# United StatesSecurities
and Exchange Commission
Washington, D.C. 20549

# _________________

# FORM 10-QSB

# _________________

| |  | QUARTERLY REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934        For
the quarterly period ended February 28, 2007
| |  | -----------------------------------------------------------------------------------------------------------------------------------------

| |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
        For the transition period from _______ to _______
| |  | --------------------------------------------------------------------------------------------------------------------------------------------

# Commission file
number: 333-118259

# _________________

|CAPITAL RESOURCE FUNDING, INC.
|------------------------------
|

|North Carolina                                                 | 54-2142880                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of
incorporation or organization) | (IRS Employer identification No.)

1 HUTAN STREET,
ZHONGSHAN DISTRICTDALIAN, P. R. CHINA(Address of principal executive offices)

(86411) 8289-7752
(Issuer's telephone number, including area code)

Check whether the issuer (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  No

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes 
No

Number of shares of common stock
outstanding as of April 13, 2007: 43,422,971

Number of shares of preferred stock
outstanding as of April 13, 2007: 0

Transitional Small
Business Disclosure Format:  Yes No



---

CAPITAL RESOURCE
FUNDING, INC.FORM 10-QSBFOR THE QUARTER ENDED
FEBRUARY 28, 2007

|PART I  | FINANCIAL INFORMATION                                                                                      | Page
|------- | ---------------------------------------------------------------------------------------------------------- | ----
|Item 1. | Financial Statements (unaudited)                                                                           | 1   
|        |                                                                                                            |     
|        | Condensed Balance Sheet as of February 28, 2007                                                            | 1   
|        |                                                                                                            |     
|        | Condensed Statements of Income for the Three and Nine Months ended February 28, 2007 and February 28, 2006 | 2   
|        |                                                                                                            |     
|        | Condensed Statements of Cash Flows for the Nine Months ended February 28, 2007 and February 28, 2006       | 3   
|        |                                                                                                            |     
|        | Notes to Condensed Financial Statements                                                                    | 4   
|        |                                                                                                            |     
|Item 2. | Management's Discussion and Analysis or Plan of Operation                                                  | 13  
|        |                                                                                                            |     
|Item 3. | Controls and Procedures                                                                                    | 18  
|        |                                                                                                            |     
|PART II | OTHER INFORMATION                                                                                          | 18  
|        |                                                                                                            |     
|Item 6. | Exhibits                                                                                                   | 18  
|        |                                                                                                            |     

i



---

# Part I.  Financial
Information

|Item 1. |  | Financial
statements
|------- |  | --------------------

# CAPITAL RESOURCE FUNDING, INCCONDENSED CONSOLIDATED BALANCE SHEET
AS OF FEBRUARY 28, 2007
(Currency expressed in United States Dollars (US$), except for number of shares)
(unaudited)

|                                                             | February 28, 2007 | 
|------------------------------------------------------------ | ----------------- | 
|                                                             |                   | 
|ASSETS                                                       |                   | 
|Current assets:                                              |                   | 
|Cash and cash equivalents                                    |                   | 
|Accounts receivable, trade                                   |                   | 
|Amount due from a related party                              |                   | 
|Prepaid expenses and other current assets                    |                   | 
|                                                             |                   | 
|Total current assets                                         |                   | 
|                                                             |                   | 
|Property, plant and equipment, net                           |                   | 
|                                                             |                   | 
|TOTAL ASSETS                                                 |                   | 
|                                                             |                   | 
|LIABILITIES AND STOCKHOLDERS' EQUITY                         |                   | 
|Current liabilities:                                         |                   | 
|Accounts payable, trade                                      |                   | 
|Customers deposit                                            |                   | 
|Other payables and accrued liabilities                       |                   | 
|Value added tax payable                                      |                   | 
|Income tax payable                                           |                   | 
|                                                             |                   | 
|Total current liabilities                                    |                   | 
|                                                             |                   | 
|TOTAL LIABILITIES                                            |                   | 
|                                                             |                   | 
|MINORITY INTEREST                                            |                   | 
|                                                             |                   | 
|Stockholders' equity:                                        |                   | 
|Convertible preferred stock; par value $.00000005; 2,000,000 |                   | 
|shares authorized; none shares issued and outstanding as of  |                   | 
|February 28, 2007                                            |                   | 
|Common stock, $0.00000005 par value; 100,000,000 shares      |                   | 
|authorized; 43,422,971 shares issued and outstanding as of   |                   | 
|February 28, 2007                                            |                   | 
|Additional paid-in capital                                   |                   | 
|Accumulated other comprehensive income                       |                   | 
|Accumulated deficits                                         |                   | 
|                                                             |                   | 
|Total stockholders' equity                                   |                   | 
|                                                             |                   | 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   |                   | 
|                                                             |                   | 

See accompanying notes
to condensed consolidated financial statements.

1

---

# CAPITAL RESOURCE FUNDING, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$), except for number of shares)
(unaudited)

