| 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                                                                       |      | 1         |
| Item 2.                   | Management’s Discussion and Analysis of Financial Condition and Results of Operation |      |   32 |
| Item 3.                   | Quantitative and Qualitative Disclosures About Market Risk                                 |      | 36        |
| Item 4.                   | Controls and Procedures                                                                    |      | 37        |
|                      | PART II                                                                                    |      |      |
| Item 1.                   | Legal Proceedings                                                                          |      |   37 |
| Item 1A.   | Risk Factors                                                                               |      | 37        |
| Item 2.                   | Unregistered Sales of Equity Securities and Use of Proceeds                                |      |   37 |
| Item 3.                   | Defaults Upon Senior Securities                                                            |      |   37 |
| Item 4.                   | (Removed and Reserved)                                                                     |      |   37 |
| Item 5.                   | Other Information                                                                          |      |   37 |
| Item 6.                   | Exhibits                                                                                   |      |   37 |
|  SIGNATURES          |                                                                                       |   38 |

| CONTENTS                                                   |         | PAGES           |
|------------------------------------------------------------|--------------|-----------------|
|                                                       |         |            |
| CONSOLIDATED BALANCE SHEETS                                |         | F-1             |
|                                                       |         |            |
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |         | F-2             |
|                                                       |         |            |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY      |         | F-3             |
|                                                       |         |            |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                      |         | F-5 - F-6       |
|                                                       |         |            |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 |    | F-7 - F-31 |

----

|                                        |   | Notes  |     |   | March 31, 2011(Unaudited) |      |             | December 31, 2010(Audited) |   |
|---------------------------------------------|--------|--------|----------|--------|-------------------------------------|-----------|------------------|--------------------------------------|--------|
| ASSETS                                      |   |   |     |   |                                |      |             |                                 |   |
| Current assets                              |   |   |     |   |                                |      |             |                                 |   |
| Cash and cash equivalents                   |   | 2(k)   |     |   | $                                   | 8,929,924 |             |                                 | $      | 9,587,765 |   |
| Trade receivables, net                      |   |   | 5        |   |                                |      | 8,506,597        |                                 |   |   | 9,287,453 |   |
| Inventories                                 |   |   | 8        |   |                                |      | 2,115,019        |                                 |   |   | 1,379,917 |   |
| Advances to suppliers                       |   |   |     |   |                                |      | 1,044,297        |                                 |   |   | 1,232,297 |   |
| Prepayments                                 |   |   |     |   |                                |      | 499,632          |                                 |   |   | 95,397 |   |
| Tender deposits                             |   |   |     |   |                                |      | 205,339          |                                 |   |   | 274,140 |   |
| Travel advances to shareholders             |   |   | 6        |   |                                |      | 20,326           |                                 |   |   | 332,709 |   |
| Advances to employees                       |   |   | 7        |   |                                |      | 226,822          |                                 |   |   | 269,303 |   |
| Deferred tax assets                         |   |   |     |   |                                |      | 57,350           |                                 |   |   | - |   |
|                                        |   |   |     |   |                                |      |             |                                 |   |   |   |   |
| Total current assets                        |   |   |     |   |                                | $         | 21,605,306       |                                 |   | $ | 22,458,981 |   |
| Restricted cash                             |   | 2(l)   |     |   |                                | 17,064    |             |                                 |   | 67,091 |   |
| Amount due from a related company           |   |   | 4        |   |                                |      | 830              |                                 |   |   | 76,682 |   |
| Property, plant and equipment, net          |   |   | 9        |   |                                |      | 9,880,300        |                                 |   |   | 10,285,308 |   |
| Intangibles, net                            |   |   | 10       |   |                                |      | 18,754,228       |                                 |   |   | 19,252,393 |   |
| Deposit for technology-based designed       |   |   |     |   |                                |      | 1,462,535        |                                 |   |   | - |   |
| Deposit for purchase of plant and equipment |   |   |     |   |                                |      | 164,381          |                                 |   |   | 163,840 |   |
|                                        |   |   |     |   |                                |      |             |                                 |   |   |   |   |
| TOTAL ASSETS                                |   |   |     |   |                                | $         | 51,884,644       |                                 |   | $ | 52,304,295 |   |
|                                        |   |   |     |   |                                |      |             |                                 |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY  |   |   |     |   |                                |      |             |                                 |   |   |   |   |
| Current liabilities                         |   |   |     |   |                                |      |             |                                 |   |   |   |   |
| Short term bank loans                       |   |   | 11       |   |                                | $         | -                |                                 |   | $ | 303,407 |   |
| Accounts payable                            |   |   |     |   |                                |      | 569,440          |                                 |   |   | 341,845 |   |
| Income tax payable                          |   |   |     |   |                                |      | 3,526            |                                 |   |   | 381,663 |   |
| Turnover and other taxes                    |   |   |     |   |                                |      | 109              |                                 |   |   | 328,760 |   |
| Expected warranty liabilities               |   |   | 12       |   |                                |      | 53,484           |                                 |   |   | 53,308 |   |
| Customer deposits                           |   |   |     |   |                                |      | 1,454,410        |                                 |   |   | 1,122,063 |   |
| Accrued liabilities                         |   |   |     |   |                                |      | 1,057,522        |                                 |   |   | 704,065 |   |
|                                        |   |   |     |   |                                |      |             |                                 |   |   |   |   |
| Total current liabilities                   |   |   |     |   |                                | $         | 3,138,491        |                                 |   | $ | 3,235,111 |   |
| Warrants liabilities                        |   |   | 13  |   |                                |      |  19,849,395 |                                 |   |   |  17,519,515 |   |
| TOTAL LIABILITIES                           |   |   |     |   |                                | $         | 22,987,886       |                                 |   | $ | 20,754,626 |   |

