| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------|

| 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 |   | 41     |
| Item 3.          |   | Quantitative and Qualitative Disclosures About Market Risk                                 |   | 45     |
| Item 4.          |   | Controls and Procedures                                                                    |   | 46     |
|             |   | PART II                                                                                    |   |   |
| Item 1.          |   | Legal Proceedings                                                                          |   | 47     |
| Item 1A.         |   | Risk Factors                                                                               |   | 47     |
| Item 2.          |   | Unregistered Sales of Equity Securities and Use of Proceeds                                |   | 47     |
| Item 3.          |   | Defaults Upon Senior Securities                                                            |   | 47     |
| Item 4.          |   | Removed and Reserved                                                                       |   | 47     |
| Item 5.          |   | Other Information                                                                          |   | 47     |
| Item 6.          |   | Exhibits                                                                                   |   | 47     |
|  SIGNATURES |   | 48                                                                                         |

----

| CONTENTS                                           |   | PAGES  |               |
|---------------------------------------------------------|--------|--------|--------------------|
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |   |   | 4                  |   |
|                                                    |   |   |               |   |
| CONSOLIDATED BALANCE SHEETS                             |   |   | 5 - 6         |   |
|                                                    |   |   |               |   |
| CONSOLIDATED STATEMENTS OF INCOME                       |   |   | 7                  |   |
|                                                    |   |   |               |   |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY   |   |   | 8                  |   |
|                                                    |   |   |               |   |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                   |   |   | 9 - 10        |   |
|                                                    |   |   |               |   |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS              |   |   | 11 – 40 |   |

----

----

| Hong Kong                                           | Albert Wong & Co.        |
|-----------------------------------------------------|------------------------------|
| May 13, 2009                                        | Certified Public Accountants |
| Except for note 19 which is dated February 14, 2011 |                         |

----

|                                         |   | Notes  |   |   | March 31,2009 |       |   | December 31,2008 |   |
|----------------------------------------------|--------|--------|--------|--------|---------------|------------|--------|------------------|--------|
|                                         |   |   |   |   | (Unaudited    |       |   | (Audited         |   |
|                                         |   |   |   |   | Restated)     |       |   | Restated)        |   |
| ASSETS                                       |   |   |   |   |          |       |   |             |   |
| Current assets                               |   |   |   |   |          |       |   |             |   |
| Cash and cash equivalents                    |   | 2(k)   |   |   | $             | 12,212,431 |   |             | $      | 15,189,941 |   |
| Trade receivables, net                       |   | 5      |   |   |          | 2,702,440  |   |             |   | 2,953,919 |   |
| Inventories                                  |   | 8      |   |   |          | 1,022,032  |   |             |   | 590,738 |   |
| Advances to suppliers                        |   |   |   |   |          | 1,502,484  |   |             |   | 547,952 |   |
| Prepayments                                  |   |   |   |   |          | 750,564    |   |             |   | - |   |
| Tender deposits                              |   |   |   |   |          | 18,406     |   |             |   | 112,735 |   |
| Travel advances to shareholders              |   | 6      |   |   |          | 57,483     |   |             |   | 38,733 |   |
| Advances to employees                        |   | 7      |   |   |          | 331,588    |   |             |   | 429,804 |   |
|                                         |   |   |   |   |          |       |   |             |   |   |   |
| Total current assets                         |   |   |   |   | $             | 18,597,428 |   |             | $      | 19,863,822 |   |
| Restricted cash                              |   |   |   |   |          | 356,046    |   |             |   | 378,366 |   |
| Amount due from a related company            |   | 4      |   |   |          | 830        |   |             |   | 830 |   |
| Property, plant and equipment, net           |   | 9      |   |   |          | 5,801,161  |   |             |   | 5,069,871 |   |
| Intangibles, net                             |   | 10     |   |   |          | 9,702,976  |   |             |   | 6,576,769 |   |
| Deposit for acquisition of computer software |   |   |   |   |          | -          |   |             |   | 1,750,751 |   |
| Deposit for technology-based design          |   |   |   |   |          | 3,505,902  |   |             |   | - |   |
| Deposit for acquisition of subsidiary        |   |   |   |   |          | -          |   |             |   | 7,725,445 |   |
|                                         |   |   |   |   |          |       |   |             |   |   |   |
| TOTAL ASSETS                                 |   |   |   |   | $             | 37,964,343 |   |             | $      | 41,365,854 |   |
|                                         |   |   |   |   |          |       |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY   |   |   |   |   |          |       |   |             |   |   |   |
| Current liabilities                          |   |   |   |   |          |       |   |             |   |   |   |
| Accounts payable                             |   |   |   |   | $             | 712,325    |   |             | $      | 59,912 |   |
| Income tax payable                           |   |   |   |   |          | 211,410    |   |             |   | 632,893 |   |
| Turnover and other taxes                     |   |   |   |   |          | 89,834     |   |             |   | 406,839 |   |
| Expected warranty liabilities                |   | 11     |   |   |          | 50,460     |   |             |   | 50,396 |   |
| Customers deposits                           |   |   |   |   |          | 202,102    |   |             |   | - |   |
| Accrued liabilities                          |   |   |   |   |          | 293,480    |   |             |   | 301,461 |   |
| Other payables                               |   |   |   |   |          | 266,945    |   |             |   | 15,168 |   |
|                                         |   |   |   |   |          |       |   |             |   |   |   |
| Total current liabilities                    |   |   |   |   | $             | 1,826,556  |   |             | $      | 1,466,669 |   |
| Warrant liabilities                          |   |   |   |   |          | 90,383,149 |   |             |   | - |   |
|                                         |   |   |   |   |          |       |   |             |   |   |   |
| TOTAL LIABILITIES                            |   |   |   |   | $             | 92,209,705 |   |             | $      | 1,466,669 |   |

----

|                                                                                                                                                                                        |   | Notes  |   |   | March 31, 2009 |        |   | December 31,2008 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|----------------|-------------|--------|------------------|--------|
|                                                                                                                                                                                        |   |   |   |   | (Unaudited)    |        |   | (Audited)        |   |
|                                                                                                                                                                                        |   |   |   |   | (Restated)     |        |   | (Restated)       |   |
| Commitments and contingencies                                                                                                                                                               |   | 16     |   |   | $              | -           |   |             | $      | - |   |
|                                                                                                                                                                                        |   |   |   |   |           |        |   |             |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                                                  |   |   |   |   |           |        |   |             |   |   |   |
|                                                                                                                                                                                        |   |   |   |   |           |        |   |             |   |   |   |
| Series B Convertible Preferred Stock $0.0000001 par value; 400,000 shares authorized; 160,494 shares issued and outstanding at March 31, 2009 and December 31, 2008  respectively |   | 12     |   |   | $              | 1           |   |             | $      | 1 |   |
|                                                                                                                                                                                        |   |   |   |   |           |        |   |             |   |   |   |
| Common stock at $0.0000001 par value; 100,000,000 shares authorized; 18,499,736 shares issued and outstanding at March 31, 2009 and December 31, 2008 respectively                          |   |   |   |   |           | 2           |   |             |   | 2 |   |
| Additional paid-in capital                                                                                                                                                                  |   |   |   |   |           | 13,833,383  |   |             |   | 17,824,325 |   |
| Statutory reserves                                                                                                                                                                          |   |   |   |   |           | 3,033,855   |   |             |   | 2,127,978 |   |
| (Accumulated deficit)/retained earning                                                                                                                                                      |   |   |   |   |           | (73,983,850 | )      |             |   | 17,102,689 |   |
| Accumulated other comprehensive income                                                                                                                                                      |   |   |   |   |           | 2,871,247   |   |             |   | 2,844,190 |   |
|                                                                                                                                                                                        |   |   |   |   |           |        |   |             |   |   |   |
|                                                                                                                                                                                        |   |   |   |   | $              | (54,245,362 | )      |             | $      | 39,899,185 |   |
|                                                                                                                                                                                        |   |   |   |   |           |        |   |             |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                            |   |   |   |   | $              | 37,964,343  |   |             | $      | 41,365,854 |   |

----

|                                    |   |   |   |   | Three months ended March 31, |        |
|-----------------------------------------|--------|--------|--------|--------|------------------------------|-------------|
|                                    |   |   |   |   | 2009                         |        |   | 2008 |   |
|                                    |   | Notes  |   |   | (Restated)                   |        |   |   |   |
|                                    |   |   |   |   |                         |        |   |   |   |
| Net revenues                            |   | 17     |   |   | $                            | 2,933,573   |   |   | $ | 3,604,034 |   |
| Cost of net revenues                    |   | 17     |   |   |                         | (893,980    | ) |   |   | (1,141,745 | ) |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Gross profit                            |   |   |   |   | $                            | 2,039,593   |   |   | $ | 2,462,289 |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Selling expenses                        |   |   |   |   |                         | (180,349    | ) |   |   | (25,237 | ) |
| General and administrative expenses     |   |   |   |   |                         | (631,894    | ) |   |   | (786,242 | ) |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Income from operation                   |   |   |   |   | $                            | 1,227,350   |   |   | $ | 1,650,810 |   |
| Interest income                         |   |   |   |   |                         | 23,577      |   |   |   | 143 |   |
| Impairment on investment                |   | 18     |   |   |                         | (4,831,386  | ) |   |   | - |   |
| Change in fair value of warrants        |   |   |   |   |                         | (20,481,276 | ) |   |   | - |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Income before (loss)/income taxes       |   |   |   |   | $                            | (24,061,735 | ) |   | $ | 1,650,953 |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Income taxes                            |   | 14     |   |   |                         | (207,996    | ) |   |   | (273,542 | ) |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Net (loss)/income                       |   |   |   |   | $                            | (24,269,731 | ) |   | $ | 1,377,411 |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Net (loss)/income per share:            |   |   |   |   |                         |        |   |   |   |   |   |
| -Basic                                  |   |   |   |   | $                            | (1.31       | ) |   | $ | 0.16 |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| -Diluted                                |   |   |   |   | $                            | (1.31       | ) |   | $ | 0.05 |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| Weighted average number of common stock |   |   |   |   |                         |        |   |   |   |   |   |
| -Basic                                  |   | 13     |   |   |                         | 18,499,736  |   |   |   | 8,360,349 |   |
|                                    |   |   |   |   |                         |        |   |   |   |   |   |
| -Diluted                                |   | 13     |   |   |                         | 18,499,736  |   |   |   | 27,642,747 |   |

