UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        DC 20549
 
 Form
        10-QSB
  
 (Mark
        one)
  x Quarterly
        Report
        Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For
        the
        quarterly period ended September 30, 2007
 
 o Transition
        Report Under Section 13
        or 15(d) of the Securities Exchange Act of 1934
 
 For
        the
        transition period from ______________ to _____________
  
  Commission
        File Number: 0-52549
  **Jade
        Mountain Corporation**
 (Exact
        name of small business issuer as specified in its charter)
 
 Nevada
        41-1508112
 (State
        of
        incorporation) (IRS Employer ID Number)
 
 11
          Youquan Road, Zhanqian Street, Jinzhou District
 Dalian,
          People's Republic of China 116100
 +86-411-87661222
 (Issuer's
        telephone number)
 
 
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days. YES x NO o
 
 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: November 14, 2007; 25,000,000
 
 Transitional
        Small Business Disclosure Format (check one): YES o NO x
  
  JADE
        MOUNTAIN CORPORATION
 
 Form
        10-QSB for the Quarter ended September 30, 2007
 
 Table
        of
        Contents
  PagePART
                    I - FINANCIAL INFORMATIONItem
                    1
                Financial
                    Statements - Unaudited
                3Item
                    2
                Management's
                    Discussion and Analysis or Plan of Operation
                9Item
                    3
                Controls
                    and Procedures
                21PART
                    II - OTHER INFORMATIONItem
                    1
                Legal
                    Proceedings
                22Item
                    2
                Recent
                    Sales of Unregistered Securities and Use of Proceeds
                22Item
                    3
                Defaults
                    Upon Senior Securities
                22Item
                    4
                Submission
                    of Matters to a Vote of Security Holders
                22Item
                    5
                Other
                    Information
                22Item
                    6
                Exhibits
                22SIGNATURES
                23Exhibits/
                  Certifications
  2
  
 PART
        I
 ITEM
        1 -
        FINANCIAL STATEMENTS


JADE
      MOUNTAIN CORPORATION AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED BALANCE SHEET


AS
      OF
      SEPTEMBER 30, 2007


(UNAUDITED)





**ASSETS****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            77,221Accounts
                receivable, net of allowances
            
            
            15,971,323Contracts
                in progress
            
            
            3,231,272Inventories,
                net
            
            
            149,871Other
                current assets and prepaid expenses
            
            
            8,985,151Total
                Current Assets
            
            
            28,414,838**PROPERTY
                AND EQUIPMENT, NET**
            
            
            10,468,380**OTHER
                ASSETS**Prepaid
                expenses (non-current)
            
            
            103,091Intangible
                assets, net
            
            
            634,068Land
                use rights, net
            
            
            877,155**TOTAL
                ASSETS**
            
            $
            40,497,532**LIABILITIES
                AND STOCKHOLDERS' EQUITY****CURRENT
                LIABILITIES**Accounts
                payable
            
            $
            3,936,548Other
                payables and accrued liabilities
            
            
            1,280,073Notes
                payable
            
            
            4,389,699Due
                to a stockholder
            
            
            466,766Business
                tax payable
            
            
            567,668Income
                tax payable
            
            
            49,357Value
                added tax payable
            
            
            1,623,520Total
                Current Liabilities
            
            
            12,313,631**LONG-TERM
                LIABILITIES**Notes
                payable - long term
            
            
            3,591,572Deferred
                tax liabilities
            
            
            5,131,718**TOTAL
                LIABILITIES**
            
            
            21,036,921**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS'
                EQUITY**Preferred
                stock ($0.0001 par value, 50,000,000 shares authorized, none issued
                and
                outstanding as of September 30, 2007)
            
            
            -Common
                stock ($0.0001 par value, 10,000,000,000 shares authorized, 17,899,643
                shares issued and outstanding as of September 30, 2007)
            
            
            1,790Additional
                paid-in capital
            
            
            3,858,452Retained
                earningsUnappropriated
            
            
            14,540,690Appropriated
            
            
            326,556Accumulated
                other comprehensive gain
            
            
            733,123Total
                Stockholders' Equity
            
            
            19,460,611**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            40,497,532





The
      accompanying notes are an integral part of these financial
      statements





3





JADE
      MOUNTAIN CORPORATION AND SUBSIDIARIES


CONDENSED
      STATEMENTS OF OPERATIONS AND


COMPREHENSIVE
      INCOME


(UNAUDITED)




For the three months ended
            
            For the nine months endedSeptember
                30
            
            September
                302007
            
            2006
            
            2007
            
            2006Consolidated
            
            
            
            Consolidated**NET
                SALES**Contracts
            
            $
            17,530,259
            
            $
            2,113,523
            
            $
            36,813,217
            
            $
            5,067,516Services
            
            
            65,807
            
            
            501,651
            
            
            9,380,179
            
            
            1,331,953Government
                grant
            
            
            52,605
            
            
            10,951
            
            
            122,463
            
            
            384,12117,648,671
            
            
            2,626,125
            
            
            46,315,859
            
            
            6,783,590**COST
                OF SALES**Cost
                of contracts
            
            
            (10,124,392)
            
            
            (1,425,260
            )
            
            (21,990,789
            )
            
            (3,273,664
            )Cost
                of services
            
            
            (13,635)
            
            
            (67,776
            )
            
            (1,358,474
            )
            
            (162,204
            )Depreciation
            
            
            (140,452)
            
            
            (88,430
            )
            
            (398,580
            )
            
            (214,402
            )(10,278,479)
            
            
            (1,581,466
            )
            
            (23,747,843
            )
            
            (3,650,270
            )**GROSS
                PROFIT**
            
            
            7,370,192
            
            
            1,044,659
            
            
            22,568,016
            
            
            3,133,320**OPERATING
                EXPENSES**Selling,
                general and administrative expenses
            
            
            2,141,041
            
            
            199,809
            
            
            6,003,380
            
            
            402,178Depreciation
            
            
            29,769
            
            
            21,927
            
            
            83,865
            
            
            63,147Amortization
                of intangible assets
            
            
            12,072
            
            
            -
            
            
            30,399
            
            
            -Amortization
                of land use rights
            
            
            2,932
            
            
            2,782
            
            
            8,674
            
            
            8,303Total
                Operating Expenses
            
            
            2,185,814
            
            
            224,518
            
            
            6,126,318
            
            
            473,628**INCOME
                FROM OPERATIONS**
            
            
            5,184,378
            
            
            820,141
            
            
            16,441,698
            
            
            2,659,692**OTHER
                INCOME (EXPENSES)**Other
                income
            
            
            86
            
            
            4,494
            
            
            5,226
            
            
            4,494Interest
                income
            
            
            630
            
            
            201
            
            
            3,050
            
            
            530Imputed
                interest
            
            
            (6,987)
            
            
            (6,336
            )
            
            (31,005
            )
            
            (19,491
            )Interest
                expenses
            
            
            (170,769)
            
            
            (83,021
            )
            
            (456,881
            )
            
            (224,823
            )Other
                expenses
            
            
            (387)
            
            
            (12,188
            )
            
            (3,574
            )
            
            (12,474
            )Total
                Other Expenses, net
            
            
            (177,427)
            
            
            (96,850
            )
            
            (483,184
            )
            
            (251,764
            )**INCOME
                FROM OPERATIONS BEFORE TAXES**
            
            
            5,006,951
            
            
            726,073
            
            
            15,958,514
            
            
            2,407,928**INCOME
                TAX EXPENSE**
            
            
            (744,149)
            
            
            (235,072
            )
            
            (4,358,165
            )
            