----

|                                                                                                                                                                | Notes  |   | March 31, 2011(Unaudited) |       |   | December 31, 2010(Audited) |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------|------------|--------|--------------------------------------|--------|
|                                                                                                                                                                |   |   |                                |       |   |                                 |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                          |   |   |                                |       |   |                                 |   |
|                                                                                                                                                                |   |   |                                |       |   |                                 |   |
| Series B Convertible Preferred Stock $0.0000001 par value; 400,000 shares authorized; 160,494 shares issued and outstanding at March 31, 2011 and December 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, 2011 and December 31, 2010    |   |   |                                | 2          |   |                                 |   | 2 |   |
| Additional paid-in capital                                                                                                                                          |   |   |                                | 13,833,383 |   |                                 |   | 13,833,383 |   |
| Statutory reserves                                                                                                                                                  |   |   |                                | 4,267,115  |   |                                 |   | 4,267,115 |   |
| Retained earnings                                                                                                                                                   |   |   |                                | 5,895,732  |   |                                 |   | 8,542,065 |   |
| Accumulated other comprehensive income                                                                                                                              |   |   |                                | 4,900,525  |   |                                 |   | 4,907,103 |   |
|                                                                                                                                            |   |   |                                |       |   |                                 |   |   |   |
|                                                                                                                                                                |   |   | $                                   | 28,896,758 |   |                                 | $      | 31,549,669 |   |
|                                                                                                                                                                |   |   |                                |       |   |                                 |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                               |   |   | $                                   | 51,884,644 |   |                                 | $      | 52,304,295 |   |

----

|                                    |   | Notes  |         |   | The three months ended March 31, |   |
|-----------------------------------------|--------|--------|--------------|--------|-----------------------------------------------------------|--------|
|                                    |   |   |         |   | 2011                                                      |   |   | 2010 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |
| Net revenues                            |   |   | 17           |   |                                                      | $      | 1,561,014 |   |   | $ | 5,200,091 |   |
| Cost of net revenues                    |   |   | 17           |   |                                                      |   | (729,868 | ) |   |   | (1,757,452 | ) |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Gross profit                            |   |   |         |   |                                                      | $      | 831,146 |   |   | $ | 3,442,639 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Selling expenses                        |   |   |         |   |                                                      |   | (231,639 | ) |   |   | (406,247 | ) |
| General and administrative expenses     |   |   |         |   |                                                      |   | (981,838 | ) |   |   | (742,655 | ) |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Income from operations                  |   |   |         |   |                                                      | $      | (382,331 | ) |   | $ | 2,293,737 |   |
| Interest income                         |   |   |         |   |                                                      |   | 8,528 |   |   |   | 4,363 |   |
| Changes in fair value of warrants       |   |   |    |   |                                                      |   | (2,329,880 | ) |   |   | (1,463,274 | ) |
|                               |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Income before income tax                |   |   |         |   |                                                      | $      | (2,703,683 | ) |   | $ | 834,826 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Income tax expense                      |   |   | 14           |   |                                                      |   | 57,350 |   |   |   | (349,653 | ) |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Net income                              |   |   |         |   |                                                      | $      | (2,646,333 | ) |   | $ | 485,173 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Net income per share:                   |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| -Basic                                  |   |   | 15           |   |                                                      | $      | (0.14 | ) |   | $ | 0.03 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| -Diluted                                |   |   | 15           |   |                                                      | $      | (0.11 | ) |   | $ | 0.02 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| Weighted average number of common stock |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| -Basic                                  |   |   | 15           |   |                                                      |   | 18,499,736 |   |   |   | 18,499,736 |   |
|                                    |   |   |         |   |                                                      |   |   |   |   |   |   |   |
| -Diluted                                |   |   | 15           |   |                                                      |   | 23,338,995 |   |   |   | 27,772,675 |   |

