| Nevada                          |   | 26-1650042          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (I.R.S. Employer    |
| incorporation or organization)  |   | Identification No.) |

| Large accelerated filer  ̈ | Accelerated filer  ̈    |
|--------------------------------|-----------------------------|
|                           |                        |
| Non-accelerated filer  ̈   | Smaller reporting company x |

----

|                                        |                                                                                       |   | Page   |
|---------------------------------------------|--------------------------------------------------------------------------------------------|--------|--------|
|                                        | PART I                                                                                     |   |   |
| Item 1.                                     | Financial Statements                                                                       |   | 3      |
| Item 2.                                     | Management’s Discussion and Analysis of Financial Condition and Results of Operation |   | 34     |
| Item 3.                                     | Quantitative and Qualitative Disclosures About Market Risk                                 |   | 41     |
| Item 4.                                     | Controls and Procedures                                                                    |   | 41     |
|                                        | PART II                                                                                    |   |   |
| Item 1.                                     | Legal Proceedings                                                                          |   | 43     |
| Item 1A.      | Risk Factors                                                                               |   | 43     |
| Item 2.                                     | Unregistered Sales of Equity Securities and Use of Proceeds                                |   | 43     |
| Item 3.                                     | Defaults Upon Senior Securities                                                            |   | 43     |
| Item 4.                                     | (Removed and Reserved)                                                                     |   | 43     |
| Item 5.                                     | Other Information                                                                          |   | 43     |
| Item 6.                                     | Exhibits                                                                                   |   | 43     |
| SIGNATURES                                  |                                                                                       | 44     |

----

| CONTENTS                                                   |   | PAGES              |
|------------------------------------------------------------|--------|--------------------|
|                                                       |   |               |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    |   |               |
|                                                       |   |               |
| CONSOLIDATED BALANCE SHEETS                                |   | 4 – 5   |
|                                                       |   |               |
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |   | 6 – 7   |
|                                                       |   |               |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY      |   | 8                  |
|                                                       |   |               |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                      |   | 9 – 10  |
|                                                       |   |               |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS10               |   | 11 – 33 |

----

|                                  |   | Notes  |   |   | September 30, 2010(Unaudited)(Restated) |   |       | December 31, 2009(Audited)(Restated) |   |
|--------------------------------------------|--------|--------|--------|--------|---------------------------------------------------|--------|------------|------------------------------------------------|--------|
| ASSETS                                     |   |   |   |   |                                              |   |       |                                           |   |
| Current assets                             |   |   |   |   |                                              |   |       |                                           |   |
| Cash and cash equivalents                  |   |   | 2(k)   |   |                                              | $      | 9,206,692  |                                           |   | $ | 4,717,240 |   |
| Trade receivables, net                     |   |   | 5      |   |                                              |   | 7,268,938  |                                           |   |   | 3,537,395 |   |
| Inventories                                |   |   | 8      |   |                                              |   | 1,282,261  |                                           |   |   | 589,871 |   |
| Advances to suppliers                      |   |   |   |   |                                              |   | 309,317    |                                           |   |   | 940,872 |   |
| Prepayments                                |   |   |   |   |                                              |   | 429,275    |                                           |   |   | 127,388 |   |
| Tender deposits                            |   |   |   |   |                                              |   | 147,852    |                                           |   |   | 122,050 |   |
| Travel advances to shareholders            |   |   | 6      |   |                                              |   | 28,131     |                                           |   |   | 71,372 |   |
| Advances to employees                      |   |   | 7      |   |                                              |   | 178,383    |                                           |   |   | 217,865 |   |
|                                       |   |   |   |   |                                              |   |       |                                           |   |   |   |   |
| Total current assets                       |   |   |   |   |                                              | $      | 18,850,849 |                                           |   | $ | 10,324,053 |   |
| Restricted cash                            |   |   |   |   |                                              |   | 128,897    |                                           |   |   | 283,175 |   |
| Amount due from a related company          |   |   | 4      |   |                                              |   | 830        |                                           |   |   | 830 |   |
| Property, plant and equipment, net         |   |   | 9      |   |                                              |   | 9,660,788  |                                           |   |   | 10,508,415 |   |
| Intangibles, net                           |   |   | 10     |   |                                              |   | 19,137,535 |                                           |   |   | 15,109,988 |   |
| Deposit for technology-based designed      |   |   |   |   |                                              |   | 649,847    |                                           |   |   | 4,318,643 |   |
|                                       |   |   |   |   |                                              |   |       |                                           |   |   |   |   |
| TOTAL ASSETS                               |   |   |   |   |                                              | $      | 48,428,746 |                                           |   | $ | 40,545,104 |   |
|                                       |   |   |   |   |                                              |   |       |                                           |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |   |   |   |   |                                              |   |       |                                           |   |   |   |   |
| Current liabilities                        |   |   |   |   |                                              |   |       |                                           |   |   |   |   |
| Accounts payable                           |   |   |   |   |                                              | $      | 350,024    |                                           |   | $ | 271,139 |   |
| Income tax payable                         |   |   |   |   |                                              |   | 425,556    |                                           |   |   | 269,082 |   |
| Turnover and other taxes                   |   |   |   |   |                                              |   | 368,237    |                                           |   |   | 154,871 |   |
| Expected warranty liabilities              |   |   | 11     |   |                                              |   | 33,296     |                                           |   |   | 32,618 |   |
| Customer deposits                          |   |   | 12     |   |                                              |   | 579,922    |                                           |   |   | 304,093 |   |
| Accrued liabilities                        |   |   |   |   |                                              |   | 665,151    |                                           |   |   | 657,215 |   |
|                                       |   |   |   |   |                                              |   |       |                                           |   |   |   |   |
| Total current liabilities                  |   |   |   |   |                                              | $      | 2,422,186  |                                           |   | $ | 1,689,018 |   |
| Warrants liabilities                       |   |   | 13     |   |                                              |   | 25,059,522 |                                           |   |   | 40,808,327 |   |
| TOTAL LIABILITIES                          |   |   |   |   |                                              | $      | 27,481,708 |                                           |   | $ | 42,497,345 |   |

----

|                                                                                                                                                               |   |   |   |   | September 30, 2010 |   |       | December 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|------------------------------|--------|------------|-----------------------------|--------|
|                                                                                                                                                               |   | Notes  |   |   | (Unaudited)(Restated)        |   |       | (Audited)(Restated)         |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                              |   |   |   |   |                         |   |       |                        |   |
|                                                                                                                                                                    |   |   |   |   |                         |   |       |                        |   |
| Series B Convertible Preferred Stock $0.0000001 par value; 400,000 shares authorized; 160,494 shares issued and outstanding at September 30, 2010 and December 31, 2009 |   |   | 14     |   |                         | $      | 1          |                        |   | $ | 1 |   |
|                                                                                                                                                                    |   |   |   |   |                         |   |       |                        |   |   |   |   |
| Common stock at $0.0000001 par value; 100,000,000 shares authorized; 18,499,736 shares issued and outstanding at September 30, 2010 and December 31, 2009               |   |   |   |   |                         |   | 2          |                        |   |   | 2 |   |
| Additional paid-in capital                                                                                                                                              |   |   |   |   |                         |   | 13,833,383 |                        |   |   | 13,833,383 |   |
| Statutory reserves                                                                                                                                                      |   |   |   |   |                         |   | 3,033,855  |                        |   |   | 3,033,855 |   |
| Retained earnings/(accumulated deficit)                                                                                                                                 |   |   |   |   |                         |   | 251,261    |                        |   |   | (21,735,219 | ) |
| Accumulated other comprehensive income                                                                                                                                  |   |   |   |   |                         |   | 3,828,536  |                        |   |   | 2,915,737 |   |
|                                                                                                                                                                    |   |   |   |   |                         |   |       |                        |   |   |   |   |
|                                                                                                                                                                    |   |   |   |   |                         | $      | 20,947,038 |                        |   | $ | (1,952,241 | ) |
|                                                                                                                                                                    |   |   |   |   |                         |   |       |                        |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                        |   |   |   |   |                         | $      | 48,428,746 |                        |   | $ | 40,545,104 |   |

