UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2008

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-21071

GOLDEN ELEPHANT GLASS
TECHNOLOGY, INC(Exact name of small business
issuer as specified in its charter)

|Nevada                              |  | 88-0309578                              
|----------------------------------- |  | ----------------------------------------
|(State
    or other jurisdiction of |  | (I.R.S.
    Employer Identification No.)
|incorporation or organization)      |  |                                         

Golden Elephant Glass Technology, Inc.
123 Chuangye Road, Haizhou District, 
Fuxin City, Liaoning Province, PRC 123000-------------------------------------------------- 
(Address of principal executive offices, Zip Code)

(86) 418-399-5066-------------------------------------------------- 
(Registrants telephone number, including area code)

12890 Hilltop Road, Argyle, TX 76226
fiscal year ended June 30
-------------------------------------------------- 
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the
registrant (1) has 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 large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer o           
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

The number of shares outstanding of each of the
issuers classes of common equity, as of August 14, 2008 is as follows:

Class of Securities
      
      Shares OutstandingCommon Stock, $0.001 par value
      
      28,340,590


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TABLE OF CONTENTS

|                                                                                                 | Page
|------------------------------------------------------------------------------------------------ | ----
|PART I - FINANCIAL
    INFORMATION                                                               |     
|Item
    1 Financial Statements                                                                  | 1   
|Item 2 Management's
    Discussion and Analysis of Financial Condition and Results of Operations | 26  
|Item
    3 Quantitative and Qualitative Disclosure about Market Risk                             | 35  
|Item 4 Controls and
    Procedures                                                               | 35  
|                                                                                                 |     
|PART II - OTHER
    INFORMATION                                                                  | 36  
|Item
    1 Legal Proceedings                                                                     | 36  
|Item 1A Risk Factors                                                                             | 36  
|Item
    2 Unregistered Sales of Equity Securities and Use of Proceeds                           | 36  
|Item 3 Defaults Upon
    Senior Securities                                                       | 36  
|Item
    4 Submission of Matters to a Vote of Security Holders                                   | 36  
|Item 5 Other
    Information                                                                     | 36  
|Item
    6 Exhibits                                                                              | 36  



---

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

1

---



Golden Elephant Glass Technology, Inc.

(Formerly Nevstar Corporation)



Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008

(Stated in US dollars)



2

---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Condensed Consolidated Financial Statements



For the three and six months ended June 30, 2008



Index to Condensed Consolidated Financial Statements



|                                                                           | Pages 
|-------------------------------------------------------------------------- | ------
|                                                                           |       
|Condensed Consolidated Statements of Income and Other Comprehensive Income | 1     
|                                                                           |       
|Condensed Consolidated Balance Sheets                                      | 2     
|                                                                           |       
|Condensed Consolidated Statements of Cash Flows                            | 3     
|                                                                           |       
|Notes to Condensed Consolidated Financial Statements                       | 4 - 22





3

---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Condensed Consolidated Statements of Income and Other Comprehensive Income

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)



|                                                           | Three months ended |   | Six months ended |  
|---------------------------------------------------------- | ------------------ | - | ---------------- | -
|                                                           | June 30            |   | June 30          |  
|                                                           | (unaudited)        |   | (unaudited)      |  
|                                                           | 2008               |   | 2007             |  
|Revenue                                                    |                    |   |                  |  
|Sales revenues - Note 19                                   | $15,348,524        |   | $17,475,040      |  
|Cost of sales                                              | (11,339,956        | ) | (12,405,815      | )
|                                                           |                    |   |                  |  
|Gross profit                                               | 4,008,568          |   | 5,069,225        |  
|                                                           |                    |   |                  |  
|Operating expenses                                         |                    |   |                  |  
|Administrative expenses                                    | 849,951            |   | 793,266          |  
|Selling expenses                                           | 79,507             |   | 272,210          |  
|                                                           |                    |   |                  |  
|Total operating expenses                                   | 929,458            |   | 1,065,476        |  
|                                                           |                    |   |                  |  
|Income from operations                                     | 3,079,110          |   | 4,003,749        |  
|Interest income                                            | 11,736             |   | 52               |  
|Other income                                               | 25,028             |   | 23,124           |  
|Bad debts recovered                                        | 2,302              |   | -                |  
|Decrease in provision for bad debts                        | 57,076             |   | -                |  
|Gain on disposal of a subsidiary
- Note 3(b)               | 508,981            |   | -                |  
|Finance costs                                              | (488,472           | ) | (213,414         | )
|Equity in net (loss)/income of an
unconsolidated affiliate | -                  |   | (6,054           | )
|                                                           |                    |   |                  |  
|Income before income taxes                                 | 3,195,761          |   | 3,807,457        |  
|Income taxes - Note 5                                      | (419,406           | ) | (532,439         | )
|Minority interests shares of loss                          | -                  |   | -                |  
|                                                           |                    |   |                  |  
|Net income                                                 | $2,776,355         |   | $3,275,018       |  
|                                                           |                    |   |                  |  
|Other comprehensive income                                 |                    |   |                  |  
|Foreign currency translation
adjustments                   | $551,348           |   | $127,063         |  
|                                                           |                    |   |                  |  
|Comprehensive income                                       | $3,327,703         |   | $3,402,081       |  
|                                                           |                    |   |                  |  
|Earnings per share :
basic and diluted - Note 6            | $0.11              |   | $0.14            |  
|                                                           |                    |   |                  |  
|Weighted average number of shares                          |                    |   |                  |  
|outstanding : basic and diluted - Note 6                   | 25,001,800         |   | 23,751,710       |  



See the accompanying notes to condensed consolidated financial statements



4



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Condensed Consolidated Balance Sheets

As of June 30, 2008 and December 31, 2007

(Stated in US Dollars)



|                                                                                                                                                                                  | June 30,    |  | December 31, | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- |  | ------------ | 
|                                                                                                                                                                                  | 2008        |  | 2007         | 
|                                                                                                                                                                                  | (Unaudited) |  | (Audited)    | 
|ASSETS                                                                                                                                                                            |             |  |              | 
|Current assets                                                                                                                                                                    |             |  |              | 
|Cash and cash equivalents                                                                                                                                                         | $8,236      |  | $62,660      | 
|Restricted cash                                                                                                                                                                   | 1,356,870   |  | 1,275,030    | 
|Trade receivables (net of allowance of doubtful accounts                                                                                                                          |             |  |              | 
|of $51,252 in 2008 and $27,677 in 2007) - Note 7                                                                                                                                  | 5,076,732   |  | 5,749,984    | 
|Other receivables (net of allowance of doubtful accounts                                                                                                                          |             |  |              | 
|of $4,377 in 2008 and $395,576 in 2007) - Note 8                                                                                                                                  | 7,872,857   |  | 3,079,943    | 
|Advances to staff (net of allowance of doubtful accounts                                                                                                                          |             |  |              | 
|of $4,304 in 2008 and $71,131 in 2007) - Note 9                                                                                                                                   | 381,652     |  | 316,016      | 
|Prepayments - Note 10                                                                                                                                                             | 5,714,104   |  | 1,794,416    | 
|Inventories - Note 11                                                                                                                                                             | 6,881,691   |  | 4,955,896    | 
|Amount due from an unconsolidated affiliate                                                                                                                                       | -           |  | 878,261      | 
|Deferred taxes                                                                                                                                                                    | 19,582      |  | 132,030      | 
|                                                                                                                                                                                  |             |  |              | 
|Total current assets                                                                                                                                                              | 27,311,724  |  | 18,244,236   | 
|                                                                                                                                                                                  |             |  |              | 
|Investment in an unconsolidated affiliate                                                                                                                                         | -           |  | 55,105       | 
|Property, plant and equipment, net - Note 12                                                                                                                                      | 26,236,497  |  | 27,408,880   | 
|Construction in progress                                                                                                                                                          | 426,028     |  | -            | 
|Land use right                                                                                                                                                                    | 2,829,201   |  | 2,930,020    | 
|Goodwill                                                                                                                                                                          | 393,831     |  | 393,831      | 
|Deferred taxes                                                                                                                                                                    | 159,821     |  | 177,459      | 
|                                                                                                                                                                                  |             |  |              | 
|TOTAL ASSETS                                                                                                                                                                      | $57,357,102 |  | $49,209,531  | 
|                                                                                                                                                                                  |             |  |              | 
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                              |             |  |              | 
|                                                                                                                                                                                  |             |  |              | 
|LIABILITIES                                                                                                                                                                       |             |  |              | 
|Current liabilities                                                                                                                                                               |             |  |              | 
|Trade payables                                                                                                                                                                    | $8,694,161  |  | $7,819,249   | 
|Bills payable                                                                                                                                                                     | 3,545,370   |  | 3,331,530    | 
|Other payables and accrued expenses - Note 13                                                                                                                                     | 11,374,066  |  | 2,587,382    | 
|Sales receipt in advance                                                                                                                                                          | 1,271,133   |  | 6,210,016    | 
|Dividend payable                                                                                                                                                                  | -           |  | 630,660      | 
|Income tax payable                                                                                                                                                                | 409,467     |  | 547,656      | 
|Amount due to a director                                                                                                                                                          | -           |  | 995,400      | 
|Secured short-term bank loans - Note 14                                                                                                                                           | 12,753,703  |  | 14,589,359   | 
|Unsecured loan - Note 15                                                                                                                                                          | 914,800     |  | -            | 
|                                                                                                                                                                                  |             |  |              | 
|TOTAL LIABILITIES                                                                                                                                                                 | 38,962,700  |  | 36,711,252   | 
|                                                                                                                                                                                  |             |  |              | 
|COMMITMENTS AND CONTINGENCIES- Note 16                                                                                                                                            |             |  |              | 
|                                                                                                                                                                                  |             |  |              | 
|STOCKHOLDERS EQUITY                                                                                                                                                              |             |  |              | 
|Preferred stock : par value $0.01 per share
Authorized 10,000,000 shares, none issued and outstanding                                                                             | -           |  | -            | 
|Common stock : par value $0.01 per share - Note 18
Authorized 150,000,000 shares in 2008 and 2007;
issued and outstanding 25,001,800 shares in 2008
and 23,751,710 shares in 2007 | 250,018     |  | 237,517      | 
|Additional paid-in capital - Note 18                                                                                                                                              | 7,513,186   |  | 7,513,186    | 
|Statutory reserves                                                                                                                                                                | 665,617     |  | 665,617      | 
|Accumulated other comprehensive income                                                                                                                                            | 2,216,103   |  | 1,076,335    | 
|Retained earnings                                                                                                                                                                 | 7,749,478   |  | 3,005,624    | 
|                                                                                                                                                                                  |             |  |              | 
|TOTAL STOCKHOLDERS EQUITY                                                                                                                                                        | 18,394,402  |  | 12,498,279   | 
|                                                                                                                                                                                  |             |  |              | 
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                        | $57,357,102 |  | $49,209,531  | 