----

|                          |   |      |   |   |      |   |   |        |   |   |       |   |   | Additional |   |   |      |   |       | Retained     |   |   | Accumulated   |   |   |   |        |
|-------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|------------|--------------|--------|--------|---------------|--------|--------|--------|-------------|
|                          |   | Preferred |   |   | Preferred |   |   | No. of |   |   |       |   |   | paid       |   |   |      |   |       | earnings/    |   |   | other         |   |   |   |        |
|                          |   | Series    |   |   | Series    |   |   | shares      |   |   | Common     |   |   | in         |   |   | Statutory |   |       | (Accumulated |   |   | comprehensive |   |   |   |        |
|                          |   |  A   |   |   |  B   |   |   | outstanding |   |   | stock      |   |   | capital    |   |   | reserves  |   |       | deficit)     |   |   | income        |   |   | Total  |        |
|                          |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |
| Balance, January 1, 2010      |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 13,833,383 |         |   | $      | 3,033,855     |   |   | $      | (21,735,219 | ) |   | $ | 2,915,737 |   |   | $ | (1,952,241 | ) |
| Net income                    |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | 31,510,544  |   |   |   | - |   |   |   | 31,510,544 |   |
| Appropriations to statutory   |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Reserves                      |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | 1,233,260     |   |   |   | (1,233,260  | ) |   |   | - |   |   |   | - |   |
| Foreign currency translation  |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Adjustment                    |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | -           |   |   |   | 1,991,366 |   |   |   | 1,991,366 |   |
|                          |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010    |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 13,833,383 |         |   | $      | 4,267,115     |   |   | $      | 8,542,065   |   |   | $ | 4,907,103 |   |   | $ | 31,549,669 |   |
|                          |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2011      |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 13,833,383 |         |   | $      | 4,267,115     |   |   | $      | 8,542,065   |   |   | $ | 4,907,103 |   |   | $ | 31,549,669 |   |
| Net income                    |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | (2,646,333  | ) |   |   | - |   |   |   | (2,646,333 | ) |
| Foreign currency translation  |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Adjustment                    |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | -           |   |   |   | (6,578 | ) |   |   | (6,578 | ) |
|                          |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, March 31, 2011  |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 13,833,383 |         |   | $      | 4,267,115     |   |   | $      | 5,895,732   |   |   | $ | 4,900,525 |   |   | $ | 28,896,758 |   |

----

|                                                                                   |   | The three months ended March 31, |       |
|----------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|------------|
|                                                                                   |   | 2011                                                      |       |   | 2010 |   |
| Cash flows from operating activities                                                   |   |                                                      |       |   |   |   |
| Net income                                                                             |   | $                                                         | (2,646,333 | ) |   | $ | 485,173 |   |
| Depreciation                                                                           |   |                                                      | 461,944    |   |   |   | 440,058 |   |
| Amortization                                                                           |   |                                                      | 561,753    |   |   |   | 370,359 |   |
| Changes in fair value of warrants                                                      |   |                                                      | 2,329,880  |   |   |   | 1,463,274 |   |
|                                                                                   |   |                                                      |       |   |   |   |   |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                                                      |       |   |   |   |   |   |
| Trade receivables, net                                                                 |   |                                                      | 809,154    |   |   |   | (1,947,650 | ) |
| Inventories                                                                            |   |                                                      | (728,405   | ) |   |   | (54,012 | ) |
| Advances to suppliers                                                                  |   |                                                      | 191,508    |   |   |   | 413,797 |   |
| Prepayments                                                                            |   |                                                      | (402,737   | ) |   |   | 28,010 |   |
| Tender deposits                                                                        |   |                                                      | 69,502     |   |   |   | (19,816 | ) |
| Travel advances to shareholders                                                        |   |                                                      | 616,081    |   |   |   | (45,202 | ) |
| Advances to employees                                                                  |   |                                                      | 43,243     |   |   |   | (40,990 | ) |
| Deferred tax assets                                                                    |   |                                                      | (57,350    | )  |   |   | - |   |
| Accounts payable                                                                       |   |                                                      | (225,802   | ) |   |   | 13,290 |   |
| Income tax payable                                                                     |   |                                                      | 378,286    |   |   |   | 83,913 |   |
| Turnover and other taxes                                                               |   |                                                      | 328,771    |   |   |   | 123,597 |   |
| Customer deposits                                                                      |   |                                                      | (327,678   | ) |   |   | (82,375 | ) |
| Accrued liabilities                                                                    |   |                                                      | (350,104   | ) |   |   | (86,391 | ) |
|                                                                                   |   |                                                      |       |   |   |   |   |   |
| Net cash provided by operating activities                                              |   | $                                                         | 1,051,713  |   |   | $ | 1,145,035 |   |
|                                                                                   |   |                                                      |       |   |   |   |   |   |
| Cash flows from investing activities                                                   |   |                                                      |       |   |   |   |   |   |
| Decrease in restricted cash                                                            |   | $                                                         | 50,026     |   |   | $ | 30,152 |   |
| Purchase of plant and equipment                                                        |   |                                                      | (24,251    | ) |   |   | (147,804 | ) |
| Purchase of intangibles                                                                |   |                                                      | (1,459,896 | ) |   |   | (96,378 | ) |
| Deposit for technology-based designed                                                  |   |                                                      | -          |   |   |   | (787,482 | ) |
|                                                                                   |   |                                                      |       |   |   |   |   |   |
| Net cash used in investing activities                                                  |   | $                                                         | (1,434,121 | ) |   | $ | (1,001,512 | ) |
|                                                                                   |   |                                                      |       |   |   |   |   |   |
| Cash flows from financing activities                                                   |   | $                                                         | -          |   |   | $ | - |   |
| Net cash provided by financing activities                                              |   | $                                                         | -          |   |   | $ | - |   |