            (667,856
            )**NET
                INCOME**
            
            
            4,262,802
            
            
            491,001
            
            
            11,600,349
            
            
            1,740,072**OTHER
                COMPREHENSIVE INCOME**Foreign
                currency translation gain
            
            
            249,954
            
            
            84,881
            
            
            535,845
            
            
            101,962**COMPREHENSIVE
                INCOME**
            
            $
            4,512,756
            
            $
            575,882
            
            $
            12,136,194
            
            
            1,842,034NET INCOME
                PER SHARE - Basic and diluted
            
            $
            0.24
            
            $
            0.03
            
            $
            0.65
            
            $
            0.10WEIGHTED
                AVERAGE NUMBER OF SHARES - Basic and diluted
            
            
            17,899,643
            
            
            17,899,643
            
            
            17,899,643
            
            
            17,899,643





The
      accompanying notes are an integral part of these financial
      statements




4





JADE
      MOUNTAIN CORPORATION AND SUBSIDIARIES


CONDENSED
      STATEMENTS OF CASH FLOWS


(UNAUDITED)





For
                the nine months endedSeptember 30, 2007
            
            September 30, 2006Consolidated**CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                income
            
            $
            11,600,349
            
            $
            1,740,072Adjusted
                to reconcile net income to cash (used in)provided
                by operating activities:Depreciation
                - cost of sales
            
            
            398,580
            
            
            214,402Depreciation-operating
                expenses
            
            
            83,865
            
            
            63,147Amortization
                of intangible assets
            
            
            30,399
            
            
            -Amortization
                of land use rights
            
            
            8,674
            
            
            8,303Imputed
                interest on advances from a stockholder
            
            
            31,005
            
            
            19,491Changes
                in operating assets and liabilities(Increase)
                decrease in:Accounts
                receivable
            
            
            (9,916,193
            )
            
            (3,327,511
            )Contracts
                in progress
            
            
            (3,164,691
            )
            
            (195,318
            )Inventories
            
            
            (33,406
            )
            
            764,303Other
                current assets and prepaid expenses
            
            
            (7,809,025
            )
            
            735,861Value
                added tax recoverable
            
            
            -
            
            
            378,677Prepaid
                expenses ( non-current)
            
            
            (100,967
            )
            
            -Increase
                (decrease) in:Accounts
                payable
            
            
            (73,886
            )
            
            135,621Other
                payables and accrued liabilities
            
            
            351,667
            
            
            (1,085,195
            )Business
                tax payable
            
            
            356,924
            
            
            66,597Income
                tax payable
            
            
            (502,172
            )
            
            192,646Value
                added tax payable
            
            
            1,577,336
            
            
            -Deferred
                tax liabilities
            
            
            4,358,165
            
            
            417,568Net
                cash (used in) provided by operating activities
            
            
            (2,803,376
            )
            
            128,664**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchase
                of property and equipment
            
            
            (81,229
            )
            
            (1,239,834
            )Purchase
                of intangible assets
            
            
            (377,813
            )
            
            -Purchase
                of land use rights
            
            
            (329,919
            )
            
            -Net cash used in investing activities
            
            
            (788,961
            )
            
            (1,239,834
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Contribution
                by stockholders
            
            
            -
            
            
            657,499Due
                to a stockholder
            
            
            (3,118
            )
            
            45,323Bank
                loans borrowed
            
            
            -
            
            
            498,859Net
                cash (used in) provided by financing activities
            
            
            (3,118
            )
            
            1,201,681**EFFECT
                OF EXCHANGE RATES ON CASH**
            
            
            68,326
            
            
            (14,125
            )**NET
                (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            (3,527,129
            )
            
            76,386**CASH
                AND CASH EQUIVALENTS AT BEGINNING OF PERIOD**
            
            
            3,604,350
            
            
            70,326**CASH
                AND CASH EQUIVALENTS AT END OF PERIOD**
            
            $
            77,221
            
            $
            146,712**SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION**Cash
                paid for interest expenses
            
            $
            456,881
            
            $
            224,823Cash
                paid for income tax
            
            $
            502,173
            
            $
            57,643




The
      accompanying notes are an integral part of these financial
      statements





5





JADE
      MOUNTAIN CORPORATION AND SUBSIDIARIES


NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      SEPTEMBER 30, 2007


(UNAUDITED)




**NOTE
              1**
            **BASIS
                OF PRESENTATION**





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and pursuant to
      the
      rules and regulations of the Securities and Exchange Commission. Accordingly,
      they do not include all of the information and footnotes required by generally
      accepted accounting principles for complete financial statements.





In
      the
      opinion of management, the unaudited condensed consolidated financial statements
      contain all adjustments consisting only of normal recurring accruals considered
      necessary to present fairly the Company's financial position at September 30,
      2007, the results of operations for the three and nine months ended September
      30, 2007 and 2006 and cash flows for the nine months ended September 30, 2007
      and 2006. The results for the nine months ended September 30, 2007 are not
      necessarily indicative of the results to be expected for the entire fiscal
      year
      ending December 31, 2007.





These
      financial statements should be read in conjunction with the
      Company's current report on Form 8-K as filed with the Securities and
      Exchange Commission on October 12, 2007.




**NOTE
              2**
            **ORGANIZATION**





Jade
      Mountain Corporation (“JMC”) was originally incorporated in 1984 as Applied
      Biometrics, Inc. in accordance with the laws of the State of Minnesota. On
      December 27, 2006, the shareholders of JMC approved proposal to re-domicile
      JMC
      from the State of Minnesota to the State of Nevada. JMC effected the re-domicile
      through a merger with a new Nevada corporation which was formed by JMC on
      September 12, 2006 solely and specifically for the purpose of effecting the
      re-domicile of JMC. At this time, JMC changed its name to Jade Mountain
      Corporation. During the first six months ended June 30, 2007, JMC ceased all
      business operations and disposed of all its assets, liabilities and operating
      activities. JMC has had no operations or significant assets since the year
      ended
      December 31, 2006.





Innomind
      Group Limited (“Innomind”) was incorporated in the British Virgin Islands
      (“BVI”) on November 17, 2006 as
      an
      investment holding company. Through its wholly owned subsidiary, Dalian Innomind
      Environment Engineering Co., Ltd. (“Dalian Innomind”) incorporated in the
      People’s Republic of China (“PRC”) as a wholly owned foreign limited liability
      company on July 9, 2007, Innomind’s principal activities are
      that
      of a holding company for the assets and business of its operating
      subsidiary,Dalian
      Innomind. Dalian Innomind’s principal activities are the design,
      development, manufacturing and installation of industrial equipment used mainly
      for environmental protection purposes in the PRC. In accordance with the
      business permit, Dalian Innomind’s right of operation expires on July 8, 2022
      and is renewable on expiry.





Dalian
      Rino Environment Engineering Science And Technology Co., Ltd. (“Dalian Rino”)
      was incorporated in the People’s Republic of China (“PRC”) on March 5, 2003 as a
      limited liability company. The business activities of Dalian Rino are the same
      with those of Dalian Innomind. In accordance with the business permit, Dalian
      Rino’s right of operation expires on March 4, 2021 and is renewable.




On
      October 5, 2007, JMC consummated a Share Exchange Agreement (“the Agreement”)
      with the shareholders of Innomind pursuant to which JMC issued 17,899,643
      shares, par value $0.0001 per share to the shareholders of Innomind for 100%
      equity interest in Innomind. Prior to the Share Exchange: (i) on July 16, 2007,
      the Company consummated a one (1) share for two hundred thousand (200,000)
      shares reverse split of its Common Stock, with fractional shares rounded up
      to
      the nearest whole number (the “Reverse Split”); and (ii) on August 31, 2007, the
      Company’s Board of Directors authorized a one hundred (100) shares for one (1)
      share forward split of the issued and outstanding shares of its Common Stock
      (the “Forward Split”). All share and per share amounts set forth in this Current
      Report as of dates on or after July 16, 2007, give effect to the Reverse Split
      and all share and per share amounts set forth in this Current Report as of
      dates
      after August 31, 2007, give effect to the Forward Split.