|                                       | Three months ended February 28, |  | Nine months ended February 28, |           
|-------------------------------------- | ------------------------------- |  | ------------------------------ | ----------
|
|REVENUE, NET                           |                                 |  | $                              | 2,661,696 
|COST OF REVENUES                       |                                 |  |                                | 1,888,930 
|                                       |                                 |  |                                |           
|GROSS PROFIT                           |                                 |  |                                | 772,766   
|                                       |                                 |  |                                |           
|OPERATING EXPENSES:                    |                                 | 
|General and administrative             |                                 |  |                                | 594,981   
|Research and development               |                                 |  |                                | 17,559    
|Depreciation                           |                                 |  |                                | 65,057    
|                                       |                                 |  |                                |           
|TOTAL OPERATING EXPENSES               |                                 |  |                                | 677,597   
|                                       |                                 |  |                                |           
|INCOME (LOSS) FROM OPERATIONS          |                                 | 
|                                       |                                 |  |                                | 95,169    
|Income tax expense                     |                                 |  |                                | (200,309  
|                                       |                                 |  |                                |           
|INCOME (LOSS) BEFORE MINORITY INTEREST |                                 | 
|                                       |                                 |  |                                | (105,140  
|Minority interest                      |                                 |  |                                | (108,004  
|                                       |                                 |  |                                |           
|NET (LOSS) INCOME                      |                                 |  | $                              | (213,144  
|                                       |                                 |  |                                |           
|Other comprehensive income (loss):     |                                 | 
|- Foreign currency translation gain    |                                 | 
|(loss)                                 |                                 |  |                                | 4,685     
|                                       |                                 |  |                                |           
|COMPREHENSIVE (LOSS) INCOME            |                                 | 
|                                       |                                 |  | $                              | (208,459  
|                                       |                                 |  |                                |           
|Net income (loss) per share - basic    |                                 | 
|and diluted                            |                                 |  | $                              | (0.01     
|                                       |                                 |  |                                |           
|Weighted average number of shares      |                                 | 
|outstanding during the period -        |                                 | 
|basic and diluted                      |                                 |  |                                | 33,358,948
|                                       |                                 |  |                                |           

See accompanying notes
to condensed consolidated financial statements.

2



---

# CAPITAL RESOURCE
FUNDING, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWSFOR THE NINE MONTHS
ENDED FEBRUARY 28, 2007 AND 2006(Currency expressed in
United States Dollars (US$))(unaudited)

|                                                                                     | Nine months ended February 28, | 
|------------------------------------------------------------------------------------ | ------------------------------ | 
|
|Cash flows from operating activities:                                                |                                | 
|Net income (loss)                                                                    |                                | 
|Adjustments to reconcile net income (loss) to net cash used in operating activities: |                                | 
|Depreciation                                                                         |                                | 
|Minority interest                                                                    |                                | 
|Stock based compensation                                                             |                                | 
|(Increase) decrease in operating assets and liabilities:                             |                                | 
|Accounts receivable, trade                                                           |                                | 
|Inventories                                                                          |                                | 
|Prepaid expenses and other current assets                                            |                                | 
|Accounts payable, trade                                                              |                                | 
|Other payables and accrued liabilities                                               |                                | 
|Value added tax payable                                                              |                                | 
|Income tax payable                                                                   |                                | 
|                                                                                     |                                | 
|                                                                                     |                                | 
|Net cash used in operating activities                                                |                                | 
|                                                                                     |                                | 
|Cash flows from investing activities:                                                |                                | 
|Purchase of plant and equipment                                                      |                                | 
|                                                                                     |                                | 
|                                                                                     |                                | 
|Net cash used in investing activities                                                |                                | 
|                                                                                     |                                | 
|Cash flows from financing activities:                                                |                                | 
|Repayment of advances to a related party                                             |                                | 
|Capital contribution from stockholders                                               |                                | 
|                                                                                     |                                | 
|Net cash provided by financing activities                                            |                                | 
|                                                                                     |                                | 
|Foreign currency translation adjustment                                              |                                | 
|                                                                                     |                                | 
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                              |                                | 
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                       |                                | 
|                                                                                     |                                | 
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                             |                                | 
|                                                                                     |                                | 
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                    |                                | 
|Cash paid for income taxes                                                           |                                | 
|                                                                                     |                                | 
|Cash paid for interest expenses                                                      |                                | 
|                                                                                     |                                | 
|SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:                                    |                                | 
|Stocks issued for service rendered                                                   |                                | 
|                                                                                     |                                | 

See accompanying notes
to condensed consolidated financial statements.

3



---

# CAPITAL RESOURCE FUNDING, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

# NOTE1
        BASIS OF PRESENTATION

The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with both generally
accepted accounting principles for interim financial information, and the instructions to
Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles for
complete financial statements. The accompanying unaudited condensed consolidated financial
statements reflect all adjustments (consisting of normal recurring accruals) that are, in
the opinion of management, considered necessary for a fair presentation of the results for
the interim periods presented. Interim results are not necessarily indicative of results
for a full year.

The condensed consolidated financial
statements and related disclosures have been prepared with the presumption that users of
the interim financial information have read or have access to our annual audited
consolidated financial statements for the preceding fiscal year. Accordingly, these
condensed consolidated financial statements should be read in conjunction with the
unaudited consolidated financial statements and the related notes thereto contained in our
Annual Report on Form 10-KSB for the year ended February 28, 2006.

# NOTE2
        ORGANIZATION AND BUSINESS BACKGROUND

Capital   Resource  Funding,  Inc.  (the  "Company"  or  "CRFU")  was
organized under the laws of the State
of North Carolina on February 2, 2004 as a subchapter S-Corporation. CRFU is a holding
company whose primary business operations are conducted by through its sole operating
subsidiary, in the provision of consultative service to small to mid-sized businesses in
need of financing source ranging from SBA loans, commercial mortgages, factoring and asset
based loans.

On September 6, 2006, CRFU entered a
stock exchange transaction with Da Lian Xin Yang High-Tech Development Co., Ltd (Sun
Group) and the transaction was effectively completed on February 28, 2007. Sun Group
was incorporated as a limited liability company in the Peoples Republic of China
(PRC) on August 8, 2000 with its principal place of business in Da Lian City,
Liaoning Province, the PRC. Sun Group is principally engaged in the production and sales
of cobaltosic oxide and lithium cobalt oxide, both anode materials used in lithium ion
rechargeable batteries.