----

|                                             |   | The three months ended March 31, |      |
|--------------------------------------------------|--------|-----------------------------------------------------------|-----------|
|                                             |   | 2011                                                      |      |   | 2010 |   |
|                                             |   |                                                      |      |   |   |   |
| Net in cash and cash equivalents (used)/sourced  |   | $                                                         | (382,408  | ) |   | $ | 143,523 |   |
|                                             |   |                                                      |      |   |   |   |   |   |
| Effect of foreign currency translation on        |   |                                                      |      |   |   |   |   |   |
| cash and cash equivalents                        |   |                                                      | (275,433  | ) |   |   | 751 |   |
|                                             |   |                                                      |      |   |   |   |   |   |
| Cash and cash equivalents–beginning period |   |                                                      | 9,587,765 |   |   |   | 4,717,240 |   |
|                                             |   |                                                      |      |   |   |   |   |   |
| Cash and cash equivalents–end period       |   | $                                                         | 8,929,924 |   |   | $ | 4,861,514 |   |

|                                 |   | The three months ended March 31, |    |
|--------------------------------------|--------|-----------------------------------------------------------|---------|
|                                 |   | 2011                                                      |    |   | 2010 |   |
| Supplementary cash flow information: |   |                                                      |    |   |   |   |
| Tax paid                             |   | $                                                         | 378,287 |   |   | $ | 265,740 |   |
| Interest received                    |   |                                                      | 8,528   |   |   |   | 4,363 |   |
| Interest paid                        |   |                                                      | -       |   |   |   | - |   |

| 1. | During the three months ended March 31, 2011 and 2010, an amount of $1,342,184 and $1,974,839 were transferred from “Deposit for technology-based designed” to “property, plant and equipment”, respectively. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

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

----

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

|  Name of subsidiaries                     |   | Place ofincorporation  |   | 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      |   |
| Moldings                            | 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 |
|-----|---------------------------|

|                                     |   | March 31, 2011 |      |   | December 31, 2010 |   |
|------------------------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|                                     |   |                     |      |   |                        |   |
| Bank of Communications, Branch of Daqing |   |                     |      |   |                        |   |
| City Economic Zone                       |   | $                        | 7,506,057 |   |                        | $      | 8,612,371 |   |
| China Construction Bank, Beijing Branch  |   |                     | 1,355,321 |   |                        |   | 471,540 |   |
| Qingdao bank                             |   |                     | 1,479     |   |                        |   | 66,117 |   |
| Agricultural Bank of China               |   |                     | 38,664    |   |                        |   | 392,647 |   |
| HSBC                                     |   |                     | 10,538    |   |                        |   | 34,788 |   |
| Cash on hand                             |   |                     | 17,865    |   |                        |   | 10,302 |   |
|                                     |   | $                        | 8,929,924 |   |                        | $      | 9,587,765 |   |

| (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 |
|-----|------------------------------|

|                       |   | March 31, 2011 |   |   | December 31, 2010 |   |   | March 31, 2010 |   |
|----------------------------|--------|--------------------------|--------|--------|-----------------------------|--------|--------|--------------------------|--------|
| Twelve months ended        |   |                     |   |   |                        |   |   |                     |   |
| RMB : USD exchange rate    |   |                     | -      |   |                        |   | 6.5918 |                     |   |   | - |   |
| Three months ended         |   |                     |   |   |                        |   |   |                     |   |   |   |   |
| RMB : USD exchange rate    |   |                     | 6.5701 |   |                        |   | -      |                     |   |   | 6.8361 |   |
| Average three months ended |   |                     |   |   |                        |   |   |                     |   |   |   |   |
| RMB : USD exchange rate    |   |                     | 6.5894 |   |                        |   | -      |                     |   |   | 6.8360 |   |

----

| (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) | Warrant Liability |
|-----|-------------------|

----

| (z) | Recent accounting pronouncements |
|-----|----------------------------------|

----

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

----

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

----

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

----

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

|       |   | For the three months ended March 31, |    |
|------------|--------|--------------------------------------------------------------------|---------|
|       |   | 2011                                                               |    |   | 2010 |   |
| Customer A |   | $                                                                  | -       |   |   | $ | 486,396 |   |
| Customer B |   |                                                               | -       |   |   |   | 404,476 |   |
| Customer D |   |                                                               | -       |   |   |   | 450,556 |   |
| Customer E |   |                                                               | -       |   |   |   | 435,196 |   |
| Customer F |   |                                                               | 228,397 |   |   |   | - |   |
| Customer K |   |                                                               | 583,474 |   |   |   | - |   |
| Customer L |   |                                                               | 168,621 |   |   |   | 240,637 |   |

|       |   | March 31, 2011 |    |   | December 31, 2010 |   |
|------------|--------|--------------------------|---------|--------|-----------------------------|--------|
|       |   |                     |    |   |                        |   |
| Customer A |   | $                        | 447,161 |   |                        | $      | 671,940 |   |
| Customer B |   |                     | 831,257 |   |                        |   | 851,516 |   |
| Customer C |   |                     | 585,756 |   |                        |   | 541,585 |   |
| Customer D |   |                     | 580,307 |   |                        |   | 836,952 |   |
| Customer E |   |                     | 637,488 |   |                        |   | 874,686 |   |
| Customer F |   |                     | 431,147 |   |                        |   | 500,458 |   |