----

|                                                          |   |      |   |   |      |   |   |        |   |   |       |   |   | Additional |   |   |      |   |       | Retained     |   |   | Accumulated   |   |   |   |        |
|--------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|-------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|------------|--------------|--------|--------|---------------|--------|--------|--------|-------------|
|                                                               |   | Preferred |   |   | Preferred |   |   | No.         |   |   |       |   |   | paid -     |   |   |      |   |       | earnings/    |   |   | other         |   |   |   |        |
|                                                               |   | Series    |   |   | Series    |   |   | shares      |   |   | Common     |   |   | in         |   |   | Statutory |   |       | (accumulated |   |   | comprehensive |   |   |   |        |
|                                                               |   | A         |   |   | B         |   |   | outstanding |   |   | stock      |   |   | capital    |   |   | reserves  |   |       | deficit)     |   |   | income        |   |   | Total  |        |
|                                                               |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |
| Balance, January 1, 2008                                           |   | $         | 1      |   |      | $      | 1      |        |   |   | 223,658    |   |   | $          | 1      |   |      | $      | 11,244,325 |         |   | $      | 2,127,978     |   |   | $      | 8,043,920   |   |   | $ | 1,180,288 |   |   | $ | 22,596,514 |   |
| Conversion of Preferred Series A into Common Stock                 |   |      | (1     | )      |      |   | -      |        |   |   | 13,711,831 |   |   |       | -      |   |      |   | 1          |         |   |   | -             |   |   |   | -           |   |   |   | - |   |   |   | - |   |
| Conversion of Preferred Series B into Common Stock                 |   |      | -      |   |      |   | -      |        |   |   | 148,140    |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | -           |   |   |   | - |   |   |   | - |   |
| Conversion of Warrant Series J into Common Stock                   |   |      | -      |   |      |   | -      |        |   |   | 4,416,107  |   |   |       | 1      |   |      |   | 6,579,999  |         |   |   | -             |   |   |   | -           |   |   |   | - |   |   |   | 6,580,000 |   |
| Net income                                                         |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | 9,058,769   |   |   |   | - |   |   |   | 9,058,769 |   |
| Foreign currency translation adjustment                            |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | -           |   |   |   | 1,663,902 |   |   |   | 1,663,902 |   |
|                                                               |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008 (restated)                              |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 17,824,325 |         |   | $      | 2,127,978     |   |   | $      | 17,102,689  |   |   | $ | 2,844,190 |   |   | $ | 39,899,185 |   |
|                                                               |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                           |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 17,824,325 |         |   | $      | 2,127,978     |   |   | $      | 17,102,689  |   |   | $ | 2,844,190 |   |   | $ | 39,899,185 |   |
| Net loss                                                           |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | (24,269,731 | ) |   |   | - |   |   |   | (24,269,731 | ) |
| Reclassification of warrants from equity to derivative liabilities |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | (3,990,942 | )            |   |   | -             |   |   |   | (65,910,931 | ) |   |   | - |   |   |   | (69,901,873 | ) |
| Appropriations to statutory reserves                               |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | 905,877       |   |   |   | (905,877    | ) |   |   | - |   |   |   | - |   |
| Foreign currency translation adjustment                            |   |      | -      |   |      |   | -      |        |   |   | -          |   |   |       | -      |   |      |   | -          |         |   |   | -             |   |   |   | -           |   |   |   | 27,057 |   |   |   | 27,057 |   |
|                                                               |   |      |   |   |      |   |   |        |   |   |       |   |   |       |   |   |      |   |       |         |   |   |          |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, March 31, 2009 (restated)                                 |   | $         | -      |   |      | $      | 1      |        |   |   | 18,499,736 |   |   | $          | 2      |   |      | $      | 13,833,383 |         |   | $      | 3,033,855     |   |   | $      | (73,983,850 | ) |   | $ | 2,871,247 |   |   | $ | (54,245,362 | ) |

----

|                                                                              |   | Three months ended March 31, |        |
|-----------------------------------------------------------------------------------|--------|------------------------------|-------------|
|                                                                              |   | 2009                         |        |   | 2008 |   |
|                                                                              |   | (Restated)                   |        |   |   |   |
| Cash flows from operating activities                                              |   |                         |        |   |   |   |   |   |
| Net (loss)/income                                                                 |   | $                            | (24,269,731 | ) |   | $ | 1,377,411 |   |
| Depreciation                                                                      |   |                         | 240,444     |   |   |   | 177,687 |   |
| Amortization                                                                      |   |                         | 253,803     |   |   |   | 196,280 |   |
| Change in fair value of warrants                                                  |   |                         | 20,481,276  |   |   |   | - |   |
| Impairment on investment                                                          |   |                         | 4,831,386   |   |   |   | - |   |
|                                                                              |   |                         |        |   |   |   |   |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                         |        |   |   |   |   |   |
| Trade receivables, net                                                            |   |                         | 255,153     |   |   |   | (620,159 | ) |
| Inventories                                                                       |   |                         | (430,489    | ) |   |   | (77,394 | ) |
| Advances to suppliers                                                             |   |                         | (776,077    | ) |   |   | 964,951 |   |
| Prepayments                                                                       |   |                         | (178,370    | ) |   |   | 383,008 |   |
| Tender deposits                                                                   |   |                         | 94,457      |   |   |   | - |   |
| Travel advances to shareholders                                                   |   |                         | (18,699     | ) |   |   | (39,137 | ) |
| Advances to employees                                                             |   |                         | 98,741      |   |   |   | (398,153 | ) |
| Accounts payable                                                                  |   |                         | 652,243     |   |   |   | (254,484 | ) |
| Income tax payable                                                                |   |                         | (422,216    | ) |   |   | 118,380 |   |
| Turnover and other taxes                                                          |   |                         | (289,028    | ) |   |   | 85,220 |   |
| Loans from unrelated parties                                                      |   |                         | -           |   |   |   | 1,572,360 |   |
| Amount due from a director                                                        |   |                         | -           |   |   |   | (726,133 | ) |
| Customers deposits                                                                |   |                         | 202,073     |   |   |   | (216,932 | ) |
| Accrued liabilities                                                               |   |                         | (8,336      | ) |   |   | 36,341 |   |
| Other payables                                                                    |   |                         | 324,750     |   |   |   | (7,113 | ) |
|                                                                              |   |                         |        |   |   |   |   |   |
| Net cash provided by operating activities                                         |   | $                            | 1,041,380   |   |   | $ | 2,572,133 |   |
|                                                                              |   |                         |        |   |   |   |   |   |
| Cash flows from investing activities                                              |   |                         |        |   |   |   |   |   |
| Purchase of technology-based designs                                              |   |                         | (3,505,390  | ) |   |   | - |   |
| Purchase of intangibles assets                                                    |   |                         | (596,754    | ) |   |   | - |   |
| Purchase of plant and equipment                                                   |   |                         | (78,781     | ) |   |   | (939,630 | ) |
|  Used of restricted cash                                                     |   |                         | 22,320      |   |   |   | 23,095 |   |
| Deposit for acquisition of computer software                                      |   |                         | -           |   |   |   | (1,281,650 | ) |
|                                                                              |   |                         |        |   |   |   |   |   |
| Net cash used in investing activities                                             |   | $                            | (4,158,605  | ) |   | $ | (2,198,185 | ) |
|                                                                              |   |                         |        |   |   |   |   |   |
| Cash flows from financing activities                                              |   | $                            | -           |   |   | $ | - |   |
|                                                                              |   |                         |        |   |   |   |   |   |
| Net cash provided by financing activities                                    |   | $                            | -           |   |   | $ | - |   |

----

|                                                |   | Three months ended March 31, |       |
|-----------------------------------------------------|--------|------------------------------|------------|
|                                                |   | 2009                         |       |   | 2008 |   |
|                                                |   |                         |       |   |   |   |
| Net in cash and cash equivalents (used)/sourced     |   | $                            | (3,117,225 | ) |   | $ | 373,948 |   |
|                                                |   |                         |       |   |   |   |   |   |
| Effect of foreign currency translation on           |   |                         |       |   |   |   |   |   |
| cash and cash equivalents                           |   |                         | 139,715    |   |   |   | 262,621 |   |
|                                                |   |                         |       |   |   |   |   |   |
| Cash and cash equivalents–beginning of period |   |                         | 15,189,941 |   |   |   | 5,820,100 |   |
|                                                |   |                         |       |   |   |   |   |   |
| Cash and cash equivalents–end of period       |   | $                            | 12,212,431 |   |   | $ | 6,456,669 |   |
|                                                |   |                         |       |   |   |   |   |   |
| Supplementary cash flow information:                |   |                         |       |   |   |   |   |   |
| Tax paid                                            |   | $                            | 630,304    |   |   | $ | 157,694 |   |
| Interest received                                   |   |                         | 23,577     |   |   |   | 143 |   |

| 1. | During the three months ended March 31, 2009 and 2008, an amount of $1,752,695 and nil were transferred from “deposit for the acquisition of computer software” to “property, plant and equipment”, respectively. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | During the three months ended March 31, 2009 and 2008, an amount of $7,725,445 and nil 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 |
|-----|----------------------|

