UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-K/A AMENDMENT 2  xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010  or  oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to _____   Commission file number 0-50002  SINO ASSURANCE INC. (Exact name of registrant as specified in its charter)  Delaware52-2175896(State or other jurisdiction of incorporation)(IRS Employer Identification Number)  20th Floor, 6009 Yitian Road, New World Center,
Futian District, Shenzhen, Peoples Republic of China(Address of principal executive office)Registrants telephone number, including area code:  86-0755-82520166 Securities registered pursuant to Section 12(b) of the Act:


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|Title of each class | Name of each exchange on which registered
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Securities to be registered under Section 12(g) of the Act:  Common Stock (Title of Class)  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  o Yes     x No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  o Yes     x No   - 1 -  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.  x Yes   o No  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.


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|Large accelerated filer
o                                             | Accelerated filer
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|Non-accelerated filer
o
(Do not check if a smaller reporting company) | Smaller reporting company
x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o  No x  State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter:  $24,711,540  APPLICABLE ONLY TO CORPORATE REGISTRANTS  Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date.  60,200,000 shares of the registrants common stock, $0.001 par value common stock outstanding as of March 18, 2011.  DOCUMENTS INCORPORATED BY REFERENCE  List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933.  The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).   - 2 -  INDEX


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|E XPLANATORY NOTE: | 4                                                                                                                   
|PART I             | 4                                                                                                                   
|                   | ITEM 1. BUSINESS                                                                                                     | 5 
|                   | ITEM 1A. RISK FACTORS                                                                                                | 12
|                   | ITEM 1B. UNRESOLVED STAFF COMMENTS                                                                                   | 19
|                   | ITEM 2. PROPERTIES                                                                                                   | 19
|                   | ITEM 3. LEGAL PROCEEDINGS                                                                                            | 19
|                   | I TEM 4. (REMOVED AND RESERVED)                                                                                      | 20
|PART II            | 20                                                                                                                  
|                   | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 20
|                   | ITEM 6. SELECTED FINANCIAL DATA                                                                                      | 20
|                   | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        | 21
|                   | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS                                                 | 30
|                   | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  | 31
|                   | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         | 53
|                   | ITEM 9A. CONTROLS AND PROCEDURES                                                                                     | 53
|                   | ITEM 9B. OTHER INFORMATION                                                                                           | 55
|PART III           | 55                                                                                                                  
|                   | ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                      | 55
|                   | ITEM 11. EXECUTIVE COMPENSATION                                                                                      | 57
|                   | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS              | 58
|                   | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                   | 59
|                   | ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                      | 60
|PART IV            | 60                                                                                                                  
|                   | ITEM 15. EXHIBITS                                                                                                    | 60

- 3 -  EXPLANATORY NOTE:  Sino Assurance Inc. is filing this Amendment No. 2 on Form 10-K/A (this Amendment 2) to its annual report on Form 10-K, which was originally filed with the Securities and Exchange Commission on March 18, 2011 (the Original Filing), and subsequently amended on Form 10-K/A (Amendment 1) on March 24, 2011.   This Amendment 2 is being filed to: i) revise disclosures under Item 1 to include additional information regarding the Companys corporate structure and include material agreements as exhibits 10.5 through 10.9 relating to the Companys corporate structure; ii) revise disclosures under Item 7  Critical Accounting Policies; and iii) revise disclosures contained in Notes 2 and 8 of the Notes to the Companys financial statements.  Pursuant to the rules of the SEC, Item 15 of Part IV of the Original Filing has been amended to contain currently-dated certifications from our principal executive officer and principal financial officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications of our principal executive officer and our principal financial officer are attached to this form 10-K/A as Exhibits 31.1, 31.2, 32.1 and 32.2.  Except as described above, no other changes have been made to the Original Filing and Amendment 1.  Except as described above, this Amendment No. 2 on Form 10-K/A does not reflect events occurring after the filing of the Original Filing or Amendment 1, or modify or update those disclosures, including any exhibits to the Original Filing and Amendment 2 affected by subsequent events. Information not affected by the changes described above is unchanged and reflects the disclosures made at the time of the Original Filing and Amendment 1.  