The stock exchange transaction
involved the following simultaneous transactions:

|1) | CRFU
issued to Sun Groups owners an amount equal to 30,000,000 new shares
               of common stock of CRFU pursuant to Regulation S under the Securities Act
of                1933, as amended, in exchange for 70% interest of Sun Group; and
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2) | the majority shareholder of CRFU delivered the 9,500,000 shares of common stock
          to a Sun Group owner in exchange for total payments of $600,000 in cash,
          less related expenses.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Also in connection with this stock
exchange transaction, CRFU and Sun Group agreed that:

4



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

|1. | CRFU
granted to Sun Groups 30%-controlling owners a two (2) year
               non-transferable option to subscribe for and purchase 10,000,000 new
shares of                CRFU in exchange for RMB31,800,000;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | CRFU
would settle all of its material liabilities as defined by U.S. Generally
               Accepted Accounting Principles; and
|-- | ---------------------------------------------------------------------------------------------------------------------------------

|3. | An
existing director would resign from the positions of director and officer
               of CRFU and a nominee of Sun Group would be appointed to the Board of
Directors                of CRFU to fill the vacancy.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Upon completion of the exchange, Sun
Group became a wholly-owned subsidiary of CRFU and the former owners of Sun Group then
owned 93% of the issued and outstanding shares of the Company.

On September 29, 2006, CRFU appointed
Mr. Wang, Bin as President and Chief Executive Officer, Ms. Feng, Gui Mei as Vice
President and Ms. Liu, Ming Fen as Chief Financial Officer. Furthermore, all of
the Companys former officers resigned from their positions.

On October 30, 2006, CRFU accepted
the resignation of Ms. Feng, Gui Mei as Vice President and Director and appointed Mr.
Wang, Yu Long as Vice President of the Company, effective as of October 30, 2006.

The stock exchange transaction has
been accounted for as a reverse acquisition and recapitalization of the CRFU whereby Sun
Group is deemed to be the accounting acquirer (legal acquiree) and CRFU to be the
accounting acquiree (legal acquirer). The accompanying condensed consolidated financial
statements are in substance those of Sun Group, with the assets and liabilities, and
revenues and expenses, of CRFU being included effective from the date of stock exchange
transaction. CRFU is deemed to be a continuation of the business of Sun Group.
Accordingly, the accompanying condensed consolidated financial statements include the
following:

|(1) | the
balance sheet consists of the net assets of the accounting acquirer at
                    historical cost and the net assets of the accounting acquiree at
historical                     cost; and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | the
financial position, results of operations, and cash flows of the acquirer
                    for all periods presented as if the recapitalization had occurred at
the                     beginning of the earliest period presented and the operations of
the accounting                     acquiree from the date of stock exchange transaction.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

CRFU and Sun Group are hereinafter
referred to as (the Company).

# NOTE3
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed
consolidated financial statements reflect the application of certain significant
accounting policies as described in this note and elsewhere in the accompanying condensed
consolidated financial statements and notes.

| |  | Use
of estimates
|- |  | ----------------

In preparing these consolidated
financial statements, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities in the balance sheets and revenues and expenses during
the period reported. Actual results may differ from these estimates.

5



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

| |  | Basis
of consolidation
|- |  | ----------------------

The unaudited condensed consolidated financial
statements include the financial statements of the Company and its subsidiary, Sun Group.

All significant inter-company
balances and transactions within the Company and subsidiary have been eliminated upon
consolidation.

| |  | Revenue
recognition
|- |  | -------------------

Revenue is recognized when products
are delivered to customers. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same period the
related sales are recorded. In instances where products are configured to customer
requirements, revenue is recorded upon the successful completion of the Companys
final test procedures and the customers acceptance.

The Company is subject to Valued Added Tax (VAT) which
is levied on the majority of the products of Sun Group at the rate of 17% on the invoiced
value of sales. Output VAT is borne by customers in addition to the invoiced value of
sales and input VAT is borne by the Company in addition to the invoiced value of purchases
to the extent not refunded for export sales.

Starting April 1, 2006, the
Company commenced the production and sales of cobaltosic oxide in the
PRC.

| |  | Cost
of revenue
|- |  | ---------------

Cost of revenue primarily includes
the purchase of raw materials, direct labor and manufacturing overhead.

| |  | Cash
and cash equivalents
|- |  | -------------------------

Cash and cash equivalents are carried
at cost and represent cash on hand, demand deposits placed with banks or other financial
institutions and all highly liquid investments with an original maturity of three months
or less as of the purchase date of such investments.

| |  | Accounts
receivable
|- |  | -------------------

Accounts receivable are recorded at
the invoiced amount and do not bear interest. The Company extends unsecured credit to its
customers in the ordinary course of business but mitigates the associated risks by
performing credit checks and actively pursuing past due accounts. An allowance for
doubtful accounts is established and determined based on managements assessment of
known requirements, aging of receivables, payment history, the customers current
credit worthiness and the economic environment. As of February 28, 2007, the Company did
not record an allowance for doubtful accounts, nor have there been any write-offs.

| |  | Property,
plant and equipment, net
|- |  | ----------------------------------

Property, plant and equipment are
stated at cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation is calculated on the straight-line basis over the following expected useful
lives from the date on which they become fully operational and after taking into account
their estimated residual values:

6



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

|                    | Depreciable life | Residual value
|------------------- | ---------------- | --------------
|Building            | 40 years         | 5%            
|Plant and machinery | 5-40 years       | 5%            
|Office equipment    | 5 years          | 5%            
|Motor vehicle       | 5 years          | 5%            

Expenditure for maintenance and
repairs is expensed as incurred.

| |  | Impairment
of long lived assets
|- |  | -------------------------------

In accordance with Statement of Financial
Accounting Standards (SFAS) No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of, a long-lived
assets and certain identifiable intangible assets held and used by the Company are
reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held
and used is evaluated by a comparison of the carrying amount of assets to estimated
discounted net cash flows expected to be generated by the assets. If such assets are
considered to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amounts of the assets exceed the fair value of the assets.

| |  | Comprehensive
income (loss)
|- |  | ---------------------------

SFAS No. 130, Reporting
Comprehensive Income, establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive income as
defined includes all changes in equity during the year from non-owner sources. Accumulated
comprehensive income consists of changes in unrealized gains and losses on foreign
currency translation. This comprehensive income is not included in the computation of
income tax expense or benefit.

| |  | Income
taxes
|- |  | ------------

The Company accounts for income taxes
in interim periods as required by Accounting Principles Board Opinion No. 28,
Interim Financial Reporting and as interpreted by FASB Interpretation
No. 18, Accounting for Income Taxes in Interim Periods. The Company has
determined an estimated annual effective tax rate. The rate will be revised, if necessary,
as of the end of each successive interim period during the Companys fiscal year to
the Companys best current estimate.