----

|                               |   |   |   |   | Nine months ended September 30 |   |
|-----------------------------------------|--------|--------|--------|--------|----------------------------------------------------|--------|
|                               |   | Notes  |   |   | 2010                                               |   |   | 2009 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |
| Net revenues                            |   |   | 18     |   |                                               | $      | 16,418,963 |   |   | $ | 8,819,247 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Cost of net revenues                    |   |   | 18     |   |                                               |   | (5,339,795 | ) |   |   | (3,068,381 | ) |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Gross profit                            |   |   |   |   |                                               | $      | 11,079,168 |   |   | $ | 5,750,866 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Selling expenses                        |   |   |   |   |                                               |   | (1,225,161 | ) |   |   | (697,057 | ) |
| General and administrative expenses     |   |   |   |   |                                               |   | (2,476,970 | ) |   |   | (2,097,560 | ) |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Income from operations                  |   |   |   |   |                                               | $      | 7,377,037 |   |   | $ | 2,956,249 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Interest expenses                       |   |   |   |   |                                               |   | - |   |   |   | (1,727 | ) |
| Interest income                         |   |   |   |   |                                               |   | 15,234 |   |   |   | 52,284 |   |
| Impairment on investment                |   |   |   |   |                                               |   | - |   |   |   | (4,831,386 | ) |
| Changes in fair value of warrants       |   |   |   |   |                                               |   | 15,748,805 |   |   |   | 13,363,953 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Income before income tax                |   |   |   |   |                                               | $      | 23,141,076 |   |   | $ | 11,539,373 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Income tax expense                      |   |   | 15     |   |                                               |   | (1,154,596 | ) |   |   | (502,651 | ) |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Net income                              |   |   |   |   |                                               | $      | 21,986,480 |   |   | $ | 11,036,722 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Net income per share:                   |   |   |   |   |                                               |   |   |   |   |   |   |   |
| -Basic                                  |   |   |   |   |                                               | $      | 1.19 |   |   | $ | 0.60 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| -Diluted                                |   |   |   |   |                                               | $      | 0.82 |   |   | $ | 0.36 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| Weighted average number of common stock |   |   |   |   |                                               |   |   |   |   |   |   |   |
| -Basic                                  |   |   | 16     |   |                                               |   | 18,499,736 |   |   |   | 18,499,736 |   |
|                                    |   |   |   |   |                                               |   |   |   |   |   |   |   |
| -Diluted                                |   |   | 16     |   |                                               |   | 26,934,551 |   |   |   | 30,763,019 |   |

----

|                                    |   |   |                     |   | Three months ended September 30, |   |
|-----------------------------------------|--------|--------|--------------------------|--------|------------------------------------------------------|--------|
|                                    |   | Notes  |                     |   | 2010                                                 |   |   | 2009 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |
| Net revenues                            |   |   |      |   |                                                 | $      | 5,769,462 |   |   | $ | 3,150,969 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Cost of net revenues                    |   |   |                     |   |                                                 |   | (1,814,588 | ) |   |   | (1,087,115 | ) |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Gross profit                            |   |   |                     |   |                                                 | $      | 3,954,874 |   |   | $ | 2,063,854 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Selling expenses                        |   |   |                     |   |                                                 |   | (474,936 | ) |   |   | (335,787 | ) |
| General and administrative expenses     |   |   |                     |   |                                                 |   | (880,862 | ) |   |   | (697,782 | ) |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Income from operation                   |   |   |                     |   |                                                 | $      | 2,599,076 |   |   | $ | 1,030,285 |   |
| Interest income                         |   |   |                     |   |                                                 |   | 5,972 |   |   |   | 10,041 |   |
| Change in fair value of warrants        |   |   |                     |   |                                                 |   | 16,552,201 |   |   |   | 2,429,394 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Income before income taxes              |   |   |                     |   |                                                 | $      | 19,157,249 |   |   | $ | 3,469,720 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Income taxes                            |   |   |                     |   |                                                 |   | (416,980 | ) |   |   | (168,978 | ) |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Net income                              |   |   |                     |   |                                                 | $      | 18,740,269 |   |   | $ | 3,300,742 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Net income per share:                   |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| -Basic and diluted                      |   |   |                     |   |                                                 | $      | 1.01 |   |   | $ | 0.18 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| -Diluted                                |   |   |                     |   |                                                 | $      | 0.73 |   |   | $ | 0.11 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| Weighted average number of common stock |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| -Basic                                  |   |   |                     |   |                                                 |   | 18,499,736 |   |   |   | 18,499,736 |   |
|                                    |   |   |                     |   |                                                 |   |   |   |   |   |   |   |
| -Diluted                                |   |   |                     |   |                                                 |   | 25,637,503 |   |   |   | 30,323,548 |   |

----

|                                                          |   |      |   |   |        |   |       |   |   |   | Additional |       |   |      |        |   | Retained     |       |      | Accumulated   |   |   |        |   |
|--------------------------------------------------------------------|--------|-----------|--------|--------|-------------|--------|------------|--------|--------|--------|------------|------------|--------|-----------|-------------|--------|--------------|------------|-----------|---------------|--------|--------|-------------|--------|
|                                                               |   | Preferred |   |   | No. of |   |       |   |   |   | paid       |       |   |      |        |   | earnings     |       |      | other         |   |   |        |   |
|                                                               |   | Series    |   |   | shares      |   |       | Common |   |   | in         |       |   | Statutory |        |   | /accumulated |       |      | comprehensive |   |   |        |   |
|                                                               |   | B         |   |   | outstanding |   |       | stock  |   |   | capital    |       |   | reserves  |        |   | deficit      |       |      | income        |   |   | Total       |   |
|                                                               |   |      |   |   |        |   |       |   |   |   |       | (Restated) |   |      |        |   |         | (Restated) |      |          |   |   |        |   |   |
| Balance, January 1, 2009 (Restated)                                |   | $         | 1      |   |        |   | 18,499,736 |   |   | $      | 2          |       |   | $         | 17,824,3255 |   |         | $          | 2,127,978 |          |   | $      | 17,102,689  |   |   | $ | 2,844,190 |   |   | $ | 39,899,185 |   |
| Reclassification of warrants from equity to derivative liabilities |   |      | -      |   |        |   | -          |   |   |   | -          |       |   |      | (3,990,942  | )      |         |       | -         |          |   |   | (65,910,931 | )      |   |   | - |   |   |   | (69,901,873 | ) |
| Net income                                                         |   |      | -      |   |        |   | -          |   |   |   | -          |       |   |      | -           |   |         |       | -         |          |   |   | 27,978,900  |   |   |   | - |   |   |   | 27,978,900 |   |
|                                                               |   |      |   |   |        |   |       |   |   |   |       |       |   |      |        |   |         |       |      |          |   |   |        |   |   |   | - |   |   |   | - |   |
| Appropriations to statutory reserves                          |   |      | -      |   |        |   | -          |   |   |   | -          |       |   |      | -           |   |         |       | 905,877   |          |   |   | (905,877    | )      |   |   | - |   |   |   | - |   |
| Foreign currency translation  adjustment                      |   |      | -      |   |        |   | -          |   |   |   | -          |       |   |      | -           |   |         |       | -         |          |   |   | -           |   |   |   | 71,547 |   |   |   | 71,547 |   |
|                                                               |   |      |   |   |        |   |       |   |   |   |       |       |   |      |        |   |         |       |      |          |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009 (Restated)                              |   | $         | 1      |   |        |   | 18,499,736 |   |   | $      | 2          |       |   | $         | 13,833,383  |   |         | $          | 3,033,855 |          |   | $      | (21,735,219 | )      |   | $ | 2,915,737 |   |   | $ | (1,952,241 | ) |
|                                                               |   |      |   |   |        |   |       |   |   |   |       |       |   |      |        |   |         |       |      |          |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2010 (Restated)                                |   | $         | 1      |   |        |   | 18,499,736 |   |   | $      | 2          |       |   | $         | 13,833,383  |   |         | $          | 3,033,855 |          |   | $      | (21,735,219 | )      |   | $ | 2,915,737 |   |   | $ | (1,952,241 | ) |
|                                                               |   |      |   |   |        |   |       |   |   |   |       |       |   |      |        |   |         |       |      |          |   |   |        |   |   |   |   |   |   |   |   |   |
| Net income                                                         |   |      | -      |   |        |   | -          |   |   |   | -          |       |   |      | -           |   |         |       | -         |          |   |   | 21,986,480  |   |   |   | - |   |   |   | 21,986,480 |   |
| Foreign currency translation  adjustment                      |   |      | -      |   |        |   | -          |   |   |   | -          |       |   |      | -           |   |         |       | -         |          |   |   | -           |   |   |   | 912,799 |   |   |   | 912,799 |   |
|                                                               |   |      |   |   |        |   |       |   |   |   |       |       |   |      |        |   |         |       |      |          |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, September 30, 2010 (Restated)                             |   | $         | 1      |   |        |   | 18,499,736 |   |   | $      | 2          |       |   | $         | 13,833,383  |   |         | $          | 3,033,855 |          |   | $      | 251,261     |   |   | $ | 3,828,536 |   |   |   | 20,947,038 |   |