See the accompanying notes to condensed consolidated financial statements



5



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Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)



|                                                                    | Six months ended June 30 |  
|------------------------------------------------------------------- | ------------------------ | -
|                                                                    | (Unaudited)              |  
|                                                                    | 2008                     |  
|Cash flows from operating activities                                |                          |  
|Net income                                                          | $4,757,427               |  
|Adjustments to reconcile net income to net cash                     |                          |  
|flows provided by operating activities:                             |                          |  
|Depreciation                                                        | 1,426,224                |  
|Amortization of land use right                                      | 30,435                   |  
|Deferred taxes                                                      | 144,220                  |  
|Gain on disposal of a subsidiary                                    | (508,981                 | )
|Recovery of doubtful debts                                          | (453,211                 | )
|Equity in net loss of an unconsolidated affiliate                   | -                        |  
|Minority interests                                                  | (4,994                   | )
|Changes in operating assets and liabilities:                        |                          |  
|Trade receivables                                                   | 1,035,909                |  
|Other receivables                                                   | 835,563                  |  
|Advances to staff                                                   | 32,304                   |  
|Prepayments                                                         | (3,688,110               | )
|Inventories                                                         | (1,625,020               | )
|Bills receivable                                                    | 2,484                    |  
|Trade payables                                                      | 354,930                  |  
|Bills payable                                                       | -                        |  
|Other payables and accrued expenses                                 | (851,370                 | )
|Sales receipt in advance                                            | (5,301,751               | )
|Amount due to a director                                            | -                        |  
|Amount due from a director                                          | (14,561                  | )
|Amount due from an unconsolidated affiliate                         | -                        |  
|Income tax payable                                                  | (170,977                 | )
|                                                                    |                          |  
|Net cash flows (used in)/provided by operating activities           | (3,999,479               | )
|                                                                    |                          |  
|Cash flows from investing activities                                |                          |  
|Payments to acquire property, plant and equipment                   | (12,316                  | )
|Sale proceeds for disposal of land use right                        | 246,759                  |  
|Payment to acquire a subsidiary - Note 3(a)                         | (135,594                 | )
|Proceeds from disposal of property, plant and equipment             | 1,432,393                |  
|Cash inflow from RTO                                                | 464                      |  
|Cash outflow from disposal of a subsidiary - Note 3(b)              | (163                     | )
|Payment for construction in progress                                | (420,216                 | )
|Increase in restricted cash                                         | -                        |  
|                                                                    |                          |  
|Net cash flows provided by/(used in) investing activities           | 1,111,327                |  
|                                                                    |                          |  
|Cash flows from financing activities                                |                          |  
|Advances to third parties                                           | (4,612,349               | )
|Amounts due to third parties                                        | 2,871,590                |  
|Amount due to Tianyuan                                              | 1,130,206                |  
|Loan from a related party                                           | 5,796,250                |  
|Dividend paid to stockholders/Fuxin Hengruis ex-stockholders       | (642,942                 | )
|Proceeds from unsecured loan                                        | 5,000,000                |  
|Proceeds from bank loans                                            | -                        |  
|Repayment of bank loans                                             | (2,711,520               | )
|Repayment of unsecured loan                                         | (4,099,177               | )
|                                                                    |                          |  
|Net cash flows provided by/(used in) financing activities           | 2,732,058                |  
|                                                                    |                          |  
|Effect of foreign currency translation on cash and cash equivalents | 101,670                  |  
|                                                                    |                          |  
|Net decrease in cash and cash equivalents                           | (54,424                  | )
|                                                                    |                          |  
|Cash and cash equivalents - beginning of period                     | 62,660                   |  
|                                                                    |                          |  
|Cash and cash equivalents - end of period                           | $8,236                   |  
|                                                                    |                          |  
|Supplemental disclosures for cash flow information:                 |                          |  
|                                                                    |                          |  
|Cash paid for:                                                      |                          |  
|Interest                                                            | $614,485                 |  
|Income taxes                                                        | 582,809                  |  
|                                                                    |                          |  
|Non-cash financing activities:                                      |                          |  
|Consideration of disposal of a subsidiary offset by other payable   | $709,200                 |  



See the accompanying notes to condensed consolidated financial statements



6



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Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





1.

Corporation information



Golden Elephant Glass Technology, Inc. (the Company) was incorporated in State
of Nevada on December 2, 1993 under the name of Nevstar Corporation. On April
21, 2008, the board of directors of the Company authorized the amendment to the
Company's Articles of Incorporation to change its name to "Golden Elephant Glass
Technology, Inc." (the "Amendment"). On the same date, stockholders holding a
majority of the outstanding shares of the common stock of the Company approved
the Amendment by written consent.



The Companys shares are quoted for trading on the Over-The-Counter Bulletin
Board (OTCBB) in the United States of America.



On June 11, 2008, as a result of the name change, the Company's trading symbol
on the OTCBB has changed from NVSC.OB to "GOEG.OB".



Pursuant to the Share Exchange Agreement dated March 31, 2008, the Company
acquired 100% ownership interest in Dollar Come Investments Limited (Dollar
Come), a limited company incorporated in the British Virgin Islands on February
12, 2004 with authorized common stock of $50,000 divided into 50,000 ordinary
shares of $1 each, in consideration for the issuance of the Companys 23,751,710
new shares to the former stockholders of Dollar Come (Dollar Come Former
Stockholders).



The aforesaid transaction was completed on March 31, 2008 and thereafter Dollar
Come became a wholly owned subsidiary of the Company and Dollar Come Former
Stockholders became the majority stockholders of the Company.  This transaction
constituted a reverse takeover transaction (RTO).



On March 31, 2008, the Company's board of directors approved a change in the
Company's fiscal year end from June 30 to December 31, subject to approval of an
amendment of the Company's Amended and Restated Bylaws, in connection with the
Companys reverse acquisition with Dollar Come.



Dollar Come is a holding company whose primary operations are conducted through
its subsidiaries located in the Liuling Province of the Peoples Republic of
China (the PRC).



Following the RTO, through Dollar Come, the Company indirectly owned Fuxin
Hengrui Technology Co., Ltd. (Fuxin Hengrui), Fuxin Xianheng Float-Glass Co.,
Ltd. (Xianheng) and Fuxin Hengrui Tianyuan New Energy Sources Co., Ltd. (Tianyuan).



Fuxin Hengrui was incorporated in the PRC on September 18, 2002 with registered
capital of $5,030,000 (RMB41,600,000, which are not divided into shares) and
engaged in manufacture and distribution of float glasses in Liuling Province.
 The entire equity interest of Fuxin Hengrui was directly held by Dollar Come.



Xianheng was incorporated in the PRC on April 1, 2004 with registered capital of
$60,500 (RMB500,000, which are not divided into shares) of which 25% equity
interest was directly held by Dollar Come whilst 75% equity interest was
indirectly held by Dollar Come through Fuxin Hengrui.  During the reporting
periods, Xianheng did not have any business activities.



7



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





1.

Corporate information (Contd)



On May 17, 2006, Fuxin Hengrui together with, Madam Lin Tan (Madam Tan), one
of the directors of Fuxin Hengrui established Tianyuan in the PRC with
registered capital of $1,251,000 (RMB10 million, which are not dividend into
shares). On May 16, 2006, according to the payment schedule, Fuxin Hengrui
contributed $131,355 to its registered capital representing 35% equity interest.
Pursuant to a special resolution passed on October 12, 2007, the registered
capital of Tianyuan was reduced from $1,251,000 to $375,000 which was effective
from January 16, 2008.  On January 16, 2008, Fuxin Hengrui further acquired 35%
equity interest in Tianyuan from Madam Tan at a total consideration of $143,955,
and thereafter, Tianyuan become a subsidiary of Nevstar.  Tianyuan is
principally engaged in manufacturing of coal water mixture to assess energy
alternative for industrial boiler. On May 17, 2008, Fuxin Hengrui disposed of
its 70% equity interest in Tianyuan to a third party at a total consideration of
$709,200 (RMB5,000,000).



More details and accounting treatment on investment in Tianyuan are set out in
Note 3.





2.

Description of business



Following the RTO as detailed in note 3, the Company commenced to be engaged in
the manufacture and distribution of float glasses in the PRC.  The Companys
product offerings include float glass, ultra-clear glass, colored flat glass and
high grade, glass processed products such as mirrors, tempered glass, insulated
glass, etc., and marketed primarily under the Golden Elephant brand name.