----

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

| (a) | Method of Accounting (Continued) |
|-----|----------------------------------|

| (b) | Principles of Consolidation |
|-----|-----------------------------|

| Name of subsidiaries                           |   | Place ofincorporation |   | Attributableinterest |   |
|----------------------------------------------------------|--------|----------------------------|--------|----------------------|--------|
|                                                     |   |                       |   |                 |   |
| World Through Ltd                                        |   | British VirginIslands |   |                 | 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    | % |

----

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

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

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

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

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

----

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

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

----

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

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

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

|                                     |   | March 31, 2009 |       |   | December 31,2008 |   |
|------------------------------------------|--------|----------------|------------|--------|------------------|--------|
| Bank of Communications, Branch of Daqing |   |           |       |   |             |   |
|                                     |   |           |       |   |             |   |   |   |
| City Economic Zone                       |   | $              | 11,858,175 |   |             | $      | 9,606,188 |   |
| Daqing City Commercial Bank              |   |           | -          |   |             |   | 4,536,667 |   |
| Agricultural Bank of China               |   |           | 82,434     |   |             |   | 930,332 |   |
| China Construction Bank, Beijing Branch  |   |           | 180,115    |   |             |   | - |   |
| HSBC                                     |   |           | 70,148     |   |             |   | 109,151 |   |
| Cash on hand                             |   |           | 21,559     |   |             |   | 7,603 |   |
|                                     |   |           |       |   |             |   |   |   |
|                                     |   | $              | 12,212,431 |   |             | $      | 15,189,941 |   |

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

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

----

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

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

| (o) | Cost of net revenues |
|-----|----------------------|

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

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

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

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

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

----

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

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

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

|                       |   | March 31,2009 |   |   | December31, 2008 |   |   | March 31,2008 |   |
|----------------------------|--------|--------------------|--------|--------|-----------------------|--------|--------|--------------------|--------|
| Twelve months ended        |   |               |   |   |                  |   |   |               |   |
| RMB : USD exchange rate    |   |               | -      |   |                  |   | 6.8542 |               |   |   | - |   |
| Three months ended         |   |               |   |   |                  |   |   |               |   |   |   |   |
| RMB : USD exchange rate    |   |               | 6.8456 |   |                  |   | -      |               |   |   | 7.0222 |   |
| Average three months ended |   |               |   |   |                  |   |   |               |   |   |   |   |
| RMB : USD exchange rate    |   |               | 6.8466 |   |                  |   | -      |               |   |   | 7.1757 |   |

----

| 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; and |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

----

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

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

----

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

|       |   | For the three months endedMarch 31, |    |
|------------|--------|--------------------------------------------------------------|---------|
|       |   | 2009                                                         |    |   | 2008 |   |
|       |   |                                                         |    |   |   |   |
| Customer B |   | $                                                            | 398,738 |   |   | $ | 378,799 |   |
| Customer E |   |                                                         | -       |   |   |   | 448,577 |   |
| Customer I |   |                                                         | -       |   |   |   | 541,141 |   |
| Customer J |   |                                                         | -       |   |   |   | 463,530 |   |
| Customer K |   |                                                         | 552,099 |   |   |   | - |   |
| Customer L |   |                                                         | 350,539 |   |   |   | - |   |

|       |   | March 31,2009 |    |   | December 31,2008 |   |
|------------|--------|--------------------|---------|--------|-----------------------|--------|
|       |   |               |    |   |                  |   |
| Customer A |   | $                  | -       |   |                  | $      | 499,583 |   |
| Customer B |   |               | 277,549 |   |                  |   | - |   |
| Customer C |   |               | -       |   |                  |   | 387,263 |   |
| Customer D |   |               | 358,917 |   |                  |   | - |   |
| Customer E |   |               | 498,043 |   |                  |   | 396,822 |   |
| Customer F |   |               | 300,459 |   |                  |   | 371,218 |   |
| Customer G |   |               | -       |   |                  |   | 325,129 |   |
| Customer H |   |               | 410,190 |   |                  |   | - |   |

----

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

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

|                         |   | March 31,2009 |      |   | December 31,2008 |   |
|------------------------------|--------|--------------------|-----------|--------|-----------------------|--------|
|                         |   |               |      |   |                  |   |
| Trade receivables, gross     |   | $                  | 2,710,864 |   |                  | $      | 2,962,333 |   |
| Provision for doubtful debts |   |               | (8,424    | )      |                  |   | (8,414 | ) |
|                         |   |               |      |   |                  |   |   |   |
|                         |   | $                  | 2,702,440 |   |                  | $      | 2,953,919 |   |

|                                |   | March 31,2009 |   |   | December31, 2008 |   |
|-------------------------------------|--------|--------------------|--------|--------|-----------------------|--------|
|                                |   |               |   |   |                  |   |
| Balance at beginning of period/year |   | $                  | 8,414  |   |                  | $      | 7,884 |   |
| Foreign exchange adjustment         |   |               | 10     |   |                  |   | 530 |   |
|                                |   |               |   |   |                  |   |   |   |
| Balance at end of period/year       |   | $                  | 8,424  |   |                  | $      | 8,414 |   |

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

|       |   | March 31,2009 |   |   | December31, 2008 |   |
|------------|--------|---------------|--------|--------|------------------|--------|
|       |   |          |   |   |             |   |
| Bo Liu     |   | $             | 33,020 |   |             | $      | 23,495 |   |
| Deli Liang |   |          | 24,463 |   |             |   | 15,238 |   |
|       |   |          |   |   |             |   |   |   |
|       |   | $             | 57,483 |   |             | $      | 38,733 |   |

----

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

|                                  |   | March 31,2009 |     |   | December31, 2008 |   |
|---------------------------------------|--------|--------------------|----------|--------|-----------------------|--------|
|                                  |   |               |     |   |                  |   |
| Beginning balance, January 1          |   | $                  | 429,804  |   |                  | $      | 548,364 |   |
| Add: Advanced during the period/year  |   |               | 142,460  |   |                  |   | 659,177 |   |
|                                  |   |               |     |   |                  |   |   |   |
| Less: Transferred to income statement |   |               | (77,639  | )      |                  |   | (406,262 | ) |
|   Recollected from employees     |   |               | (163,037 | )      |                  |   | (371,475 | ) |
|                                  |   |               |     |   |                  |   |   |   |
| Ending balance                        |   | $                  | 331,588  |   |                  | $      | 429,804 |   |

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

|             |   | March 31,2009 |      |   | December31, 2008 |   |
|------------------|--------|--------------------|-----------|--------|-----------------------|--------|
|             |   |               |      |   |                  |   |
| Finished goods   |   | $                  | 459,889   |   |                  | $      | 218,448 |   |
| Work in progress |   |               | 41,187    |   |                  |   | 188,855 |   |
| Raw materials    |   |               | 520,956   |   |                  |   | 183,435 |   |
|             |   |               |      |   |                  |   |   |   |
|             |   | $                  | 1,022,032 |   |                  | $      | 590,738 |   |

----

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

|                                |   | March 31,2009 |       |   | December 31,2008 |   |
|-------------------------------------|--------|--------------------|------------|--------|-----------------------|--------|
| At cost                             |   |               |       |   |                  |   |
| Buildings                           |   | $                  | 1,449,221  |   |                  | $      | 1,447,402 |   |
| Machinery and equipment             |   |               | 1,119,996  |   |                  |   | 1,116,941 |   |
| Moldings                            |   |               | 4,160,819  |   |                  |   | 4,155,598 |   |
| Computer software                   |   |               | 2,098,260  |   |                  |   | 2,073,181 |   |
| Office equipment and motor vehicles |   |               | 369,799    |   |                  |   | 288,736 |   |
|                                |   |               |       |   |                  |   |   |   |
|                                |   | $                  | 9,198,095  |   |                  | $      | 9,081,858 |   |
| Less: accumulated depreciation      |   |               | (4,264,904 | )      |                  |   | (4,011,987 | ) |
|                                |   |               |       |   |                  |   |   |   |
|                                |   | $                  | 4,933,191  |   |                  | $      | 5,069,871 |   |
| Construction in progress            |   |               | 867,970    |   |                  |   | - |   |
|                                |   |               |       |   |                  |   |   |   |
|                                |   | $                  | 5,801,161  |   |                  | $      | 5,069,871 |   |

|                                |   | For the three months endedMarch 31, |    |
|-------------------------------------|--------|--------------------------------------------------------------|---------|
|                                |   | 2009                                                         |    |   | 2008 |   |
| Cost of net revenues                |   | $                                                            | 219,089 |   |   | $ | 163,266 |   |
| General and administrative expenses |   |                                                         | 11,702  |   |   |   | 14,421 |   |
| Selling expenses                    |   |                                                         | 9,653   |   |   |   | - |   |
|                                |   |                                                         |    |   |   |   |   |   |
|                                |   | $                                                            | 240,444 |   |   | $ | 177,687 |   |