Accordingly, this Amendment No. 2 on Form 10-K/A should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the Original Filing and Amendment 1.  PART I  DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS  Certain statements in this report, including statements in the following discussion, are what are known as forward-looking statements, which are basically statements about the future.  For that reason, these statements involve risk and uncertainty since no one can accurately predict the future.  Words such as plans, intends, will, hopes, seeks, anticipates, expects, and the like, often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement.  Such forward-looking statements include statements concerning our plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits.  Numerous factors and future events could cause the Company to change such plans and objectives, or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits.  Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report on Form 10-Kand in the Companys other filings with the Securities and Exchange Commission.  No  - 4 -  statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.   ITEM 1. BUSINESS    BACKGROUND  We were incorporated under the laws of the State of Delaware on August 19, 1997, under the name of Sheffield Products, Inc. We changed our name to Digital Network Alliance International, Inc. on November 30, 2004, and changed our name again to Sino Assurance Inc. (SNAS) on November 20, 2008.  We were formed as a "blind pool" or "blank check" company whose business plan was to seek to acquire a business opportunity through completion of a merger, exchange of stock, or other similar type of transaction. In furtherance of our business plan, we voluntarily elected to become subject to the periodic reporting obligations of the Securities Exchange Act of 1934 by filing a registration statement on Form 10-SB.  The registration statement on Form 10-SB became effective on or about November 11, 2002.  On July 21, 2004, we had a change of control as the first step in the business acquisition process. Strong Win Limited, a British Virgin Islands corporation, purchased 6,076,116 shares, (or approximately 90%) of our then issued and outstanding shares, from 4 of our major shareholders for a purchase price of $50,000.  On August 13, 2004, we completed the business acquisition process by acquiring all of the issued and outstanding common stock of Digital Network Alliance Holdings (BVI), Inc., in a share exchange transaction. We issued 13,248,760 shares of our common stock in the share exchange transaction in exchange for all of the issued and outstanding stock of Digital Network Alliance Holdings (BVI) Inc.  On September 22, 2005, we effected a 1:2 reverse stock split of all issued and outstanding shares, which decreased the number of issued and outstanding shares of the Company without causing a reduction in the total number of authorized shares.  We issued one new share for every two shares held.  Before the reverse stock split, we had 22,200,000 shares issued and outstanding.  Immediately following the split, we had 11,100,000 shares issued and outstanding.  Except as otherwise specifically noted, all references in this Prospectus to the number of shares issued and outstanding have been revised to reflect the number issued and outstanding following completion of the reverse split.  Strong Win Limited was introduced to Sheffield Products, Inc. by First Asia Finance Group Limited, a Hong Kong registered investment advisor which presented Strong Win Limiteds business plan and financial statements to the board of directors of Sheffield.  First Asia also assisted Strong Win Limited in its negotiations related to the change of control and business combination transaction with Sheffield Products, Inc., and assisted it with completing certain restructuring prior to the change of control and business combination, including the formation of Digital Network Alliance Holdings (BVI), Inc., as a holding company for its operating subsidiaries.  Terence Yap participated in the negotiations on behalf of the Strong Win Limited.  The board of directors of Sheffield Products, Inc. participated in the negotiations on its behalf.  - 5 -   As a result of the share exchange transaction, Digital Network Alliance Holdings (BVI) Inc. became our wholly-owned subsidiary.  The former stockholders of Digital Network Alliance Holdings (BVI) Inc. acquired a majority of our issued and outstanding common stock as a result of completion of the share exchange transaction. Therefore, although Digital Network Alliance Holdings (BVI) Inc. became our wholly-owned subsidiary, the transaction was accounted for as a recapitalization of Digital Network Alliance Holdings (BVI) Inc., whereby it is deemed to be the accounting acquirer and is deemed to have adopted our capital structure.  On September 23, 2008, we entered into an Agreement for Share Exchange with Linking Target Limited, a British Virgin Islands corporation (LTL), and the individual shareholder of LTL, pursuant to which we acquired 1 share of LTL, representing 100% of its issued and outstanding common stock, in exchange for the issuance of 48,399,997 shares of our common stock.  As a result of completion of the share exchange transaction, LTL became our wholly-owned subsidiary.  As a result of the change of control, we changed the focus of our business operations to concentrate on the business activities carried on by LTL.  LTL was founded in British Virgin Islands on January 23, 2008.   Prior to completion of the share exchange transaction, we had 11,600,003 shares of common stock issued and outstanding.  Following completion of the share exchange transaction, we had 60,000,000 shares issued and outstanding, of which 11,600,003 or approximately 19.33%, were owned by persons who were previously our shareholders.  To comply with the PRC laws and regulations, the Company currently conducts substantially all of its businesses through China Construction Guaranty Company Limited (CCG), a corporation incorporated in the Peoples Republic of China, which is considered as a Variable Interest Entity of the Company, as more fully described below.  On August 1, 2008, prior to the closing of the share exchange transaction, LTL entered into an Exclusive Cooperation Agreement (the Agreement) with China Construction Guaranty Company Limited (CCG), a corporation incorporated in the Peoples Republic of China which is engaged in the business of the construction and employees guaranty, pursuant to which the parties have agreed, among other things, that LTL will provide various services to CCG, including consulting services, training services, human resources for business development and other related services.  