, State
      Administration of Work Safety Supervision, Ministry of Supervision, the
      State Tourism Administration, the State Meteorological Administration, the
      Chinese Academy of Sciences, the Chinese Academy of Social Sciences, the
      Legal Affairs Office of the State Council, the State Bureau for Letters
      and Calls and the China Law
Society.
 ·
                    Green
      Lighting Procurement Projects. Recently, the Ministry of
      Finance and the State Development and Reform Commission jointly held the
      "National Project to Promote Efficient Lighting Products Tender" whereby
      more than 30 well-known enterprises bid for projects.  The
      Company won several bids for projects, including the Green Lighting
      Procurement Project of Central Government Departments under the CPC
      Central Committee.
 ·
                    Primary
      and Secondary Schools.In 2006, the Company’s products
      achieved the top integrated score among the three most successful
      enterprises (the Company, Philips and Matsushita) involved in an
      energy-saving lighting rebuilding project of Beijing’s primary and
      secondary schools organized by the Beijing Municipal Development and
      Reform Commission. The Company’s products were used in the implementation
      of energy-saving lighting rebuilding in more than 300 primary and
      secondary schools in the Changping, Huairou, Shunyi and Mentougou
      Districts of Beijing.In September2008, the Company was named as the designated
      supplier ofShanghai
      Primary and SecondarySchoolClassrooms Light Environment
      ImprovementProjects.  The first phase of
      delivery and installation for the project was completed in November
      2008.
 ·
                              Colleges,
      Universities and other Well-known Enterprises. In August
      2008, the Company was named as the sole supplier of Tianjin Vocational
      College New Campus Lighting Purchasing Project for which a dozen of
      lighting manufacturers in China submitted bids. In addition, the Company
      also successfully won the energy-saving lighting products replacement
      purchasing projects of Visual Arts College of Fudan University, the Ningbo
      Wanli International Aristocratic School, the Chengdu Institute of
      Technology, Foxconn (Suzhou) Co., Ltd. and Suning Appliance Chain Store
      (Suzhou) Co., Ltd.
  - 5
-
 
 Domestic
Direct Sales
 
 The Company is one of the key lighting
products suppliers to the Chinese government.  The government
procurement market is an important part the Company's business development, and
the Company has been very successful in such endeavors. For example, the Company
is the only enterprise in the Chinese lighting industry that was awarded the
China Energy-Saving Contribution Award for two (2) consecutive years. It has the
highest number of series of products on the Chinese government’s procurement
list of energy-saving products out of all lighting enterprises.  The
Company is the leading company participating in the national efficient lighting
products promotion project. In addition, the Company’s products were given the
status of “State Inspection-free Qualification” in China.
  The
Company has a leading position in product technology, product quality, product
variety, energy saving and environmental protection. The Company has won
national key projects of government procurement of rebuilding energy-saving
lighting systems.  Additionally, it has won bids for major national
projects, including:
 ·
                    Beijing Olympic
      Project. The Olympic Park National Conference Center was the main
      press centre and international broadcast centre of 2008 Beijing Olympic
      Games. In November 2007, when the Olympic Park National Conference Center
      invited lighting brands in China and abroad to tender bids, the Company
      won the first place.
 ·
                    Olympic Fire Command
      Center. The Company won the bid for Beijing lighting systems at the
      Olympic Fire Command Center.
 ·
                    Construction of Infrastructure
      Projects. The Company has also won projects in public
      infrastructure such as the lighting system project of Beijing Subway Line
      5, the lighting systems project of the People's Square in Shanghai’s
      subway system. At the same time, the Company has also won projects for
      offices, hotels, hospitals and other projects to provide lighting products
      and services.
 ·
                    Chinese Government
      Procurement of Green Lighting Project. In March 2008, the Company
      successfully won the bid for the Chinese Government Procurement of Green
      Lighting Project as a result of which, the Company’s energy-saving
      lighting systems were installed in various governmental departments and
      agencies, including: the Organization Department of the Chinese
      Government, the Chinese Government Commission for Discipline Inspection,
      the National Federation of Trade Unions, International Liaison Department
      of the Chinese Government, and the People's Daily, among others. In
      addition, the Company also became the designated supplier of the
      energy-saving lighting systems replacement projects of State
      Administration for Industry and Commerce and State Administration of
      Taxation.
 ·
                    Eleventh National
      Games Competition Venues and Training Facilities Procurement
      Project. On July 12, 2008, the Company successfully became a
      designated brand of the Eleventh National Games Competition Venues and
      Training Facilities Procurement
Project.
 ·
                    Guangzhou 2010 Asian
      Games Venue Construction Projects. In October 2008, the
      Company successfully became a qualified supplier for the Guangzhou
      Asian Games Venue Construction Projects.  The Company ranked
      number one of all the major lighting products qualified
      vendors.
 ·
                    Hangzhou Civic Center Lighting
      Project.
      In September 2008, the Company successfully won the Hangzhou Civic Center
      Lighting Project.  The Company was required to deliver and
      complete the project within one month.  The Hangzhou Civic
      Center opened in October 2008 as the largest municipal building in the
      Zhejiang
Province.
 - 6
-
 International
Direct Sales
 