----

| 10. | INTANGIBLE ASSETS, NET |
|-----|------------------------|

|                             |   | March 31,2009 |       |   | December 31,2008 |   |
|----------------------------------|--------|--------------------|------------|--------|-----------------------|--------|
|                             |   |               |       |   |                  |   |
| Land use rights, at cost         |   | $                  | 2,484,712  |   |                  | $      | 1,354,308 |   |
| Technology-based design, at cost |   |               | 8,519,706  |   |                  |   | 6,320,577 |   |
|                             |   |               |       |   |                  |   |   |   |
|                             |   | $                  | 11,004,418 |   |                  | $      | 7,674,885 |   |
| Less: accumulated amortization   |   |               | (1,301,442 | )      |                  |   | (1,098,116 | ) |
|                             |   |               |       |   |                  |   |   |   |
|                   |   | $                  | 9,702,976  |   |                  | $      | 6,576,769 |   |

----

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

|                                 |   | March 31,2009 |   |   | December31, 2008 |   |
|--------------------------------------|--------|--------------------|--------|--------|-----------------------|--------|
|                                 |   |               |   |   |                  |   |
| Balance at beginning of period/year  |   | $                  | 50,396 |   |                  | $      | 55,351 |   |
| Warranty expense for the period/year |   |               | -      |   |                  |   | (8,533 | ) |
| Foreign currency difference          |   |               | 64     |   |                  |   | 3,578 |   |
|                                 |   |               |   |   |                  |   |   |   |
| Balance at end of period/year        |   | $                  | 50,460 |   |                  | $      | 50,396 |   |

| 12. | 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 ofshares |      |   | ExercisePrice |   | 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 |

----

| 12. | SERIES B CONVERTIBLE PREFERRED STOCK AND ASSOCIATED WARRANTS (CONTINUED) |
|-----|--------------------------------------------------------------------------|

----

| 13. | (LOSS)/EARNINGS PER SHARE |
|-----|---------------------------|

|                                                                                   |   | For the three months ended March31, |        |
|----------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|-------------|
|                                                                                   |   | 2009                                                         |        |   | 2008 |   |
| Earnings:                                                                              |   |                                                         |        |   |   |   |
| (Loss)/earnings for the purpose of Basic (loss)/earnings per share                     |   | $                                                            | (24,269,731 | ) |   | $ | 1,377,411 |   |
| Effect of dilutive potential common                                                    |   |                                                         |        |   |   |   |   |   |
| Stock                                                                                  |   |                                                         | -           |   |   |   | - |   |
|                                                                                   |   |                                                         |        |   |   |   |   |   |
| (Loss)/earnings for the purpose of Dilutive (loss)/earnings per share                  |   | $                                                            | (24,269,731 | ) |   | $ | 1,377,411 |   |
|                                                                                   |   |                                                         |        |   |   |   |   |   |
| Number of shares:                                                                      |   |                                                         |        |   |   |   |   |   |
| Weighted average number of common stock for the purpose of basic earnings per share    |   |                                                         | 18,499,736  |   |   |   | 8,360,349 |   |
| Effect of dilutive potential common stock                                              |   |                                                         |        |   |   |   |   |   |
|  -conversion of Series A                                                          |   |                                                         |        |   |   |   |   |   |
|   convertible preferred stock                                                |   |                                                         | -           |   |   |   | 5,575,140 |   |
|  -conversion of Series B                                                          |   |                                                         |        |   |   |   |   |   |
|   convertible preferred stock                                                |   |                                                         | -           |   |   |   | 4,962,960 |   |
| -conversion of Warrant Series A                                                        |   |                                                         | -           |   |   |   | 2,520,496 |   |
| -conversion of Warrant Series B                                                        |   |                                                         | -           |   |   |   | 885,551 |   |
| -conversion of Warrant Series J                                                        |   |                                                         | -           |   |   |   | 2,623,161 |   |
| -conversion of Warrant Series C                                                        |   |                                                         | -           |   |   |   | 2,057,343 |   |
| -conversion of Warrant Series D                                                        |   |                                                         | -           |   |   |   | 657,747 |   |
|                                                                                   |   |                                                         |        |   |   |   |   |   |
| Weighted average number of common stock for the purpose of dilutive earnings per share |   |                                                         | 18,499,736  |   |   |   | 27,642,747 |   |

----

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

|                                      |   | Three months ended March 31, |     |
|-------------------------------------------|--------|--------------------------------------------------|----------|
|                                      |   | 2009                                             |     |   | 2008 |   |
| U.S. statutory rate                       |   |                                             | 34       | % |   |   | 34 | % |
| Foreign income not recognized in the U.S. |   |                                             | (34      | )% |   |   | (34 | )% |
| PRC Enterprise Income Tax                 |   |                                             | 25       | % |   |   | 25 | % |
| Tax holiday                               |   |                                             | (10      | )% |   |   | (10 | )% |
|  Provision for income tax            |   |                                             | 15  | % |   |   | 15  | % |

|                        |   | Three months endedMarch 31, |    |
|-----------------------------|--------|--------------------------------------------|---------|
|                        |   | 2009                                       |    |   | 2008 |   |
| Current tax – PRC EIT |   | $                                          | 207,996 |   |   | $ | 273,542 |   |
| Deferred tax provision      |   |                                       | -       |   |   |   | - |   |
|  Income tax expenses   |   | $                                          | 207,996 |   |   | $ | 273,542 |   |

|                             |   | Three months ended March 31, |        |
|----------------------------------|--------|--------------------------------------------------|-------------|
|                             |   | 2009                                             |        |   | 2008 |   |
| Income (Loss) before taxation    |   | $                                                | (24,061,735 | ) |   | $ | 1,650,953 |   |
| Add: Impairment on investment    |   |                                             | 4,831,386   |   |   |   | - |   |
| Other non-tax deductible items   |   |                                             | 135,713     |   |   |   | 172,660 |   |
| Change in fair value of warrants |   |                                             | 20,481,276  |   |   |   | - |   |
|                             |   |                                             |        |   |   |   |   |   |
| Adjusted PRC EIT taxable income  |   | $                                                | 1,386,640   |   |   | $ | 1,823,613 |   |

| 15. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
|-----|-------------------------------------|

----

| March 31,           |   |   |   |
|---------------------|--------|--------|--------|
| 2010                |   | $      | 70,001 |   |
| 2011 and thereafter |   |   | -      |   |
|                |   |   |   |   |
|                |   | $      | 70,001 |   |

| For the threemonths endedMarch 31,2009 |   | Workstation |      |   | Workstation |   |     | Workstation |   |   |      |   |   |         |   |
|------------------------------------------------------------|--------|-------------|-----------|--------|-------------|--------|----------|-------------|--------|--------|-----------|--------|--------|--------------|--------|
|                                                       |   | Type A |      |   | Type B |   |     | Type C |   |   | SADP      |   |   | Consolidated |   |
|                                                       |   |        |      |   |        |   |     |        |   |   |      |   |   |         |   |
| Net revenues                                               |   | $           | 1,088,862 |   |        | $      | 368,066  |        |   | $      | 1,476,645 |   |   | $            | -      |   |   | $ | 2,933,573 |   |
| Cost of net revenues                                       |   |        | (307,439  | )      |        |   | (101,667 | )           |   |   | (484,874  | )      |   |         | -      |   |   |   | (893,980 | ) |
|                                                       |   |        |      |   |        |   |     |        |   |   |      |   |   |         |   |   |   |   |   |   |
|                                                       |   | $           | 781,423   |   |        | $      | 266,399  |        |   | $      | 991,771   |   |   | $            | -      |   |   | $ | 2,039,593 |   |

| For the threemonths endedMarch 31,2008 |   | Workstation |     |   | Workstation |   |      | Workstation |   |   |     |   |   |         |     |
|------------------------------------------------------------|--------|-------------|----------|--------|-------------|--------|-----------|-------------|--------|--------|----------|--------|--------|--------------|----------|
|                                                       |   | Type A |     |   | Type B |   |      | Type C |   |   | SADP     |   |   | Consolidated |     |
|                                                       |   |        |     |   |        |   |      |        |   |   |     |   |   |         |     |
| Net revenues                                               |   | $           | 653,597  |   |        | $      | 2,024,198 |        |   | $      | 356,064  |   |   | $            | 570,175  |   |   | $ | 3,604,034 |   |
| Cost of net revenues                                       |   |        | (177,442 | )      |        |   | (628,720  | )           |   |   | (134,920 | )      |   |         | (200,663 | ) |   |   | (1,141,745 | ) |
|                                                       |   |        |     |   |        |   |      |        |   |   |     |   |   |         |     |   |   |   |   |   |
|                                                       |   | $           | 476,155  |   |        | $      | 1,395,478 |        |   | $      | 221,144  |   |   | $            | 369,512  |   |   | $ | 2,462,289 |   |

----

|                                                |   |   |       |
|-----------------------------------------------------|--------|--------|------------|
| Purchase consideration                              |   | $      | 7,725,445  |   |
|                                                |   |   |       |   |
| Less: Fair value of net assets acquired (see below) |   |   | (2,894,059 | ) |
|                                                |   |   |       |   |
| Impairment on investment                            |   | $      | 4,831,386  |   |

|                          |   | Fair value |      |
|-------------------------------|--------|------------|-----------|
| 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  | ) |
|                          |   |       |      |   |
| Net assets acquired           |   | $          | 2,894,059 |   |