The raw materials used in production are mainly divided into four groups, soda
ash, heavy oils, silica sand and dolomite, which are primary sourced from
suppliers located in the PRC.  The production facilities of the Company are
located in Liuling Province of the PRC.





3.

Basis of presentation



Pursuant to the Share Exchange Agreement dated on March 31, 2008, the Company
issued 23,751,710 new shares, par value $0.01 per share, to the stockholders of
Dollar Come, representing approximately 95% of the Company post-exchange issued
and outstanding common stock, in exchange for 100% of the outstanding capital
stock of Dollar Come.



The RTO has been accounted for as a recapitalization of the Company whereby the
historical financial statements and operations of Dollar Come become the
historical financial statements of the Company, with no adjustment to the
carrying values of the assets and liabilities.  The accompanying consolidated
financial statements reflect the recapitalization of the stockholders equity as
if the transaction occurred as of the beginning of the first period presented.



The accompanying consolidated financial statement of the Company have been
prepared in accordance with generally accepted accounting principles in the
United States of America.



The consolidated financial statements include the accounts of the Company and
its subsidiaries.  All significant inter-company accounts and transactions have
been eliminated in consolidation.  The results of subsidiary acquired or
disposed of during the periods are included in the consolidated statement of
income and comprehensive income from the effective date of acquisition or up to
the date of disposal.



8



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





3.

Basis of presentation (Contd)



(a)

The Company acquired 35% equity interest in Tianyuan at a consideration of
$143,955 on January 16, 2008.  The fair value of Tianyuan as of January 16, 2008
was as follows :-



As of
January 16,
2008Cash and cash equivalents
  $8,361Other receivables and prepayments
  625,451Property, plant and equipment, net
  575,726Inventories
  609,068Other assets
  76,091Other payables and accrued expenses(405,255
  )Other liabilities
  (1,309,628
  )Net assets
  $179,81435% equity interest acquired
  $62,935Goodwill
  81,020Consideration
  $143,955Satisfied by :-Cash payment
  $143,955Net cash paid to acquire Tianyuan
  $135,594




As of March 31, 2008, the consolidated balance sheet reflects a goodwill
identified on acquisition of Tianyuan of $81,020 which represents the excess of
the purchase price of $143,955 over the attributable share (that is 35%) of fair
value of acquired identifiable net assets of Tianyuan of $62,935.



The following unaudited pro forma financial information presents the combined
results of the Company with the operations of Tianyuan for three months ended
March 31, 2008 as if the acquisition had occurred as of January 1, 2008 :-



Three months ended March 31,
(Unaudited)2008
  
  2007Revenue
  $11,825,710
  
  $9,448,726Net income/(loss)$1,981,072
  $ (393,606)Earnings/(loss) per share : basic and diluted
  $0.08
  
  $ (0.02
  )




This unaudited pro forma financial information is presented for informational
purposes only.  The unaudited pro forma financial information may not
necessarily reflect the future results of operations or the results of
operations would have been had the Company owned and operated this business as
of the beginning of the period presented.



9



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





3.

Basis of presentation (Contd)



(b)

According to the share transfer agreement signed between Fuxin Hengrui and a
third party, Fuxin Hengrui disposed of its 70% equity interest in Tianyuan to a
third party at a total consideration of $709,200 (RMB5,000,000) with effective
date from May 17, 2008.



The assets and liabilities arising from the disposal as of May 17, 2008 were as
follows :-



Property, plant and equipment
  $468,371Construction in progress
  113,626Inventories
  714,379Other receivables, deposits and prepayments734,812Cash and cash equivalents
  163Trade payables(37,053
  )Other payables and accruals
  (546,570
  )Amount due to a director(245,616
  )Amount due to a shareholder
  (974,708
  )Unsecured short-term loans(57,120
  )Minority interests
  (51,085
  )Net assets disposed$119,199Release on goodwill
  81,020Gain on disposal of a subsidiary
  508,981Consideration
  $709,200Satisfied by :-Non cash transaction arising from disposal :-Consideration offset by other payable of acquirer
  $709,200Net cash outflow on disposal of Tianyuan
  $(163
  )






4.

Summary of significant accounting policies



Goodwill



Goodwill represents the excess of the purchase price of an acquired business
over the fair value of the identifiable assets acquired and liabilities assumed.
 Pursuant to the provisions of SFAS No. 142 Goodwill and Other Intangible
Assets, goodwill is not amortized and is subjected to an annual impairment test
which occurs in the fourth quarter of each fiscal year.



Goodwill will be written down only when and if impairment is identified and
measured, based on future events and conditions.



Minority interests



Minority interests resulted from the consolidation of 70% owned subsidiary,
Tianyuan, where the Company has control over its operation.



10



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





4.

Summary of significant accounting policies



Use of estimates



In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting periods.  These accounts and estimates include, but are not limited
to, the valuation of accounts receivable, inventories, deferred income taxes and
the estimation on useful lives of property, plant and equipment.  Actual results
could differ from those estimates.



Concentrations of credit risk



Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash and cash equivalents,
trade receivables and other receivables.  As of June 30, 2008 and December 31,
2007, substantially all of the Companys cash and cash equivalents and
restricted cash were held by major financial institutions located in the PRC,
which management believes are of high credit quality.  With respect to other
receivables and trade receivables, the Company extends credit based on an
evaluation of the customers financial condition.  The Company generally does
not require collateral for trade receivables and other receivables and maintains
an allowance for doubtful accounts of trade receivables and other receivables.



During the reporting periods, customers representing 10% or more of the
Companys consolidated sales are :-



Three months ended
  Six months endedJune 30
  June 30(unaudited)
  (unaudited)2008
  
  2007
  
  2008
  
  2007Aushen Xingsheng Glass
Distribution Office
  $3,833,390
  
  N/A
  
  $7,018,844
  
  N/A




Cash and cash equivalents



Cash and cash equivalents include all cash, deposits in banks and other highly
liquid investments with initial maturities of three months or less to be cash
equivalents.  As of June 30, 2008 and December 31, 2007, almost all the cash and
cash equivalents were denominated in Renminbi (RMB) and were placed with banks
in the PRC.  They are not freely convertible into foreign currencies and the
remittance of these funds out of the PRC is subject to exchange control
restrictions imposed by the PRC government.  The remaining insignificant balance
of cash and cash equivalents were denominated in US dollars.



Restricted cash



Deposits in banks pledged as securities for bills payable that are restricted in
use are classified as restricted cash under current assets.



11



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





4.

Summary of significant accounting policies (Contd)



Allowance of doubtful accounts



The Company establishes an allowance for doubtful accounts based on managements
assessment of the collectibility of trade receivables and other receivables.  A
considerable amount of judgment is required in assessing the amount of the
allowance, the Company considers the historical level of credit losses and
applies percentages to aged receivable categories.  The Company makes judgments
about the creditworthiness of each customer based on ongoing credit evaluations,
and monitors current economic trends that might impact the level of credit
losses in the future.  If the financial condition of the customers were to
deteriorate, resulting in their inability to make payments, a larger allowance
may be required.



Based on the above assessment, during the reporting years, the management
establishes the general provisioning policy to make allowance equivalent to 10%
of gross amount of trade receivables and other receivables due over 6-12 months,
25% gross amount of trade receivables and other receivables due over 1-2 years
and 50% of gross amount of trade receivables and other receivables due over 2-3
years and 100% of gross amount of trade receivables and other receivables due
over 3 years.  Additional specific provision is made against trade receivables
aged less than 6 months to the extent which they are considered to be doubtful.



Bad debts are written off when identified.  The Company extends unsecured credit
to customers ranging from three to six months in the normal course of business.
 The Company does not accrue interest on trade receivables.



Historically, losses from uncollectible accounts have not significantly deviated
from the general allowance estimated by the management and no significant
additional bad debts have been written off directly to the profit and loss.
 This general provisioning policy has not changed in the past since
establishment and the management considers that the aforementioned general
provisioning policy is adequate and not too excessive and does not expect to
change this established policy in the near future.



Inventories



Inventories are stated at the lower of cost or market value.  Cost is determined
on a weighted average basis and includes all expenditures incurred in bringing
the goods to the point of sale and putting them in a saleable condition.  In
assessing the ultimate realization of inventories, the management makes
judgments as to future demand requirements compared to current or committed
inventory levels.  Our reserve requirements generally increase as our projected
demand requirements; decrease due to market conditions, product life cycle
changes.  The Company estimates the demand requirements based on market
conditions, forecasts prepared by its customers, sales contracts and orders in
hand.



In addition, the Company estimates net realizable value based on intended use,
current market value and inventory ageing analyses.  The Company writes down the
inventories for estimated obsolescence or unmarketable inventory equal to the
difference between the cost of inventories and the estimated market value based
upon assumptions about future demand and market conditions.



Based on the above assessment, the Company establishes a general provision to
make a 50% provision for inventories aged over 1 year.  As of June 30, 2008 and
December 31, 2007, no general provision for inventories were made.



Historically, the actual net realizable value is close to the management
estimation.



12



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





4.

Summary of significant accounting policies (Contd)



Property, plant and equipment



Property, plant and equipment are stated at cost less accumulated depreciation.
 Cost represents the purchase price of the asset and other costs incurred to
bring the asset into its existing use.



Depreciation is provided on straight-line basis over their estimated useful
lives.  The principal depreciation rates are as follows :-



Annual rate
  
  Residual valueBuildings
  1.9%
  
  5%Plant and machinery
  9.5%
  
  5%Motor vehicles
  11.875%
  
  5%Office equipment
  19%
  
  5%Tools
  9.5%
  
  5%Leasehold improvements
  12.5%
  
  Nil




Construction in progress mainly represents expenditures in respect of the
Companys warehouses and factories under construction.  All direct costs
relating to the acquisition or construction of the Companys warehouses and
factories are capitalized as construction in progress.  No depreciation is
provided in respect of construction in progress.