The
      merger of JMC and Innomind was treated for accounting purposes as a capital
      transaction and recapitalization by Innomind (“the accounting acquirer”) and
      re-organization by JMC (“the accounting acquiree”). The financial statements
      have been prepared as if the reorganization had occurred
      retroactively.





Accordingly,
      the financial statements include the following:





(1)
            The
                balance sheet consists of the net assets of the acquirer at historical
                cost and the net assets of the acquiree at historical
                cost.





(2)
            The
                statement of operations includes the operations of the acquirer for
                the
                periods presented and the operations of the acquiree from the date
                of the
                merger.





On
      the
      same date, Dalian Innomind entered into a series of agreements (collectively
      known as the Restructuring Agreements) with Dalian Rino and the shareholders
      of
      Dalian Rino in which Dalian Innomind will take over the management of the
      business activities of Dalian Rino and will hold a 100% variable interest in
      Dalian Rino. As both companies are under common control, this has been accounted
      for as a reorganization of entities and the financial statements have been
      prepared as if the reorganization had occurred retroactively.





6





JMC,
      Innomind, Dalian Innomind and Dalian Rino are hereinafter referred to as (“the
      Company”).





**NOTE
              3**
            **PRINCIPLES
                OF CONSOLIDATION**





The
      accompanying unaudited condensed consolidated financial statements for 2007
      include the unaudited financial statements of Innomind and its wholly owned
      subsidiary, Dalian Innomind and Dalian Rino, a Variable Interest Entity of
      Dalian Innomind.





The
      accompanying unaudited condensed financial statements for 2006 only include
      the
      unaudited financial statement of Dalian Rino.





All
      significant inter-company accounts and transactions have been eliminated in
      consolidation.




**NOTE
              4**
            **REVENUE
                RECOGNITION**





The
      Company enters into long-term fixed price contracts with customers to
      manufacture and install industrial equipment. Revenue on long-term fixed price
      contracts is recognized under the percentage-of-completion method in accordance
      with the American Institute of Certified Public Accountants Statement of
      Position 81-1 “Accounting for Performance of Construction-Type and Certain
      Production-Type Contracts”. Under the percentage-of-completion method,
      management estimates the percentage-of-completion based upon costs incurred
      as a
      percentage of the total estimated costs to the customer. When total cost
      estimates exceed revenues, the Company accrues for the estimated losses
      immediately. The use of the percentage of completion method requires significant
      judgment relative to estimating total contract revenues and costs, including
      assumptions relative to the length of time to complete the project, the nature
      and complexity of the work to be performed, and anticipated changes in estimated
      costs. Estimates of total contract revenues and costs are continuously monitored
      during the term of the contract, and recorded revenues and costs are subject
      to
      revision as the contract progresses. When revisions in estimated contract
      revenues and costs are determined, such adjustments are recorded in the period
      in which they are first identified. For instances where the work performed
      on
      fixed price contracts is of relatively short duration, revenue is recognized
      when the work is completed.





The
      Company also provides technical professional services to its customers based
      on
      a fixed-price time contract. The Company recognizes services-based revenue
      from
      all of its contracts when the services have been performed, the customers have
      approved the completion of the services and invoices have been issued and
      collectibility is reasonably assured.





To
      utilize the idle time of its heavy duty machining tools, the Company provides
      machining services to customers. The machining service revenue is recognized
      when the performance of the service is completed, customer’s acceptance has been
      received and invoice is issued and collectibility is reasonably assured.




**NOTE
              5**
            **CONSOLIDATION
                OF VARIABLE INTEREST
                ENTITY**





On
      October 5, 2007 Dalian Innomind entered into Restructuring Agreements with
      Dalian Rino and its shareholders in which Dalian Innomind took over the
      management of the business activities of Dalian Rino. The Restructuring
      Agreements consist of the following agreements:





(a)
            Dalian
                Rino sold substantially all of its manufacturing equipment and tangible
                assets to Dalian Innomind for RMB 2,250,343;


(b)
            Dalian
                Rino transferred all of its three, presently owned patents, and three
                presently pending patent applications, to Dalian Innomind for an
                aggregate
                transfer fee of RMB 10,000;


(c)
            Dalian
                Rino will lease to Dalian Innomind substantially all of its manufacturing
                plant and land at an annual rent of RMB 612,000;


(d)
            With
                respect to its presently owned patents, Dlian Rino will contemporaneously
                enter into a separate transfer agreement (the “Patent Transfer Contract”)
                with Dalian Innomind to accomplish their actual transfer to Dalian
                Innomind;


(e)
            With
                respect to its presently pending patent applications, and in order
                to
                accomplish the actual transfer of, each such applied-for patent,
                Dalian
                Rino will enter into additional patent transfer contracts within
                ten days
                after the issuance of the patents; and


(f)
            Dalian
                Rino has granted to Dalian Innomind the royalty-free, perpetual right
                to
                use the “RINO” trademark and logo.





Under
      the
      requirements of FASB Interpretation No. 46 (R), Consolidation of Variable
      Interest Entities, an interpretation of ARB No. 51 (“FIN 46”), the Company
      consolidated the financial statements of Dalian Rino, a VIE of Dalian Innomind.
      As both companies are under common control, the financial statements have been
      prepared as if the transaction had occurred retroactively.




**NOTE
              6**
            **OTHER
                CURRENT ASSETS AND PREPAID
                EXPENSES**





Other
      current assets and prepaid expenses as of September 30, 2007 consist of the
      following:





Other
                receivables
            
            $
            416,178Advances
                to staff
            
            
            119,026Deposits
                with suppliers
            
            
            8,426,003Prepaid
                expenses
            
            
            23,944$
            8,985,151




7




During
      the nine months ended September 30, 2007, the Company paid deposits totaling
      $7,436,966 to a supplier for materials to be used in future
      contracts.




**NOTE
              7**
            **PREPAID
                EXPENSES (NON-CURRENT)**




These
      represent research and development costs paid to a third party under two
      agreements for services over a period of three years and five years. The costs
      will be amortized over the lives of the agreements.





The
                amount amortized as research and development expenses for the nine
                months
                ended September 30, 2007 and 2006 was $103,091 and $0
                respectively.




**NOTE
              8**
            **INTANGIBLE
                ASSETS**





In
      2006,
      the Company acquired from a third party an exclusive license under patent rights
      for $268,628 for a de-oxidation paint formula and production techniques for
      a
      period of three years subject to further renewal. In April 2007, the Company
      re-negotiated with the third party to extend the license to fifteen years for
      an
      additional cost of $255,976.





In
      May
      2007, the Company acquired from a third party a patent right for $131,151 for
      a
      desulphurization technology for a period of ten years.





The
      following is a summary of intangible assets as of September 30,
      2007:





Patents
            
            $
            665,106Less:
                accumulated amortization
            
            
            31,038$
            634,068




The
      intangible assets acquired for the de-oxidation and desulphurization technology
      are amortized on a straight-line basis over their useful lives starting from
      January 2007 and June 2007 respectively. For the nine months ended September
      30,
      2007 and 2006, the amount amortized was $30,399 and $0
      respectively.