----

|                                         |         | Registrant(Historical) |       |         | Target(Historical) |          |      | Pro formaadjustments |          |   | Pro formaCombined |         |
|----------------------------------------------|--------------|------------------------|------------|--------------|--------------------|---------------|-----------|---------------------------|---------------|--------|------------------------|--------------|
| ASSETS                                       |         |                   |       |         |               |          |      |                      |          |   |                   |         |
| Current assets                               |         |                   |       |         |               |          |      |                      |          |   |                   |         |
| Cash and cash equivalents                    |         | $                      | 15,189,941 |         |               | $             | 869       |                      |          | $      |                   |         |   | $ | 15,190,810 |   |
| Trade receivables, net                       |         |                   | 2,953,919  |         |               |          | -         |                      |          |   |                   |         |   |   | 2,953,919 |   |
| Inventories                                  |         |                   | 590,738    |         |               |          | -         |                      |          |   |                   |         |   |   | 590,738 |   |
| Advances to suppliers                        |         |                   | 547,952    |         |               |          | -         |                      |          |   |                   |         |   |   | 547,952 |   |
| Tender deposits                              |         |                   | 112,735    |         |               |          | -         |                      |          |   |                   |         |   |   | 112,735 |   |
| Travel advances to shareholders              |         |                   | 38,733     |         |               |          | -         |                      |          |   |                   |         |   |   | 38,733 |   |
| Advances to employees                        |         |                   | 429,804    |         |               |          | -         |                      |          |   |                   |         |   |   | 429,804 |   |
| Advances to a shareholder                    |         |                   | -          |         |               |          | 1,074,640 |                      |          |   | (432,298               | )            |   |   | 642,342 |   |
| Other receivables                            |         |                   | -          |         |               |          | 6,954     |                      |          |   |                   |         |   |   | 6,954 |   |
|                                         |         |                   |       |         |               |          |      |                      |          |   |                   |         |   |   |   |   |
| Total current assets                         |         | $                      | 19,863,822 |         |               | $             | 1,082,463 |                      |          | $      |                   |         |   | $ | 20,513,987 |   |
|                                         |         |                   |       |         |               |          |      |                      |          |   |                   |         |   |   |   |   |
| Restricted cash                              |    | $                      | 378,366    |         |               | $             | -         |                      |          | $      |                   |         |   | $ | 378,366 |   |
| Amount due from a related company            |         |                   | 830        |         |               |          | -         |                      |          |   |                   |         |   |   | 830 |   |
| Property, plant and equipment, net           |         |                   | 5,069,871  |         |               |          | 555,005   |                      |          |   |                   |         |   |   | 5,624,876 |   |
| Intangible assets, net                       |         |                   | 6,576,769  |         |               |          | 196,014   |                      |          |   |                   |         |   |   | 6,772,783 |   |
| Deposit for acquisition of computer software |         |                   | 1,750,751  |         |               |          | -         |                      |          |   |                   |         |   |   | 1,750,751 |   |
| Deposit for acquisition of subsidiary        |         |                   | 7,725,445  |         |               |          | -         |                      |          |   | (7,725,445             | )            |   |   | - |   |
| Impairment on investment                     |    |                   | -          |    |          |     | -         |                      |     |   | 6,598,351              |    |   |   | 6,598,351 |   |
|                                         |         |                   |       |         |               |          |      |                      |          |   |                   |         |   |   |   |   |
| TOTAL ASSETS                                 |         | $                      | 41,365,854 |         |               | $             | 1,833,482 |                      |          | $      |                   |         |   | $ | 41,639,944 |   |

----

|                                       |   | Registrant(Historical ) |      |   | Target(Historical) |   |    | Pro formaadjustments |   |   | Pro formaCombined |   |
|--------------------------------------------|--------|-------------------------|-----------|--------|--------------------|--------|---------|---------------------------|--------|--------|------------------------|--------|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |   |                    |      |   |               |   |    |                      |   |   |                   |   |
| Current liabilities                        |   |                    |      |   |               |   |    |                      |   |   |                   |   |
| Short-term bank loans                      |   | $                       | -         |   |               | $      | 277,202 |                      |   | $      |                   |   |   | $ | 277,202 |   |
| Accounts payable                           |   |                    | 59,912    |   |               |   | 25,298  |                      |   |   |                   |   |   |   | 85,210 |   |
| Income tax payable                         |   |                    | 632,893   |   |               |   | (28,410 | )                         |   |   |                   |   |   |   | 604,483 |   |
| Turnover and other taxes                   |   |                    | 406,839   |   |               |   | -       |                      |   |   |                   |   |   |   | 406,839 |   |
| Expected warranty                          |   |                    |      |   |               |   |    |                      |   |   |                   |   |   |   |   |   |
| liabilities                                |   |                    | 50,396    |   |               |   | -       |                      |   |   |                   |   |   |   | 50,396 |   |
| Accrued liabilities                        |   |                    | 301,461   |   |               |   | -       |                      |   |   |                   |   |   |   | 301,461 |   |
| Other payables                             |   |                    | 15,168    |   |               |   | 432,298 |                      |   |   | (432,298               | )      |   |   | 15,168 |   |
|                                       |   |                    |      |   |               |   |    |                      |   |   |                   |   |   |   |   |   |
| Total current liabilities                  |   | $                       | 1,466,669 |   |               | $      | 706,388 |                      |   | $      |         |   |   | $ | 1,740,759 |   |
|                                       |   |                    |      |   |               |   |    |                      |   |   |                   |   |   |   |   |   |
| TOTAL LIABILITIES                          |   | $                       | 1,466,669 |   |               | $      | 706,388 |                      |   | $      |              |   |   | $ | 1,740,759 |   |
|                                       |   |                    |      |   |               |   |    |                      |   |   |                   |   |   |   |   |   |
| Commitments and contingencies              |   | $                       | -         |   |               | $      | -       |                      |   | $      |              |   |   | $ | - |   |

----

|                                                                                                                                                |   | Registrant(Historical) |       |   | Target(Historical) |   |      | Pro formaadjustments |   |   | Pro formaCombined    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|------------|--------|--------------------|--------|-----------|---------------------------|--------|--------|---------------------------|--------|
| SHAREHOLDERS’ EQUITY                                                                                                                          |   |                   |       |   |               |   |      |                      |   |   |                      |   |
| Series B convertible preferred stock at $0.000001 par value; 400,000 shares authorized; 160,494  shares issued and  outstanding |   | $                      | 1          |   |               | $      | -         |                      |   | $      |                 |   |   | $ | 1 |   |
|                                                                                                                                                |   |                   |       |   |               |   |      |                      |   |   |                      |   |   |   |   |   |
| Common Stock at $0.000001 par value; 100,000,000 shares authorized, 18,499,736 shares issued and outstanding                                        |   |                   | 2          |   |               |   | 1,237,076 |                      |   |   | (1,237,076                | )      |   |   | 2 |   |
| Additional paid-in capital                                                                                                                          |   |                   | 17,824,325 |   |               |   | -         |                      |   |   |                      |   |   |   | 17,824,325 |   |
| Statutory reserves                                                                                                                                  |   |                   | 2,127,978  |   |               |   | -         |                      |   |   |                      |   |   |   | 2,127,978 |   |
| Retained earnings/ (accumulated losses)                                                                                                             |   |                   | 17,102,689 |   |               |   | (109,982  | )                         |   |   | 109,982                   |   |   |   | 17,102,689 |   |
| Accumulated other comprehensive income                                                                                                              |   |                   | 2,844,190  |   |               |   | -         |                      |   |   |                      |   |   |   | 2,844,190 |   |
|                                                                                                                                                |   |                   |       |   |               |   |      |                      |   |   |                      |   |   |   |   |   |
|                                                                                                                                                |   | $                      | 39,899,185 |   |               | $      | 1,127,094 |                      |   | $      |                 |   |   | $ | 39,899,185 |   |
|                                                                                                                                                |   |                   |       |   |               |   |      |                      |   |   |                      |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                    |   | $                      | 41,365,854 |   |               | $      | 1,833,482 |                      |   | $      |       |   |   | $ | 41,639,944 |   |

----

|                                                                             |   | Registrant(Historical) |       |   | Target(Historical) |   |    | Pro formaadjustments |   |   |   | Pro formaCombined |   |
|---------------------------------------------------------------------------------------|--------|------------------------|------------|--------|--------------------|--------|---------|---------------------------|--------|--------|--------|------------------------|--------|
| Net revenues                                                                          |   | $                      | 19,845,882 |   |               | $      | -       |                      |   | $      |   |                   |   |   | $ | 19,845,882 |   |
| Cost of net revenues                                                                  |   |                   | (5,634,143 | )      |               |   | -       |                      |   |   |   |                   |   |   |   | (5,634,143 | ) |
|                                                                                  |   |                   |       |   |               |   |    |                      |   |   |   |                   |   |   |   |   |   |
| Gross profit                                                                          |   | $                      | 14,211,739 |   |               | $      | -       |                      |   | $      |   |                   |   |   | $ | 14,211,739 |   |
|                                                                                  |   |                   |       |   |               |   |    |                      |   |   |   |                   |   |   |   |   |   |
| Selling expenses                                                                      |   |                   | (425,050   | )      |               |   | -       |                      |   |   |   |                   |   |   |   | (425,050 | ) |
| General and administrative expenses                                                   |   |                   | (3,068,027 | )      |               |   | (5,167  | )                         |   |   |   |                   |   |   |   | (3,073,194 | ) |
|                                                                                  |   |                   |       |   |               |   |    |                      |   |   |   |                   |   |   |   |   |   |
| Income(loss) from operation                                                           |   | $                      | 10,718,662 |   |               | $      | (5,167  | )                         |   | $      |   |                   |   |   | $ | 10,713,495 |   |
| Interest income                                                                       |   |                   | 66,935     |   |               |   | 244     |                      |   |   |   |                   |   |   |   | 67,179 |   |
| Interest expenses                                                                     |   |                   | -          |   |               |   | (27,229 | )                         |   |   |   |                   |   |   |   | (27,229 | ) |
|                                                                                  |   |                   |       |   |               |   |    |                      |   |   |   |                   |   |   |   |   |   |
| Income(loss) before income taxes                                                      |   | $                      | 10,785,597 |   |               | $      | (32,152 | )                         |   | $      |   |                   |   |   | $ | 10,753,445 |   |
| Income taxes                                                                          |   |                   | (1,726,828 | )      |               |   | -       |                      |   |   |   |                   |   |   |   | (1,726,828 | ) |
|                                                                                  |   |                   |       |   |               |   |    |                      |   |   |   |                   |   |   |   |   |   |
| Net income(loss)                                                                      |   | $                      | 9,058,769  |   |               | $      | (32,152 | )                         |   | $      |   |                   |   |   | $ | 9,026,617 |   |
| Other comprehensive income income:  Foreign currency translation adjustment |   |                   | 1,663,902  |   |               |   | -       |                      |   |   |   |                   |   |   |   | 1,663,902 |   |
|                                                                                  |   |                   |       |   |               |   |    |                      |   |   |   |                   |   |   |   |   |   |
| Comprehensive income(loss)                                                            |   | $                      | 10,722,671 |   |               | $      | (32,152 | )                         |   | $      |   |                   |   |   | $ | 10,690,519 |   |