 Through
ten (10) years of hard work, the Company’s products have obtained critical
certifications in a number of countries (such as the EU's CE, TUV and GS, UL in
the United States, South Korea’s KS and Saudi Arabia’s SASO) which have enabled
the Company to create opportunities for ODM and OEM production for many large
companies in the international market. Through ODM and OEM, the Company's
products are sold to major multinational lighting enterprises. The Company plans
to use the influence of its brand for self-owned brand sales in the
international market and to increase sales for end-users.
  Results
of Operations
 
 Results
of Operations For the Three (3) Months Ended March 31, 2009 Compared To The
Three (3) Months Ended March 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.
 Three
      (3) Months Ended March 312009
                        
                        
                        2008
                        
                        
                        2009
                        
                        
                        2008Revenues
                        
                        $
                        8,165
                        
                        
                        $
                        15,282
                        
                        
                        
                        100.00
                        %
                        
                        
                        100.00
                        %Cost
      of sales
                        
                        $
                        (6,123
                        )
                        
                        $
                        (10,395
                        )
                        
                        
                        (74.99
                        )%
                        
                        
                        (68.02
                        )%Gross
      income
                        
                        $
                        2,042
                        
                        
                        $
                        4,887
                        
                        
                        
                        25.01
                        %
                        
                        
                        31.98
                        %Sales,
      marketing and distribution expenses
                        
                        $
                        (619
                        )
                        
                        $
                        (350
                        )
                        
                        
                        (7.58
                        )%
                        
                        
                        (2.29
                        )%General
      and administrative expenses
                        
                        $
                        (822
                        )
                        
                        $
                        (1,824
                        )
                        
                        
                        (10.07
                        )%
                        
                        
                        (11.94
                        )%Operating
      income
                        
                        $
                        601
                        
                        
                        $
                        2,713
                        
                        
                        
                        7.36
                        %
                        
                        
                        17.75
                        %Government
      subsidies income
                        
                        $
                        223
                        
                        
                        $
                        147
                        
                        
                        
                        2.73
                        %
                        
                        
                        0.96
                        %Other
      income
                        
                        $
                        10
                        
                        
                        $
                        7
                        
                        
                        
                        0.12
                        %
                        
                        
                        0.05
                        %Interest
      income
                        
                        $
                        610
                        
                        
                        $
                        102
                        
                        
                        
                        7.47
                        %
                        
                        
                        0.67
                        %Interest
      expenses
                        
                        $
                        (1,004
                        )
                        
                        $
                        (1,393
                        )
                        
                        
                        (12.30
                        )%
                        
                        
                        (9.12
                        )%Income
      before income taxes and minority interests
                        
                        $
                        440
                        
                        
                        $
                        1,576
                        
                        
                        
                        5.39
                        %
                        
                        
                        10.31
                        %Income
      taxes expenses
                        
                        $
                        36
                        
                        
                        $
                        179
                        
                        
                        
                        0.44
                        %
                        
                        
                        1.17
                        %Minority
      interests
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        -
                        %
                        
                        
                        -
                        %Net
      income
                        
                        $
                        476
                        
                        
                        $
                        1,755
                        
                        
                        