----

|                                                                              |   | Nine months ended September 30 |        |
|-----------------------------------------------------------------------------------|--------|--------------------------------|-------------|
|                                                                              |   | 2010                           |        |   | 2009 |   |
|                                                                              |   |                           |        |   |   |   |
| Cash flows from operating activities                                              |   |                           |        |   |   |   |
| Net income                                                                        |   | $                              | 21,986,480  |   |   | $ | 11,036,722 |   |
| Depreciation                                                                      |   |                           | 1,355,059   |   |   |   | 730,606 |   |
| Amortization                                                                      |   |                           | 1,311,290   |   |   |   | 743,651 |   |
| Loss on disposal of fixed assets                                                  |   |                           | -           |   |   |   | 9,553 |   |
| Changes in fair value of warrants                                                 |   |                           | (15,748,805 | ) |   |   | (13,363,953 | ) |
| Impairment on investment                                                          |   |                           | -           |   |   |   | 4,831,386 |   |
|                                                                              |   |                           |        |   |   |   |   |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                           |        |   |   |   |   |   |
| Trade receivables, net                                                            |   |                           | (3,594,595  | ) |   |   | (253,167 | ) |
| Inventories                                                                       |   |                           | (668,336    | ) |   |   | (56,811 | ) |
| Advances to suppliers                                                             |   |                           | 639,795     |   |   |   | (320,629 | ) |
| Prepayments                                                                       |   |                           | (294,048    | ) |   |   | (236,756 | ) |
| Tender deposits                                                                   |   |                           | (22,864     | ) |   |   | (6,131 | ) |
| Travel advances to shareholders                                                   |   |                           | 43,947      |   |   |   | (53,536 | ) |
| Advances to employees                                                             |   |                           | 43,242      |   |   |   | 133,501 |   |
| Other receivables                                                                 |   |                           | -           |   |   |   | 445,950 |   |
| Accounts payable                                                                  |   |                           | 71,983      |   |   |   | 48,915 |   |
| Income tax payable                                                                |   |                           | 148,267     |   |   |   | (461,647 | ) |
| Turnover and other taxes                                                          |   |                           | 206,502     |   |   |   | (357,705 | ) |
| Customer deposits                                                                 |   |                           | 264,837     |   |   |   | 300,213 |   |
| Accrued liabilities                                                               |   |                           | (5,472      | ) |   |   | 256,655 |   |
|                                                                              |   |                           |        |   |   |   |   |   |
| Net cash provided by operating activities                                         |   | $                              | 5,737,282   |   |   | $ | 3,426,817 |   |
|                                                                              |   |                           |        |   |   |   |   |   |
| Cash flows from investing activities                                              |   |                           |        |   |   |   |   |   |
| Used of restricted cash                                                           |   | $                              | 154,279     |   |   | $ | 66,450 |   |
| Purchase of plant and equipment                                                   |   |                           | (307,700    | ) |   |   | (4,287,278 | ) |
| Purchase of intangibles assets                                                    |   |                           | (1,267,340  | ) |   |   | (7,027,411 | ) |
| Deposit for technology assets designed                                            |   |                           | -           |   |   |   | (2,648,886 | ) |
|                                                                              |   |                           |        |   |   |   |   |   |
| Net cash used in investing activities                                             |   | $                              | (1,420,761  | ) |   | $ | (13,897,125 | ) |
|                                                                              |   |                           |        |   |   |   |   |   |
| Cash flows from financing activities                                              |   | $                              | -           |   |   | $ | - |   |
|                                                                              |   |                           |        |   |   |   |   |   |
| Net cash provided by financing activities                                         |   | $                              | -           |   |   | $ | - |   |

----

|                                                                |   | Nine months ended September 30 |      |
|---------------------------------------------------------------------|--------|----------------------------------------------------|-----------|
|                                                                |   | 2010                                               |      |   | 2009 |   |
|                                                                |   |                                               |      |   |   |   |
| Net in cash and cash equivalents sourced/(used)                     |   | $                                                  | 4,316,521 |   |   | $ | (10,470,308 | ) |
| Effect of foreign currency translation on cash and cash equivalents |   |                                               | 172,931   |   |   |   | 140,915 |   |
| Cash and cash equivalents–beginning of period                 |   |                                               | 4,717,240 |   |   |   | 15,189,941 |   |
| Cash and cash equivalents–end of period                       |   | $                                                  | 9,206,692 |   |   | $ | 4,860,548 |   |

|                                 |   | Nine months ended September 30 |      |
|--------------------------------------|--------|----------------------------------------------------|-----------|
|                                 |   | 2010                                               |      |   | 2009 |   |
|                                 |   |                                               |      |   |   |   |
| Supplementary cash flow information: |   |                                               |      |   |   |   |
| Tax paid                             |   | $                                                  | 1,006,328 |   |   | $ | 964,297 |   |
| Interest received                    |   |                                               | 15,234    |   |   |   | 52,284 |   |
| Interest expenses                    |   |                                               | -         |   |   |   | 1,727 |   |

| 1. | During the nine months ended September 30, 2010 and 2009, an amount of $4,065,825 and 1,750,751 were transferred from “deposit for technology-based designed” to “Purchase of intangibles assets”, respectively. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | During the nine months ended September 30, 2010 and 2009, an amount of nil and $7,725,445 were transferred from “deposit for the acquisition of subsidiary” to “acquisition of subsidiary, net of cash acquisition”. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Cash and cash equivalents     |   | $      | 73,193    |   |
|-------------------------------|--------|--------|-----------|--------|
| Property, plant and equipment |   |   | 955,208   |   |
| Land use rights               |   |   | 1,133,323 |   |
| Other receivables             |   |   | 1,127,949 |   |
| Turnover and other taxes      |   |   | 28,477    |   |
| Other payables                |   |   | (424,091  | )      |
| Impairment on investment      |   |   | 4,831,386 |   |
|                          |   |   |      |   |
|                          |   | $      | 7,725,445 |   |

----

| 1. | ORGANIZATION AND PRINCIPAL ACTIVITIES |
|----|---------------------------------------|

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

| (a) | Method of accounting |
|-----|----------------------|

----

| (b) | Principles of consolidation |
|-----|-----------------------------|

| Name of subsidiaries                           |   | Place of incorporation |   | Attributableinterest |   |
|----------------------------------------------------------|--------|----------------------------------|--------|----------------------|--------|
|                                                     |   |                             |   |                 |   |
| World Through Ltd                                        |   | British Virgin Islands           |   |                 | 100    | % |
|                                                     |   |                             |   |                 |   |   |
| Sunway World Through Technology (Daqing) Co Ltd          |   | PRC                              |   |                 | 100    | % |
|                                                     |   |                             |   |                 |   |   |
| *Daqing Sunway Technology Co Ltd                         |   | PRC                              |   |                 | 100    | % |
|                                                     |   |                             |   |                 |   |   |
| Beijing Sunway New-force Medical Treatment Tech Co., Ltd |   | PRC                              |   |                 | 100    | % |
|                                                     |   |                             |   |                 |   |   |
| Qingdao Liheng Textiles Co Ltd                      |   | PRC                              |   |                 | 100    | % |
|                                                     |   |                             |   |                 |   |   |
| *Note: Deemed variable interest entity                   |   |                             |   |                 |   |   |

| (c) | Use of estimates |
|-----|------------------|

| (d) | Economic and political risks |
|-----|------------------------------|

----

| (e) | Intangibles |
|-----|-------------|

| Land use rights         | over the lease terms |
|-------------------------|----------------------|
| Technology-based design | 10 years             |

| (f) | Property, plant and equipment |
|-----|-------------------------------|

| Buildings                           | 20 years     |
|-------------------------------------|--------------|
| Machinery and equipment             | 6 years      |
| Mouldings                           | 10 years     |
| Computer software                   | 3 - 10 years |
| Office equipment and motor vehicles | 6 - 10 years |

| (g) | Maintenance and repairs |
|-----|-------------------------|

| (h) | Accounting for the impairment of long-lived assets |
|-----|----------------------------------------------------|