----

| Earnings per common share |   |   |       |
|---------------------------|--------|--------|------------|
| - Basic                   |   | $      | 0.60       |   |
|                      |   |   |       |   |
| - Fully diluted           |   | $      | 0.31       |   |
|                      |   |   |       |   |
| Common shares outstanding |   |   |       |   |
| - Basic                   |   |   | 15,127,645 |   |
|                      |   |   |       |   |
| - Fully diluted           |   |   | 28,870,595 |   |

----

| ITEMS                                        |   | Original       |       |   | Amendment 1 |   |             | Amendment 2 |   |   | Restated    |   |
|----------------------------------------------|--------|----------------|------------|--------|-------------|--------|------------------|-------------|--------|--------|-------------|--------|
|                                         |   | March 31, 2009 |       |
|                                         |   | (Unaudited)    |       |   |        |   |             |        |   |   | (Unaudited) |   |
| ASSETS                                       |   |           |       |   |        |   |             |        |   |   |        |   |
| Current assets                               |   |           |       |   |        |   |             |        |   |   |        |   |
| Cash and cash equivalents                    |   | $              | 12,212,431 |   |        |   |             |        |   |   |        | $      | 12,212,431 |   |
| Trade receivables, net                       |   |           | 2,702,440  |   |        |   |             |        |   |   |        |   | 2,702,440 |   |
| Inventories                                  |   |           | 1,022,032  |   |        |   |             |        |   |   |        |   | 1,022,032 |   |
| Advances to suppliers                        |   |           | 1,502,484  |   |        |   |             |        |   |   |        |   | 1,502,484 |   |
| Prepayments                                  |   |           | 750,564    |   |        |   |             |        |   |   |        |   | 750,564 |   |
| Tender deposits                              |   |           | 18,406     |   |        |   |             |        |   |   |        |   | 18,406 |   |
| Travel advances to shareholders              |   |           | 57,483     |   |        |   |             |        |   |   |        |   | 57,483 |   |
| Advances to employees                        |   |           | 331,588    |   |        |   |             |        |   |   |        |   | 331,588 |   |
|                                         |   |           |       |   |        |   |             |        |   |   |        |   |   |   |
| Total current assets                         |   | $              | 18,597,428 |   |        |   |             |        |   |   |        | $      | 18,597,428 |   |
| Restricted cash                              |   |           | 356,046    |   |        |   |             |        |   |   |        |   | 356,046 |   |
| Amount due from a related company            |   |           | 830        |   |        |   |             |        |   |   |        |   | 830 |   |
| Property, plant and equipment, net           |   |           | 5,801,161  |   |        |   |             |        |   |   |        |   | 5,801,161 |   |
| Intangibles, net                             |   |           | 9,702,976  |   |        |   |             |        |   |   |        |   | 9,702,976 |   |
| Deposit for acquisition of computer software |   |           | -          |   |        |   |             |        |   |   |        |   | - |   |
| Deposit for technology-based design          |   |           | 3,505,902  |   |        |   |             |        |   |   |        |   | 3,505,902 |   |
| Deposit for acquisition of subsidiary        |   |           | -          |   |        |   |             |        |   |   |        |   | - |   |
| Goodwill                                     |   |           | 4,831,386  |   |        |   | ( 4,831,386 | )           |   |   |        |   |   | - |   |
|                                         |   |           |       |   |        |   |             |        |   |   |        |   |   |   |   |
| TOTAL ASSETS                                 |   | $              | 42,795,729 |   |        |   | (4,831,386       | )           |   |   | 0           |   |   | $ | 37,964,343 |   |
|                                         |   |           |       |   |        |   |             |        |   |   |        |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY   |   |           |       |   |        |   |             |        |   |   |        |   |   |   |   |   |
| Current liabilities                          |   |           |       |   |        |   |             |        |   |   |        |   |   |   |   |   |
| Accounts payable                             |   | $              | 712,325    |   |        |   |             |        |   |   |        |   |   | $ | 712,325 |   |
| Income tax payable                           |   |           | 211,410    |   |        |   |             |        |   |   |        |   |   |   | 211,410 |   |
| Turnover and other taxes                     |   |           | 89,834     |   |        |   |             |        |   |   |        |   |   |   | 89,834 |   |
| Expected warranty liabilities                |   |           | 50,460     |   |        |   |             |        |   |   |        |   |   |   | 50,460 |   |
| Customers deposits                           |   |           | 202,102    |   |        |   |             |        |   |   |        |   |   |   | 202,102 |   |
| Accrued liabilities                          |   |           | 293,480    |   |        |   |             |        |   |   |        |   |   |   | 293,480 |   |
| Other payables                               |   |           | 266,945    |   |        |   |             |        |   |   |        |   |   |   | 266,945 |   |
|                                         |   |           |       |   |        |   |             |        |   |   |        |   |   |   |   |   |
| Total current liabilities                    |   | $              | 1,826,556  |   |        |   |             |        |   |   |        |   |   | $ | 1,826,556 |   |
|                                         |   |           |       |   |        |   |             |        |   |   |        |   |   |   |   |   |
| Warrant liabilities                          |   |           | -          |   |        |   | 90,383,149       |        |   |   | 0           |   |   |   | 90,383,149 |   |
| TOTAL LIABILITIES                            |   | $              | 1,826,556  |   |        |   | 90,383,149       |        |   |   | 0           |   |   | $ | 92,209,705 |   |

----

|  ITEMS                                                                                                                                   | Original       |   |       | Amendment 1 |   |   | Amendment 2 |   | Restated    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|------------|-------------|--------|--------|-------------|--------|-------------|--------|
|                                                                                                                                          | March 31, 2009 |   |
|                                                                                                                                          | (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, 2009 |           | $      | 1          |        |   |   |        |   |        |   |   | $ | 1 |   |
|                                                                                                                                          |           |   |       |        |   |   |        |   |        |   |   |   |   |   |
| Common stock at $0.0000001 par value; 100,000,000 shares authorized; 18,499,736 shares issued and outstanding at March 31, 2009               |           |   | 2          |        |   |   |        |   |        |   |   |   | 2 |   |
| Additional paid-in capital                                                                                                                    |           |   | 22,679,965 |        |   |   | (3,990,942  | )      |        |   | (4,855,640 | )  |   |   | 13,833,383 |   |
| Statutory reserves                                                                                                                            |           |   | 3,033,855  |        |   |   |        |   |        |   |   |   |   |   | 3,033,855 |   |
| Retained earnings/(accumulated deficit)                                                                                                       |           |   | 12,384,103 |        |   |   | (91,223,593 | )      |        |   | 4,855,640 |   |   |   | (73,983,850 | ) |
| Accumulated other comprehensive income                                                                                                        |           |   | 2,871,247  |        |   |   |        |   |        |   |   |   |   |   | 2,871,247 |   |
|                                                                                                                                          |           |   |       |        |   |   |        |   |        |   |   |   |   |   |   |   |
|                                                                                                                                          |           | $      | 40,969,173 |        |   |   | (95,214,535 | )      |        |   | 0 |   |   | $ | (54,245,362 | ) |
|                                                                                                                                          |           |   |       |        |   |   |        |   |        |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                              |           | $      | 42,795,729 |        |   |   | (4,831,386  | )      |        |   | 0 |   |   | $ | 37,964,343 |   |