                        5.83
                        %
                        
                        
                        11.48
                        %Other
      comprehensive income
                        
                        $
                        34
                        
                        
                        $
                        473
                        
                        
                        
                        0.42
                        %
                        
                        
                        3.10
                        %Comprehensive
      income
                        
                        $
                        510
                        
                        
                        $
                        2,228
                        
                        
                        
                        6.25
                        %
                        
                        
                        14.58
                        %
 Revenues
 
 Revenue
for the three months ended March 31, 2009 decreased by US$7,117,000, or 46.57%,
to US$8,165,000 compared to US$15,282,000 for the corresponding period in 2008.
The decrease occurred as a result of (i) a drop in export sales due to global
recession, (ii) a slow down of PRC government procurement orders after the
Olympic Games, and (iii) a change in lighting incentive policies of the PRC
government from indirect subsidies on unit price of energy saving lighting
products to direct subsidy funds granted.
 
 - 7
-
 Cost
of Sales
 
 Cost of
sales for the three months ended March 31, 2009 and 2008 were US$6,123,000 and
US$10,395,000, respectively, and cost rates were 74.99% and 68.02%,
respectively. The increase in cost rates occurred as a result of the Company’s
implementation of a price reduction strategy since January 2009 in response to
the global recession. The unit selling price of the Company’s products was cut
by about 5% to 10% as compared with the corresponding period in
2008.
 
 Sales,
Marketing and Distribution Expenses
 
 Sales,
marketing and distribution expenses for the three months ended March 31, 2009
and 2008 were US$619,000 and US$350,000, respectively. The increase occurred as
a provision for the rebate to the distributors of US$178,000 was made for
the domestic sales for the three months ended March 31, 2009. No such
provision was required in the corresponding period in 2008 as such rebate
schemes commenced in December 2008.
 
 General
and Administrative Expenses
 
 General
and administrative expenses for the three months ended March 31, 2009 and 2008
were US$822,000 and US$1,824,000, respectively. The decrease relates to the
Company’s cost saving plans implemented since January 2009 as a response to
global recession.
 
 Government
Subsidies Income
 
 Income
from government subsidies for the three months ended March 31, 2009 and 2008 was
US$223,000 and US$147,000, respectively. As of March 31, 2009, unrecognized
potential subsidy income for the sale of energy saving lighting products in the
PRC was approximately US$ 1.2 million.  This amount has been approved
by the relevant provincial governments and is being reviewed by the state
government of the PRC. We are confident that the said unrecognized potential
subsidies income will be officially granted to the Company and recognized as
income in the coming quarter.
 
 Interest
Income
 
 Interest
income for the three months ended March 31, 2009 and 2008 were
US$610,000 and US$102,000, respectively. The increase relates to the recognition
of interest income receivables from related parties of US$492,000 for the
three months ended March 31, 2009. No such income was reported in the
corresponding period in 2008 as the relevant interest has been charged since
July 16, 2008.
 
 Interest
Expenses
 
 Interest
expenses for the three months ended March 31, 2009 and 2008 were US$1,004,000
and US$1,393,000, respectively. The decrease relates to the drop in bank
borrowing interest rates in the PRC.
 
 Net
Income
 
 For the
three months ended March 31, 2009 and 2008, the Company realized a net income of
US$476,000 and US$1,755,000, respectively.
 
 - 8
-
 Results
of Operations For the Six (6) Months Ended March 31, 2009 Compared To The Six
(6) Months Ended March 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.
  Six
      (6) Months Ended March 312009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008Revenues
                      
                      $
                      24,829
                      
                      
                      $
                      37,141
                      
                      
                      
                      100.00
                      %
                      
                      
                      100.00
                      %Cost
      of sales
                      
                      $
                      (17,110
                      )
                      
                      $
                      (25,348
                      )
                      
                      
                      (68.91
                      )%
                      
                      
                      (68.25
                      )%Gross
      income
                      
                      $
                      7,719
                      
                      
                      $
                      11,793
                      
                      
                      
                      31.09
                      %
                      
                      
                      31.75
                      %Sales,
      marketing and distribution expenses
                      
                      $
                      (2,473
                      )
                      
                      $
                      (995
                      )
                      