The estimated annual effective tax
rate is applied to the year-to-date ordinary income (or loss) at the end of the interim
period.

7



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

| |  | Net
income (loss) per share
|- |  | ---------------------------

The Company computes net income
(loss) per share in accordance with SFAS No. 128 Earnings per Share
(SFAS No. 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98).
Under the provisions of SFAS No. 128 and SAB 98, basic net income (loss) per share is
computed by dividing the net income or loss available to common stockholders for the
period by the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per common share is computed based on the weighted average
number of common shares outstanding during the period increased by the effect of dilutive
stock options and stock purchase warrants using the treasury stock method, however, if the
stock options or warrants become anti-dilutive, the income per share results are reflected
at the average basic weighted average income per share.

The weighted average number of common
shares outstanding as shown in the financial statements presented herewith was computed
based on the number of shares of common shares outstanding, and took into account the
recapitalization transactions and the reverse acquisition transaction as described in Note
2.

| |  | Foreign
currencies translation
|- |  | ------------------------------

The reporting currency of the Company
is the United States dollar (U.S. dollars). Transactions denominated in
currencies other than U.S. dollar are calculated at the average rate for the period.
Monetary assets and liabilities denominated in currencies other than U.S. dollar are
translated into U.S. dollar at the rates of exchange ruling at the balance sheet date. The
resulting exchange differences are recorded in the other expenses in the consolidated
statement of operations and comprehensive income.

The Companys subsidiary, Sun Group,
maintains its books and records in its local currency, the Renminbi Yuan
(RMB), which is functional currency as being the primary currency of the
economic environment in which its operations are conducted. In general, for consolidation
purposes, the Company translates the subsidiarys assets and liabilities into U.S.
dollars using the applicable exchange rates prevailing at the balance sheet date, and the
statement of operations is translated at average exchange rates during the reporting
period. Adjustments resulting from the translation of the subsidiarys financial
statements are recorded as accumulated other comprehensive income.

| |  | Related
parties
|- |  | ---------------

Parties, which can be a corporation
or individual, are considered to be related if the Company has the ability, directly or
indirectly, to control the other party or exercise significant influence over the other
party in making financial and operating decisions. Companies are also considered to be
related if they are subject to common control or common significant influence.

| |  | Segment
reporting
|- |  | -----------------

SFAS No. 131 Disclosures
about Segments of an Enterprise and Related Information establishes standards
for reporting information about operating segments on a basis consistent with the
Companys internal organization structure as well as information about geographical
areas, business segments and major customers in the financial statements. The Company
operates in one reportable segment.

8



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

| |  | Fair
value of financial instruments
|- |  | -----------------------------------

The Company values its financial
instruments as required by SFAS No. 107, Disclosures about Fair Value of
Financial Instruments. The estimated fair value amounts have been determined by
the Company, using available market information and appropriate valuation methodologies.
The estimates presented herein are not necessarily indicative of amounts that the Company
could realize in a current market exchange.

The Companys financial
instruments primarily include cash and cash equivalents, accounts receivable, amount due
from related parties, prepaid expenses and other current assets, accounts payable,
customers deposit, other payables and accrued liabilities, VAT payable and income tax
payable.

As of the balance sheet date, the
estimated fair values of financial instruments were not materially different from their
carrying values as presented due to short maturities of these instruments.

| |  | Equity-based
compensation
|- |  | -------------------------

The Company adopts SFAS No. 123R,Accounting for Stock-Based Compensation using the fair value method. Under
SFAS No. 123R, stock-based compensation expense is measured at the grant date
based on the value of the option or restricted stock and is recognized as expense, less
expected forfeitures, over the requisite service period, which is generally the vesting
period.

# NOTE4
        ACCOUNTS RECEIVABLE, NET

The majority of the Companys
sales are on open credit terms and in accordance with terms specified in the contracts
governing the relevant transactions. The Company evaluates the need of an allowance for
doubtful accounts based on specifically identified amounts that management believes to be
uncollectible. If actual collections experience changes, revisions to the allowance may be
required. Based upon the aforementioned criteria, management has determined that no
allowance for doubtful accounts is required as of February 28, 2007.

|                                      | 2007 | 
|------------------------------------- | ---- | 
|Accounts receivable, gross            |      | 
|Less: allowance for doubtful accounts |      | 
|                                      |      | 
|Accounts receivable, net              |      | 
|                                      |      | 

# NOTE5
        AMOUNT DUE FROM A RELATED PARTY

The amount due from a related
party is comprised of temporary advances made to Sun Group High Technology Development
Co., Ltd, a former owner of Sun Group. The balance is unsecured, and non-interest bearing
and was repayable within 12 months.

9



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

# NOTE6
        PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net, as
of February 28, 2007 is as follows:

|                                   | 2007 | 
|---------------------------------- | ---- | 
|Building                           |      | 
|Plant and machinery                |      | 
|Office equipment                   |      | 
|Motor vehicle                      |      | 
|                                   |      | 
|                                   |      | 
|Less: accumulated depreciation     |      | 
|                                   |      | 
|Property, plant and equipment, net |      | 
|                                   |      | 

Depreciation expense for the nine
months ended February 28, 2007 and 2006 was $ 278,816 and $160,040, respectively.