| ITEMS                                                                                                                                            | Original          |   |       | Amendment 1 |   |   | Amendment 2 |   | Restated    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------|------------|-------------|--------|--------|-------------|--------|-------------|--------|
|                                                                                                                                             | December 31, 2008 |   |
|                                                                                                                                             | (Unaudited)       |   |       |        |   |   |        |   | (Unaudited) |   |
|                                                                                                                                             |              |   |       |        |   |   |        |   |        |   |
| STOCKHOLDERS’ EQUITY                                                                                                                       |              |   |       |        |   |   |        |   |        |   |
|                                                                                                                                             |              |   |       |        |   |   |        |   |        |   |
| Series B Convertible Preferred Stock $0.0000001 par value; 400,000 shares authorized; 160,494 shares issued and outstanding at December 31, 2008 |              | $      | 1          |        |   |   |        |   |        |   |   | $ | 1 |   |
|                                                                                                                                             |              |   |       |        |   |   |        |   |        |   |   |   |   |   |
| Common stock at $0.0000001 par value; 100,000,000 shares authorized; 18,499,736 shares issued and outstanding at December 31, 2008               |              |   | 2          |        |   |   |        |   |        |   |   |   | 2 |   |
| Additional paid-in capital                                                                                                                       |              |   | 22,679,965 |        |   |   | 0           |   |        |   | (4,855,640 | )  |   |   | 17,824,325 |   |
| Statutory reserves                                                                                                                               |              |   | 2,127,978  |        |   |   |        |   |        |   |   |   |   |   | 2,127,978 |   |
| Retained earnings                                                                                                                                |              |   | 12,247,049 |        |   |   | 0           |   |        |   | 4,855,640 |   |   |   | 17,102,689 |   |
| Accumulated other comprehensive income                                                                                                           |              |   | 2,844,190  |        |   |   |        |   |        |   |   |   |   |   | 2,844,190 |   |
|                                                                                                                                             |              |   |       |        |   |   |        |   |        |   |   |   |   |   |   |   |
|                                                                                                                                             |              | $      | 39,899,185 |        |   |   | 0           |   |        |   | 0 |   |   | $ | 39,899,185 |   |
|                                                                                                                                             |              |   |       |        |   |   |        |   |        |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                 |              | $      | 41,365,854 |        |   |   | 0           |   |        |   | 0 |   |   | $ | 41,365,854 |   |

----

| ITEMS                                   |   | Original                          |       |   | Amendmenr 1 |   |        | Amendment 2 |   |   | Restated    |   |
|-----------------------------------------|--------|-----------------------------------|------------|--------|-------------|--------|-------------|-------------|--------|--------|-------------|--------|
|                                    |   | Three months ended March 31, 2009 |       |
|                                    |   | (Unaudited)                       |       |   |        |   |        |        |   |   | (Unaudited) |   |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |
| Net revenues                            |   | $                                 | 2,933,573  |   |        |   |        |        |   |   |        | $      | 2,933,573 |   |
| Cost of net revenues                    |   |                              | (893,980   | )      |        |   |        |        |   |   |        |   | (893,980 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |
| Gross profit                            |   | $                                 | 2,039,593  |   |        |   |        |        |   |   |        | $      | 2,039,593 |   |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |
| Selling expenses                        |   |                              | (180,349   | )      |        |   |        |        |   |   |        |   | (180,349 | ) |
| General and administrative expenses     |   |                              | (631,894   | )      |        |   |        |        |   |   |        |   | (631,894 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |
| Income from operation                   |   | $                                 | 1,227,350  |   |        |   |        |        |   |   |        | $      | 1,227,350 |   |
| Interest income                         |   |                              | 23,577     |   |        |   |        |        |   |   |        |   | 23,577 |   |
| Impairment on investment                |   |                              | -          |   |        |   | (4,831,386  | )           |   |   | 0           |   |   |   | (4,831,386 | ) |
| Change in fair value of warrants        |   |                              | -          |   |        |   | (20,481,276 | )           |   |   | 0           |   |   |   | (20,481,276 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   | - |   |
| Income/(loss) before income taxes       |   | $                                 | 1,250,927  |   |        |   | (25,312,662 | )           |   |   | 0           |   |   |   | (24,061,735 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Income taxes                            |   |                              | (207,996   | )      |        |   |        |        |   |   |        |   |   |   | (207,996 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Net income/(loss)                       |   | $                                 | 1,042,931  |   |        |   | (25,312,662 | )           |   |   | 0           |   |   | $ | (24,269,731 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Net income/(loss) per share:            |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| -Basic                                  |   | $                                 | 0.06       |   |        |   | (1.37       | )           |   |   | 0           |   |   | $ | (1.31 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| -Diluted                                |   | $                                 | 0.03       |   |        |   | (1.34       | )           |   |   | 0           |   |   | $ | (1.31 | ) |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Weighted average number of common stock |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| -Basic                                  |   |                              | 18,499,736 |   |        |   |        |        |   |   |        |   |   |   | 18,499,736 |   |
|                                    |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| -Diluted                                |   |                              | 31,578,154 |   |        |   | (13,078,418 | )           |   |   | 0           |   |   |   | 18,499,736 |   |

----

| ITEMS                                                                             |   | Original                          |       |   | Amendment 1 |   |        | Amendment 2 |   |   | Restated    |   |
|-----------------------------------------------------------------------------------|--------|-----------------------------------|------------|--------|-------------|--------|-------------|-------------|--------|--------|-------------|--------|
|                                                                              |   | Three months ended March 31, 2009 |       |
|                                                                              |   | (Unaudited)                       |       |   |        |   |        |        |   |   | (Unaudited) |   |
| Cash flows from operating activities                                              |   |                              |       |   |        |   |        |        |   |   |        |   |
| Net income/(loss)                                                                 |   | $                                 | 1,042,931  |   |        |   | (25,312,662 | )           |   |   | 0           |   |   | $ | (24,269,731 | ) |
| Depreciation                                                                      |   |                              | 240,444    |   |        |   |        |        |   |   |        |   |   |   | 240,444 |   |
| Amortization                                                                      |   |                              | 253,803    |   |        |   |        |        |   |   |        |   |   |   | 253,803 |   |
| Change in fair value of warrants                                                  |   |                              | -          |   |        |   | 20,481,276  |        |   |   | 0           |   |   |   | 20,481,276 |   |
| Impairment on investment                                                          |   |                              | -          |   |        |   | 4,831,386   |        |   |   | 0           |   |   |   | 4,831,386 |   |
|                                                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Trade receivables, net                                                            |   |                              | 255,153    |   |        |   |        |        |   |   |        |   |   |   | 255,153 |   |
| Inventories                                                                       |   |                              | (430,489   | )      |        |   |        |        |   |   |        |   |   |   | (430,489 | ) |
| Advances to suppliers                                                             |   |                              | (953,755   | )      |        |   | 177,678     |        |   |   | 0           |   |   |   | (776,077 | ) |
| Prepayments                                                                       |   |                              | 377,494    |   |        |   | (555,864    | )           |   |   | 0           |   |   |   | (178,370 | ) |
| Tender deposits                                                                   |   |                              | 94,457     |   |        |   |        |        |   |   |        |   |   |   | 94,457 |   |
| Travel advances to shareholders                                                   |   |                              | (18,699    | )      |        |   |        |        |   |   |        |   |   |   | (18,699 | ) |
| Advances to employees                                                             |   |                              | 98,741     |   |        |   |        |        |   |   |        |   |   |   | 98,741 |   |
| Accounts payable                                                                  |   |                              | 652,243    |   |        |   |        |        |   |   |        |   |   |   | 652,243 |   |
| Income tax payable                                                                |   |                              | (393,739   | )      |        |   | (28,477     | )           |   |   | 0           |   |   |   | (422,216 | ) |
| Turnover and other taxes                                                          |   |                              | (317,470   | )      |        |   | 28,442      |        |   |   | 0           |   |   |   | (289,028 | ) |
| Loans from unrelated parties                                                      |   |                              | -          |   |        |   |        |        |   |   |        |   |   |   | - |   |
| Amount due from a director                                                        |   |                              | -          |   |        |   |        |        |   |   |        |   |   |   | - |   |
| Customers deposits                                                                |   |                              | 202,073    |   |        |   |        |        |   |   |        |   |   |   | 202,073 |   |
| Accrued liabilities                                                               |   |                              | (8,336     | )      |        |   |        |        |   |   |        |   |   |   | (8,336 | ) |
| Other payables                                                                    |   |                              | (172,370   | )      |        |   | 497,120     |        |   |   | 0           |   |   |   | 324,750 |   |
|                                                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Net cash provided by operating activities                                         |   | $                                 | 922,481    |   |        |   | 118,899     |        |   |   | 0           |   |   | $ | 1,041,380 |   |
|                                                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Cash flows from investing activities                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Purchase of technology-based designs                                              |   |                              | (3,505,390 | )      |        |   |        |        |   |   |        |   |   |   | (3,505,390 | ) |
| Purchase of intangibles assets                                                    |   |                              | (485,275   | )      |        |   | (111,479    | )           |   |   | 0           |   |   |   | (596,754 | ) |
| Purchase of plant and equipment                                                   |   |                              | (10,051    | )      |        |   | (68,730     | )           |   |   | 0           |   |   |   | (78,781 | ) |
| Used of restricted cash                                                           |   |                              | 22,320     |   |        |   |        |        |   |   |        |   |   |   | 22,320 |   |
| Acquisition of subsidiary, net of cash acquired                                   |   |                              | (7,652,252 | )      |        |   | 7,652,252   |        |   |   | 0           |   |   |   | - |   |
| Reversal of deposit for acquisition of subsidiary                                 |   |                              | 7,725,445  |   |        |   | (7,725,445  | )           |   |   | 0           |   |   |   | - |   |
|                                                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Net cash used in investing activities                                             |   | $                                 | (3,905,203 | )      |        |   | (253,402    | )           |   |   | 0           |   |   | $ | (4,158,605 | ) |
|                                                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Cash flows from financing activities                                              |   | $                                 | -          |   |        |   |        |        |   |   |        |   |   | $ | - |   |
|                                                                              |   |                              |       |   |        |   |        |        |   |   |        |   |   |   |   |   |
| Net cash provided by financing activities                                         |   | $                                 | -          |   |        |   |        |        |   |   |        |   |   | $ | - |   |