                      
                      (9.96
                      )%
                      
                      
                      (2.68
                      )%General
      and administrative expenses
                      
                      $
                      (2,049
                      )
                      
                      $
                      (2,685
                      )
                      
                      
                      (8.25
                      )%
                      
                      
                      (7.23
                      )%Operating
      income
                      
                      $
                      3,197
                      
                      
                      $
                      8,113
                      
                      
                      
                      12.88
                      %
                      
                      
                      21.84
                      %Government
      subsidies income
                      
                      $
                      1,941
                      
                      
                      $
                      295
                      
                      
                      
                      7.82
                      %
                      
                      
                      0.79
                      %Other
      income
                      
                      $
                      20
                      
                      
                      $
                      31
                      
                      
                      
                      0.08
                      %
                      
                      
                      0.08
                      %Interest
      income
                      
                      $
                      1,853
                      
                      
                      $
                      243
                      
                      
                      
                      7.46
                      %
                      
                      
                      0.65
                      %Interest
      expenses
                      
                      $
                      (2,092
                      )
                      
                      $
                      (2,246
                      )
                      
                      
                      (8.43
                      )%
                      
                      
                      (6.05
                      )%Income
      before income taxes and minority interests
                      
                      $
                      4,919
                      
                      
                      $
                      6,436
                      
                      
                      
                      19.81
                      %
                      
                      
                      17.33
                      %Income
      taxes expenses
                      
                      $
                      (532
                      )
                      
                      $
                      (523
                      )
                      
                      
                      (2.14
                      )%
                      
                      
                      (1.41
                      )%Minority
      interests
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      
                      -
                      %
                      
                      
                      -
                      %Net
      income
                      
                      $
                      4,387
                      
                      
                      $
                      5,913
                      
                      
                      
                      17.67
                      %
                      
                      
                      15.92
                      %Other
      comprehensive income
                      
                      $
                      37
                      
                      
                      $
                      836
                      
                      
                      
                      0.15
                      %
                      
                      
                      2.25
                      %Comprehensive
      income
                      
                      $
                      4,424
                      
                      
                      $
                      6,749
                      
                      
                      
                      17.82
                      %
                      
                      
                      18.17
                      %
 Revenues
 
 Revenue
for the six months ended March 31, 2009 decreased by US$12,312,000, or 33.15%,
to US$24,829,000 compared to US$37,141,000 for the corresponding period in 2008.
The decrease occurred as a result of (i) a drop in export sales due to global
recession, (ii) a slow down of PRC government procurement orders after the
Olympic Games, and (iii) a change in lighting incentive policies of PRC
government from indirect subsidies on unit price of energy saving lighting
products to direct subsidy funds granted.
 
 Cost
of Sales
 
 Cost of
sales for the six months ended March 31, 2009 and 2008 were US$17,110,000 and
US$25,348,000, respectively, and cost rates were 68.91% and 68.25%,
respectively. The reduction in the unit selling price of the Company’s products
since January 2009 is partly compensated by improvement in the operation
efficiency.
 
 - 9
-
 Sales,
Marketing and Distribution Expenses
 
 Sales,
marketing and distribution expenses for the six months ended March 31, 2009 and
2008 were US$2,473,000 and US$995,000, respectively. The increase occurred as a
provision for the rebate to the distributors of US$988,000 was made for
the domestic sales for the six months ended March 31, 2009. No such
provision was required in the corresponding period in 2008 as such rebate
schemes commenced in December 2008.
 
 General
and Administrative Expenses
 
 General
and administrative expenses for the six months ended March 31, 2009 and 2008
were US$2,049,000 and US$2,685,000, respectively. The decrease relates to the
Company’s cost saving plans implemented since January 2009 as a response to
global recession.
 
 Government
Subsidies Income
 
 Government
subsidy income for the six months ended March 31, 2009 and 2008 was US$1,941,000
and US$295,000, respectively.  The increase relates to the change in
lighting incentive policies of the PRC government from indirect subsidies on the
unit purchase price of energy saving lighting products to direct subsidy funds
granted.
 