----

| (i) | Inventories |
|-----|-------------|

| (j) | Trade receivables |
|-----|-------------------|

| (k) | Cash and cash equivalents |
|-----|---------------------------|

|                                     |   | September 30, 2010 |      |   | December 31, 2009 |   |
|------------------------------------------|--------|------------------------------|-----------|--------|-----------------------------|--------|
| Bank of Communications, Branch of Daqing |   |                         |      |   |                        |   |
| City Economic Zone                       |   | $                            | 8,093,420 |   |                        | $      | 4,402,294 |   |
| China Construction Bank, Beijing Branch  |   |                         | 411,727   |   |                        |   | 147,273 |   |
| Qingdao bank                             |   |                         | 266,787   |   |                        |   | 16,111 |   |
| Agricultural Bank of China               |   |                         | 387,954   |   |                        |   | 100,025 |   |
| HSBC                                     |   |                         | 34,866    |   |                        |   | 35,106 |   |
| Cash on hand                             |   |                         | 11,938    |   |                        |   | 16,431 |   |
|                                     |   |                         |      |   |                        |   |   |   |
|                                     |   | $                            | 9,206,692 |   |                        | $      | 4,717,240 |   |

| (l) | Restricted cash |
|-----|-----------------|

| (m) | Revenue recognition |
|-----|---------------------|

----

| (m) | Revenue recognition (Continued) |
|-----|---------------------------------|

| (n) | Expected warranty liabilities |
|-----|-------------------------------|

| (o) | Cost of sales |
|-----|---------------|

| (p) | Leases |
|-----|--------|

| (q) | Advertising |
|-----|-------------|

| (r) | Shipping and handling |
|-----|-----------------------|

| (s) | Research and development |
|-----|--------------------------|

----

| (t) | Retirement benefits |
|-----|---------------------|

| (u) | Income taxes |
|-----|--------------|

| (v) | Foreign currency translation |
|-----|------------------------------|

|                                             |   | September 30,2010 |   |   | December 31, 2009 |   |   | September 30,2009 |   |
|--------------------------------------------------|--------|------------------------|--------|--------|-----------------------------|--------|--------|------------------------|--------|
| Twelve months ended                              |   |                   |   |   |                        |   |   |                   |   |
| RMB : USD exchange rate                          |   |                   | -      |   |                        |   | 6.8372 |                   |   |   | - |   |
| Nine months ended                                |   |                   |   |   |                        |   |   |                   |   |   |   |   |
| RMB : USD exchange rate                          |   |                   | 6.6981 |   |                        |   | -      |                   |   |   | 6.8376 |   |
| Average three months ended                       |   |                   |   |   |                        |   |   |                   |   |   |   |   |
| RMB : USD exchange rate                          |   |                   | 6.7803 |   |                        |   | -      |                   |   |   | 6.8411 |   |
| Average nine months endedRMB : USD exchange rate |   |                   | 6.8164 |   |                        |   | -      |                   |   |   | 6.8425 |   |

----

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

| (w) | Statutory reserves |
|-----|--------------------|

|   | (i) | Making up cumulative prior years’ losses, if any; |
|--------|-----|---------------------------------------------------------|

|   | (ii) | Allocations to the “Statutory surplus reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital, which is restricted for set off against losses, expansion of production and operation or increase in registered capital; |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's “Statutory common welfare fund”, which is restricted for capital expenditure for the collective benefits of the Company's employees; and |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Allocations to the discretionary surplus reserve, if approved in the shareholders’ general meeting. |
|--------|------|-----------------------------------------------------------------------------------------------------------|

| (x) | Comprehensive income |
|-----|----------------------|

| (y) | Recent accounting pronouncements |
|-----|----------------------------------|

----

| (y) | Recent accounting pronouncements (Continued) |
|-----|----------------------------------------------|

----

| (y) | Recent accounting pronouncements (Continued) |
|-----|----------------------------------------------|

----

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

| (y) | Recent accounting pronouncements (Continued) |
|-----|----------------------------------------------|

----

| 3. | CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS |
|----|---------------------------------------------------|

|       |   | For the nine months ended September 30 |      |
|------------|--------|----------------------------------------------------------------------|-----------|
|       |   | 2010                                                                 |      |   | 2009 |   |
| Customer A |   | $                                                                    | 1,694,443 |   |   | $ | 906,389 |   |

|       |   | September 30, 2010 |    |   | December 31, 2009 |   |
|------------|--------|------------------------------|---------|--------|-----------------------------|--------|
|       |   |                         |    |   |                        |   |
| Customer A |   | $                            | 723,024 |   |                        | $      | 347,195 |   |
| Customer B |   | $                            | 820,546 |   |                        | $      | 373,223 |   |

----

| 4. | AMOUNT DUE FROM A RELATED COMPANY |
|----|-----------------------------------|

| 5. | TRADE RECEIVABLES, NET |
|----|------------------------|

|                         |   | September 30,2010 |      |   | December 31, 2009 |   |
|------------------------------|--------|------------------------|-----------|--------|-----------------------------|--------|
|                         |   |                   |      |   |                        |   |
| Trade receivables, gross     |   | $                      | 7,287,294 |   |                        | $      | 3,555,378 |   |
| Provision for doubtful debts |   |                   | (18,356   | )      |                        |   | (17,983 | ) |
|                         |   |                   |      |   |                        |   |   |   |
| Trade receivables, net       |   | $                      | 7,268,938 |   |                        | $      | 3,537,395 |   |

|                                |   | September 30,2010 |   |   | December 31, 2009 |   |
|-------------------------------------|--------|------------------------|--------|--------|-----------------------------|--------|
|                                |   |                   |   |   |                        |   |
| Balance at beginning of period/year |   | $                      | 17,983 |   |                        | $      | 8,414 |   |
| Addition of the provision           |   |                   | -      |   |                        |   | 9,549 |   |
| Foreign exchange adjustment         |   |                   | 373    |   |                        |   | 20 |   |
|                                |   |                   |   |   |                        |   |   |   |
| Balance at end of period/year       |   | $                      | 18,356 |   |                        | $      | 17,983 |   |

----

| 6. | TRAVEL ADVANCES TO SHAREHOLDERS |
|----|---------------------------------|

|       |   | September 30, 2010 |   |   | December 31, 2009 |   |
|------------|--------|------------------------------|--------|--------|-----------------------------|--------|
| Bo Liu     |   | $                            | 5,222  |   |                        | $      | 28,015 |   |
| Deli Liang |   |                         | 22,909 |   |                        |   | 43,357 |   |
|       |   |                         |   |   |                        |   |   |   |
|       |   | $                            | 28,131 |   |                        | $      | 71,372 |   |

|                                  |   | September 30, 2010 |     |   | December 31, 2009 |   |
|---------------------------------------|--------|------------------------------|----------|--------|-----------------------------|--------|
|                                  |   |                         |     |   |                        |   |
| Beginning balance, January 1          |   | $                            | 71,372   |   |                        | $      | 38,733 |   |
| Add: Advanced during the period/year  |   |                         | 232,890  |   |                        |   | 122,997 |   |
|                                  |   |                         |     |   |                        |   |   |   |
| Less: Transferred to income statement |   |                         | (39,626  | )      |                        |   | (90,358 | ) |
| Repayment by directors                |   |                         | (236,505 | )      |                        |   | - |   |
|                                  |   |                         |     |   |                        |   |   |   |
| Ending balance                        |   | $                            | 28,131   |   |                        | $      | 71,372 |   |