----

| ITEMS                                                               |   | Original                          |       |   | Amendment 1 |   |     | Amendment 2 |   |   | Restated    |   |
|---------------------------------------------------------------------|--------|-----------------------------------|------------|--------|-------------|--------|----------|-------------|--------|--------|-------------|--------|
|                                                                |   | Three months ended March 31, 2009 |       |
|                                                                |   | (Unaudited)                       |       |   |        |   |     |        |   |   | (Unaudited) |   |
| Net in cash and cash equivalents used                               |   | $                                 | (2,982,722 | )      |        |   | (134,503 | )           |   |   | 0           |   |   | $ | (3,117,225 | ) |
|                                                                |   |                              |       |   |        |   |     |        |   |   |        |   |   |   |   |   |
| Effect of foreign currency translation on cash and cash equivalents |   |                              | 5,212      |   |        |   | 134,503  |        |   |   | 0           |   |   |   | 139,715 |   |
|                                                                |   |                              |       |   |        |   |     |        |   |   |        |   |   |   |   |   |
| Cash and cash equivalents–beginning of period                 |   |                              | 15,189,941 |   |        |   | 0        |        |   |   | 0           |   |   |   | 15,189,941 |   |
|                                                                |   |                              |       |   |        |   |     |        |   |   |        |   |   |   |   |   |
| Cash and cash equivalents–end of period                       |   | $                                 | 12,212,431 |   |        |   | 0        |        |   |   | 0           |   |   | $ | 12,212,431 |   |
|                                                                |   |                              |       |   |        |   |     |        |   |   |        |   |   |   |   |   |
| Supplementary cash flow information:                                |   |                              |       |   |        |   |     |        |   |   |        |   |   |   |   |   |
| Tax paid                                                            |   | $                                 | 630,304    |   |        |   |     |        |   |   |        |   |   | $ | 630,304 |   |
| Interest received                                                   |   |                              | 23,577     |   |        |   |     |        |   |   |        |   |   |   | 23,577 |   |

----

|                              |   | Three Months Ended March 31, |        |   |   |   |      |   |   |
|-----------------------------------|--------|------------------------------|-------------|--------|--------|--------|-----------|--------|--------|
|                              |   | 2009                         |        |   | 2008   |   |      | Change |   |   | Change rate |   |
| Net Revenue                       |   | $                            | 2,933,573   |   |   | $      | 3,604,034 |   |   | $ | (670,461 | ) |   |   | (18.60 | ) % |
| Cost of net revenue               |   | $                            | 893,980     |   |   | $      | 1,141,745 |   |   | $ | (247,765 | ) |   |   | (21.70 | ) % |
| Gross Profit                      |   | $                            | 2,039,593   |   |   | $      | 2,462,289 |   |   | $ | (422,696 | ) |   |   | (17.17 | ) % |
| Gross Margin                      |   |                         | 69.53       | %      |   | $      | 68.32     | %      |   |   | - |   |   |   | 1.21 | % |
| Operating Income                  |   | $                            | 1,227,350   |   |   | $      | 1,650,810 |   |   | $ | (423,460 | ) |   |   | (25.65 | ) % |
| Changes in fair value of warrants |   | $                            | 20,481,276  |   |   | $      | -         |   |   | $ | 20,481,276 |   |   |   | - |   |
| Impairment on investment          |   | $                            | 4,831,386   |   |   | $      | -         |   |   | $ | 4,831,386 |   |   |   | - |   |
| Net Loss/income                   |   | $                            | (24,269,731 | )      |   | $      | 1,377,411 |   |   | $ | (25,647,142 | ) |   |   | - |   |
| Net profit margin                 |   |                         | -           |   |   |   | 38.22     | %      |   |   | - |   |   |   | - |   |

----

|              |   | Three Months Ended March 31, |      |
|-------------------|--------|--------------------------------------------------|-----------|
|              |   | 2009                                             |      |   | 2008 |   |
|              |   | sales                                            |      |   | % of total sales |   |   | sales |   |   | % of total sales |   |
| PTS               |   | $                                                | 2,933,573 |   |   |   | 100.00 | % |   | $ | 3,033,859 |   |   |   | 84.18 | % |
| SADP              |   | $                                                | -         |   |   |   | - | % |   | $ | 570,175 |   |   |   | 15.82 | % |
| Total net revenue |   | $                                                | 2,933,573 |   |   |   | 100.00 | % |   | $ | 3,604,034 |   |   |   | 100.00 | % |

|         |   | Three Months Ended March 31, |      |
|--------------|--------|--------------------------------------------------|-----------|
|         |   | 2009                                             |      |   | 2008 |   |
|         |   | US$                                              |      |   | Gross profit margin |   |   | US$ |   |   | Gross profit margin |   |
| Gross Profit |   | $                                                | 2,039,593 |   |   |   | 69.53 | % |   | $ | 2,462,289 |   |   |   | 68.32 | % |

|                |   | Three Months Ended March 31, |    |   |   |
|---------------------|--------|----------------------------------------|---------|--------|--------|
|                |   | 2009                                   |    |   | 2008   |   | Change |   |
| Cost of net revenue |   | $                                      | 893,980 |   |   | $ | 1,141,745 |   |   |   | 21.70 | % |

|                                  |   | Three Months Ended March 31, |    |   |   |
|---------------------------------------|--------|--------------------------------------------------|---------|--------|--------|
|                                  |   | 2009                                             |    |   | 2008   |   | Change |   |
| Selling expenses                      |   | $                                                | 180,349 |   |   | $ | 25,237 |   |   |   | 614.62 | % |
| General & Administrative expenses |   | $                                                | 631,894 |   |   | $ | 786,242 |   |   |   | (19.63 | )% |
| Total operating expenses              |   | $                                                | 812,243 |   |   | $ | 811,479 |   |   |   | 0.09 | % |

----

| Item             |   | March 31,2009 |      |   | December 31,2008 |   |    | Change |   |
|------------------|--------|--------------------|-----------|--------|-----------------------|--------|---------|--------|--------|
| Finished goods   |   | $                  | 459,889   |   |                  | $      | 218,448 |   |   |   | 110.53 | % |
| Work in progress |   | $                  | 41,187    |   |                  | $      | 188,855 |   |   |   | (78.19 | )% |
| Raw material     |   | $                  | 520,956   |   |                  | $      | 183,435 |   |   |   | 184.00 | % |
| Total            |   | $                  | 1,022,032 |   |                  | $      | 590,738 |   |   |   | 73.01 | % |

----

|                                                                |   | Three months ended March 31, |       |    |   |   |
|---------------------------------------------------------------------|--------|--------------------------------------------------|------------|---------|--------|--------|
|                                                                |   | 2009                                             |       |    | 2008   |   |   | Change |   |
| Net cash provided by (used in) operating activities                 |   | $                                                | 1,041,380  |    |   | $      | 2,572,133 |   |   | $ | (1,530,753 | ) |
| Net cash provided by (used in) investing activities                 |   | $                                                | (4,158,605 | )  |   | $      | (2,198,185 | )  |   | $ | (1,960,420 | ) |
| Net cash provided by (used in) financing activities                 |   | $                                                | -          |    |   | $      | - |   |   | $ | - |   |
| Effect of foreign currency translation on cash and cash equivalents |   | $                                                | 139,715    |    |   | $      | 262,621 |   |   | $ | (122,906 | ) |
| Beginning cash and cash equivalent                                  |   | $                                                | 15,189,941 |    |   | $      | 5,820,100 |   |   | $ | 9,369,841 |   |
| Ending cash and cash equivalent                                     |   | $                                                | 12,212,431 |    |   | $      | 6,456,669 |   |   | $ | 5,755,762 |   |

----

----

|   | 1. | Changes in fair value of warrants is a non-cash income, which resulted from the change in fair values of warrants issued to investors in conjunction with the Company’s issuance of warrants in June of 2007 pursuant to provisions of FASB ASC Topic 815, “Derivative and Hedging”(ASC 815). The accounting treatment of the warrants resulted from a provision providing anti-dilution protection to the warrant holders. On March 18, 2010, the Company entered into an agreement with Vision Opportunity Master Fund, Ltd. to exchange the Series A, B, C and D warrants into 2,000,000 shares of common stock of the company (the “Warrant Exchange”).  The closing of the Warrant Exchange is conditional upon a closing of a financing with minimum proceeds of $10 million to the Company. On April 5, 2010, the Company entered into a Security Escrow Agreement as an inducement to the holders of warrants to enter into the Security Exchange Agreement, the principal shareholders of the Company have agreed to place an amount of common stock equal to one million shares into escrow for the benefit of the holders in the event the Company fails to achieve certain milestones by December 31, 2010. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Originally, Impairment on investment was listed on goodwill in the first quarter of 2009 and represented the excess of the cost of an acquisition over the fair value of the net acquired identifiable assets at the date of acquisition. In the first quarter of 2010, after extensive analysis into the definition of a business as set forth in the paragraph 805-10-20 of the FASB Accounting Standards Codification, we recognized the acquisitions based on the fair value of net assets obtained. For the amount over the fair value of the net assets obtained, we have written them off as expenses at the time of acquisition. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 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 |   |

| Dated:   May 12, 2011 | By:   | /s/ Samuel Sheng               |   |
|---------------------------------|-----------------|--------------------------------|--------|
|                            |            | Name: Samuel Sheng             |   |
|                            |            | Title: Chief Financial Officer |   |

----