----

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

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

|                         |   | March 31, 2011 |      |   | December 31, 2010 |   |
|------------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|                         |   |                     |      |   |                        |   |
| Trade receivables, gross     |   | $                        | 8,546,306 |   |                        | $      | 9,327,032 |   |
| Provision for doubtful debts |   |                     | (39,709   | )      |                        |   | (39,579 | ) |
|                         |   |                     |      |   |                        |   |   |   |
| Trade receivables, net       |   | $                        | 8,506,597 |   |                        | $      | 9,287,453 |   |

|                           |   | March 31, 2011 |   |   | March 31, 2010 |   |
|--------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                           |   |                     |   |   |                     |   |
| Balance at beginning of period |   | $                        | 39,579 |   |                     | $      | 17,983 |   |
| Foreign exchange adjustment    |   |                     | 130    |   |                     |   | 3 |   |
|                           |   |                     |   |   |                     |   |   |   |
| Balance at end of period       |   | $                        | 39,709 |   |                     | $      | 17,986 |   |

----

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

|       |   | March 31, 2011 |   |   | December 31, 2010 |   |
|------------|--------|--------------------------|--------|--------|-----------------------------|--------|
|       |   |                     |   |   |                        |   |
| Bo Liu     |   | $                        | 10,518 |   |                        | $      | 319,697 |   |
| Deli Liang |   |                     | 9,808  |   |                        |   | 13,012 |   |
|       |   |                     |   |   |                        |   |   |   |
|       |   | $                        | 20,326 |   |                        | $      | 332,709 |   |

|                                        |   | March 31, 2011 |     |   | December 31, 2010 |   |
|---------------------------------------------|--------|--------------------------|----------|--------|-----------------------------|--------|
|                                        |   |                     |     |   |                        |   |
| Beginning balance                           |   | $                        | 332,709  |   |                        | $      | 71,372 |   |
|                                        |   |                     |     |   |                        |   |   |   |
| Add: Advanced during the period/year        |   |                     | -        |   |                        |   | 570,554 |   |
|                                        |   |                     |     |   |                        |   |   |   |
| Less:  Transferred to income statement |   |                     | (7,974   | )      |                        |   | (43,887 | ) |
| Repayment by directors                      |   |                     | (304,409 | )      |                        |   | (265,330 | ) |
|                                        |   |                     |     |   |                        |   |   |   |
| Ending balance                              |   | $                        | 20,326   |   |                        | $      | 332,709 |   |

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

|                                        |   | March 31, 2011 |     |   | December 31, 2010 |   |
|---------------------------------------------|--------|--------------------------|----------|--------|-----------------------------|--------|
|                                        |   |                     |     |   |                        |   |
| Beginning balance                           |   | $                        | 269,303  |   |                        | $      | 217,865 |   |
| Add: Advanced during the period/year        |   |                     | 519,303  |   |                        |   | 688,121 |   |
|                                        |   |                     |     |   |                        |   |   |   |
| Less:  Transferred to income statement |   |                     | (493,280 | )      |                        |   | (314,842 | ) |
| Recollected from employees                  |   |                     | (68,504  | )      |                        |   | (321,841 | ) |
|                                        |   |                     |     |   |                        |   |   |   |
| Ending balance                              |   | $                        | 226,822  |   |                        | $      | 269,303 |   |

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

|            |   | March 31, 2011 |      |   | December 31, 2010 |   |
|-----------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|            |   |                     |      |   |                        |   |
| Finished goods  |   | $                        | 961,377   |   |                        | $      | 943,148 |   |
| Work in process |   |                     | 808,053   |   |                        |   | 116,157 |   |
| Raw materials   |   |                     | 345,589   |   |                        |   | 320,612 |   |
|            |   |                     |      |   |                        |   |   |   |
|            |   | $                        | 2,115,019 |   |                        | $      | 1,379,917 |   |

----

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

|                                |   | March 31, 2011 |       |   | December 31, 2010 |   |
|-------------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
| At cost                             |   |                     |       |   |                        |   |
| Buildings                           |   | $                        | 2,135,905  |   |                        | $      | 2,128,873 |   |
| Machinery and equipment             |   |                     | 1,261,810  |   |                        |   | 1,257,656 |   |
| Moldings                            |   |                     | 9,338,263  |   |                        |   | 9,300,380 |   |
| Computer software                   |   |                     | 2,186,245  |   |                        |   | 2,186,190 |   |
| Office equipment and motor vehicles |   |                     | 667,012    |   |                        |   | 653,781 |   |
|                                |   |                     |       |   |                        |   |   |   |
|                                |   | $                        | 15,589,235 |   |                        | $      | 15,526,880 |   |
| Less: accumulated depreciation      |   |                     | (7,034,607 | )      |                        |   | (6,551,027 | ) |
|                                |   |                     |       |   |                        |   |   |   |
|                                |   | $                        | 8,554,628  |   |                        | $      | 8,975,853 |   |
| Construction in progress            |   |                     | 1,325,672  |   |                        |   | 1,309,455 |   |
|                                |   |                     |       |   |                        |   |   |   |
|                                |   | $                        | 9,880,300  |   |                        | $      | 10,285,308 |   |

|                                |   | Three Months Ended March 31, |    |
|-------------------------------------|--------|------------------------------|---------|
|                                |   | 2011                         |    |   | 2010 |   |
| Cost of net revenues                |   | $                            | 414,804 |   |   | $ | 397,745 |   |
| General and administrative expenses |   |                         | 29,327  |   |   |   | 25,919 |   |
| Selling expenses                    |   |                         | 17,813  |   |   |   | 16,394 |   |
|                                |   |                         |    |   |   |   |   |   |
| Total depreciation expenses         |   | $                            | 461,944 |   |   | $ | 440,058 |   |