 Interest
Income
 
 Interest
income for the six months ended March 31, 2009 and 2008 were US$1,853,000 and
US$243,000, respectively. The increase relates to the recognition of interest
income receivables from related parties of US$1,492,000 for the six months ended
March 31, 2009. No such income was reported in the corresponding period in 2008
as the relevant interest has only been charged since July 16, 2008.
 
 Interest
Expenses
 
 Interest
expenses for the six months ended March 31, 2009 and 2008 were US$2,092,000 and
US$2,246,000, respectively. The decrease relates to the drop in bank borrowing
interest rates in the PRC.
 
 Net
Income
 
 For the
six month periods ended March 31, 2009 and 2008, the Company realized a net
income of US$4,387,000 and US$5,913,000, respectively.
 
 Liquidity
and Capital Resources
 
 We
generally finance our operations through our operating profit and borrowings
from banks.
  During
the reporting periods, 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 through 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 dollars, for the
periods indicated:
  Six (6) Months Ended March
      312009
                
                
                2008Net
      cash provided by operating activities
                
                $
                174,000
                
                
                $
                10,128,000Net
      cash used in investing activities
                
                $
                (26,267,000
                )
                
                $
                (11,827,000
                )Net
      cash provided by financing activities
                
                $
                26,238,000
                
                
                $
                1,088,000Net
      increase (decrease) in cash and cash equivalents
                
                $
                145,000
                
                
                $
                (611,000
                )Effect
      of exchange rate changes on cash
                
                $
                6,000
                
                
                $
                326,000Cash
      and cash equivalents at beginning of the period
                
                $
                3,154,000
                
                
                $
                5,340,000Cash
      and cash equivalents at end of the period
                
                $
                3,305,000
                
                
                $
                5,055,000
 - 10
-
  Operating
activities
 
 China's
domestic market is different from the export market in that the Company produces
“made to order” products for the export market as opposed to the domestic market
where the Company prepares a sufficient stock of goods to meet the needs of
clients at any time.  Furthermore, the export market requires advance
payment of 20% to 80% of the balance due prior to delivery.  On the
other hand, the Company offers clients in the domestic market credit lines with
usual payment terms equal to 60 days.
 
 The
decrease in the net cash provided by operating activities was mainly due to the
changes in the net operating assets which are analyzed as follows, in dollars,
for the periods indicated:
  Six (6) Months Ended March
      312009
                
                
                
                2008Accounts
      receivables, net
                
                $
                3,689,000
                
                
                $
                (5,478,000
                )Inventories,
      net
                
                $
                198,000
                
                
                $
                4,135,000Prepayment
                
                $
                824,000
                
                
                $
                (1,247,000
                )Other
      receivables
                
                $
                (860,000
                )
                
                $
                2,241,000Accounts
      payable
                
                $
                (4,294,000
                )
                
                $
                1,684,000Notes
      payable
                
                $
                (2,953,000
                )
                
                $
                3,258,000Accrued
      expenses and other accrued liabilities
                
                $
                193,000
                
                
                $
                (1,457,000
                )Customer
      deposits
                
                $
                (831,000
                )
                
                $
                169,000Taxes
      payable
                
                $
                57,000
                
                
                $
                480,000Changes
      in operating assets and liabilities
                
                $
                (3,977,000
                )
                
                $
                3,785,000
 Investing
Activities
 
 The
increase in net cash used in investing activities was mainly due to the
investment in restricted bank balances the changes to which are connected with
changes in bank borrowings. The net cash used in investing activities is
analyzed as follows, in dollars, for the periods indicated:
  Six (6) Months Ended March
      312009
                
                
                2008Purchase
      of property, plant and equipment
                
                $
                (1,998,000
                )
                
                $
                (1,964,000
                )Investment
      in restricted bank balances, net
                
                $
                (23,223,000
                )
                
                $
                (9,863,000
                )Advance
      to related parties, net
                
                $
                (1,046,000
                )
                
                $
                --Net
      cash used in investing activities
                
                $
                (26,267,000
                )
                
                $
                (11,827,000
                )
 
 - 11
-
 Financing
Activities
 
 The
Company obtains financing for its operations and development mainly through
short-term bank loans, long-term interest-bearing loans, bill financings and
advances from related parties. The increase in net cash provided
by financing activities is analyzed as follows, in dollars, for the periods
indicated:
  Six (6) Months Ended March
      312009
                