Maintenance or repairs are charged to expense as incurred.  Significant
improvements and renewals that extend the useful life of the asset are
capitalized.  Upon sale or disposition, the applicable amounts of asset cost and
accumulated depreciation are removed from the accounts and the net amount less
proceeds from disposal is charged or credited to income.



Land use right



Land use right is stated at cost less accumulated amortization.  Amortization is
provided using the straight-line method over the terms of the lease of 50 years
obtained from the relevant PRC land authority.



Impairment of long-lived assets



Long-lived assets are tested for impairment in accordance with SFAS No. 144 and
Accounting Principles Board (APB) Opinion 18, Equity Method of Accounting for
Investments in Common Stock, respectively.  The Company periodically evaluates
potential impairment whenever events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable.  The Company
recognizes impairment of long-lives assets and investment in an affiliate in the
event that the net book values of such assets exceed the future undiscounted
cashflows attributable to such assets.  During the reporting periods, the
Company has no identified any indicators that would require testing for
impairment.



Revenue recognition



Revenue from sales of the Companys products is recognized when the significant
risks and rewards of ownership have been transferred to the buyer at the time of
delivery, the sales price is fixed or determinable and collection is reasonably
assured.



13



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





4.

Summary of significant accounting policies (Contd)



Basic and diluted earnings per share



The Company reports basic earnings per share in accordance with SFAS No. 128,
Earnings Per Share.  Basic earnings per share is computed using the weighted
average number of shares outstanding during the periods presented.  The weighted
average number of shares of the Company represents the common stock outstanding
during the reporting periods.



Recently issued accounting pronouncements



In May 2008, FASB issued SFAS 162, The Hierarchy of Generally Accepted
Accounting Principles. Effective 60 days following the SECs approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. The Board does not expect that this Statement will result in a
change in current practice. However, transition provisions have been provided in
the unusual circumstance that the application of the provisions of this
Statement results in a change in practice. The management is in the process of
evaluating the impact that SFAS 162 will have on the Companys financial
statements upon adoption.



In March 2008, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards (SFAS) No. 161, "Disclosures about
Derivative Instruments and Hedging Activities - an amendment to FASB Statement
No. 133". SFAS No. 161 is intended to improve financial standards for derivative
instruments and hedging activities by requiring enhanced disclosures to enable
investors to better understand their effects on an entity's financial position,
financial performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b)
how derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entity's financial position,
financial performance, and cash flows. It is effective for financial statements
issued for fiscal years beginning after November 15, 2008, with early adoption
encouraged.  The management is in the process of evaluating the impact that SFAS
160 will have on the Companys financial statements upon adoption.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115 (SFAS 159).  SFAS 159 permits entities to choose to measure
many financial instruments and certain other items at fair value.  Entities that
elect the fair value option will report unrealized gains and losses in earnings
at each subsequent reporting date.  The fair value option may be elected on an
instrument-by-instrument basis, with few exceptions.  SFAS 159 also establishes
presentation and disclosure requirements to facilitate comparisons between
companies that choose different measurement attributes for similar assets and
liabilities.  The requirements of SFAS 159 are effective for our fiscal year
beginning January 1, 2008.  The management is in the process of evaluating the
impact that SFAS 159 will have on the Companys financial statements upon
adoption.



14



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





5.

Income taxes



United States



The Company is subject to U.S federal income tax at a tax rate of 34%.  No
provision for U.S federal income taxes has been made as the Company was dormant
and had no taxable income for the reporting periods.



BVI



Dollar Come was incorporated in the BVI and, under the current laws of the BVI,
not subject to income taxes.



PRC



Before the implementation of the new enterprise income tax (EIT) law (as
discussed below), Foreign Invested Enterprises (FIE) established in the PRC
are generally granted certain tax benefits or holiday by the relevant tax
authority.  On March 16, 2007, the National Peoples Congress of China passed
the new Corporate Income Tax Law (EIT Law), and on November 28, 2007, the
State Council of China passed the Implementing Rules for the EIT Law
(Implementing Rules) which took effect on January 1, 2008. The EIT Law and
Implementing Rules impose a unified EIT of 25.0% on all domestic-invested
enterprises and FIEs, unless they qualify under certain limited exceptions.
Therefore, nearly all FIEs are subject to the new tax rate alongside other
domestic businesses rather than benefiting from the old tax laws applicable to
FIEs, and its associated preferential tax treatments, beginning January 1, 2008.



Despite these changes, the EIT Law gives the FIEs established before March 16,
2007 (Old FIEs), such as our subsidiary Fuxin Hengrui and Xianheng, a
five-year grandfather period during which they can continue to enjoy their
existing preferential tax treatments. During this five-year grandfather period,
the Old FIEs which enjoyed tax rates lower than 25% under the original EIT Law
shall gradually increase their EIT rate by 2% per year until the tax rate
reaches 25%. In addition, the Old FIEs that are eligible for the two-year
exemption and three-year half reduction or five-year exemption and five-year
half-reduction under the original EIT Law, are allowed to remain to enjoy their
preference until these holidays expire.



In addition to the changes to the current tax structure, under the EIT Law, an
enterprise established outside of China with de facto management bodies within
China is considered a resident enterprise and will normally be subject to an EIT
of 25.0% on its global income. The Implementing Rules define the term de facto
management bodies as an establishment that exercises, in substance, overall
management and control over the production, business, personnel, accounting,
etc., of a Chinese enterprise. If the PRC tax authorities subsequently
determine that the Company should be classified as a resident enterprise, then
the organizations global income will be subject to PRC income tax of 25.0%.



Under the income tax law and the related implementing rules, FIEs engaging in
manufacturing businesses with a term of operation exceeding ten years may,
subject to approval from local taxation authorities, be entitled to a two-year
tax exemption from PRC EIT starting from the year they become profitable and a
50.0% tax reduction for the three years thereafter.



15



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





5.

Income taxes (Contd)



As approved by the relevant PRC tax authority, Fuxin Hengrui and Xianheng was
entitled to a two-year exemption from EIT followed by a 50.0% tax exemption for
the next three years, commencing from the first cumulative profit-making year in
the fiscal financial year. The tax holiday of Fuxin Hengrui commenced in 2004.
Accordingly, Fuxin Hengrui is entitled to a 50% reduction on EIT tax rate of
12.5% for 2008 and will be subject to an EIT rate of 25% from 2009.  Xianhengs
tax holiday commenced in 2008, therefore, Xianheng is exempted from EIT in 2008
and 2009 and will be subject to a reduced EIT rate of 12.5% from 2010 to 2012.



In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty
in Income Taxes (FIN 48). This interpretation requires recognition and
measurement of uncertain income tax positions using a more-likely-than-not
approach. The Company adopted FIN 48 on January 1, 2007. The management
evaluated the Companys tax positions and considered that no additional
provision for uncertainty in income taxes is necessary as of June 30, 2008.





6.

Earnings per share



During the reporting periods, the Company had no dilutive instruments.
 Accordingly, the basic and diluted earnings per share are the same.





7.

Trade receivables

June 30,
  
  December 31,2008
  
  2007(Unaudited)
  (Audited)Trade receivables
  $5,127,984
  
  $5,777,661Allowance for doubtful accounts(51,252)(27,677)$5,076,732
  
  $5,749,984




The Company incurred $21,192 of doubtful debt expense and had $188,681 of
doubtful debt recovery for the six months ended June 30, 2008 and 2007
respectively.



16



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





8.

Other receivables

June 30,
  
  December 31,2008
  
  2007(Unaudited)
  (Audited)Advances to third parties - Note 8a
  $7,226,010
  
  $2,923,647Other receivables309,019
  551,872Other tax recoverable
  342,205
  
  -7,877,234
  3,475,519Allowance of doubtful debts
  (4,377
  )
  (395,576
  )$7,872,857
  $3,079,943




Note :-



a.

The amounts are interest-free, unsecured and repayable on demand.



b.

The Company had $404,997 and $20,459 of doubtful debt recovery for the six
months ended June 30, 2008 and 2007 respectively.





9.

Advances to staff



The amounts are interest-free, unsecured and repayable on demand. The Company
had $69,406 and $3,423 of doubtful debt recovery for the six months ended June
30, 2008 and 2007 respectively.





10.

Prepayments

June 30,
  
  December 31,2008
  
  2007(Unaudited)
  (Audited)Prepayment for raw materials
  $4,211,089
  
  $718,220Prepayment for rental expenses1,345,888
  814,236Prepayment for factory construction
  101,125
  
  28,052Prepayment for factory tools-
  34,973Prepayment for utilities expenses
  20,476
  
  191,306Prepayment for other expenses
  35,526
  7,629$5,714,104
  
  $1,794,416




17



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





11.

Inventories

June 30,
  
  December 31,2008
  
  2007(Unaudited)
  (Audited)Raw materials
  $2,278,929
  
  $871,549Finished goods4,561,981
  4,046,025Consumables
  40,781
  
  38,322$6,881,691
  $4,955,896




No (recovery of)/provision for obsolete inventories were (credited)/charged to
operations during the period.



As of June 30, 2008, totally 388,375 boxes of finished goods with carrying value
of $2,048,053 and $1,530,840 were pledged to the banks for the bank loans (Note
14a) granted to the Company and the bills payable undertaken by the banks.





12.

Property, plant and equipment

June 30,
  
  December 31,2008
  
  2007(Unaudited)
  (Audited)Costs:Buildings$13,912,343
  $14,478,246Plant and machinery
  20,122,273
  
  18,901,987Office equipment125,392
  112,554Tools
  186,308
  
  175,071Leasehold improvements3,853,457
  3,621,035Motor vehicles
  472,888
  
  447,35838,672,661
  37,736,251Accumulated depreciation
  (12,436,164
  )
  (10,327,371
  )Net
  $26,236,497
  $27,408,880




As of June 30, 2008, certain property, plant and equipment with aggregate net
book value of $13,241,372 was pledged to banks to secure general banking
facilities (Note 14b).