| 7. | ADVANCES TO EMPLOYEES |
|----|-----------------------|

|                                  |   | September 30, 2010 |     |   | December 31, 2009 |   |
|---------------------------------------|--------|------------------------------|----------|--------|-----------------------------|--------|
|                                  |   |                         |     |   |                        |   |
| Beginning balance, January 1          |   | $                            | 217,865  |   |                        | $      | 429,804 |   |
| Add: Advanced during the period/year  |   |                         | 471,502  |   |                        |   | 610,677 |   |
|                                  |   |                         |     |   |                        |   |   |   |
| Less: Transferred to income statement |   |                         | (211,088 | )      |                        |   | (418,288 | ) |
| Recollected from employees            |   |                         | (299,896 | )      |                        |   | (404,328 | ) |
|                                  |   |                         |     |   |                        |   |   |   |
| Ending balance                        |   | $                            | 178,383  |   |                        | $      | 217,865 |   |

| 8. | INVENTORIES |
|----|-------------|

|              |   | September 30, 2010 |      |   | December 31, 2009 |   |
|-------------------|--------|------------------------------|-----------|--------|-----------------------------|--------|
| Finished goods    |   | $                            | 649,267   |   |                        | $      | 241,831 |   |
| Work in process   |   |                         | 193,176   |   |                        |   | 26,152 |   |
| Raw materials     |   |                         | 439,818   |   |                        |   | 321,888 |   |
|              |   |                         |      |   |                        |   |   |   |
| Total Inventories |   | $                            | 1,282,261 |   |                        | $      | 589,871 |   |

----

| 9. | PROPERTY, PLANT AND EQUIPMENT, NET |
|----|------------------------------------|

|                                |   | September 30, 2010 |       |   | December 31, 2009 |   |
|-------------------------------------|--------|------------------------------|------------|--------|-----------------------------|--------|
| At cost                             |   |                         |       |   |                        |   |
| Buildings                           |   | $                            | 1,886,455  |   |                        | $      | 1,848,075 |   |
| Machinery and equipment             |   |                         | 708173     |   |                        |   | 1,087,332 |   |
| Moldings                            |   |                         | 9,152,782  |   |                        |   | 8,966,572 |   |
| Computer software                   |   |                         | 2,145,149  |   |                        |   | 2,101,507 |   |
| Office equipment and motor vehicles |   |                         | 640,040    |   |                        |   | 97,728 |   |
|                                |   |                         |       |   |                        |   |   |   |
|                                |   | $                            | 14,532,599 |   |                        | $      | 14,101,214 |   |
| Less: accumulated depreciation      |   |                         | (6,130,780 | )      |                        |   | (4,678,587 | ) |
|                                |   |                         |       |   |                        |   |   |   |
|                                |   | $                            | 8,401,819  |   |                        | $      | 9,422,627 |   |
| Construction in progress            |   |                         | 1,258,969  |   |                        |   | 1,085,788 |   |
|                                |   |                         |       |   |                        |   |   |   |
| Property, plant and equipment, net  |   | $                            | 9,660,788  |   |                        | $      | 10,508,415 |   |

|                                |   | September 30, 2010 |      |   | September 30, 2009 |   |
|-------------------------------------|--------|------------------------------|-----------|--------|------------------------------|--------|
| Cost of net revenues                |   | $                            | 1,222,724 |   |                         | $      | 619,907 |   |
| General and administrative expenses |   |                         | 81,784    |   |                         |   | 78,897 |   |
| Selling expenses                    |   |                         | 50,551    |   |                         |   | 31,802 |   |
|                                |   |                         |      |   |                         |   |   |   |
| Total depreciation expenses         |   | $                            | 1,355,059 |   |                         | $      | 730,606 |   |

----

| 10. | INTANGIBLES, NET |
|-----|------------------|

|                             |   | September 30, 2010 |       |   | December 31, 2009 |   |
|----------------------------------|--------|------------------------------|------------|--------|-----------------------------|--------|
|                             |   |                         |       |   |                        |   |
| Land use rights, at cost         |   | $                            | 2,659,783  |   |                        | $      | 2,502,082 |   |
| Technology-based design, at cost |   |                         | 20,038,892 |   |                        |   | 14,811,984 |   |
|                             |   |                         |       |   |                        |   |   |   |
|                             |   | $                            | 22,698,675 |   |                        | $      | 17,314,066 |   |
| Less: accumulated amortization   |   |                         | (3,561,140 | )      |                        |   | (2,204,078 | ) |
| Total intangibles, net           |   | $                            | 19,137,535 |   |                        | $      | 15,109,988 |   |

| 11. | EXPECTED WARRANTY LIABILITIES |
|-----|-------------------------------|

|                                 |   | September 30, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------|--------|------------------------------|--------|--------|-----------------------------|--------|
| Balance at beginning of period/year  |   | $                            | 32,618 |   |                        | $      | 50,396 |   |
| Warranty expense for the period/year |   |                         | -      |   |                        |   | (17,903 | ) |
| Foreign currency difference          |   |                         | 678    |   |                        |   | 125 |   |
|                                 |   |                         |   |   |                        |   |   |   |
| Balance at end of period/year        |   | $                            | 33,296 |   |                        | $      | 32,618 |   |

----

| 12. | CUSTOMER DEPOSITS |
|-----|-------------------|

| 13. | WARRANT LIABILITIES |
|-----|---------------------|

|                                |   | September 30, 2010 |        |   | December 31, 2009 |   |
|-------------------------------------|--------|------------------------------|-------------|--------|-----------------------------|--------|
| Balance at beginning of period/year |   | $                            | 40,808,327  |   |                        | $      | 69,901,873 |   |
| Changes in fair value of warrants   |   |                         | (15,748,805 | )      |                        |   | (29,093,546 | ) |
|                                |   |                         |        |   |                        |   |   |   |
| Balance at end of period/year       |   | $                            | 25,059,522  |   |                        | $      | 40,808,327 |   |

| 14. | SERIES B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS |
|-----|--------------------------------------------------------------|

|                            |   | InvestmentAmount |      |   | PreferredB |   |    | AWarrant |   |   | BWarrant  |   |   | JWarrant |      |   | CWarrant |   |      | DWarrant |   |
|--------------------------------------|--------|------------------|-----------|--------|------------|--------|---------|----------|--------|--------|-----------|--------|--------|----------|-----------|--------|----------|--------|-----------|----------|--------|
| Vision Opportunity Master Fund, Ltd. |   |             | 6,500,000 |   |       |   | 160,494 |     |   |   | 4,814,815 |   |   |     | 2,407,407 |   |     |   | 4,362,416 |     |   |   | 4,362,416 |   |   |   | 2,181,208 |   |
| Columbia China Capital Group, Inc.   |   |             | 200,000   |   |       |   | 4,938   |     |   |   | 148,148   |   |   |     | 74,074    |   |     |   | 134,228   |     |   |   | 134,228 |   |   |   | 67,114 |   |

| Series of Warrant |   | Number of shares |      |   | Exercise Price |   | Expiry Date |
|-----------------------------|--------|----------------------------|-----------|--------|---------------------|--------|------------------|
| Series A                    |   |                       | 4,962,963 |   |                | $      | 1.76             |   | 6 /5 /2012 |
| Series B                    |   |                       | 2,481,481 |   |                |   | 2.30             |   | 6 /5 /2012 |
| Series J                    |   |                       | 4,496,644 |   |                |   | 1.49             |   | 6 /5 /2008 |
| Series C                    |   |                       | 4,496,644 |   |                |   | 1.94             |   | 6 /5 /2012 |
| Series D                    |   |                       | 2,248,322 |   |                |   | 2.53             |   | 6 /5 /2012 |

----

| 14. | SERIES B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS(Continued) |
|-----|-------------------------------------------------------------------------|