                
                
                2008Advance
      to related parties, net
                
                $
                --
                
                
                $
                (13,897,000
                )Capital
      contribution to a subsidiary by its minority shareholder
                
                $
                --
                
                
                $
                64,000Proceeds
      from short-term bank loans
                
                $
                21,167,000
                
                
                $
                15,795,000Repayment
      of short-term bank loans
                
                $
                (22,837,000
                )
                
                $
                (10,104,000
                )Proceeds
      from bills financing, net
                
                $
                29,506,000
                
                
                $
                10,116,000Repayment
      of long-term interest-bearing loans
                
                $
                (1,598,000
                )
                
                $
                (886,000
                )Advance
      to related parties, net
                
                $
                26,238,000
                
                
                $
                1,088,000
 Working
Capital
 
 Accounts
Receivable, Trade and Allowance for Doubtful Accounts
 
 The
Company’s business operations are conducted in the PRC.  During the
normal course of business, the Company extends unsecured credit to its
customers.  The Company had gross accounts receivable balances of
US$15,768,000 as of March 31, 2009 and US$19,208,000 as of September 30, 2008,
respectively, a decrease of 17.91%.
 
 Management
reviews accounts receivable on a regular basis to determine if the allowance for
doubtful accounts is adequate.  An estimate for doubtful accounts is
recorded when collection of the full amount is no longer
probable.  The Company’s management has determined its allowance for
doubtful accounts was US$560,000 and US$337,000 as of March 31, 2009 and
September 30, 2008, respectively.
 
 Other
Receivables
 
 The
Company had other receivables of US$4,959,000 as of March 31, 2009 and
US$4,093,000 as of September 30, 2008, an increase of 21.16%. Other receivables
mainly represented deposits made to a financial institution for
certain finance leases of the Company.
 
 Prepayment
 
 The
Company had prepayment of US$1,905,000 as of March 31, 2009 and US$2,724,000 as
of September 30, 2008. The decrease of 30.07% was due to several pre-paid
deposits for purchases of raw materials have been utilized during the
period.
 
 Inventories
 
 Inventories
are stated at the lower of cost or market under the weighted average
method.  Management reviews its inventory on a regular basis for
possible obsolete goods or to determine if any reserves are necessary for
potential obsolescence.
 
 The
Company had balances for inventories (net) of US$15,125,000 as of March 31, 2009
and US$15,303,000 as of September 30, 2008, a decrease of 1.16%.  As
of March 31, 2009, the Company had determined that no reserves are
necessary.
 
 As
      of
                March
      31,
                2009
              
              
              As
      of
                September
      30,
                2008Raw
      materials
              
              $
              2,873,000
              
              
              $
              3,397,000Work-in-progress
      and semi-finished goods
              
              $
              3,090,000
              
              
              $
              2,277,000Finished
      goods
              
              $
              9,162,000
              
              
              $
              9,626,000Total
      inventories
              
              $
              15,125,000
              
              
              $
              15,303,000
 
 Cash
and Cash Equivalents
 
 The
Company had cash and cash equivalents of US$3,305,000 as of March 31, 2009 and
US$3,154,000 as of September 30, 2008, an increase of 4.79%.
 
 - 12
-
 Capital
Expenditures
 
 The
Company had property, plant and equipment (net) equal to US$17,560,000 as of
March 31, 2009 and US$16,318,000 as of September 30, 2008.  An
increase in assets was due to an increase in production capacity.
 
 As
      of
                March
      31,
                2009
              
              
              As
      of
                September
      30,
                2008Buildings
              
              $
              6,883,000
              
              
              $
              6,869,000Plant
      and machinery
              
              $
              10,879,000
              
              
              $
              9,729,000Motor
      vehicles
              
              $
              1,001,000
              
              
              $
              1,000,000Furniture,
      fixtures and office equipment
              
              $
              1,182,000
              
              
              $
              1,167,000Construction-in-progress
              
              $
              3,394,000
              
              
              $
              2,548,000Accumulated
      depreciation
              
              $
              (5,779,000)
              
              
              $
              (4,995,000)Total
      property, plant and equipment
              
              $
              17,560,000
              
              
              $
              16,318,000
 
 The
Company had balances for long-term land lease prepayments (net) of US$869,000
and US$887,000 as of March 31, 2009 and September 30, 2008,
respectively.
 