**NOTE
              9**
            **LAND
                USE RIGHTS**





Under
      the
      laws of the PRC, land is owned by the government. Private enterprises are
      allowed to lease and use of the land. The following is a summary of land use
      rights acquired by the Company as of September 30, 2007:





Cost
            
            $
            927,282Less:
                accumulated amortization
            
            
            50,127$
            877,155




The
      land
      use rights are amortized over the term of the leases of fifty years. The
      amortization expense for the nine months ended September 30, 2007 and 2006
      was
      $8,674 and 8,303, respectively.




**NOTE
              10**
            **RELATED
                PARTY TRANSACTIONS**





As
      of
      September 30, 2007, the Company owed a stockholder $466,766 for advances made
      on
      an unsecured basis and free of interest payment and repayable on demand. Imputed
      interest is charged at 7% per annum on the amount due. Total imputed interest
      recorded as additional paid-in capital amounted to $31,005 and $19,491 for
      the
      nine months ended September 30, 2007 and 2006, respectively.




**NOTE
              11**
            **SUBSEQUENT
                EVENTS**





(A)
            Share
                Exchange Agreement





On
      October 5, 2007, JMC consummated the Agreement with the shareholders of Innomind
      pursuant to which JMC issued 17,899,643 shares to the shareholders of Innomind
      for 100% equity in Innomind.





(B)
            Restructuring
                Agreements





8




On
      October 3, 2007 Dalian Innomind entered into Restructuring Agreements with
      Dalian Rino and its shareholders in which Dalian Innomind took over the
      management of the business activities of Dalian Rino.




(C)
              Private
                  Placement


On
            October 5, 2007, the Company completed a private placement with 24 accredited
            investors for $24,435,319 from the sale of $5,464,357 shares of common
            stock of
            the Company.


**NOTE
              12**
            **RECENT
                ACCOUNTING PRONOUNCEMENTS**





In
      July 2006, the FASB issued FASB Interpretation No. 48, Accounting for
      Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”),
      which clarifies the accounting for uncertainty in tax positions. This
      Interpretation provides that the tax effects from an uncertain tax position
      can
      be recognized in the Company’s financial statements, only if the position is
      more likely than not of being sustained on audit, based on the technical merits
      of the position. The provisions of FIN 48 are effective as of the beginning
      of
      fiscal 2007, with the cumulative effect of the change in accounting principle
      recorded as an adjustment to opening retained earnings. The Company does not
      expect the adoption of FIN 48 to have an impact on the Company’s results of
      operations or financial condition.





In
      September 2006, FASB issued Statement 157, Fair Value Measurements. This
      statement defines fair value and establishes a framework for measuring fair
      value in generally accepted accounting principles (GAAP). More precisely, this
      statement sets forth a standard definition of fair value as it applies to assets
      or liabilities, the principal market (or most advantageous market) for
      determining fair value (price), the market participants, inputs and the
      application of the derived fair value to those assets and liabilities. The
      effective date of this pronouncement is for all full fiscal and interim periods
      beginning after November 15, 2007. The Company does not expect the adoption
      of SFAS 157 to have an impact on the Company’s results of operations or
      financial condition.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“SFAS 159”) which permits entities
      to choose to measure many financial instruments and certain other items at
      fair
      value that are not currently required to be measured at fair value. SFAS 159
      will become effective for us on January 1, 2008. The Company is currently
      evaluating the impact of this new Standard, but believes that it will not have
      that it will not have a material impact on the Company’s financial
      position.





**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





**Overview**




The
      Company is engaged in designing, developing, manufacturing, and installing
      environmental protection and energy saving equipment for the Chinese iron and
      steel industry. Most of our customers are large, state-owned iron and steel
      companies. Our business operations are conducted throughout China.




China’s
      iron and steel companies have experienced robust growth during the last twenty
      years, following the expansion of China’s economy and industrial base,
      generally. Along with this growth, the iron and steel industry has produced
      large amounts of waterborne and airborne industrial waste and pollution, and
      as
      a consequence it faces increasingly stringent governmental mandates to reduce
      or
      eliminate sulphur dixoide emissions and untreated wastewater discharges. Failure
      to meet mandated emission and discharge standards can result in financial
      penalties.




Demand
      for our core product, the Lamella Wastewater System, increased in 2006 and
      we
      expect demand to continue in 2007. One of our two new products, the
      Desulphurization System which we introduced in late 2006, is based on
      proprietary technology we jointly developed with the Research Institute of
      the
      Chinese Academy of Sciences, and can reduce flue gas sulphur dioxide levels
      by
      over 90%. We expect to see strong demand from the industry for the solutions
      that our Desulphurization System offers for airborne sulphur dioxide emissions.
      Starting in January 2007, we launched another new product, our Anti-Oxidation
      System, that materially reduces scrap loss in the production of hot rolled
      steel
      plate production caused by oxidation. Anti-oxidation is a long-sought solution
      in the Iron and Steel industry. We believe our Anti-Oxidation System, including
      paint and spraying equipment, is the only online system that prevents or reduces
      oxidation without needing to first cool down the steel slab. We anticipate
      that
      our Anti-Oxidation System will be an important driver of revenue
      growth.




In
      addition to the foregoing, we provide machining services to third parties,
      utilizing our heavy machine tools’ idle time to generate contract manufacturing
      revenue. In the first quarter of 2007, we also earned a significant amount
      of
      revenue from providing technical support to a business partner for the
      fulfillment of its desulphurization contract. The technical support business
      maintains our revenue growth while we continue to experience production capacity
      constraints. We anticipate that this business will decline beginning in 2008
      as
      we build up adequate production capacity.




9


We
      also
      receive grants from local government with amount varying from year to year
      as
      rewards for our continued investment in new technologies.




All
      our
      products are custom-built pursuant to our customers’ specific requirements. We
      enter into fixed price engineering and installation agreements with our
      customers that are performed in engineering, manufacturing, construction and
      installation phases. Equipment and components are engineered and manufactured
      primarily at our headquarter facilities. Generally, we fulfill our contracts
      in
      twelve months.




Our
      project-based revenue is affected directly by our customers’ capital budgets and
      need to build new plants. Since most of our customers are
      state-owned-enterprises, their budgeting decisions are influenced by the central
      government’s environmental protection and pollution control policies, which
      presently are favorable to our business and products. We expect such policy
      emphasis to continue for the foreseeable future.




The
      cost
      of revenue for our products includes direct materials, direct labor, and
      manufacturing overhead, with a significant portion allocable to materials costs,
      which are subject to fluctuation.




**Recent
      Developments**




***Share
        Exchange, Restructuring Agreements and Private Placement
        Financing***
 
 In
        a
        share exchange transaction that closed on October 5, 2007 (the “Share
        Exchange”), the Company acquired Innomind, and through that acquisition also
        acquired Innomind’s wholly-owned subsidiary, Dalian Innomind, as well as the
        assets and business of Dalain Innomind’s PRC affiliate, RINO. In the Share
        Exchange the Company issued a controlling number of shares (the “Control
        Shares”) of its common stock to Zhang Ze, Innomind’s sole shareholder, in
        exchange for all of the issued and outstanding shares of Innomind, which
        were
        owned by Zhang Ze (the “Innomind Shares”). Prior to the Share Exchange: (i) on
        July 16, 2007, the Company consummated a one (1) share for two hundred thousand
        (200,000) shares reverse split of its Common Stock, with fractional shares
        rounded up to the nearest whole number (the “Reverse Split”); and (ii) on August
        31, 2007, the Company’s Board of Directors authorized a one hundred (100) shares
        for one (1) share forward split of the issued and outstanding shares of its
        Common Stock (the “Forward Split”).
 