----

| 14. | SERIES B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS(Continued) |
|-----|-------------------------------------------------------------------------|

| 15. | INCOME TAXES |
|-----|--------------|

----

| 15. | INCOME TAXES (Continued) |
|-----|--------------------------|

|                                      |   | September 30, 2010 |   |   | September 30, 2009 |   |
|-------------------------------------------|--------|------------------------------|--------|--------|------------------------------|--------|
|                                      |   |                         |   |   |                         |   |
| U.S. statutory rate                       |   |                         | 34     | %      |                         |   | 34 | % |
| Foreign income not recognized in the U.S. |   |                         | (34    | )%     |                         |   | (34 | )% |
| PRC CIT                                   |   |                         | 25     | %      |                         |   | 25 | % |
| Tax holiday                               |   |                         | (10    | )%     |                         |   | (10 | )% |
|                                      |   |                         |   |   |                         |   |   |   |
| Provision for income taxes                |   |                         | 15     | %      |                         |   | 15 | % |

|                   |   | September 30, 2010 |      |   | September 30, 2009 |   |
|------------------------|--------|------------------------------|-----------|--------|------------------------------|--------|
|                   |   |                         |      |   |                         |   |
| Current tax - PRC CIT  |   | $                            | 1,154,596 |   |                         | $      | 502,651 |   |
|                   |   |                         |      |   |                         |   |   |   |
| Deferred tax provision |   |                         | -         |   |                         |   | - |   |
|                   |   |                         |      |   |                         |   |   |   |
| Income tax expenses    |   | $                            | 1,154,596 |   |                         | $      | 502,651 |   |

|                             |   | September 30, 2010 |        |   | September 30, 2009 |   |
|----------------------------------|--------|------------------------------|-------------|--------|------------------------------|--------|
| Income before taxation           |   | $                            | 23,141,076  |   |                         | $      | 11,539,373 |   |
| Add: Impairment on investment    |   |                         | -           |   |                         |   | 4,831,386 |   |
| Change in fair value of warrants |   |                         | (15,748,805 | )      |                         |   | (13,363,953 | ) |
| Other non-tax deductible items   |   |                         | 305,036     |   |                         |   | 344,200 |   |
|                             |   |                         |        |   |                         |   |   |   |
| Adjusted PRC EIT taxable income  |   | $                            | 7,697,307   |   |                         | $      | 3,351,006 |   |

----

| 16. | EARNINGS PER SHARE |
|-----|--------------------|

|                                                                                                      |   | For the nine months ended September 30 |       |
|-----------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|------------|
|                                                                                                      |   | 2010                                                                 |       |   | 2009 |   |
|                                                                                                      |   |                                                                 |       |   |   |   |
| Income:                                                                                                   |   |                                                                 |       |   |   |   |
| Income for the purpose of basic earnings per share                                                        |   | $                                                                    | 21,986,480 |   |   | $ | 11,036,722 |   |
| Effect of dilutive potential common  Stock                                                      |   |                                                                 | -          |   |   |   | - |   |
|                                                                                                      |   |                                                                 |       |   |   |   |   |   |
| Income for the purpose of  dilutive earnings per share                                          |   | $                                                                    | 21,986,480 |   |   | $ | 11,036,722 |   |
|                                                                                                      |   |                                                                 |       |   |   |   |   |   |
| Number of shares:                                                                                         |   |                                                                 |       |   |   |   |   |   |
| Weighted average number of  common stock for the purpose of basic  earnings per share |   |                                                                 | 18,499,736 |   |   |   | 18,499,736 |   |
| Effect of dilutive potential common stock                                                                 |   |                                                                 |       |   |   |   |   |   |
| -conversion of Series A                                                                                   |   |                                                                 |       |   |   |   |   |   |
|   convertible preferred stock                                                                        |   |                                                                 | -          |   |   |   | - |   |
| -conversion of Series B                                                                                   |   |                                                                 |       |   |   |   |   |   |
|   convertible preferred stock                                                                        |   |                                                                 | 4,814,820  |   |   |   | 4,814,820 |   |
| -conversion of Warrant Series A                                                                           |   |                                                                 | 1,771,357  |   |   |   | 2,940,791 |   |
| -conversion of Warrant Series B                                                                           |   |                                                                 | 396,057    |   |   |   | 1,160,176 |   |
| -conversion of Warrant Series C                                                                           |   |                                                                 | 1,285,728  |   |   |   | 2,432,728 |   |
| -conversion of Warrant Series D                                                                           |   |                                                                 | 166,853    |   |   |   | 914,768 |   |
|                                                                                                      |   |                                                                 |       |   |   |   |   |   |
| Weighted average number of common stock for the purpose of dilutive earnings per share                    |   |                                                                 | 26,934,551 |   |   |   | 30,763,019 |   |

----

| 17. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| September 30,       |   |   |   |
|---------------------|--------|--------|--------|
| 2011                |   | $      | 86,101 |   |
| 2012 and thereafter |   |   | -      |   |
|                |   |   |   |   |
|                |   | $      | 86,101 |   |

| 18. | SEGMENT INFORMATION |
|-----|---------------------|

| For the nine months  |   | Workstation |       |   | Workstation |   |    | Workstation |   |   |       |   |   |   |     |   |         |   |
|------------------------------------------|--------|-------------|------------|--------|-------------|--------|---------|-------------|--------|--------|------------|--------|--------|--------|----------|--------|--------------|--------|
| ended September 30, 2010  |   | Type A |       |   | Type B |   |    | Type C |   |   | SADP       |   |   | Other  |     |   | Consolidated |   |
|                                     |   |        |       |   |        |   |    |        |   |   |       |   |   |   |     |   |         |   |
| Net revenues                             |   | $           | 3,815,445  |   |        | $      | 204,190 |        |   | $      | 11,434,287 |   |   | $      | 648,746  |   |         | $      | 316,295 |   |   | $ | 16,418,963 |   |
| Cost of net revenues                     |   |        | (1,184,175 | )      |        |   | (50,624 | )           |   |   | (3,840,028 | )      |   |   | (250,099 | )      |         |   | (14,869 | ) |   |   | (5,339,795 | ) |
|                                     |   |        |       |   |        |   |    |        |   |   |       |   |   |   |     |   |         |   |   |   |   |   |   |   |
|                                     |   | $           | 2,631,270  |   |        | $      | 153,566 |        |   | $      | 7,594,259  |   |   | $      | 398,647  |   |         | $      | 301,426 |   |   | $ | 11,079,168 |   |

| For the Nine Months ended |   | Workstation |      |   | Workstation |   |      | Workstation |   |   |       |   |   |   |     |   |         |   |
|-----------------------------------------------|--------|-------------|-----------|--------|-------------|--------|-----------|-------------|--------|--------|------------|--------|--------|--------|----------|--------|--------------|--------|
| September 30, 2009                  |   | Type A |      |   | Type B |   |      | Type C |   |   | SADP       |   |   | Other  |     |   | Consolidated |   |
|                                          |   |        |      |   |        |   |      |        |   |   |       |   |   |   |     |   |         |   |
| Net revenues                                  |   | $           | 3,157,837 |   |        | $      | 1,177,786 |        |   | $      | 3,727,970  |   |   | $      | 672,276  |   |         | $      | 83,378 |   |   | $ | 8,819,247 |   |
| Cost of net revenues                          |   |        | (999,727  | )      |        |   | (364,953  | )           |   |   | (1,271,340 | )      |   |   | (361,927 | )      |         |   | (70,434 | ) |   |   | (3,068,381 | ) |
|                                          |   |        |      |   |        |   |      |        |   |   |       |   |   |   |     |   |         |   |   |   |   |   |   |   |
|                                          |   | $           | 2,158,110 |   |        | $      | 812,833   |        |   | $      | 2,456,630  |   |   | $      | 310,349  |   |         | $      | 12,944 |   |   | $ | 5,750,866 |   |