----

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

|                             |   | March 31, 2011 |       |   | December 31, 2010 |   |
|----------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
|                             |   |                     |       |   |                        |   |
| Land use rights, at cost         |   | $                        | 2,711,602  |   |                        | $      | 2,702,675 |   |
| Technology-based design, at cost |   |                     | 20,429,293 |   |                        |   | 20,362,041 |   |
|                             |   | $                        | 23,140,895 |   |                        | $      | 23,064,716 |   |
| Less: accumulated amortization   |   |                     | (4,386,667 | )      |                        |   | (3,812,322 | ) |
| Total intangibles, net           |   | $                        | 18,754,228 |   |                        | $      | 19,252,393 |   |

----

| 11. | SHORT-TERM BANK LOANS |
|-----|-----------------------|

|                                                                               |   | March 31, 2011 |     |   | December 31, 2010 |   |
|------------------------------------------------------------------------------------|--------|--------------------------|----------|--------|-----------------------------|--------|
|                                                                               |   |                     |     |   |                        |   |
| Loans from Bank of Qingdao, interest rates at 6.37% per annum, due August 30, 2011 |   | $                        | 303,407  |   |                        | $      | 303,407 |   |
| Less: Repayment during the period                                                  |   |                     | (303,407 | )      |                        |   | - |   |
|                                                                               |   | $                        | -        |   |                        | $      | 303,407 |   |

| 12. | EXPECTED WARRANTY LIABILITIES |
|-----|-------------------------------|

|                          |   | March 31, 2011 |   |   | December 31, 2010 |   |
|-------------------------------|--------|--------------------------|--------|--------|-----------------------------|--------|
|                          |   |                     |   |   |                        |   |
| Beginning balance             |   | $                        | 53,308 |   |                        | $      | 32,618 |   |
| Warranty expense for the year |   |                     | -      |   |                        |   | 19,476 |   |
| Foreign currency difference   |   |                     | 176    |   |                        |   | 1,214 |   |
| Ending balance                |   | $                        | 53,484 |   |                        | $      | 53,308 |   |

----

| 13. | 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 |

----

| 13.  | SERIES B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS |
|-----------|--------------------------------------------------------------|

----

| 13.  | SERIES B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS |
|-----------|--------------------------------------------------------------|

----

| 14. | INCOME TAXES |
|-----|--------------|

----

| 14. | INCOME TAXES (Continued) |
|-----|--------------------------|

|                                      |   | March 31, 2011 |   |   | December 31, 2010 |   |
|-------------------------------------------|--------|--------------------------|--------|--------|-----------------------------|--------|
|                                      |   |                     |   |   |                        |   |
| 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 | % |

|                   |   | March 31, 2011 |    |    | December 31, 2010 |   |
|------------------------|--------|--------------------------|---------|---------|-----------------------------|--------|
|                   |   |                     |    |    |                        |   |
| Current tax - PRC CIT  |   | $                        | (57,350 | )  |                        | $      | 1,532,991 |   |
|                   |   |                     |    |    |                        |   |   |   |
| Deferred tax provision |   |                     | -       |    |                        |   | - |   |
| Income tax expenses    |   | $                        | (57,350 | )  |                        | $      | 1,532,991 |   |

|                                                          |   | March 31, 2011 |       | December 31, 2010 |   |
|---------------------------------------------------------------|--------|--------------------------|------------|-----------------------------|--------|
| Income before taxation                                        |   | $                        | (2,703,683 | )                      |   | $ | 33,043,535 |   |
| Add:  Impairment of property, plant & equipment |   |                     | -          |                        |   |   | 429,263 |   |
|    Impairment on investment                         |   |                     |       |                        |   |   | - |   |
|    Other non-tax deductible items                   |   |                     | (8,528     | )                      |   |   | 35,954 |   |
|                                                          |   |                     |       |                        |   |   |   |   |
| Less:  Change in fair value of warrants             |   |                     | 2,329,880  |                        |   |   | (23,288,812 | ) |
| Taxable income (loss)                                         |   | $                        | (382,331   | )                      |   | $ | 10,219,940 |   |