# NOTE7
        OTHER PAYABLES AND ACCRUED LIABILITIES

Other payables and accrued
liabilities as of February 28, 2007 consist of following:

|                           | 2007 | 
|-------------------------- | ---- | 
|Government levies payable  |      | 
|Rental payable             |      | 
|Salary and welfare payable |      | 
|Accrued expenses           |      | 
|                           |      | 
|                           |      | 
|                           |      | 

# NOTE8
        MINORITY INTEREST

In connection with the stock exchange
transaction as fully described in Note 2, the Company granted to Sun Groups
30%-controlling owners of the two (2) years option for the subscription and purchase of
the additional 10,000,000 new shares of common stock of CRFU in exchange for RMB
38,100,000, equivalent to 30% of the registered capital of Sun Group.

Pro forma financial
information

The following summarized pro forma
results of operations for the three and nine months ended February 28, 2006 and
2007, assume that the stock exchange transaction of 30% of the registered capital of Sun
Group in exchange for the additional 10,000,000 new shares of common stock of CRFU
occurred as of June 1, 2005 and 2006. These pro forma results have been prepared for
comparative purposes only and do not purport to be indications of the result of operations
which actually would have resulted had the significant stock exchange occurred as of June
1, 2005 and 2006.

10



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

|                                    | Three months ended February 28, |  | Nine months ended February 28, |           
|----------------------------------- | ------------------------------- |  | ------------------------------ | ----------
|
|Net income (loss) attributable to   |                                 |  |                                |           
|holders of common stock             |                                 |  | $                              | (105,140  
|Weighted average ordinary shares    |                                 | 
|outstanding - basic and diluted     |                                 |  |                                | 27,666,667
|Income (loss) per share - basic and |                                 | 
|diulted                             |                                 |  | $                              | 0.00      
|                                    |                                 |  |                                |           

# NOTE9
        CAPITAL TRANSACTIONS

On February 28, 2007, the Company
completed a stock exchange transaction with the equity owners of Sun Group. 30,000,000
shares of common stock were issued in exchange for 70% interest Sun Group and 9,500,000
shares of common stock were transferred from the former shareholder to a Sun Group
owner, representing 93% of CRFUs outstanding common stock.

As of February 28, 2007, the number
of outstanding shares of the Companys common stock was 43,422,971.

# NOTE10
        STOCK BASED COMPENSATION

On January 31, 2007, the
Company issued 1,000,000 restricted shares of common stock for
business advisory services to Greentree Financial Group, Inc. The fair value of this
restricted stock issuance was determined using the fair value of the Companys common
stock on the grant date, at a price of $0.45 per share. The Company recognized a stock
based compensation of $450,000 for the three and nine months ended February 28, 2007.

# NOTE11
        CONCENTRATIONS AND RISKS

(a)    
          Major customers and vendors

100% of the Companys assets
were located in the PRC and 100% of the Companys revenues were generated from
customers located in the PRC. For the nine months ended February 28, 2007, the
customers who account for 10% or more of revenues and purchases of the Company are
presented as follows:

|           |  |  | Revenues |  | Percentage of Revenues |   | Accounts
Receivable | 
|---------- |  |  | -------- |  | ---------------------- | - | ------------------- | 
|           |  |  |          |  |                        |   |                    
|
|Customer A |  |  |          |  |                        | $ | 2,782,638           | 
|Customer B |  |  |          |  |                        |   | 1,803,929           | 
|Customer C |  |  |          |  |                        |   | 872,279             | 
|           |  |  |          |  |                        |   |                    
|           |  |  |          | 
|           |  |  | Total:   |  |                        | $ | 5,458,846           | 
|           |  |  |          |  |                        |   |                    

11



---

# CAPITAL RESOURCE FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2007 AND 2006
(Currency expressed in United States Dollars (US$))
(unaudited)

|         |  |  |  | 
|-------- |  |  |  | 
|         |  |  |  | 
|
|         |  |  |  | 
|Vendor A |  |  |  | 
|         |  |  |  | 

The  Company  commenced  operations  in April 2006
and there was no revenue generated or purchases
made for the nine months ended February 28, 2006.

(b)     Credit
risk

Financial instruments that
potentially subject the Company to significant concentrations of credit risk consist
principally of cash and trade accounts receivable. The Company performs ongoing credit
evaluations of its customers financial condition, but does not require collateral to
support such receivables.

# NOTE12
        COMMITMENT

The Company leased an office
premise under a non-cancelable operating lease agreement for a period of eight years, due
July 25, 2008. The annual lease payment is $6,408.

12



---

|Item 2. |  | Management's
Discussion and Analysis or Plan of Operation
|------- |  | ---------------------------------------------------------

# Cautionary Notice
Regarding Forward-Looking Statements

We
make certain  forward-looking  statements in this report.  Statements concerning our
future operations, prospects,  strategies,  financial condition,  future economic
performance (including growth and earnings),  demand for our services,  and other
statements of our plans, beliefs, or expectations,  including the statements contained
under the captions "Risk  Factors,"  "Management's  Discussion and Analysis or Plan of
Operation,"  "Description of Business," as well as captions  elsewhere in this document,
 are  forward-looking  statements.  In some cases these statements  are  identifiable
 through  the use of words such as  "anticipate,"  "believe,"  "estimate,"  "expect,"
"intend," "plan," "project,"  "target,"  "can,""could,"  "may," "should," "will,"
"would," and similar expressions. We intend such  forward-looking  statements to be
covered by the safe harbor provisions contained in Section 27A of the Securities  Act of
1933, as amended (the  "Securities  Act") and in Section 21E of the Securities  Exchange
Act of 1934, as amended (the  "Exchange  Act").  The  forward-looking  statements we make
are not  guarantees of future performance  and are subject to various  assumptions,
 risks,  and other factors that could cause actual results to differ  materially from
those suggested by these  forward-looking  statements.  Because such statements are
subject to risks and  uncertainties,  actual  results  may  differ  materially  from
 those  expressed  or  implied  by the forward-looking  statements.  Indeed,  it is
likely that some of our  assumptions  will prove to be incorrect.  Our actual results and
financial position will vary from those projected or implied in the  forward-looking
 statements and the  variances  may be  material.  You are  cautioned  not to  place
 undue  reliance  on such  forward-looking statements.  These risks and  uncertainties,
 together with the other risks  described from time to time in reports and documents that
we file with the SEC should be considered in evaluating forward-looking statements.