 In
        connection with the Share Exchange, through a series of agreements between
        Dalian Innomind and RINO that we refer to as the “Restructuring Agreements,”
which were executed on October 3, 2007, Dalian Innomind agreed to: (i) purchase
        and lease from RINO substantially all of RINO’s assets and properties; and (ii)
        fully conduct and manage RINO’s business (the “Business”) in exchange for RINO’s
        payment to Dalian Innomind of a management fee equal to the Business’s monthly
        net profits. To the extent that any aspect of the Business needs  to
        be  conducted
        directly through RINO in the future, the Restructuring Agreements provide
        Dalian
        Innomind with the legal right and power to control RINO and any of its remaining
        assets and operations.
 
 The
        Restructuring Agreements were utilized instead of a direct acquisition of
        RINO's
        assets, because of the lack of clarity in the implementation of current PRC
        laws
        regarding the use of a non-PRC entity’s equity as consideration to acquire a PRC
        entity’s equity or assets. This makes it highly uncertain, if not impossible,
        for a non-PRC entity (such as the Company or Innomind) to use its equity
        to
        acquire a PRC entity (such as RINO). While PRC law does allow for the purchase
        of equity interests in, or assets of a PRC entity by a non-PRC entity for
        cash,
        the purchase price must be based on the appraised value of the equity or
        assets.
        Because the Company did not have sufficient cash to pay the estimated full
        value
        of all of the assets of RINO, the Company, through Dalian Innomind, purchased
        the maximum amount of assets possible with the net proceeds of the private
        placement described below, and leased from RINO the remainder of the assets
        used
        in RINO’s business.
 
 Although
        the acquisition of the assets and business of RINO through the Restructuring
        Agreements was effective on October 5, 2007, not all of the transactions
        contemplated by the Restructuring Agreements have been consummated, and for
        that
        reason Dalian Innomind has not yet fully assumed total operational control
        of
        the Business. To complete these transactions, Dalian Innomind must complete
        additional steps, filings and registrations. Dalian Innomind has already
        completed the verification of capital required under PRC law, as well as
        obtaining a new business license to reflect its status as an operating entity.
        Remitting to RINO the full purchase price for the assets to be purchased
        by it
        under the Restructuring Agreements and obtaining an environmental report
        for the
        assets purchased from RINO remain in progress. We anticipate these steps
        will be
        completed within approximately 30 days after the date of this prospectus. **** At
        their
        completion, Dalian Innomind will assume full operating control of the Business.
 
 The
        funds
        used to consummate the Company’s acquisition of Innomind and the Restructuring
        Agreements were provided from the proceeds of a private placement of the
        Company’s common stock to 24 accredited investors that closed on October 5,
        2007, simultaneously with the Innomind acquisition and the implementation
        of the
        Restructuring Agreements. The private placement resulted in gross proceeds
        of
        $24,435,319 from the sale of 5,464,357 shares of our common stock. Pursuant
        to
        the Securities Purchase Agreement between the investors and the Company,
        the net
        proceeds of the Private Placement will otherwise principally be used by the
        Company and by Dalian Innomind to expand manufacturing and production capacity
        and facilities, and to provide working capital for the
        Business.


**Basis
      of presentation**





The
      accompanying unaudited condensed financial statements have been prepared in
      accordance with accounting principles generally accepted in the United States
      of
      America for interim financial information and pursuant to the rules and
      regulations of the Securities and Exchange Commission. Accordingly, they do
      not
      include all of the information and footnotes required by generally accepted
      accounting principles for complete financial statements.





In
      the
      opinion of management, the unaudited condensed financial statements contain
      all
      adjustments consisting only of normal recurring accruals considered necessary
      to
      present fairly the Company's financial position at September 30, 2007, the
      results of operations for the three months and nine months ended September
      30,
      2007 and 2006, and cash flows for the nine months ended September 30, 2007
      and
      2006. The results for the nine months ended September 30, 2007 are not
      necessarily indicative of the results to be expected for the entire fiscal
      year
      ending December 31, 2007.





For
      further information, refer to the financial statements and footnotes of the
      Company for the years ended December 31, 2006 and 2005.




10




**Recent
        Accounting Pronouncements**
 
 In
        July 2006, the FASB issued FASB Interpretation No. 48, Accounting for
        Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”),
        which clarifies the accounting for uncertainty in tax positions. This
        Interpretation provides that the tax effects from an uncertain tax position
        can
        be recognized in the Company’s financial statements, only if the position is
        more likely than not of being sustained on audit, based on the technical
        merits
        of the position. The provisions of FIN 48 are effective as of the beginning
        of
        fiscal 2007, with the cumulative effect of the change in accounting principle
        recorded as an adjustment to opening retained earnings. The Company does
        not
        expect the adoption of FIN 48 to have an impact on the Company's results
        of
        operations or financial conditions.


In
      September 2006, FASB issued Statement 157, Fair Value Measurements. This
      statement defines fair value and establishes a framework for measuring fair
      value in generally accepted accounting principles (GAAP). More precisely, this
      statement sets forth a standard definition of fair value as it applies to assets
      or liabilities, the principal market (or most advantageous market) for
      determining fair value (price), the market participants, inputs and the
      application of the derived fair value to those assets and liabilities. The
      effective date of this pronouncement is for all full fiscal and interim periods
      beginning after November 15, 2007. The Company does not expect the adoption
      of SFAS 157 to have an impact on the Company's results of operations
      or financial condition.


In
      February 2007, the FASB issued SFAS No. 159, "The
      Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159")
      which permits entities to choose to measure many financial instruments and
      certain other items at fair value that are not currently required to be measured
      at fair value. SFAS 159 will become effective for us on January 1, 2008. The
      Company is currently evaluating the impact of this new standard, but believes
      that it will not have a material impact on the Company's financial
      position.





**Critical
        Accounting Policies and Estimates**
  The
        following discussion and analysis is based upon the Company’s consolidated
        financial statements, which have been prepared in conformity with accounting
        principles generally accepted in the United States of America. The Company’s
        significant accounting policies are more fully described in the Notes to
        the
        Consolidated Financial Statements. However, certain accounting policies and
        estimates are particularly important to the understanding of the Company’s
        financial position and results of operations and require the application
        of
        significant judgment by the Company’s management or can be materially affected
        by changes from period to period in economic factors or conditions that are
        outside of the control of management. As a result they are subject to an
        inherent degree of uncertainty. In applying these policies, the Company’s
        management uses their judgment to determine the appropriate assumptions to
        be
        used in the determination of certain estimates. Those estimates are based
        on the
        Company’s historical operations, its future business plans and projected
        financial results, the terms of existing contracts, the Company’s observance of
        trends in the industry, information provided by customers and information
        available from other outside sources, as appropriate. The following discusses
        the Company’s significant accounting policies and estimates.
 
 **Principles
        of Consolidation**
 
 The
        accompanying unaudited condensed consolidated financial statements for 2007
        include the unaudited financial statements of Innomind and its wholly owned
        subsidiary, Dalian Innomind and Dalian Rino, a Variable Interest Entity of
        Dalian Innomind.
  The
        accompanying unaudited condensed financial statements for 2006 only include
        the
        unaudited financial statement of Dalian Rino.
  All
        significant inter-company accounts and transactions have been eliminated
        in
        consolidation.
 