18



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





13.

Other payables and accrued expenses

June 30,
  December 31,2008
  
  2007(Unaudited)
  
  (Audited)Accrued audit fee
  $174,788
  
  $180,698Payable for acquisition of property, plant and equipment-
  313,484Accruals for factory construction
  587,428
  
  179,379Loan from a related party - Note 13a4,946,292
  -Amounts due to third parties - Note 13b
  3,793,755
  
  505,079Amount due to Tianyuan - Note 13b1,145,835
  -Other accrued expenses
  541,042
  
  602,197Staff welfare payable - Note 13c184,926
  692,533Other payables
  -
  
  114,012$11,374,066
  $2,587,382




Note :-



a.

The amount represents loan from Madam Tan and is interest-free, unsecured and
not repayable until the Company is in a position to do so.



b.

The amounts are interest-free, unsecured and not repayable until the Company is
in a position to do so.



c.

Staff welfare payable represents accrued staff medical, industry injury claims,
labor and unemployment insurances.  All of which are third parties insurance and
the insurance premiums are based on certain percentage of salaries.  The
obligations of the Company are limited to those premiums contributed by the
Company.





14.

Secured short-term bank loans

June 30,
  
  December 31,2008
  
  2007(Unaudited)
  (Audited)Bank loans repayable as follows:Within 1 year
  $12,753,703
  
  $14,589,359




As of June 30, 2008, the Companys banking facilities were as follows:



Facilities granted
  
  Granted
  
  Amount utilized
  
  UnusedSecured bank loans
  
  $14,701,700
  
  $12,753,703
  
  $1,947,997




19



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





14.

Secured short-term bank loans (Contd)



The above banking loans were secured by the following :-



a.

Finished goods with carrying value of $2,048,053 (Note 11);

b.

Property, plant and equipment with carrying value of $13,241,372 (Note 12);

c.

Land use right with carrying value of $2,829,201;

d.

Guarantees executed by Mr. Song Lihui who is a director of Golden Elephant Glass
Technology, Inc. and third parties; and

e.

All the bank loans are denominated in RMB and carry interest rates ranging from
4.785% to 8.964% per annum with maturity dates within 1 year.



During the reporting periods, there was no covenant requirement under the
banking facilities granted to the Company.





15.

Unsecured loan



On May 6, 2008, Dollar Come entered into a loan agreement with Madam Tan to
borrow $5,000,000 at the annual interest rate of 8%.  The agreement has a
two-year term and the loan proceed was used as working capital of the Company.





16.

Commitments and contingencies



a.

Capital commitment



As of June 30, 2008, the Company had no capital commitments in respect of the
acquisition of property, plant and equipment which were contracted for but not
provided in the financial statements.



b.

Operating lease arrangement



As of June 30, 2008, the Company had a non-cancelable operating lease for its
warehouse.  The lease will expire in 2015 and the expected payments are as
follows:-



Within one year
  $425,520Two to five years
  1,702,080After five years
  602,820$2,730,420




The rental expenses relating to the operating leases were $212,760 and $194,450
for the six months ended June 30, 2008 and 2007, respectively.



20



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





16.

Commitments and contingencies (Cont'd)



c.

Environmental



The Companys operations are subject to the laws and regulations in the PRC
relating to the generation, storage, handling, transportation and discharge of
certain materials, substances and waste into the environment, and various other
health and safety matters.  Governmental authorities have the power to enforce
compliance with their regulations, and violators may be subject to fines,
injunctions or both.  The Company must devote substantial financial resources to
ensure compliance, and the management believes that it is in substantial
compliance with all the applicable laws and regulations.



The Company has not incurred any significant expenditure for environmental
remediation, is currently not involved in any environmental remediation and has
not accrued any amounts for environmental remediation relating to its
operations.  Under existing legislation, management believes that there are no
probable liabilities that will have a material adverse effect on the financial
position, operating results or cash flows of the Company.



The Company incurred normal routine pollutant discharge fees of $Nil and $31 for
the six months ended June 30, 2008 and 2007 respectively.





17.

State pension contribution plan



The Company has a defined contribution plan for all qualified employees in the
PRC.  The employer and its employees are each required to make contributions to
the plan at the rates specified in the plan.  The only obligation of the Company
with respect to retirement scheme is to make the required contributions under
the plan.  No forfeited contribution is available to reduce the contribution
payable in the future years.  The defined contribution plan contributions were
charged to the condensed consolidated statements of operations.  The Company
contributed $43,933 and $36,923 for the six months ended June 30, 2008 and 2007
respectively.



21



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





18.

Common stock and additional paid-in capital



Common stock of par value 
  $0.01 per shareAdditionalNumber of
  
  
  
  paid-inshares
  Amount
  capitalBalance, January 1, 2007 andDecember 31, 2007
  23,751,710
  
  $237,517
  
  $7,513,186Recapitalization1,250,090
  12,501
  -Balance, June 30, 2008
  25,001,800
  
  $250,018
  
  $7,513,186




Note :-



a.

On March 31, 2008, the Company issued 23,751,710 new shares of common stock, par
value $0.01 per share, to the stockholders of Dollar Come in exchange for 100%
of the outstanding capital stock of Dollar Come.



b.

The Companys issued and outstanding number of common stock immediately prior to
the RTO is 1,250,090 shares are accounted for at $(1,072) of net book value at
the time of the RTO.





19.

Segment information



The nature of the products, their production processes, the type of their
customers and their distribution methods are substantially similar, they are
considered as a single reportable segment under FAS 131, Disclosure about
Segments of Enterprise and Related Information.



All of the Companys long-lived assets are located in the PRC.  Geographic
information about the revenues, which are classified based on the customers, is
set out as follows:



Three months ended
  
  Six months endedJune 30
  
  June 30(Unaudited)
  
  (Unaudited)2008
  
  2007
  
  2008
  
  2007PRC
  $14,545,247
  
  $16,322,137
  
  $26,057,419
  
  $24,697,840Other
  803,277
  
  1,152,903
  
  1,116,815
  
  1,702,093Total
  $15,348,524
  
  $17,475,040
  
  $27,174,234
  
  $26,399,933




22



---



Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





20.

Subsequent events



(a)

Securities Purchase Agreement



On July 24, 2008, the Company entered into a securities purchase agreement (the
"Securities Purchase Agreement") with certain accredited investors
(collectively, the "Investors"). Under the Securities Purchase Agreement,
the Company agreed to issue and sell to the Investors 3,338,790 new shares of
the Companys common stock (the "Shares"), representing approximately
11.8% of the issued and outstanding capital stock of the Company on a
fully-diluted basis as of and immediately after consummation of the transactions
contemplated by the Securities Purchase Agreement, for an aggregate purchase
price of approximately $5 million (the "Purchase Price"), or $1.52 per
share.



(b)

Registration Rights Agreement



On July 24, 2008, as a condition to the Securities Purchase Agreement, the
Company and the Investors also entered into a registration rights agreement (the
"Registration Rights Agreement"), pursuant to which the Company is
obligated to register the Shares within a pre-defined period. Under the terms of
the Registration Rights Agreement, the Company is obligated to file a
registration statement under the Securities Act of 1933 on Form S-1 or on Form
S-3 (if the Company is eligible) covering the resale of the Shares and any other
shares of common stock issued to the Investors under the Securities Purchase
Agreement. If the Company does not file the required registration statements in
a timely manner, or if the Company fails to file any pre-effective amendments to
such registration statements and respond in writing to the comments made by the
Securities and Exchange Commission (the "SEC") within a pre-defined
period, then the Investors are entitled to liquidated damages equal to 1.0% of
the aggregate contribution of each Investor in any 30-day period up to a maximum
of 10% of the aggregate amount of the Purchase Price. The Registration Rights
Agreement also gives the Investors customary piggyback registration rights.



(c)

Lock-up Agreement



On July 24, 2008, the Company entered into separate lock-up agreements (the "Lock-up
Agreements") with the chief executive officer and chief financial officer of
the Company (each a "Holder"), pursuant to which each Holder agreed that,
except as set forth in the Lock-up Agreement, he will not offer, pledge,
encumber, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, or
announce the offering of, any of their shares of the Companys common stock
(including any securities convertible into, or exchangeable for, or representing
the rights to receive, the Companys common stock) or engage in any short sales
with respect to any security of the Company.



23



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Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





21.

Subsequent events (contd)



(d)

Holdback Escrow Agreement



On July 24, 2008, the Company entered into a holdback escrow agreement (the "Holdback
Escrow Agreement") with the Investors and Securities Transfer Corporation,
as escrow agent ("STC"), pursuant to which the Company agreed that an
aggregate of $500,000 of the Purchase Price (the "Holdback Amount") will
be deposited at the closing of the offering with STC and be distributed upon the
satisfaction of two of the Company's covenants set forth in the Securities
Purchase Agreement.



Pursuant to the Holdback Escrow Agreement, 50% of the Holdback Amount will be
released to the Company upon the Companys satisfaction of the covenant
regarding the Qualified Board and 50% of the Holdback Amount will be released to
the Company upon the Companys satisfaction of the covenant regarding the
Qualified CFO.