The
nature of our business makes  predicting the future trends of our revenues,  expenses,
 and net income difficult.  Thus,  our  ability to  predict  results or the actual
 effect of our  future  plans or  strategies  is inherently  uncertain.  The risks and
 uncertainties  involved in our business could affect the matters referred to in any
 forward-looking  statements  and it is  possible  that our actual  results may differ
 materially  from the anticipated  results  indicated  in these  forward-looking
 statements.  Important  factors that could cause actual results to differ from those in
the forward-looking  statements include, without limitation,  the factors discussed above
in the section entitled "Risk Factors" and the following:

| |  |  | the
effect of political, economic, and market conditions and geopolitical events;
| | - |  | ---------------------------------------------------------------------------------

| |  |  | legislative
and regulatory changes that affect our business;
| | - |  | ------------------------------------------------------------

| |  |  | the
availability of funds and working capital;
| | - |  | ----------------------------------------------

| |  |  | the
actions and initiatives of current and potential competitors;
| | - |  | -----------------------------------------------------------------

| |  |  | investor
sentiment; and
| | - |  | -----------------------

| |  |  | our
reputation.
| | - |  | ---------------

We
 do not  undertake  any  responsibility  to publicly  release  any  revisions  to these
 forward-looking statements to take into account  events or  circumstances  that occur
after the date of this report.  Additionally, we do not undertake  any  responsibility
 to update you on the  occurrence  of any  unanticipated  events which may cause actual
results to differ from those expressed or implied by any forward-looking statements.

13



---

The
 following  discussion  and analysis  should be read in  conjunction  with our
 consolidated  financial statements  and the  related  notes  thereto  as  filed  with
the SEC and  other  financial  information  contained elsewhere in this Report.

# Overview

We
were  incorporated  in North  Carolina  on  February  2,  2004 and have  since  undergone
 a change  in business.  We recently  acquired a 70% ownership  interest in Da Lian Xin
Yang  High-Tech  Development  Co. Ltd., a corporation  organized  and existing  under the
laws of the  Peoples'  Republic of China  ("DLX"),  through a share exchange which was
 consummated on February 28, 2007.  Currently,  our only  operations are conducted
 through DLX, who engages in the business of manufacturing  and selling  cobaltosic oxide
products.  These products are primarily manufactured, marketed, and sold in China.

Through
DLX,  Capital  Resource  Funding,  Inc.  produces  anode  materials used in lithium ion
batteries. Lithium ion batteries  continue to gain in popularity due to their
 versatility,  high energy density and capacity, high voltage, compact size, light
weight, and excellent energy retention  characteristics.  They are used in mobile phones,
 PDAs,  laptops,  and digital  cameras,  as well as electric  automobiles and solar and
wind energy storage units.  DLX  primarily  produces  cobaltosic  oxide and lithium
 cobalt  oxide and also engages in the research and development of new technologies to be
used in the lithium ion battery market.

# New Financial
Accounting Pronouncements

In
December 2004, the Financial  Accounting  Standards Board ("FASB")  issued SFAS No. 123R,
 "Share-Based Payment" ("SFAS 123R").  SFAS 123R revises FASB Statement No. 123
"Accounting  for  Stock-Based  Compensation"  and supersedes  APB Opinion No. 25
 "Accounting  for Stock  Issued to  Employees."  SFAS 123R  requires  all public and
non-public  companies  to measure and  recognize  compensation  expense for all
 stock-based  payments for services received at the grant-date fair value,  with the cost
recognized over the vesting period (or the requisite  service period).  SFAS 123R is
effective for small business  issuers for all interim  periods  beginning after December
15, 2005.  The adoption of SFAS 123R did not have a material  impact on the Company's
 financial  statements or results of operations.

SFAS
No. 123R permits public  companies to adopt its  requirements  using one of two methods.
 A "modified prospective"  method in which  compensation  cost is recognized  beginning
with the effective date (a) based on the requirements  of SFAS 123R for all  share-based
 payments  granted  after the  effective  date and (b) based on the requirements  of SFAS
No. 123 for all awards  granted to  employees  prior to the  effective  date of SFAS No.
123R that remain unvested on the effective date. A "modified  retrospective"  method
which includes the  requirements of the  modified  prospective  method  described  above,
 but also  permits  entities to restate  based on the amounts previously  recognized
 under SFAS No.  123 for  purposes  of pro forma  disclosures  either (a) all prior
 periods presented or (b) prior interim  periods of the year of adoption.  The Company
has yet to determine  which method to use in adopting SFAS 123R.

In
November 2004,  the FASB issued SFAS No. 151 "Inventory  Costs - an amendment of ARB No.
43, Chapter 4" ("SFAS 151").  This  statement  amends the guidance in ARB No. 43,
 Chapter 4,  "Inventory  Pricing" to clarify the accounting  for  abnormal  amounts  of
 idle  facility  expense,  freight,  handling  costs,  and  wasted  material (spoilage).
 SFAS 151  requires  that those items be  recognized  as  current-period  charges.  In
 addition,  this Statement  requires that allocation of fixed  production  overheads to
costs of conversion be based upon the normal capacity of the production  facilities.  The
provisions of SFAS 151 are effective for fiscal years  beginning after June 15, 2005.  As
such,  the Company has adopted  these  provisions,  if any, at the  beginning of the
fiscal year 2006.