----

| 19. | FAIR VALUE MEASUREMENTS |
|-----|-------------------------|

| Level 1 |         | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Level 2 |         | Inputs to the valuation methodology include·            quoted prices for similar assets or liabilities in active markets·            quoted prices for identical or similar assets or liabilities in inactive markets·            inputs other than quoted prices that are observable for the asset or liability·            inputs that are derived principally from or corroborated by observable market data by correlation or other meansIf the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. |
|    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Level 3 |    | Inputs to the valuation methodology are unobservable and significant to the fair value measurement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

| 20. | RESTATEMENTS |
|-----|--------------|

----

|                                     |   | Notes  |   |   | Original          |   |        | Restated  |   |
|------------------------------------------|--------|--------|--------|--------|-------------------|--------|-------------|-----------|--------|
|                                     |   |   |   |   | December 31, 2009 |   |
|                                     |   |   |   |   | (Audited)         |   |        | (Audited) |   |
| STOCKHOLDERS’ EQUITY               |   |   |   |   |              |   |        |      |   |
|                                     |   |   |   |   |              |   |        |      |   |
| Series B Convertible Preferred           |   |   |   |   |              |   |        |      |   |
| Stock $0.0000001 par value; 400,000      |   |   |   |   |              |   |        |      |   |
| shares authorized; 160,494 shares issued |   |   |   |   |              |   |        |      |   |
| and outstanding at December 31, 2009     |   |   | 13     |   |              | $      | 1           |      |   | $ | 1 |   |
|                                     |   |   |   |   |              |   |        |      |   |   |   |   |
| Common stock at $0.0000001 par           |   |   |   |   |              |   |        |      |   |   |   |   |
| value; 100,000,000 shares authorized;    |   |   |   |   |              |   |        |      |   |   |   |   |
| 18,499,736 shares issued and             |   |   |   |   |              |   |        |      |   |   |   |   |
| outstanding at December 31, 2009         |   |   |   |   |              |   | 2           |      |   |   | 2 |   |
| Additional paid-in capital               |   |   |   |   |              |   | 11,989,023  |      |   |   | 13,833,383 |   |
| Statutory reserves                       |   |   |   |   |              |   | 3,033,855   |      |   |   | 3,033,855 |   |
| Accumulated deficit                      |   |   |   |   |              |   | (19,890,859 | )         |   |   | (21,735,219 | ) |
| Accumulated other comprehensive income   |   |   |   |   |              |   | 2,915,737   |      |   |   | 2,915,737 |   |
|                                     |   |   |   |   |              |   |        |      |   |   |   |   |
| STOCKHOLDERS’ EQUITY               |   |   |   |   |              | $      | (1,952,241  | )         |   | $ | (1,952,241 | ) |

|                                     |   | Notes  |   |   | Original           |   |       | Restated    |   |
|------------------------------------------|--------|--------|--------|--------|--------------------|--------|------------|-------------|--------|
|                                     |   |   |   |   | September 30, 2010 |   |
|                                     |   |   |   |   | (Unaudited)        |   |       | (Unaudited) |   |
| STOCKHOLDERS’ EQUITY               |   |   |   |   |               |   |       |        |   |
|                                     |   |   |   |   |               |   |       |        |   |
| Series B Convertible Preferred           |   |   |   |   |               |   |       |        |   |
| Stock $0.0000001 par value; 400,000      |   |   |   |   |               |   |       |        |   |
| shares authorized; 160,494 shares issued |   |   |   |   |               |   |       |        |   |
| and outstanding at March 31, 2010        |   |   | 13     |   |               | $      | 1          |        |   | $ | 1 |   |
|                                     |   |   |   |   |               |   |       |        |   |   |   |   |
| Common stock at $0.0000001 par           |   |   |   |   |               |   |       |        |   |   |   |   |
| value; 100,000,000 shares authorized;    |   |   |   |   |               |   |       |        |   |   |   |   |
| 18,499,736 shares issued and             |   |   |   |   |               |   |       |        |   |   |   |   |
| outstanding at March 31, 2010            |   |   |   |   |               |   | 2          |        |   |   | 2 |   |
| Additional paid-in capital               |   |   |   |   |               |   | 11,989,023 |        |   |   | 13,833,383 |   |
| Statutory reserves                       |   |   |   |   |               |   | 3,033,855  |        |   |   | 3,033,855 |   |
| Accumulated deficit                      |   |   |   |   |               |   | 2,095,621  |        |   |   | 251,261 |   |
| Accumulated other comprehensive income   |   |   |   |   |               |   | 3,828,536  |        |   |   | 3,828,536 |   |
|                                     |   |   |   |   |               |   |       |        |   |   |   |   |
| STOCKHOLDERS’ EQUITY               |   |   |   |   |               | $      | 20,947,038 |        |   | $ | 20,947,038 |   |

----

|                             |   | Three Months Ended September 30, |       |   |   |   |      |   |   |
|----------------------------------|--------|------------------------------------------------------|------------|--------|--------|--------|-----------|--------|--------|
|                             |   | 2010                                                 |       |   | 2009   |   |      | Change |   |   | Change rate |   |
| Net Revenue                      |   | $                                                    | 5,769,462  |   |   | $      | 3,150,969 |   |   | $ | 2,618,493 |   |   |   | 83.10 | % |
| Cost of net revenue              |   | $                                                    | 1,814,588  |   |   | $      | 1,087,115 |   |   | $ | 727,473 |   |   |   | 66.92 | % |
| Gross Profit                     |   | $                                                    | 3,954,874  |   |   | $      | 2,063,854 |   |   | $ | 1,891,020 |   |   |   | 91.63 | % |
| Gross Margin                     |   |                                                 | 68.55      | %      |   |   | 65.50     | %      |   |   | - |   |   |   | 3.05 | % |
| Operating Income                 |   | $                                                    | 2,599,076  |   |   | $      | 1,030,285 |   |   | $ | 1,568,791 |   |   |   | 152.27 | % |
| Change in fair value of warrants |   | $                                                    | 16,552,201 |   |   | $      | 2,429,394 |   |   | $ | 14,122,807 |   |   |   | - | % |
| Net Income                       |   | $                                                    | 18,740,269 |   |   | $      | 3,300,742 |   |   | $ | 15,439,527 |   |   |   | - | % |
| Net profit margin                |   |                                                 | 324.82     | %      |   |   | 104.75    | %      |   |   | - |   |   |   | - | % |

----

|               |   | Three Months Ended September 30, |      |
|--------------------|--------|------------------------------------------------------|-----------|
|               |   | 2010                                                 |      |   | 2009 |   |
|               |   | sales                                                |      |   | % of total sales |   |   | sales |   |   | % of total sales |   |
| PTS                |   | $                                                    | 5,467,590 |   |   |   | 94.77 | % |   | $ | 2,913,590 |   |   |   | 92.47 | % |
| SADP               |   | $                                                    | 172,472   |   |   |   | 2.99 | % |   | $ | 237,379 |   |   |   | 7.53 | % |
| Other              |   | $                                                    | 129,400   |   |   |   | 2.24 | % |   | $ | - |   |   |   | - | % |
| Total net revenues |   | $                                                    | 5,769,462 |   |   |   | 100.00 | % |   | $ | 3,150,969 |   |   |   | 100.00 | % |

|         |   | Three Months Ended September 30, |      |
|--------------|--------|------------------------------------------------------|-----------|
|         |   | 2010                                                 |      |   | 2009 |   |
|         |   | US$                                                  |      | Gross profitmargin |   |   | US$ |   | Gross profitmargin |   |
|         |   |                                                 |      |   |   |   |   |   |   |   |
| Gross Profit |   | $                                                    | 3,954,874 |   |   |   | 68.55 | % |   | $ | 2,063,854 |   |   |   | 65.50 | % |

|                |   | Three Months Ended September 30, |      |   |   |
|---------------------|--------|------------------------------------------------------|-----------|--------|--------|
|                |   | 2010                                                 |      |   | 2009   |   | Change |   |
| Cost of net revenue |   | $                                                    | 1,814,588 |   |   | $ | 1,087,115 |   |   |   | 66.92 | % |

----

|                                  |   | Three Months Ended September 30, |      |   |   |
|---------------------------------------|--------|------------------------------------------------------|-----------|--------|--------|
|                                  |   | 2010                                                 |      |   | 2009   |   | Change |   |
| Selling expenses                      |   | $                                                    | 474,936   |   |   | $ | 335,787 |   |   |   | 41.44 | % |
| General & Administrative expenses |   | $                                                    | 880,862   |   |   | $ | 697,782 |   |   |   | 26.24 | % |
| Total operating expenses              |   | $                                                    | 1,355,798 |   |   | $ | 1,033,569 |   |   |   | 31.18 | % |