----

| 15. | EARNINGS PER SHARE |
|-----|--------------------|

|                                                                                   |   | For the three months ended March 31, |       |
|----------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|------------|
|                                                                                   |   | 2011                                                               |       |   | 2010 |   |
| Income:                                                                                |   |                                                               |       |   |   |   |
| Income for the purpose of basic earnings per share                                     |   | $                                                                  | (2,646,333 | ) |   | $ | 485,173 |   |
| Effect of dilutive potential common stock                                              |   |                                                               | -          |   |   |   | - |   |
| Income for the purpose of dilutive earnings per share                                  |   | $                                                                  | (2,646,333 | ) |   | $ | 485,173 |   |
|                                                                                   |   |                                                               |       |   |   |   |   |   |
| 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                                                        |   |                                                               | -          |   |   |   | - |   |
| -conversion of Warrant Series B                                                        |   |                                                               | 24,439     |   |   |   | 2,027,368 |   |
| -conversion of Warrant Series J                                                        |   |                                                               | -          |   |   |   | 563,337 |   |
| -conversion of Warrant Series C                                                        |   |                                                               | -          |   |   |   | 1,536,828 |   |
| -conversion of Warrant Series D                                                        |   |                                                               | -          |   |   |   | 330,586 |   |
| Weighted average number of common stock for the purpose of dilutive earnings per share |   |                                                               | 23,338,995 |   |   |   | 27,772,675 |   |

----

| 16. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| March 31,           |   |   |    |
|---------------------|--------|--------|---------|
| 2011                |   | $      | 69,896  |   |
| 2012 and thereafter |   |   | 61,011  |   |
|                |   | $      | 130,907 |   |

| 17. | SEGMENT INFORMATION |
|-----|---------------------|

| For the three  |   |        |    |   |        |   |   |        |   |   |     |   |   |   |     |   |         |   |
|-------------------------------|--------|-------------|---------|--------|-------------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|----------|--------|--------------|--------|
| months ended        |   |        |    |   |        |   |   |        |   |   |     |   |   |   |     |   |         |   |
| March 31,                |   | Workstation |    |   | Workstation |   |   | Workstation |   |   |     |   |   |   |     |   |         |   |
| 2011                          |   | Type A      |    |   | Type B      |   |   | Type C      |   |   | SADP     |   |   | Other  |     |   | Consolidated |   |
| Net revenues                  |   | $           | 90,297  |   |        | $      | -      |        |   | $      | 328,921  |   |   | $      | 988,461  |   |         | $      | 153,335 |   |   | $ | 1,561,014 |   |
| Cost of net revenues          |   |        | (28,639 | )      |        |   | -      |        |   |   | (117,381 | )      |   |   | (546,484 | )      |         |   | (37,364 | ) |   |   | (729,868 | ) |
|                          |   | $           | 61,658  |   |        | $      | -      |        |   | $      | 211,540  |   |   | $      | 441,977  |   |         | $      | 115,971 |   |   | $ | 831,146 |   |

| For the three        |   |        |      |   |        |   |    |        |   |   |       |   |   |   |     |   |         |   |
|----------------------|--------|-------------|-----------|--------|-------------|--------|---------|-------------|--------|--------|------------|--------|--------|--------|----------|--------|--------------|--------|
| months ended         |   | Workstation |      |   | Workstation |   |    | Workstation |   |   |       |   |   |   |     |   |         |   |
| March 31, 2010       |   | Type A      |      |   | Type B      |   |    | Type C      |   |   | SADP       |   |   | Others |     |   | Consolidated |   |
|                 |   |        |      |   |        |   |    |        |   |   |       |   |   |   |     |   |         |   |
| Net revenues         |   | $           | 1,536,366 |   |        |   | 203,928 |        |   |   | 2,908,000  |   |   | $      | 475,820  |   |         | $      | 75,977 |   |   | $ | 5,200,091 |   |
| Cost of net revenues |   |        | (493,139  | )      |        |   | (50,247 | )           |   |   | (1,017,833 | )      |   |   | (193,798 | )      |         |   | (2,435 | ) |   |   | (1,757,452 | ) |
|                 |   | $           | 1,043,227 |   |        |   | 153,681 |        |   |   | 1,890,167  |   |   | $      | 282,022  |   |         | $      | 73,542 |   |   | $ | 3,442,639 |   |

----

| 18. | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

|                         |   | Three Months Ended March 31 |        |   |   |   |      |    |   |
|-----------------------------------|--------|-------------------------------------------------|-------------|--------|--------|--------|-----------|---------|--------|
|                         |   | 2011                                            |        |   | 2010   |   |      | Change  |   |   | Change rate |   |
| Net Revenue                       |   | $                                               | 1,561,014   |   |   | $      | 5,200,091 |    |   | $ | (3,639,077) |   |   |   | (69.98) | % |
| Cost of net revenue               |   | $                                               | 729,868     |   |   | $      | 1,757,452 |    |   | $ | (1,027,584) |   |   |   | (58.47) | % |
| Gross Profit                      |   | $                                               | 831,146     |   |   | $      | 3,442,639 |    |   | $ | (2,611,493) |   |   |   | (75.86) | % |
| Gross Margin                      |   |                                            | 53.24       | %      |   |   | 66.20     | %       |   |   |   |   |   |   |   (12.96) | % |
| Operating (loss)/ Income          |   | $                                               | (382,331)   |   |   | $      | 2,293,737 |    |   | $ | (2,676,068) |   |   |   | (116.67) | % |
| Changes in fair value of warrants |   | $                                               | 2,329,880   |   |   | $      | 1,463,274 |    |   | $ | 866,606 |   |   |   | 59.22 |  % |
| (loss)/ Net Income                |   | $                                               | (2,646,333) |   |   | $      | 485,173   |    |   | $ | (3,131,506) |   |   |   | (645.44) | % |
| Net (loss) / profit margin        |   |                                            | (169.53)    | %      |   |   | 9.33      | %  |   |   |   |   |   |   | - |   |