14



---

In
December 2004, the FASB issued SFAS No. 153,  "Exchanges of  Non-monetary  Assets - an
amendment of APB Opinion No. 29" ("SFAS 153").  SFAS 153 replaces the exception  from
fair value  measurement  in APB Opinion No. 29 for non-monetary  exchanges of similar
 productive  assets with a general exception from fair value measurement for exchanges of
non-monetary  assets that do not have  commercial  substance.  A non-monetary  exchange
has commercial substance  if the  future  cash  flows of the  entity  are  expected  to
 change  significantly  as a result of the exchange.  SFAS 153 is effective for all
interim  periods  beginning  after June 15, 2005. The adoption of SFAS 153 did not have a
material impact on the Company's financial statements or results of operations.

In
May 2005, the FASB issued SFAS No. 154,  "Accounting  Changes and Error  Corrections - a
replacement of APB Opinion No. 20 and FASB  Statement No. 3" ("SFAS 154").  SFAS 154
changes the  requirements  for the accounting for and reporting of a change in
 accounting  principle.  These  requirements  apply to all  voluntary  changes and
changes required by an accounting  pronouncement in the unusual  instance that the
 pronouncement  does not include specific  transition  provisions.  SFAS 154 is effective
 for fiscal years  beginning  after  December 15, 2005. As such,  the Company has adopted
these  provisions,  if any, at the  beginning of the fiscal year ended  December 31, 2006.

In
February 2006, the FASB issued SFAS No. 155,  "Accounting for Certain Hybrid Financial
 Instruments--an amendment  of FASB  Statements  No. 133 and 140" ("SFAS  155").  This
 Statement  amends FASB  Statements  No. 133, "Accounting  for  Derivative  Instruments
 and Hedging  Activities",  and No. 140,  "Accounting  for  Transfers and Servicing of
Financial  Assets and  Extinguishments  of Liabilities".  This Statement  resolves issues
addressed in Statement 133  Implementation  Issue No. D1,  "Application of Statement 133
to Beneficial  Interests in Securitized Financial  Assets".  This Statement  permits fair
value  re-measurement  for any hybrid  financial  instrument that contains an embedded
 derivative that otherwise would require  bifurcation,  clarifies which  interest-only
 strips and  principal-only  strips are not subject to the  requirements  of Statement
 133,  establishes a requirement  to evaluate  interests in securitized  financial
 assets to identify  interests that are  freestanding  derivatives or that are hybrid
financial  instruments that contain an embedded derivative  requiring  bifurcation,
 clarifies that concentrations  of credit risk in the form of subordination  are not
embedded  derivatives and amends Statement 140 to  eliminate  the  prohibition  on a
 qualifying  special-purpose  entity  from  holding  a  derivative  financial instrument
that pertains to a beneficial interest other than another derivative financial
 instrument.  SFAS 155 is effective for all financial  instruments  acquired or issued
for the Company for fiscal year begins after September 15, 2006.  The  adoption of this
 standard is not expected to have a material  effect on the  Company's  results of
operations or financial position.

# Results of Operations

Three and Nine Months
Ended February 28, 2007 Compared to the Three and Nine Months Ended February 28, 2006

Net Revenues

Net
revenues for the three and nine months ended  February  28, 2007 totaled  $2,661,696  and
 $5,685,076, compared to $0 and $0 for the three and nine  months  ended  February  28,
 2006.  This  represents  an increase of $2,661,696  and  $5,685,076  for the three and
nine months ended  February 28, 2007,  respectively.  The  increases resulted from the
commencement of production and sales, which began in April 2006.

15



---

Cost of Revenue

Cost
of  revenues  for the  three  and  nine  months  ended  February  28,  2007  totaled
 $1,888,930  and $4,156,086,  compared to $0 and $0 for the three and nine months  ended
 February  28,  2006.  This  represents  an increase of $1,888,930  and $4,156,086  for
the three and nine months ended  February 28, 2007,  respectively.  The increases
resulted from the commencement of production and sales, which began in April 2006.

General and
Administrative Expense

General
 and  administrative  expenses  for the three and nine months  ended  February  28,  2007
 totaled $594,981 and  $781,066,  compared to $30,581 and  $104,184  for the three and
nine months ended  February 28, 2006. This  represents  an increase of $564,400  and
 $676,882  for the three and nine months  ended  February  28, 2007, respectively.  The
increases resulted from expenses associated with the higher number of office employees recruited after May 31, 2006.

Research and Development Expense

Research
and  development  expense for the three and nine months ended  February 28, 2007 totaled
$17,559 and $72,424,  compared to $21,000 and $72,000 for the three and nine months ended
February 28, 2006.  This represents a decrease  of $3,441  for the three  months  ended
 February  28,  2007 and an increase of $424 for the nine months ended  February 28,
2007.  The  decreases  resulted from a shift in our business  focus.  From the inception
of DLX through March 31, 2006, we operated as a research center.  On April 1, 2006,
 however,  we commenced the production and sale of cobalt  products,  and as a result,
 reduced our  research  and  development  activities.

Depreciation Expense

Depreciation
 expense for the three and nine months ended February 28, 2007 totaled  $65,057 and
$190,107, compared to $60,537  and  $160,040  for the three and nine months  ended
 February  28,  2006.  This  represents  an increase of $4,520 for the three  months
 ended  February  28, 2007 and an increase of $30,067 for the nine months ended  February
28,  2007.  The increases for the three  months  and nine months ended  February 28, 2007 resulted
from the  commencement  of production in April 2006, which triggered depreciation expense
on all equipment used in the production process.