 Off-Balance
Sheet Arrangements
 
 Financial
guarantees
  The
Company entered into cross financial guarantee contracts with unrelated third
parties in the ordinary course of business. The maximum potential amount of
future payments under these guarantees is as follows:
 
 As
      of
                March
      31,
                2009
              
              
              As
      of
                September
      30,
                2008Financial
      guarantees
              
              $
              4,382,000
              
              
              $
              5,106,000
 
 The
Company does not have any variable interest in any unconsolidated entity that
provides financing, liquidity, market risk or credit support to the Company or
engages in leasing, hedging or research and development services with the
Company.
 
 Capital
Commitments
 
 As of
March 31, 2009 and September 30, 2008, the Company had capital expenditure
commitments for construction projects and purchases of machinery of
approximately US$10,114,000 and US$3,343,000 respectively.
  Operating
Lease Commitments
 
 The
following table summarizes rental payments under non-cancelable operating
leases:
 
 As
      of
                March
      31,
                2009
              
              
              As
      of
                September
      30,
                2008Within
      one (1) year
              
              $
              32,000
              
              
              $
              21,0002–3
      years
              
              $
              30,000
              
              
              $
              30,0004–5
      years
              
              $
              30,000
              
              
              $
              30,000Over
      five (5) years
              
              $
              10,000
              
              
              $
              3,000Total
      operating lease obligations
              
              $
              102,000
              
              
              $
              84,000
 
 Long
Term Bank Indebtedness
 
 The
long-term interest-bearing loans are repayable as follows:
 
 As
      of
                March
      31,
                2009
              
              
              As
      of
                September
      30,
                2008Within
      one (1) year
              
              $
              2,897,000
              
              
              $
              3,068,0002–3
      years
              
              $
              4,679,000
              
              
              $
              6,093,0004–5
      years
              
              $
              7,576,000
              
              
              $
              9,161,000
  
 - 13
-
 ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 RMB
Appreciation
 
 The
Company believes that inflation has not had a material effect on its operations
to date.  However, continued appreciation of the RMB against the
U.S. Dollar and its effect on the Company's export business, could have a
material adverse effect on the Company.  In the even of a material
adverse effect on the Company, our strategy would be to reduce our reliance on
exports and to increase domestic sales.
 
 Non-Tariff
Technical Trade Barriers Could Have a Materially Adverse Effect on our Exporting
Business
 
 Non-tariff
technical trade barriers imposed by governments such as the European Unions’s
EuP Directive, could adversely affect our export business.  In response to
the EuP Directive, the Company has launched a project to evaluate the impact of
our products on the environment during each stage of a product’s life, from
design, material procurement and manufacture, to maintenance, recovery and
treatment.  This project conforms with the trend of reducing resource
consumption and pollution as laid out in the EuP Directive.
 
 The
Development of High-Tech Products Takes a Long Time and There Are Many
Uncertainties in the Process
 
 The
special light source products developed by the Company are an innovation in the
industry.  As a result  there might be unpredictable or
presently unavoidable technical flaws in the product, or the new products may
not fit into the market demand.  Either way, the new products might
not be able to enter mass production and be sold in the markets.  To
avert such a risk, the Company has set up a new products decision committee and
has hired senior experts in China to better oversee and grasp the developmental
tendencies of the industry.  Prior to the development and trial of new
products, we plan on conducting systematic and in-depth research to find market
space and identify technical problems and key targets for
breakthrough.
 
 Theft of our Key Technologies Could
Have a Material Adverse Effect on the Company’s Business and
Development
 
 To avert
the risk of theft of our technologies, the Company uses management measures,
such as performance bonuses and other project rewards, to maintain the stability
of its technical team.  The Company (and its subsidiaries) also has in
place confidentiality agreements with certain technical employees to prevent
leakage of core technologies.
 