 **Revenue
        Recognition**
 
 The
        Company enters into long-term fixed price contracts with customers to
        manufacture and install industrial equipment. Revenue on long-term fixed
        price
        contracts is recognized under the percentage-of-completion method in accordance
        with the American Institute of Certified Public Accountants Statement of
        Position 81-1 “Accounting for Performance of Construction-Type and Certain
        Production-Type Contracts”. Under the percentage-of-completion method,
        management estimates the percentage-of-completion based upon costs incurred
        as a
        percentage of the total estimated costs to the customer. When total cost
        estimates exceed revenues, the Company accrues for the estimated losses
        immediately. The use of the percentage of completion method requires significant
        judgment relative to estimating total contract revenues and costs, including
        assumptions relative to the length of time to complete the project, the nature
        and complexity of the work to be performed, and anticipated changes in estimated
        costs. Estimates of total contract revenues and costs are continuously monitored
        during the term of the contract, and recorded revenues and costs are subject
        to
        revision as the contract progresses. When revisions in estimated contract
        revenues and costs are determined, such adjustments are recorded in the period
        in which they are first identified. For instances where the work performed
        on
        fixed price contracts is of relatively short duration, revenue is recognized
        when the work is completed.
  11
  The
        Company also provides technical professional services to its customers based
        on
        a fixed-price time contract. The Company recognizes services-based revenue
        from
        all of its contracts when the services have been performed, the customers
        have
        approved the completion of the services and invoices have been issued and
        collectibility is reasonably assured.
  To
        utilize the idle time of its heavy duty machining tools, the Company provides
        machining services to customers. The machining service revenue is recognized
        when the performance of the service is completed, customer’s acceptance has been
        received and invoice is issued and collectibility is reasonably assured.
 
 **** **Consolidation
        of Variable Interest Entity**
 
 On
        October 5, 2007 Dalian Innomind entered into Restructuring Agreements with
        Dalian Rino and its shareholders in which Dalian Innomind took over the
        management of the business activities of Dalian Rino. The Restructuring
        Agreements consist of the following agreements:
 
 (a)
              Dalian
                  Rino sold substantially all of its manufacturing equipment and
                  tangible
                  assets to Dalian Innomind for RMB 2,250,343;
 (b)
              Dalian
                  Rino transferred all of its three, presently owned patents, and
                  three
                  presently pending patent applications, to Dalian Innomind for an
                  aggregate
                  transfer fee of RMB 10,000;
 (c)
              Dalian
                  Rino will lease to Dalian Innomind substantially all of its manufacturing
                  plant and land at an annual rent of RMB 612,000;
 (d)
              With
                  respect to its presently owned patents, Dlian Rino will contemporaneously
                  enter into a separate transfer agreement (the “Patent Transfer Contract”)
                  with Dalian Innomind to accomplish their actual transfer to Dalian
                  Innomind;
 (e)
              With
                  respect to its presently pending patent applications, and in order
                  to
                  accomplish the actual transfer of, each such applied-for patent,
                  Dalian
                  Rino will enter into additional patent transfer contracts within
                  ten days
                  after the issuance of the patents; and
 (f)
              Dalian
                  Rino has granted to Dalian Innomind the royalty-free, perpetual
                  right to
                  use the “RINO” trademark and logo.
  Under
        the
        requirements of FASB Interpretation No. 46 (R), Consolidation of Variable
        Interest Entities, an interpretation of ARB No. 51 (“FIN 46”), the Company
        consolidated the financial statements of Dalian Rino, a VIE of Dalian Innomind.
        As both companies are under common control, the financial statements have
        been
        prepared as if the transaction had occurred retroactively.
  12
 **Contracts
        in progress**
 
 Contracts
        in progress are stated at the lower of cost or market value and include the
        costs and earnings in excess of billings, pursuant to the percentage of
        completion method of accounting for long-term fixed price contracts. The
        costs
        of contracts in progress include production costs and related overhead,
        including an applicable portion of general and administrative expenses. As
        of
        December 31, 2006, the Company has no contracts in progress.
 
 **Inventories**
 
 Raw
        materials are stated at the lower of cost or market value, cost being calculated
        on the weighted average basis.
 
 The
        Company provided inventory allowances based on excess and obsolete inventories
        determined principally by customer demand.
 
 **Property
        and equipment**
 
 Property
        and equipment are stated at cost, less accumulated depreciation. Expenditures
        for additions, major renewals and betterments are capitalized and expenditures
        for maintenance and repairs are charged to expense as incurred.
 
 Depreciation
        is provided on a straight-line basis, less estimated residual value over
        the
        assets’ estimated useful lives. The estimated useful lives are as
        follows:
 
 Buildings
              
              
              30
                  YearsPlant
                  and machinery
              
              
              15
                  YearsMotor
                  vehicles
              
              
              10
                  YearsFurniture,
                  fixtures and equipment
              
              
              5
                  Years
  Land
        use
        rights are stated at cost, less accumulated amortization and are amortized
        over
        the term of the relevant rights of 50 years from the date of
        acquisition.


13




The
      Company’s principal office and its manufacturing facilities are located in the
      Jinzhou Industry Cooperation Zone of Dalian, PRC. In 2003 RINO acquired from
      the
      government the right to use 287,117 square feet of land in the Jinzhou Industry
      Cooperation Zone for a 50 year period that expires in 2053 (the “Land Use
      Rights”). Instead of periodic rent, RINO paid a one-time fee of $580,203 for the
      Land Use Rights.





Of
      the
      area leased by us, our factory occupies 91,570 square feet, and office space,
      warehouse facilities and living quarters comprise 90,148 square feet.





**Dalian
      Facilities**





Our
      Dalian facilities have a staff of 270 managerial, technical, clerical and
      manufacturing employees, who cover the Company’s national operations,
      generally.





**Branch
      Offices**





In
      addition to the head office in Dalian, the Company leases branch offices in
      Lanzhou, Beijing, Chongqing, Wuhan and Nanchang. Each branch office covers
      and
      is responsible for the Company’s operations in a specific territory in
      China:





**City**
            
            **Staff**
            
            **Sq. Meters**
            
            **Lease**
                **Expires**
            
            **Rent**
            
            **Territory**Lanzhou
            
            
            3
            
            
            100
            
            
            May
                2008
            
            $
            196 per mo.
            
            
            Northwest
                ChinaBeijing
            
            
            5
            
            
            400
            
            
            July
                2008
            
            $
            4,196 per mo.
            
            
            Mid
                ChinaChongqing
            
            
            3
            
            
            100
            
            
            February 2008
            
            $
            196 per mo.
            
            
            Southwest ChinaWuhan
            
            
            2
            
            
            100
            
            
            February 2008
            
            $
            196 per mo.
            
            
            Southeast
                ChinaNanchang
            
            
            2
            
            
            130
            
            
            November 2007
            
            $
            209 per mo.
            
            
            Jiangxi
                Province





Management
      believes that it will be able to renew these leases.