Income (Loss) From
Operations

Income
 from  operations  for the three and nine  months  ended  February  28,  2007  totaled
 $95,169 and $485,393,  compared to a loss from  operations of  $112,118  and
 $336,224  for the three and nine months ended February  28,  2006.  This  represents
 an increase of $207,287  and  $821,617  for the three and nine months ended February 28,
2007,  respectively.  These  increases  resulted  primarily  from the  commencement  of
production and sales, which began in April 2006.

Minority Interest

The
minority  interest  expense for the three and nine months ended February 28, 2007
totaled  $108,004 and $156,441.

16



---

Foreign Currency
Translation Gain

The
foreign  currency  translation  gain for the three and nine months  ended  February  28,
2007  totaled $4,685  and  $7,030 as compared  to a gain of $3,511 and $4,019 for
the three and nine months  ended  February 28, 2006.  This  represents  an increase of
$1,174 and $3,011 for the three and nine months ended  February 28, 2007,
respectively.  These increases resulted from the revaluation of RMB.

Liquidity and Capital
Resources

During
the nine months ended February 28, 2007,  net cash generated from operating  activities
was $61,984 compared to net cash used of $35,696 for the same period in 2006.  This increase  resulted from
 primarily from the  commencement  of production  and sales,  which  began in April 2006.
 This  commencement  resulted  in an  increase in our  accounts receivable,  an  increase
 in  our  accounts  payable  and  other  current  liabilities,  and  an  increase  in our
inventories, prepaid expenses, and other current assets.

During
the nine months ended  February 28, 2007,  net cash used for investing  activities was
$17,934 as compared to  $5,836 for the same  period in 2006.  These  investing
 funds were used to  purchase  fixed  assets during the nine months ended February 28,
2007.  The increase resulted from our efforts to enhance our production capabilities.

During
the nine months  ended  February  28,  2007,  net cash  generated  from  financing
 activities  was $101,084  compared to  $1,261,905  for the same period in 2006.  These
 financing  funds were  generated  from loan repayments by a related party.

Total
 capital  expenditures  were $17,934 for the nine  months  ended  February  28,  2007.  These
funds were primarily used to purchase production equipment.

Income Taxes

Income
tax expense was  $200,309  and  $267,977  for the three and nine months  ended  February
 28, 2007, respectively.

We
did not have any federal or state  income tax expense for the nine months ended  February
28, 2006,  as we did not have any revenues until we commenced production and sales in
April 2006.

General

During
 2007,  we  plan  to  expand  our  research  and   development   facilities  by
  establishing   an electro-chemistry  testing  center.  This center will  conduct
 research in  increasing  the quality of our current products and anode  materials  used
in lithium ion batteries,  in general.  We also plan to fully equip our on-site
inspection  center with equipment and specialized  personnel.  Our future plans also include establishing
 a processing  factory on
our property  located at the Dalian  High-Tech Park Ganjingzi Zone in China.
Recently, we signed a purchase agreement
to purchase a cobalt ore mine in Zambia.  We are currently conducting a sampling of the mine.

17



---

We
do not believe that the funds  available to us and those  generated  from revenues are
adequate to meet our  operating  and/or  capital  needs for the rest of fiscal 2007.  We
will begin  evaluating  various  sources of capital to meet our growth  requirements.
 Such  sources  will  include  debt  financings,  the  issuance of equity securities,
 and entrance into other financing  arrangements.  There can be no assurance,  however,
that any of the contemplated  financing  arrangements  described  herein will be
available  and, if  available,  can be obtained on terms favorable to us.
                                          Off Balance Sheet Arrangements

None.

|Item 3. |  | Controls
and Procedures.
|------- |  | ------------------------

As
of the end of the  period  covered  by this  report,  our  management,  with the
 participation  of our Principal  Executive  Officer,  Wang  Bin,  and our  Principal
 Financial  and  Accounting  Officer,  Ming Fen Liu, evaluated  the  effectiveness  of
the design and operation of our  disclosure  controls and  procedures,  which are those
 controls  and other  procedures  of an issuer that are  designed to ensure that
 information  required to be disclosed by the us, in the reports we file under the
Exchange Act of 1934, as amended (the  "Exchange  Act"),  are recorded,  processed,
 summarized  and reported,  within the time periods  specified in the Securities and
Exchange Commission's  rules and forms.  These  disclosure  controls and  procedures  may
include,  controls and  procedures designed to ensure that  information  required to be
 disclosed  by us in the reports  that we file or submit under the Exchange Act are
 accumulated  and  communicated  to the our  management,  including  our  Principal
 Executive Officer and Principal  Financial  and  Accounting  Officer,  as  appropriate
 to allow timely  decisions  regarding required  disclosure.  Based  on this  evaluation,
 our  management  concluded  that as of  February  28,  2007 our disclosure controls and
procedures were effective.

During
the quarter ended February 28, 2007,  there were no changes in our internal  control over
financial reporting that has materially  affected,  or is reasonably  likely to
materially  affect our internal  control over financial reporting.

# Part II. Other
Information

|Item 6. |  | Exhibits
and Reports on Form 8-K
|------- |  | --------------------------------

(a) Exhibits

|31.1 |  | Certification
Required Under Section 302 of Sarbanes-Oxley Act of 2002 *
|---- |  | ------------------------------------------------------------------------

|31.2 |  | Certification
Required Under Section 302 of Sarbanes-Oxley Act of 2002 *
|---- |  | ------------------------------------------------------------------------

|32 |  | Certification
Required Under Section 906 of Sarbanes-Oxley Act of 2002 *
|-- |  | ------------------------------------------------------------------------

* Filed herewith.

18



---

# SIGNATURES

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

|Date: April 23, 2007 | CAPITAL RESOURCE FUNDING, INC.
By: /s/ Bin Wang
       Name: Bin Wang
       Title: President, Chief Executive Officer and Chairman
|-------------------- | -----------------------------------------------------------------------------------------------------------------------------------

19