 
 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.
  Internal
Control over Financial Reporting
  There
were no changes in internal control over financial reporting that occurred
during the fiscal quarter covered by this report that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.
 - 14
-
 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 March 31, 2009, there was no pending or outstanding material litigation
with the Company or with the Group.
  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 March 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
 
 None.
 
 ITEM
6. EXHIBITS
 
 (a) Exhibits:
  EXHIBIT NO.
              
              DESCRIPTION
              
              LOCATION2.1
              
              Agreement
      and Plan of Reorganization regarding the merger of Innovative Coatings
      Corporation with and into ICC Holdings Corp.
              
              Incorporated
      by reference to Instachem Systems, Inc.’s Current Report as filed with the
      SEC on August 29, 20032.2
              
              Stock
      Purchase Agreement, by and between David Lennox and Instachem Systems,
      Inc.
              
              Incorporated
      by reference to Exhibit 2.2 to the Company’s Annual Report on Form 10-KSB
      as filed with the SEC on January 20, 20062.3
              
              Agreement
      and Plan of Merger between Instachem Systems, Inc. and Sino-Biotics,
      Inc.
              
              Incorporated
      by reference to Exhibit 2.3 to the Company’s Annual Report on Form 10-KSB
      as filed with the SEC on January 20, 20062.4
              
              Share
      Exchange Agreement, dated July 16, 2008, by and among Sino-Biotics, Inc.,
      KEG International Limited and CH International Holdings
      Limited
              
              Incorporated
      by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K as
      filed with the SEC on July 16, 20083.1
              
              Certificate
      of Incorporation of Sino-Biotics, Inc.
              
              Incorporated
      by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-KSB
      as filed with the SEC on January 20, 20063.2
              
              Certificate
      of Amendment to Certificate of Incorporation of Sino-Biotics,
      Inc.
              
              Incorporated
      by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-KSB
      as filed with the SEC on January 20,
2006
  - 15
-
 3.3
              
              Restated
      Certificate of Incorporation of Sino-Biotics, Inc.
              
              Incorporated
      by reference to Exhibit 3.6 to the Company’s Annual Report on Form 10-KSB
      as filed with the SEC on January 20, 20063.4
              
              Certificate
      of Amendment to Certificate of Incorporation of Sino-Biotics, Inc. dated
      December 13, 2008 (increase of authorized shares).
              
              Incorporated
      by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K as
      filed with the SEC on July 16, 20083.5
              
              Memorandum
      and Articles of Associationof CH
      International Holdings Limited
              
              Incorporated
      by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K as
      filed with the SEC on July 16, 20083.6
              
              Amended
      and Restated Bylaws of CH Lighting International Corporation, effective as
      of August 25, 2008
              
              Incorporated
      by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as
      filed with the SEC on August 26, 200814.1
              
              Code
      of Ethics
              
              Incorporated
      by reference to the Company’s Annual Report on Form 10-K as filed with the
      SEC on December 29, 200816.1
              
              Auditor
      Letter, dated August 25, 2008
              
              Incorporated
      by reference to the Company’s Annual Report on Form 10-K as filed with the
      SEC on December 29, 200821
              
              List
      of Subsidiaries of CH Lighting International Corporation
              
              Incorporated
      by reference to Exhibit 21 to the Company’s Current Report on Form 8-K as
      filed with the SEC on July 16, 200831.1
              
              Certifications
      of the Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
              
              Provided
      herewith31.2
              
              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
              
              Audit
      Committee Charter
              
              Incorporated
      by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
      as filed with the SEC on August 26, 200899.2
              
              Compensation
      Committee Charter
              
              Incorporated
      by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K
      as filed with the SEC on August 26, 200899.3
              
              Corporate
      Governance and Nominating Committee Charter
              
              Incorporated
      by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K
      as filed with the SEC on August 26,
2008
  
 - 16
-
  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:    May
      15, 2009
                  By:
                  /s/
      Zhao GuosongName:
      Zhao GuosongIts:
      President, Chief Executive Officer and Principal
                      Executive
      Officer
 
 Date:    May
      15, 2009
                  By:
                  /s/
      Huang Hsiao-IName:
      Huang Hsiao-IIts:
      Chief Financial Officer, Corporate Secretary,
                      Principal
      Financial and Accounting
Officer