(e)

Make Good Escrow Agreement



Also in connection with the entry into the Securities Purchase Agreement, on
July 24, 2008, the Company entered into a make good escrow agreement (the "Make
Good Escrow Agreement") with Win-Win Global Investments, Inc. (the "Pledgor"),
the Investors, Roth Capital Partners, LLC ("Roth") and STC, pursuant to
which the Pledgor agreed to certain "make good" provisions in the event that the
Company does not meet certain income thresholds for fiscal years 2008 and/or
2009 discussed in the Securities Purchase Agreement. Pursuant to the Make Good
Escrow Agreement, the Pledgor established an escrow account and delivered to STC
certificates evidencing 1,669,398 shares of the Companys common stock held by
the Pledgor (the "Make Good Shares") along with blank stock powers, to be
held for the benefit of the Investors. The Pledgor agreed that if the after tax
net income (the "ATNI") for the Companys 2008 fiscal year is less than
$10,000,000 or the ATNI for the Companys 2009 fiscal year is less than
$14,000,000 (after the exclusion of certain items from the calculation), then,
in each case, the Pledgor will transfer to the Investors, on a pro rata basis,
50% of the Make Good Shares within 10 business days after the Companys annual
report on Form 10-K is filed for the respective fiscal year. In such event, the
Pledgors obligation to transfer the Make Good Shares continues to apply to each
of the Investors, even if an Investor has transferred or sold all or any portion
of its securities, and each of the Investors shall have the right to assign its
rights to receive a pro rata portion of the Make Good Shares in conjunction with
negotiated sales or transfers of any of its securities. If the ATNI for the
Companys 2008 fiscal year is no less than $10,000,000 (after the exclusion of
certain items from the calculation), 50% of the Make Good Shares will be
released to the Pledgor. If the ATNI for the Companys 2009 fiscal year is no
less than $14,000,000 (after the exclusion of certain items from the
calculation), then the remaining 50% of the Make Good Shares will be released to
the Pledgor. The parties also agreed that for purposes of determining the ATNI
under the Securities Purchase Agreement, the release of the Make Good Shares to
the Investors or the Pledgor as a result of the operation of the Make Good
Agreement shall not be deemed to be an expense, charge, or other deduction from
revenues even though GAAP may require contrary treatment. The Make Good Escrow
Agreement will terminate upon the distribution of all the Make Good Shares.



24



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Golden Elephant Glass Technology, Inc. (Formerly Nevstar Corporation)

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2008 and 2007

(Unaudited)

(Stated in US Dollars)





21.

Subsequent events (contd)



(f)

Roth Capital Partners, LLC and WLT Brothers Capital, Inc. acted as the Companys
placement agents ("Placement Agents") in connection with the offering of
the Shares. As compensation for their services, the Placement Agents received a
cash fee equal to $355,247.37, representing 7% of the gross proceeds received
from the sale of the Shares. Roth also received a warrant to purchase 166,940
shares of common stock of the Company, representing 5% of the Shares (the "Warrant").
The Warrant has a term of three years, is exercisable immediately on issuance
and has an exercise price of $1.824.







25



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the following
"Managements Discussion and Analysis of Financial Condition and Results of
Operations," contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Such statements include,
among others, those concerning our expected financial performance and strategic
and operational plans, as well as all assumptions, expectations, predictions,
intentions or beliefs about future events. You are cautioned that any such
forward-looking statements are not guarantees of future performance and that a
number of risks and uncertainties could cause actual results of the Company to
differ materially from those anticipated, expressed or implied in the
forward-looking statements. The words "believe," "expect," "anticipate,"
"project," "targets," "optimistic," "intend," "aim," "will" or similar
expressions are intended to identify forward-looking statements. All statements
other than statements of historical fact are statements that could be deemed
forward-looking statements. Risks and uncertainties that could cause actual
results to differ materially from those anticipated include risks related to new
and existing products; any projections of sales, earnings, revenue, margins or
other financial items; any statements of the plans, strategies and objectives of
management for future operations; any statements regarding future economic
conditions or performance; uncertainties related to conducting business in
China; any statements of belief or intention; any of the factors mentioned in
the "Risk Factors" section of our Current Report on Form 8-K filed on March 31,
2008, and other risks and uncertainties mentioned in this Form 10-Q. The Company
assumes no obligation and does not intend to update any forward-looking
statements, except as required by law.

Certain Terms

Except as otherwise indicated by the context, references in this report to:

- 

"Dollar Come" refers to Dollar Come
  Investments Limited, a British Virgin Islands corporation and our direct,
  wholly owned subsidiary, and/or its direct and indirect subsidiaries, as the
  case may be;

"Fuxin Hengrui" refers to Fuxin Hengrui
  Technology Co. Ltd., a PRC corporation and our indirect, wholly-owned
  subsidiary;

"Fuxin Xianheng" refers to Fuxin
  Xianheng Float Glass Co. Ltd., a PRC corporation and our indirect,
  wholly-owned subsidiary;

"China," "Chinese" and "PRC" refer to
  the Peoples Republic of China;

"BVI" refers to the British Virgin
  Islands;

"RMB" refers to Renminbi, the legal
  currency of China;

"U.S. dollar," "$" and "US$" refer to
  the legal currency of the United States;

"Securities Act" refers to the
  Securities Act of 1933, as amended; and

"Exchange Act" refers to the Securities
  Exchange Act of 1934, as amended.

Overview

Golden Elephant Glass Technology, Inc. is a Nevada holding company whose
primary business operations are conducted through its direct wholly owned
subsidiary Dollar Come and Dollar Comes Chinese subsidiary Fuxin Hengrui.

26

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Our operating subsidiary, Fuxin Hengrui, is a leading
China-based float glass manufacturer whose product offerings include float
glass, ultra-clear glass (also called crystal glass), colored float glass and
high grade, processed glass products such as mirrors, glass artwork, tempered
glass, insulated glass, laminated glass, lacquered glass and similar products.
Our glass is mostly used in a variety of end products, such as automobiles,
commercial and residential buildings, construction materials, furniture and
display cases, lighting fixtures and decorative glass artwork, bath fixtures and
electrical household appliances, such as refrigerators and microwave ovens. Our
glass products are manufactured in a broad range of specifications and marketed
primarily under the "Golden Elephant" brand name. We have been manufacturing our
glass products from our production facility in Fuxin City, Liaoning Province,
China since 2002 and sell our products to end users in China, Asia, Europe,
South America and South Africa. We ranked second in the Northeast China glass
market based on sales revenues and production capacity according to a report
issued by China Construction Products Quality Supervision Association.

Our total annual production capacity of our glass products is
currently 4.95 million weight cases and we maintain two production lines which
have an aggregate daily melting capacity of over 800 tons.

Recent Developments

On July 24, 2008, we consummated a private placement
transaction in which we issued and sold to certain accredited investors
approximately 3.3 million shares of our common stock, representing approximately
11.8% of our issued and outstanding capital stock on a fully-diluted basis as of
and immediately after consummation of the transaction, for an aggregate purchase
price of approximately $5 million, or $1.52 per share. The proceeds raised in
this financing transaction will be used for working capital purposes. Please see
our Current Report on Form 8-K filed on July 25, 2008 for more details.

Second Quarter Financial Results

In the second quarter of 2008, we  redirected a considerable
portion of our sales efforts and manufacturing resources toward our higher
margin float glass products with a thickness of 8 - 12mm  which resulted in a modest reduction in sales volume
of our legacy thin float glass products. We also made a strategic decision to
delay the manufacturing of our ultra-clear glass products until after completion
of the second quarter of 2008. Consequently, our sales revenue and net
income decreased as compared to the same quarter last year, notwithstanding a decrease in sales volume, we continued to
experience an increase in the per-unit sales price of our glass products during
the second quarter of 2008 as a result of continuing demand for our products.  In July 2008, we began manufacturing
ultra-clear glass products and expect our sales revenue and net income to
increase significantly in the third quarter of 2008.

The following are some of our financial results for the
second quarter of 2008:

- 





27Fully diluted net income
  per share: Fully diluted net income per share was $0.11 for the second
  quarter of 2008, as compared to $0.14 for the same period last year. 

Taxation

United States
Golden Elephant Glass Technology, Inc. is subject to United
States tax at a tax rate of 34%. No provision for income taxes in the United
States has been made as Golden Elephant had no income taxable in the United
States during the second quarter of 2008.
British Virgin Islands
Dollar Come Investments Limited was incorporated in the
British Virgin Islands, or BVI, and, under the current laws of the BVI, is not
subject to income taxes.
PRC
Before the implementation of the enterprise income tax ("EIT")
law (as discussed below), Foreign Invested Enterprises ("FIE") established in
the PRC are generally subject to an EIT rate of 33.0%, which includes a 30.0%
state income tax and a 3.0% local income tax. On March 16, 2007, the National
Peoples Congress of China passed the new Corporate Income Tax Law ("EIT Law"),
and on November 28, 2007, the State Council of China passed the Implementing
Rules for the EIT Law ("Implementing Rules") which took effect on January 1,
2008. The EIT Law and Implementing Rules impose a unified EIT of 25.0% on all
domestic-invested enterprises and FIEs, unless they qualify under certain
limited exceptions. Therefore, nearly all FIEs are subject to the new tax rate
alongside other domestic businesses rather than benefiting from the old tax laws
applicable to FIEs, and its associated preferential tax treatments, beginning
January 1, 2008.
Despite these pending changes, the EIT Law gives the FIEs
established before March 16, 2007 ("Old FIEs"), such as our subsidiary Fuxin
Hengrui and Fuxin Xianheng, a five-year grandfather period during which they can
continue to enjoy their existing preferential tax treatment. During this
five-year grandfather period, the Old FIEs which enjoyed tax rates lower than
25% under the original EIT Law shall gradually increase their EIT rate by 2% per
year until the tax rate reaches 25%. In addition, the Old FIEs that are eligible
for the "two-year exemption and three-year half reduction" or "five-year
exemption and five-year half-reduction" under the original EIT Law, are allowed
to remain to enjoy their preference until these holidays expire. The
discontinuation of any such special or preferential tax treatment or other
incentives would have an adverse effect on any organizations business, fiscal
condition and current operations in China.
In addition to the changes to the current tax structure,
under the EIT Law, an enterprise established outside of China with "de facto
management bodies" within China is considered a resident enterprise and will
normally be subject to an EIT of 25.0% on its global income. The Implementing
Rules define the term "de facto management bodies" as "an establishment that
exercises, in substance, overall management and control over the production,
business, personnel, accounting, etc., of a Chinese enterprise." If the PRC tax
authorities subsequently determine that the Company should be classified as a
resident enterprise, then the organizations global income will be subject to
PRC income tax of 25.0%.
Under the income tax law and the related implementing rules,
FIEs engaging in manufacturing businesses with a term of operation exceeding ten
years may, subject to approval from local taxation authorities, be entitled to a
two-year tax exemption from PRC EIT starting from the year they become
profitable and a 50.0% tax reduction for the three years thereafter.
28