14


**Results
        of Operations**
 
 ***Three
        Months Ended September 30, 2007 Compared to Three Months Ended September
        30,
        2006***
 
 ***Financial
        Highlights***
  For
                  the three months ended Sept 302007
              
              
              2006NET
                SALESContracts
              
              $
              17,530,259
              
              $
              2,113,523Services
              
              
              65,807
              
              
              501,651Government
                  grant
              
              
              52,605
              
              
              10,95117,648,671
              
              
              2,626,125COST
                OF SALESCost
                  of contracts
              
              
              (10,124,392
              )
              
              (1,425,260
              )Cost
                  of services
              
              
              (13,635
              )
              
              (67,776
              )Depreciation
              
              
              (140,452
              )
              
              (88,430
              )(10,278,479
              )
              
              (1,581,466
              )
 GROSS
                  PROFIT
              
              
              7,370,192
              
              
              1,044,659Selling
                  , general and administrative expenses
              
              
              2,141,041
              
              
              199,809Depreciation
              
              
              29,769
              
              
              21,927Amortization
                  of intangible assets
              
              
              12,072
              
              
              -Amortization
                  of land use rights
              
              
              2,932
              
              
              2,782Total
                  Operating Expenses
              
              
              2,185,814
              
              
              224,518INCOME
                  FROM OPERATIONS
              
              
              5,186,768
              
              
              820,141Other
                  income
              
              
              86
              
              
              4,494Interest
                  income
              
              
              636
              
              
              201Imputed
                  interest
              
              
              (6,987
              )
              
              (6,336
              )Interest
                  expenses
              
              
              (170,769
              )
              
              (83,021
              )Other
                  expenses
              
              
              (387
              )
              
              (12,188
              )Total
                  Other Income/Expenses
              
              
              (177,427
              )
              
              (96,850
              )INCOME
                  FROM OPERATIONS BEFORE TAXES
              
              
              5,006,951
              
              
              723,291INCOME
                  TAX EXPENSE
              
              
              (744,149
              )
              
              (235,072
              )NET
                  INCOME
              
              
              4,262,802
              
              
              488,219OTHER
                COMPREHENSIVE
                INCOME
 Foreign
                  currency translation gain
              
              
              249,954
              
              
              84,881.COMPREHENSIVE
                  INCOME
              
              $
              4,512,756
              
              $
              573,100


***Sales
      and Gross Profit***




***Revenues*** *.*




Revenues,
      excluding government grants, increased by $15.0 million or 573% for the three
      months ended September 30, 2007, as compared to the three months ended September
      30, 2006. The revenue increase in 2007 was due to the growing demand for our
      flue gas desulphurization product. Equipment sales revenues in the three months
      ended September 30, 2007 were entirely related to flue gas desulphurization
      projects which were signed in July.




The
      composition of main items of our revenues in the three months ended September
      30, 2007 is as follows:




15




For
                the three months ended September 30,2007
            
            2006Flue
                gas desulphurization
            
            
            12,373,837
            
            
            0Wastewater
                treatment
            
            
            2,311,456
            
            
            1,345,769Deoxidation
                treatment
            
            
            138,552
            
            
            0Machining
                services
            
            
            2,772,221
            
            
            768,027




***Cost
      of Revenue*** .




The
      cost
      of revenue for the three months ended September 30, 2007 increased by $8.7
      million to $10.3 million from $1.6 million for the three months ended September
      30, 2006, largely due to increased sales. As a percentage of revenue excluding
      government grants, the cost of revenue decreased to 58% for the three months
      ended September 30, 2007 from 60% for the same period of 2006, primarily because
      we continue to realize savings in machining through using in-house heavy machine
      tools acquired in 2006.




***Operating
      Expenses***





Operating
      expenses for the three months ended September 30, 2007 increased to $2.2 million
      from $0.2 million for the same period ended September 30, 2006 as a result
      of
      higher levels of operations during 2007. As a percentage of revenue, the
      operating expenses increased by 3% to 12% for the three months ended September
      30, 2007 from 9% for the same period in 2006.





***Other
      Income and Expenses***





Other
      income and expenses include primarily interest income and interest expense.
      Interest income was immaterial due to the fact we have maintained a low cash
      balance for most of our operations. Interest expense increased to $0.2 million
      for the three months ended September 30, 2007 from $0.08 million for the three
      months ended September 30, 2006, due to an increased amount of the bank debt
      financing we undertook during 2006.





***Net
      Income***





Net
      income was $4,262,802 in the three months ended September 30, 2007, compared
      with $488,219 in the same period last year, primarily due to the increased
      sales, higher gross margins, and lower income taxes as a percentage of revenue
      than realized in the same period in 2006.





16





***Nine
      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,
      2006***


***Financial
        Highlights***
 
 For
                  the nine months ended Sept 302007
              
              2006NET
                  SALESContracts
              
              $
              36,813,217
              
              $
              5,067,516Services
              
              
              9,380,179
              
              
              1,331,953Government
                  grant
              
              
              122,463
              
              
              384,12146,315,859
              
              
              6,783,590COST
                OF SALESCost
                  of contracts
              
              
              (21,990,789
              )
              
              (3,273,664
              )Cost
                  of services
              
              
              (1,358,474
              )
              
              (162,204
              )Depreciation
              
              
              (398,580
              )
              
              (214,402
              )(23,747,843
              )
              
              (3,650,270
              )GROSS
                  PROFIT
              
              
              22,568,016
              
              
              3,133,320
  Selling,
                  general & administrative expenses
              
              
              6,003,380
              
              
              402,178Depreciation
              
              
              83,865
              
              
              63,147Amortization
                  of intangible assets
              
              
              30,399Amortization
                  of land use rights
              
              
              8,674
              
              
              8,303Total
                  Operating Expenses
              
              
              6,123,928
              
              
              473,628INCOME
                  FROM OPERATIONS
              
              
              16,444,088
              
              
              2,659,692Other
                  income
              
              
              5,226
              
              
              4,494Interest
                  income
              
              
              3,050
              
              
              530Imputed
                  interest
              
              
              (31,005
              )
              
              (19,491
              )Interest
                  expenses
              
              
              (456,881
              )
              
              (224,823
              )Other
                  expenses
              
              
              (3,575
              )
              
              (12,474
              )Total
                  Other Income/Expenses
              
              
              (483,179
              )
              
              (251,764
              )INCOME
                  FROM OPERATIONS BEFORE TAXES
              
              
              15,958,514
              
              
              2,407,928INCOME
                  TAX EXPENSE
              
              
              (4,358,165
              )
              
              (667,856
              )NET
                  INCOME
              
              
              11,600,349
              
              
              1,740,072OTHER
                COMPREHENSIVE INCOMEForeign
                  currency translation gain
              
              
              535,845
              
              
              101,962COMPREHENSIVE
                  INCOME
              
              $
              12,136,194
              
              $
              1,842,034


***Sales
      and Gross Profit***





***Revenues.***





Revenues,
      excluding government grants, increased by $39.8 million or 622% for the nine
      months ended September 30, 2007, as compared to the nine months ended September
      30, 2006. The revenue increase in 2007 was due to the substantial growth in
      demand for our existing wastewater treatment and contract machining services.
      In
      addition, our new flue gas desulphurization product became our largest selling
      product by sales turnover, while our new deoxidation treatment product
      registered strong growth. Technical consulting services grew strongly in the
      first six months of 2007 but fell off in the third quarter as we reassigned
      engineers to work on other projects.




We
      sell
      to large iron and steel companies around China. The following table sets for
      our
      composition of revenues by product in the nine months ended September 30, 2007
      and September 30, 2006.




17




For the nine months ended
              September 30,2007
            
            2006Flue
                gas desulphurization
            
            
            20,747,298
            
            
            0Wastewater
                treatment
            
            
            6,473,927
            
            
            3,423,801Deoxidation
                treatment
            
            
            1,952,868
            
            
            0Machining
                services
            
            
            7,639,124
            
            
            1,643,715




***Cost
      of Revenues.***





The
      cost
      of revenue for the nine months ended September 30, 2007 increased by $20.1
      million to $23.7 million from $3.7 million for the nine months ended September
      30, 2006, largely due to increased sales. As a percentage of revenue excluding
      government grants, the cost of revenue decreased to 51% for the nine months
      ended September 30, 2007 from 57% for the same period of 2006, primarily because
      our acquisition of heavy machine tools in 2006 allowed us to process product
      parts and components in-house, resulting in machine processing
      savings.