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|         |   | Three Months Ended March 31, |      |
|-------------------|--------|--------------------------------------------------|-----------|
|         |   | 2011                                             |      |   | 2010 |   |
|         |   | sales                                            |      |   | % of total sales |   |   | sales |   |   | % of total sales |   |
| PTS               |   | $                                                | 419,218   |   |   |   | 26.86 | %     |   | $ | 4,648,294 |   |   |   | 89.39 | % |
| SADP              |   | $                                                | 988,461   |   |   |   | 63.32 | % |   | $ | 475,820 |   |   |   | 9.15 | % |
| Other             |   | $                                                | 153,335   |   |   |   | 9.82 | % |   | $ | 75,977 |   |   |   | 1.46 | % |
| Total net revenue |   | $                                                | 1,561,014 |   |   |   | 100.00 | % |   | $ | 5,200,091 |   |   |   | 100.00 | % |

|         |   | Three Months Ended March 31, |    |
|--------------|--------|--------------------------------------------------|---------|
|         |   | 2011                                             |    |   | 2010 |   |
|         |   | US$                                              |    |   | Gross profitmargin |   |   | US$ |   |   | Gross profitmargin |   |
|         |   |                                             |    |   |   |   |   |   |   |   |   |   |
| Gross Profit |   | $                                                | 831,146 |   |   |   | 53.24 | % |   | $ | 3,442,639 |   |   |   | 66.20 | % |

|                |   | Three Months Ended March 31, |    |   |   |   |
|---------------------|--------|--------------------------------------------------|---------|--------|--------|--------|
|                |   | 2011                                             |    |   | 2010   |   |   | Change |   |
| Cost of net revenue |   | $                                                | 729,868 |   |   | $      | 1,757,452 |   |   |   | (58.47) | % |

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|                                  |   | Three Months Ended March 31, |      |   |   |
|---------------------------------------|--------|---------------------------------------------|-----------|--------|--------|
|                                  |   | 2011                                        |      |   | 2010   |   | Change |   |
| Selling expenses                      |   | $                                           | 231,639   |   |   | $ | 406,247 |   |   |   | (42.98) | % |
| General & Administrative expenses |   | $                                           | 981,838   |   |   | $ | 742,655 |   |   |   | 32.21 | % |
| Total operating expenses              |   | $                                           | 1,213,477 |   |   | $ | 1,148,902 |   |   |   | 5.62 | % |

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| Item             |   | March 31, 2011 |      |   | December 31, 2010 |   |      | Change |   |
|------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|-----------|--------|--------|
| Finished goods   |   | $                        | 961,377   |   |                        | $      | 943,148   |   |   |   | 1.93 | % |
| Work in progress |   | $                        | 808,053   |   |                        | $      | 116,157   |   |   |   | 595.66 | % |
| Raw material     |   | $                        | 345,589   |   |                        | $      | 320,612   |   |   |   | 7.79 |  % |
| Total            |   | $                        | 2,115,019 |   |                        | $      | 1,379,917 |   |   |   | 53.27 | % |

|                                                           |   | Three months ended March 31, |        |   |   |   |
|---------------------------------------------------------------------|--------|--------------------------------------------------|-------------|--------|--------|--------|
|                                                           |   | 2011                                             |        |   | 2010   |   |   | Change |   |
| Net cash provided by (used in) operating activities                 |   | $                                                | 1,051,713   |   |   | $      | 1,145,035 |   |   | $ | (93,322) |   |
| Net cash provided by (used in) investing activities                 |   | $                                                | (1,434,121) |   |   | $      | (1,001,512) |   |   | $ | (432,609) |   |
| Net cash provided by (used in) financing activities                 |   | $                                                | -           |   |   | $      | - |   |   | $ | - |   |
| Effect of foreign currency translation on cash and cash equivalents |   | $                                                | (275,433)   |   |   | $      | 751 |   |   | $ | (276,184) |   |
| Beginning cash and cash equivalent                                  |   | $                                                | 9,587,765   |   |   | $      | 4,717,240 |   |   | $ | 4,870,525 |   |
| Ending cash and cash equivalent                                     |   | $                                                | 8,929,924   |   |   | $      | 4,861,514 |   |   | $ | 4,068,410 |   |

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| 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. |

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|                       | SUNWAY GLOBAL, INC.                                               |
|----------------------------|-------------------------------------------------------------------|
|                       |                                                              |
| Dated:   May 20, 2011 | By:                                                     | /s/ Liu Bo |
|                       |                                                              | Name: Liu Bo |
|                       | Title: Chief Executive Officer (principal executive officer) |

| Dated:   May 20, 2011 | By:                                                                          | /s/ Samuel Sheng |
|----------------------------|----------------------------------------------------------------------------------------|------------------|
|                       | Name: Samuel Sheng                                                                     |
|                       | Title: Chief Financial Officer  (principal financial and accounting officer) |

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