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As approved by the relevant PRC tax authority, each of Fuxin
Hengrui and Fuxin Xianheng is entitled to a two-year exemption from EIT followed
by a 50.0% tax exemption for the next three years, commencing from the first
cumulative profit-making year in the fiscal financial year. The tax holiday of
Fuxin Hengrui commenced in 2004. Accordingly, Fuxin Hengrui is entitled to a 50%
reduction on EIT tax rate of 12.5% for 2008 and will be subject to an EIT rate
of 25% from 2009. The tax holiday of our subsidiary, Fuxin Xianheng, commenced
in 2008, therefore, Fuxin Xianheng is exempted from EIT in 2008 and 2009 and
will be subject to a reduced EIT rate of 12.5% from 2010 to 2012.

Results of Operations

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

(All amounts, other than percentages, in thousands of U.S.
dollars)

|                           | Three months
    ended | Six months
    ended
|-------------------------- | ---------------------- | --------------------
|                           | June 30                | June 30             
|                           | (unaudited)            | (unaudited)         
|                           | 2008                   | 2007                
|                           |                        | As a % of           
|                           | In                     | sales               
|                           | Thousands              | revenues            
|Sales revenue              | $15,349                | 100%                
|Cost of sales              | 11,340                 | 73.9%               
|Gross profit               | 4,009                  | 26.1%               
|Operating expenses         |                        |                     
|Administrative expenses    | 850                    | 5.5%                
|Selling expenses           | 80                     | 0.5%                
|Total operating expenses   | 930                    | 6.1%                
|Income before income taxes | 3,196                  | 20.8%               
|Income taxes               | (420)                  | 2.7%                
|Minority interests         | -                      | -%                  
|                           |                        |                     
|Net income                 | $2,776                 | 18.1%               

Comparison of Three Months Ended June 30, 2008 and June 30, 2007

Sales Revenue

29

---

In the second quarter of 2008, we  changed our product mix and produced more float glass products with a thickness
of 8-12mm, which have a higher profit margin than thinner float glass products.
In anticipation of the planned third quarter 2008 launch of our ultra-clear
glass product line in the third quarter which we believe will reduce our
manufacturing capacity of float glass products, we increased inventories of
float glass products in order to meet expected demand for our float glass
products by customers in the third quarter. As a result, our sales volume of
float glass products decreased approximately 129,000 weight cases as compared to
that of the same quarter last year. In addition, since our customers for float
glass products generally provide 100% prepayment and our customers for
ultra-clear glass products generally provide approximately 25% of prepayment, we
made a strategic decision to delay the manufacturing of our higher margin
ultra-clear products to the third quarter. We have started the manufacturing of
ultra-clear glass products in July and expect our sales revenue in the third
quarter to increase significantly.

Cost of Sales. Our cost of sales is primarily
comprised of the costs of our raw materials, components, labor and overhead. Our
cost of sales decreased $1.1 million, or 8.9%, to $11.3 million for the
three-month period ended June 30, 2008 from $12.4 million for the same period in
2007. As a percentage of sales revenue, the cost of sales increased to 73.9% for
the three month period ended June 30, 2008 from 71% for the same period in 2007.
The decrease was primarily attributable to our strategic decision to delay the
manufacturing of ultra-clear glass products to the third quarter as discussed in
more details below.

Gross Profit

Administrative Expenses. Our administrative expenses
consist of the costs associated with staff and support personnel who manage our
business activities and professional fees paid to third parties. Our
administrative expenses increased $56,685, or 7.2%, to $849,951 for the three
month period ended June 30, 2008 from approximately $793,266 for the same period
in 2007. As a percentage of sales revenue, administrative expenses increased to
5.5% for the three-month period ended June 30, 2008, as compared to 4.5% for the
same period in 2007. This percentage increase was primarily attributable to
increased professional expenses related to the costs of being a public reporting
company.

Selling Expenses.

30

---

Total Operating Expenses.

Income Taxes

Net Income. Our net income decreased $0.5 million, or
15.2%, to $2.8 million for the three month period ended June 30, 2008 from a net
loss of $3.3 for the same period in 2007, as a result of the factors described
above.

Comparison of Six Months Ended June 30, 2008 and June 30,
2007

Sales Revenue

Cost of Sales. Our cost of sales increased $0.2
million, or 0.8%, to $21.0 million for the six-month period ended June 30, 2008
from $20.8 million for the same period in 2007. This increase was mainly due to
the increase of raw materials. As a percentage of sales revenue, the cost of
goods sales decreased to 77.2% for the six-month period ended June 30, 2008 from
78.8% for the same period in 2007. The percentage decrease was primarily due to
the increase of our per unit sales price which outpaced the increase of prices
of raw materials. In addition, we used synthetic fuel oil called 520 Fuel Serum
to partially replace the heavy oil which eased the price increase of raw
materials. We also benefited from more efficient cost control management which
allowed us to reduce raw material consumption per unit of production.

Gross Profit. Our gross profit increased $0.6
million, or 10.8%, to $6.2 million for the six-month period ended June 30, 2008
from approximately $5.6 million for the same period in 2007. Gross profit as a
percentage of sales revenue was 22.8% for the six-month period ended June 30,
2008, as compared to 21.2% for the same period in 2007. Such percentage increase
was mainly due to the factors as discussed above.

Administrative Expenses. Our administrative expenses
increased $0.2 million, or 12.3%, to $1.2 million for the six-month period ended
June 30, 2008 from approximately $1.4 million for the same period in 2007. As a
percentage of sales revenue, administrative expenses decreased to 4.6% for the
six-month period ended June 30, 2008, as compared to 5.4% for the same period in
2007. Such percentage decrease was primarily attributable to the more efficient
cost management.

Selling Expenses. Our selling expenses decreased
$431,898, or 80.9%, to $101,853 for the six-month period ended June 30, 2008
from $533,751 for the same period in 2007. As a percentage of sales revenue,
selling expenses decreased to 0.4% for the six-month period ended June 30, 2008,
as compared to 2.0% for the same period in 2007. This decrease is primarily
attributable to an increased focus on domestic sales which have lower selling
expenses than export sales. Exports sales constituted approximately 4.1% of our
total sales revenue in the six-month period ended June 30, 2008, as compared to
6.4% for the same period last year. We also diversified our sales and
distribution channels and increased direct sales to end customers in the first
six months of 2008. As a result, our sales commission cost decreased as compared
to the same period last year. In addition, we incurred large marine
transportation costs in the first six months last year because we manufactured
ultra-clear glass products and most of our ultra-clear glass product customers
were located in Southern China. As stated above, we did not manufacture
ultra-clear glass products in the second quarter of 2008.

31

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Total Operating Expenses. Our total expenses
decreased $0.6 million, or 30.9%, to $1.4 million for the six-month period ended
June 30, 2008 from $2.0 million for the same period in 2007. As a percentage of
sales revenue, total expenses decreased to 5.0% for the six-month period ended
June 30, 2008, as compared to 7.5% for the same period in 2007. This percentage
decrease was primarily attributable to the decrease of selling expenses as
discussed above.

Income before Income Taxes. Income before income
taxes increased $1.8 million, or 51.0%, to $5.3 million for the six-month period
ended June 30, 2008 from a loss of $3.5 million for the same period in 2007.
Income before income taxes as a percentage of sales revenue increased to 19.5%
for the six-month period ended June 30, 2008, as compared to 13.3% for the same
period in 2007 due to the factors described above.

Income Taxes. Our income taxes decreased to $543,851
for the six-month period ended June 30, 2008 from $632,631 for the same period
in 2007 due to the decrease of EIT rate which was 16.5% last year as compared to
12.5% this year.

Minority Interests. Our financial statements reflect
an adjustment to our consolidated group net income equal to $4,994 for the six
months ended June 30, 2008, reflecting the minority interests held by third
parties in Fuxin Hengrui Tianyuan New Energy Sources Co., Ltd.. In May 2008, we
sold our 70% equity interest in Fuxin Hengrui Tianyuan New Energy Sources Co.,
Ltd. for. $709,200.

Net Income. Our net income increased $1.9 million, or
65.5%, to $4.8 million for the six-month period ended June 30, 2008 from a net
loss of $2.9 for the same period in 2007, as a result of the factors described
above.