***Operating
      Expenses***





Operating
      expenses for the nine months ended September 30, 2007 increased to $6.1 million
      from $0.5 million for the same period ended September 30, 2006 as a result
      of
      higher levels of operations during the year of 2006. As a percentage of revenue,
      the operating expenses decreased by 6% to 13% for the nine months ended
      September 30, 2007 from 7% for the same period in 2006. Half of the increase
      was
      due to a significant increase in selling expense during the first two quarters
      in 2007. No material selling expense was incurred during the same period in
      2006. Excluding selling expense, operating expenses remained at approximately
      6.2% of revenue, slightly below the 7.4% of revenue recorded for operating
      expenses during the same period in 2006.





***Other
      Income and Expenses***





Other
      income and expenses include primarily interest income and interest expense.
      Interest income was immaterial due to the fact we have maintained a low cash
      balance for most of our operations. Interest expense increased to $0.5 million
      for the nine months ended September 30, 2007 from $0.2 million for the nine
      months ended September 30, 2006, due to an increased amount of the bank debt
      financing we undertook during 2006. As a percentage of revenue, however,
      interest expense in the first nine months of 2007 fell to 1.0% of revenue from
      3.5% of revenue in the same period in 2006, largely due to the increasing base
      as revenues rose sharply in the first nine months of 2007 over the same period
      in 2006.





***Net
      Income***





Net
      income was $11,600,349 in the nine months ended September 30, 2007, compared
      with $1,740,072 in the same period last year, primarily due to the increased
      sales, stable gross margins partly offset by rising operational expenses, and
      lower income taxes as a percentage of revenue than realized in the same period
      in 2006.





18




**Liquidity
          and Capital Resources**
  We
          have
          historically funded our working capital needs from operations, advance
          payments
          from customers, bank borrowings, and capital from shareholders. Our working
          capital requirements are influenced by the level of our operations, the
          numerical and dollar volume of our project contracts, the progress of our
          contract execution, and the timing of accounts receivable collections.
  Our
          Accounts Receivable equaled $15,971,323. Our customers are large iron and
          steel
          enterprises in China, we have recorded no reserves against their
          receivables.
  Our
          inventories include raw materials for equipment projects, consumables,
          and other
          items related to our business. Contracts in progress includes costs and
          estimated earnings on uncompleted projects, net of billings. Billings in
          excess
          of the costs and estimated earnings on projects is reported as a
          liability.
  As
          of
          September 30, 2007, cash and cash equivalents totaled $0.08
          million.
  The
          following tables present our net cash flows for the nine months ended September
          30, 2007 and for the same period ended September 30, 2006.
  For
                    the nine months ended
                  September
                    30,2007
                
                2006Cash
                    provided by (used) in operating activities
                
                $
                (2,803,376
                )
                $
                128,664Cash
                    provided by (used) in investing activities
                
                
                (788,961
                )
                
                (1,239,834
                )Cash
                    provided by (used) in financing activities
                
                
                (3,118
                )
                
                1,201,681Effect
                    of exchange rate on cash flows
                
                
                68,326
                
                
                (14,125
                )Net
                    increase (decrease) in cash
                
                
                (3,527,129
                )
                
                76,386Beginning
                    cash
                
                
                3.604,350
                
                
                70,326Ending
                    cash
                
                $
                77,221
                
                $
                146,712
   ***Cash
          flow from operating activities*** .  Net
          cash
          used in operating activities was $2.8 million for the nine months ended
          September 30, 2007 as compared to $0.13 million provided by operating activities
          for the same period ended September 30, 2006. The negative cash flow from
          operating activities during the first three quarters of 2007 was primarily
          attributable to disadvantageous payment terms with raw material suppliers
          resulting in a significant increase in advance payments that exceeded the
          deposits received from our customers. Our higher investment in accounts
          receivable and in contracts in progress largely results from growth in
          our
          business.
  ***Cash
          used in investing activities*** .
          For the
          nine months ended September 30, 2007, net cash used in investing activities
          decreased by $0.41 million to $0.79 million as compared to $1.2 million
          for the
          same period ended September 30, 2006. This decrease primarily resulted
          from the
          reduced spending on intangible assets. There were no proceeds from sales
          of
          properties or other investments during either nine month period.
   ***Cash
          provided by financing activities*** .
          Our
          operations historically have been financed by capital contributions and
          loans
          from RINO’s founder and by bank loans. For the nine months ended September 30,
          2007, net cash used by financing activities equaled $0.03 million as compared
          to
          cash provided by financing activities of $1.2 million for the same period
          ended
          September 30, 2006. This was principally the result of repayment of capital
          contributions from RINO’s founders.


19





**Off-Balance
      Sheet Arrangements**





The
      Company does not have any off-balance sheet arrangements.




20


ITEM
      3 -
      CONTROLS AND PROCEDURES





(a) Evaluation
      of Disclosure Controls and Procedures


We
        maintain disclosure controls and procedures that are designed to ensure that
        information required to be disclosed in our reports under the Securities
        Exchange Act of 1934 (“Exchange Act”), as amended, is recorded, processed,
        summarized and reported within the time periods specified in the Securities
        and
        Exchange Commission's rules and forms, and that such information is accumulated
        and communicated to our management to allow timely decisions regarding required
        disclosure. Management necessarily applied its judgment in assessing the
        costs
        and benefits of such controls and procedures, which, by their nature, can
        provide only reasonable assurance regarding management's control
        objectives.
 
 At
        the
        conclusion of the nine months ended September 30, 2007 we carried out an
        evaluation, under the supervision and with the participation of our management,
        including our Chief Executive Officer and Chief Financial Officer, of the
        effectiveness of the design and operation of our disclosure controls and
        procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
        Act,
        the design and operation of our disclosure controls and procedures, as of
        September 30, 2007. Based upon that evaluation, our Chief Executive Officer
        and
        Chief Financial Officer concluded that as of the end of the period covered
        by
        this report, our disclosure controls and procedures were effective and
        adequately designed to ensure that the information required to be disclosed
        by
        us in the reports we submit under the Exchange Act is recorded, processed,
        summarized and reported within the time periods specified in the applicable
        rules and forms and that such information was accumulated and communicated
        to
        our Chief Executive Officer/President and Chief Financial Officer, in a manner
        that allowed for timely decisions regarding required disclosure.
 
 During
        the period covered by this report, there have been no changes in our internal
        controls over financial reporting that have materially affected, or are
        reasonably likely to materially affect our internal controls over financial
        reporting.


(b)
      Changes in Internal Controls




There
      have been no significant changes in our internal controls or in other factors
      that could significantly affect the internal controls subsequent to the date
      of
      the evaluation in connection with the preparation of this quarterly report
      on
      Form 10-QSB.




21




PART
      II -
      OTHER INFORMATION





ITEM
      1 -
      LEGAL PROCEEDINGS





None





ITEM
      2 -
      RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS





Incorporated
      by reference to the disclosures made in the Registrant’s Current Report on Form
      8-K filed with the Commission on October 12, 2007.





ITEM
      3 -
      DEFAULTS ON SENIOR SECURITIES





None





ITEM
      4 -
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





The
      Company has held no regularly scheduled, called or special meetings of
      stockholders during the reporting period.




ITEM
      5 -
      OTHER INFORMATION





Please
      refer to the disclosures made in the Registrant’s Current Report on Form 8-K
      filed with the Commission on October 12, 2007.





ITEM
      6 -
      EXHIBITS





31.1
      Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002


32.1
      Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002





22




SIGNATURES





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**JADE
              MOUNTAIN CORPORATION**Date: November 19, 2007
            By:
            /s/ Zou DejunZou
              DejunTitle: Chief Executive OfficerDate:
              November 19, 2007
            By:
            /s/
              Bruce RichardsonBruce
              RichardsonTitle:
              Chief Financial Officer and Secretary




23