----

|                             |   | Nine Months Ended September 30, |       |   |   |   |       |   |   |
|----------------------------------|--------|-----------------------------------------------------|------------|--------|--------|--------|------------|--------|--------|
|                             |   | 2010                                                |       |   | 2009   |   |       | Change |   |   | Change rate |   |
| Net Revenue                      |   | $                                                   | 16,418,963 |   |   | $      | 8,819,247  |   |   | $ | 7,599,716 |   |   |   | 86.17 | % |
| Cost of net revenue              |   | $                                                   | 5,339,795  |   |   | $      | 3,068,381  |   |   | $ | 2,271,414 |   |   |   | 74.03 | % |
| Gross Profit                     |   | $                                                   | 11,079,168 |   |   | $      | 5,750,866  |   |   | $ | 5,328,302 |   |   |   | 92.65 | % |
| Gross Margin                     |   |                                                | 67.48      | %      |   |   | 65.21      | %      |   |   | - |   |   |   | 2.27 | % |
| Operating Income                 |   | $                                                   | 7,377,037  |   |   | $      | 2,956,249  |   |   | $ | 4,420,788 |   |   |   | 149.54 | % |
| Impairment on investment         |   | $                                                   | -          |   |   | $      | 4,831,386  |   |   |   | (4,831,386 | ) |   |   | - | % |
| Change in fair value of warrants |   | $                                                   | 15,748,805 |   |   | $      | 13,363,953 | -      |   | $ | 2,384,852 |   |   |   | 17.85 | % |
| Net Income                       |   | $                                                   | 21,986,480 |   |   | $      | 11,036,722 |   |   | $ | 10,949,758 |   |   |   | 99.21 | % |
| Net profit margin                |   |                                                | 133.91     | %      |   |   | 125.14     | %      |   |   | - |   |   |   | - | % |

|              |   | Nine Months Ended September 30, |       |
|-------------------|--------|-----------------------------------------------------|------------|
|              |   | 2010                                                |       |   | 2009 |   |
|              |   | sales                                               |       | % of total sales |   |   | sales |   | % of total sales |   |
| PTS               |   | $                                                   | 15,453,922 |   |   |   | 94.12 | %   |   | $ | 8,063,593 |   |   |   | 91.43 | % |
| SADP              |   | $                                                   | 648,746    |   |   |   | 3.95 | % |   | $ | 672,276 |   |   |   | 7.62 | % |
| Other             |   | $                                                   | 316,295    |   |   |   | 1.93 | % |   | $ | 83,378 |   |   |   | 0.95 | % |
| Total net revenue |   | $                                                   | 16,418,963 |   |   |   | 100.00 | % |   | $ | 8,819,247 |   |   |   | 100.00 | % |

|         |   | Nine Months Ended September 30, |       |
|--------------|--------|-----------------------------------------------------|------------|
|         |   | 2010                                                |       |   | 2009 |   |
|         |   | US$                                                 |       | Gross profitmargin |   |   | US$ |   | Gross profitmargin |   |
|         |   |                                                |       |   |   |   |   |   |   |   |
| Gross Profit |   | $                                                   | 11,079,168 |   |   |   | 67.48 | % |   | $ | 5,750,866 |   |   |   | 65.21 | % |

----

|                |   | Nine Months Ended September 30, |      |   |   |
|---------------------|--------|-----------------------------------------------------|-----------|--------|--------|
|                |   | 2010                                                |      |   | 2009   |   | Change |   |
| Cost of net revenue |   | $                                                   | 5,339,795 |   |   | $ | 3,068,381 |   |   |   | 74.03 | % |

|                                  |   | Nine Months Ended September 30, |      |   |   |
|---------------------------------------|--------|-----------------------------------------------------|-----------|--------|--------|
|                                  |   | 2010                                                |      |   | 2009   |   | Change |   |
| Selling expenses                      |   | $                                                   | 1,225,161 |   |   | $ | 697,057 |   |   |   | 75.76 | % |
| General & Administrative expenses |   | $                                                   | 2,476,970 |   |   | $ | 2,097,560 |   |   |   | 18.09 | % |
| Total operating expenses              |   | $                                                   | 3,702,131 |   |   | $ | 2,794,617 |   |   |   | 32.47 | % |

----

| Item             |   | September 30, 2010, |      |   | December 31, 2009 |   |    | Change |   |
|------------------|--------|-------------------------------|-----------|--------|-----------------------------|--------|---------|--------|--------|
| Finished goods   |   | $                             | 649,267   |   |                        | $      | 138,783 |   |   |   | 367.83 | % |
| Work in progress |   | $                             | 193,176   |   |                        | $      | 23,197  |   |   |   | 732.76 | % |
| Raw material     |   | $                             | 439,818   |   |                        | $      | 487,044 |   |   |   | (9.70 | )% |
| Total            |   | $                             | 1,282,261 |   |                        | $      | 649,024 |   |   |   | 97.57 | % |

|                                                                |   | Nine months ended September 30, |       |   |   |   |
|---------------------------------------------------------------------|--------|-----------------------------------------------------|------------|--------|--------|--------|
|                                                                |   | 2010                                                |       |   | 2009   |   |   | Change |   |
| Net cash provided by (used in) operating activities                 |   | $                                                   | 5,737,282  |   |   | $      | 3,426,817 |   |   | $ | 2,310,465 |   |
| Net cash provided by (used in) investing activities                 |   | $                                                   | (1,420,761 | )      |   | $      | (13,897,125 | ) |   | $ | (12,476,364 | ) |
| Net cash provided by (used in) financing activities                 |   | $                                                   | -          |   |   | $      | - |   |   | $ | - |   |
| Effect of foreign currency translation on cash and cash equivalents |   | $                                                   | 172,931    |   |   | $      | 140,915 |   |   | $ | 32,016 |   |
| Beginning cash and cash equivalent                                  |   | $                                                   | 4,717,240  |   |   | $      | 15,189,941 |   |   | $ | (10,472,701 | ) |
| Ending cash and cash equivalent                                     |   | $                                                   | 9,206,692  |   |   | $      | 4,860,548 |   |   | $ | 4,346,144 |   |

----

----

----

|   | 1. | The Company’s Annual Report on Form 10-K for the year ended December 31, 2009 to correct and reclassify the Company’s financial statements, notes, and related disclosure as relates to comply with paragraph 740-10-50-12 of the FASB Accounting Standards Codification; correction for a typographical error on the Company’s financial statements for the year ended December 31, 2008, and additional explanation to be included to clarify the statement of cash flows for the year ended December 31, 2009. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | All Quarterly Reports on Form 10-Q/A filed for the interim fiscal periods in 2009 to correct and restate its financial statements, notes, and related disclosure as relates to changes in the classification of the fair value of warrants in accordance with to paragraph 815-40.15 of the FASB Accounting Standards Codification (EITF 07-05) as adopted on January 1, 2009, the classification of the Company’s acquisition of Qingdao Liheng Textiles Co., Ltd as an impairment on investment, and the classification of the statements of stockholders equity relating to the Series B financing. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 1.  | LEGAL PROCEEDINGS. |
|--------------------|--------------------|

| ITEM 1A.  | RISK FACTORS. |
|---------------------|---------------|

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

| ITEM 3.  | DEFAULTS UPON SENIOR SECURITIES. |
|--------------------|----------------------------------|

| ITEM 4.  | (REMOVED AND RESERVED). |
|--------------------|-------------------------|

| ITEM 5.  | OTHER INFORMATION. |
|--------------------|--------------------|

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

----

|                                 | SUNWAY GLOBAL, INC. |
|--------------------------------------|---------------------|
|                                 |                |   |
| Dated:   May 12, 2011 | By:                 | /s/ Liu Bo |
|                                 |                | Name: Liu Bo |
|                                 |                | Title: Chief Executive Officer |
|                                 |                | (principal executive officer) |
|                                 |                |   |
| Dated:   May 12, 2011 | By:                 | /s/ Samuel Sheng |
|                                 |                | Name: Samuel Sheng |
|                                 |                | Title: Chief Financial Officer |
|                                 |                | (principal financial and accounting officer) |

----