Liquidity and Capital Resources

As of June 30, 2008, we had cash and cash equivalents of
$8,236. The following table sets forth a summary of our cash flows for the
periods indicated:

Statement of Cash Flow

|                                                                        | Six Months Ended
|----------------------------------------------------------------------- | ----------------
|                                                                        | June 30,        
|                                                                        | (in thousands)  
|                                                                        | 2008            
|                                                                        |                 
|Net
    cash (used in) provided by operating activities                 | $(3,999)        
|Net cash provided by
    (used in) investing activities                 | 1,111           
|Net
    cash provided by (used in) financing activities                 | 2,732           
|Effect of foreign
    currency translation on cash and cash equivalents | 102             
|Net
    cash flow                                                       | $(54)           

32

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Operating Activities:

Net cash used in operating activities was $4.0 million for
the six-month period ended June 30, 2008, which is a decrease of $5.9 million
from the $1.9 million net cash provided by operating activities for the same
period in 2007. The decrease in net cash provided by operating activities was
mainly due to the increase of raw material inventories made in anticipation of
increased prices in the summer quarter and the increase of float glass
inventories as discussed above.

Investing Activities:

Our main uses of cash for investing activities are payments
to the acquisition of property, plant and equipment and restricted cash pledged
as deposit for bills payable issuance.

Net cash provided by investing activities in the six-month
period ended June 30, 2008 was $1.1 million, which is an increase of $1.5
million from net cash used in investing activities of $0.4 million in the same
period of 2007. The increase was mainly attributable to proceeds from sales of
certain assets that are unrelated to our core business.

Financing Activities:

Net cash provided by financing activities in the six-month
period ended June 30, 2008 totaled $2.7 million, which is an increase of $4.6
million from net cash used in investing activities of $1.9 million in the same
period of 2007. The increase in net cash provided by financing activities was
mainly due to a $5 million loan from Lin Tan who is a major shareholder of our
company.

As of June 30, 2008, the amount, maturity date and term of
each of our bank loans are as follows:

(All amounts, other than percentages, in millions of U.S.
dollars)

|Banks                                     | Amounts | Maturity Date      | Duration
|----------------------------------------- | ------- | ------------------ | --------
|China CITIC Bank, Shenyang Branch         | $2.6    | November 26, 2008  | 1 year  
|China Construction
    Bank, Fuxin Branch | 2.9     | March
    24, 2009 | 1 year  
|Shanghai Pudong Development Bank,         | 4.3     | June 12, 2008      | 1 year  
|China Construction
    Bank, Fuxin Branch | 2.9     | May 22,
    2008   | 6 months
|                                          |         |                    |         
|Total                                     | $12.7   |                    |         

On May 6, 2008, our subsidiary Dollar Come entered into a
loan agreement with Ms. Lin Tan to borrow US$5 million at the annual interest
rate of 8%. The agreement has a two-year term and the loan proceeds will be used
as working capital.

On July 24, 2008, we consummated a private placement
transaction in which we issued and sold to certain accredited investors
approximately 3.3 million shares of our common stock for an aggregate purchase
price of approximately $5 million

We repaid a bank loan in the amount of $1.9 million in the
second quarter of 2008. We have approximately $12.7 million bank loans that will
mature in the next 12 months and we may decide to refinance these loans upon
maturity. . We believe that we maintain good relationships with the banks we
deal with and our current available working capital, after receiving the
aggregate proceeds of the loan from Ms. Tan, the private placement proceeds and
bank loans referenced above, should be adequate to sustain our operations at our
current levels through the next twelve months.

33

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Obligations under Material Contract

Below is a table setting forth our contractual obligations as of June 30,
2008:

All amounts in thousands of U.S. dollars

|                               |   | Total |   | Less            |   | 2-5
    years |              | More
|------------------------------ | - | ----- | - | --------------- | - | ------------- | ------------ | ----
|                               |   |       |   | than 1
    year |   |               | than 5 years
|                               |   |       |   |                 |   |               |              |     
|Long
    term debt obligations | $ | -     | $ | -               | $ | -             | $            | -   
|Capital commitment             |   | -     |   | -               |   | -             |              | -   
|Operating lease obligations    |   | 2,730 |   | 425             |   | 1,702         |              | 603 
|Purchase obligations           |   | -     |   | -               |   | -             |              | -   
|Total                          |   | 2,730 |   | 425             |   | 1,702         |              | 603 

Critical Accounting Policies

The preparation of financial statements in conformity with
GAAP requires estimates and assumptions that affect the reported amounts of
assets and liabilities, revenues and expenses, and related disclosures of
contingent assets and liabilities in the consolidated financial statements and
accompanying notes. The SEC has defined a companys critical accounting policies
as the ones that are most important to the portrayal of the companys financial
condition and results of operations, and which require the company to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. We also have other key
accounting policies, which involve the use of estimates, judgments, and
assumptions that are significant to understanding our results. See Item 2,
Managements Discussion and Analysis of Results of Operations and Financial
Condition in the Companys quarterly report on Form 10-Q for the fiscal quarter
ended March 31, 2008 for a discussion of the Companys critical accounting
policies. Although we believe that our estimates, assumptions, and judgments are
reasonable, they are based upon information presently available. Actual results
may differ significantly from these estimates under different assumptions,
judgments, or conditions.

Recently issued accounting pronouncements:

In May 2008, FASB issued SFAS 162, "The Hierarchy of
Generally Accepted Accounting Principles". Effective 60 days following the
SECs approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted
Accounting Principles. The Board does not expect that this Statement will result
in a change in current practice. However, transition provisions have been
provided in the unusual circumstance that the application of the provisions of
this Statement results in a change in practice. The management is in the process
of evaluating the impact that SFAS 162 will have on the Companys financial
statements upon adoption.

In March 2008, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 161,
"Disclosures about Derivative Instruments and Hedging Activities - an amendment
to FASB Statement No. 133". SFAS No. 161 is intended to improve financial
standards for derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on
an entity's financial position, financial performance, and cash flows. Entities
are required to provide enhanced disclosures about: (a) how and why an entity
uses derivative instruments; (b) how derivative instruments and related hedged
items are accounted for under Statement 133 and its related interpretations; and
(c) how derivative instruments and related hedged items affect an entity's
financial position, financial performance, and cash flows. It is effective for
financial statements issued for fiscal years beginning after November 15, 2008,
with early adoption encouraged. The management is in the process of evaluating
the impact that SFAS 160 will have on the Companys financial statements upon
adoption.

34

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In February 2007, the FASB issued SFAS No. 159, "The Fair
Value Option for Financial Assets and Financial Liabilities - Including an
Amendment of FASB Statement No. 115" ("SFAS 159"). SFAS 159 permits entities to
choose to measure many financial instruments and certain other items at fair
value. Entities that elect the fair value option will report unrealized gains
and losses in earnings at each subsequent reporting date. The fair value option
may be elected on an instrument-by-instrument basis, with few exceptions. SFAS
159 also establishes presentation and disclosure requirements to facilitate
comparisons between companies that choose different measurement attributes for
similar assets and liabilities. The requirements of SFAS 159 are effective for
our fiscal year beginning January 1, 2008. The management is in the process of
evaluating the impact that SFAS 159 will have on the Companys financial
statements upon adoption.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Seasonality

Our business is seasonal, with the highest proportion of
sales and operating income being generated in the second and third quarters of
each year, with lesser sales and operating income being generated in the first
and fourth quarters fourth quarters of each year. Our working capital
requirements fluctuate during the year, increasing substantially during the
first and fourth quarters as a result of lower demand for glass products due to
the curtailment of construction works in winter season.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK

Not applicable.

ITEMS 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. We
maintain a system of disclosure controls and procedures. The term "disclosure
controls and procedures," as defined by regulations of the SEC, means controls
and other procedures that are designed to ensure that information required to be
disclosed in the reports that we file or submit to the SEC under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SECs rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file or submit
to the SEC under the Exchange Act is accumulated and communicated to the our
management, including our principal executive officer and our principal
financial officer, or persons performing similar functions, as appropriate to
allow timely decisions to be made regarding required disclosure. Each of Lihui
Song, our President and Chief Executive Officer, and Qiang Hao, our Chief
Financial Officer, have evaluated the design and operating effectiveness of our
disclosure controls and procedures as of June 30, 2008. Based upon their
evaluation, these executive officers have concluded that our disclosure controls
and procedures are effective as of June 30, 2008.

Changes in Internal Control over Financial Reporting.
There has been no change to our internal control over financial reporting during
the quarter ended June 30, 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

Management decided to exclude recently acquired Dollar Come
and its subsidiaries from its evaluation of controls and procedures above
because it was not possible to conduct an assessment of the acquired companies
controls and procedures in the period between the consummation date and the date
of managements assessment.

35

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PART II 
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

Not Applicable.

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

During the three-month period ended June 30, 2008, we made no unregistered
sales of our equity securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

On May 1, 2008, we filed an information statement on Schedule
14C to amend our articles of incorporation, which, among other things, changed
our name to Golden Elephant Glass Technology, Inc. Shareholders holding a
majority of our shares of common stock approved such amendment by written
consent in lieu of a shareholders meeting.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

EXHIBITS.

|      |                                                                                                                                                                         
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1* | Certification of
    Principal Executive Officer filed pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                   
|      |                                                                                                                                                                         
|31.2* | Certification of
    Principal Financial Officer filed pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                   
|      |                                                                                                                                                                         
|32.1* | Certification of
    Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|      |                                                                                                                                                                         
|32.2* | Certification of
    Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Filed herewith.

36

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SIGNATURES

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

DATED: August 19, 2008

GOLDEN ELEPHANT GLASS
      TECHNOLOGY, INC.By: /s/ Qiang HaoQiang HaoChief Financial Officer(On behalf of the Registrant and
      asPrincipal Financial Officer)




37

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EXHIBIT INDEX

|      |                                                                                                                                                                         
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1* | Certification of
    Principal Executive Officer filed pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                   
|      |                                                                                                                                                                         
|31.2* | Certification of
    Principal Financial Officer filed pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                   
|      |                                                                                                                                                                         
|32.1* | Certification of
    Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|      |                                                                                                                                                                         
|32.2* | Certification of
    Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



38

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