On September 23, 2008, the Company through its subsidiary, LTL entered into additional agreements amongst CCG and the individual owner of CCG thereby establishing CCG  as a variable interest entity of the Company (the Cooperation Agreement and additional VIE Agreements are referred to herein as the Initial VIE Agreements).  On October 26, 2009, LTL assigned its rights under the Initial VIE Agreements to Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited (ZHJ), a wholly-owned subsidiary of the Company.  Subsequent to the assignment, ZHJ, CCG and the individual owner of CCG entered into the agreements set forth below to replace the Initial VIE Agreements. Through the contractual arrangements, described below, the Company has variable interest of CCG and consequently is the primary beneficiary of CCG.  The Agreements that provide ZHJ effective  - 6 -  control over CCG are as follows (all of which are collectively referred to as the Current VIE Agreements):  1.Operating AgreementCCG and the registered legal owners of CCG mutually agree to grant CCG with the principal operating decision making rights, such as appointment of directors and senior executive officers of the VIE. Also, ZHJ is a guarantor to CCG in connection with the operational performance of all contracts entered between CCG and third parties.2.Exclusive Management Service and Business Consulting AgreementZHJ is an exclusive provider of the business consulting, related services and financial support to CCG for a period of 20 years, in return for a service fee which is equal to all of CCGs annual net profit. The service fees are eliminated upon consolidation.3.Option AgreementZHJ has the irrecoverable right to purchase the equity interests of CCG from the registered legal equity owners of CCG, to the extent permitted under PRC laws and regulations at the request of the Company.4.Proxy StatementAll of the registered legal equity owners of CCG irrecoverably grant and entrust with their voting rights and vote on their behalf on all matters they are entitled to vote on, under the laws of the PRC and the Articles of Association of CCG.  5.Equity Pledge AgreementAll of the registered legal equity owners of CCG have pledged their respective equity interests in CCG as a security the obligations of the registered legal equity owners and CCG under the agreements and for the payment by CCS under the exclusive management service and business consulting agreement.  The foregoing description of the Current VIE Agreements is qualified in its entirety by reference to the Operating Agreement, Exclusive Management Service and Business Consulting Agreement, Option Agreement, Proxy Statement, and the Equity Pledge Agreement, which are attached hereto as Exhibits, 10.5, 10.6, 10.7, 10.8, and 10.9, respectively, and are herein incorporated by reference.  On October 30, 2008, we completed the sale of the subsidiary, Digital Network Alliance Holdings (BVI), Inc., a British Virgin Islands corporation (DNA BVI).  The sale was completed pursuant to the terms of an Agreement for Sale of Stock dated October 30, 2008.  DNA BVI was sold to Ms Au Wing Chi, Vicky, for a price of US$100.  The sale was accomplished by selling the 10,000 shares of DNA BVI held by the Company to the purchaser.  The entire purchase price was paid at closing.   We agreed to sell the interest in DNA BVI for a nominal price because it was unable to generate a profit through the operations of DNA BVI.  The decision to sell DNA BVI was made because we were unable to generate a profit through the operations of DNA BVI.   - 7 -  CURRENT BUSINESS OPERATIONS  The Company, through its subsidiaries and variable interest entity, is principally engaged in the provision of surety and tendering guarantees service to corporations and individuals in the PRC.  CCG is headquartered in Shenzhen China, and is in the business of providing a guarantee service to corporations and individuals in issuing and obtaining surety or tendering guarantees for this business operations and/or personal use.  The types of guarantees CCG provides include various project guarantees such as Project Bidding Guarantee, Performance Bond Guarantee, and Advance Payment Guarantee via its 19 branches located throughout China such as Beijing, Guangzhou, Dalian, Hangzhou, Nanjing, Chengdu, Ningbo, Qingdao, Chongqing, Changsha and Wuhan etc.  In exchange for CCGs guarantee services, customers pay CCG a certain percentage of the surety amount as an upfront fee.  CCG adapts the development of market economy, government policy need and the development of credit guarantee industry. CCG was born in 2004 and positioned itself as a commercial credit guarantee agent. Today it leads the emerging industries as the leader of engineering guarantee industry. As an originator of employee guarantee business, CCG shoulders the mission of building a robust Chinas credit system, undertakes the employee guarantee business to provide enterprises and individuals with comprehensive credit services. It will be devoted to promoting the development of credit guarantee industry, setting up the standards for credit guarantee industry and quickening the construction of credit culture and social credit system.    PRINCIPAL PRODUCTS AND SERVICES  Bid guarantee: Before a bidder makes a tender, a guarantor strictly verifies the qualification of the bidder and provides the bidder with the tender guarantee so as to ensure that the bidder participates in bidding activity in accordance with the requirements stated in the bidding document. Once the bidder is awarded the tender, the guarantor will promptly conclude a construction contract with the bidder, and will provide the bidder with the required letter of guarantee for execution of contract and advance payment. If the bidder is in breach of the contract, the guarantor will compensate the bidders losses according to the sum insured.   Performance guarantee: It is provided by the guarantor for the construction party (applicant) and employer (beneficiary), ensuring the construction party fulfils the duties and obligations specified in the construction contract. If the contractor fails to execute the contract, the employer can request the guarantor to bear the liability for guarantee on the basis of the sum insured. Then the guarantor can make a claim to the contractor for compensation in conformity with the law. Generally, the performance guarantee provided by a guarantee company is conditional, which means the employer must submit the evidence of nonperformance of the contractor whenever the employer makes a claim. After verification, the guarantor shall accept the liability for guarantee. Performance guarantee is applicable to the performance of sub-contract and material supply contract.  Payment guarantee (including workers payment guarantee): The employer shall fulfill the payment requirement as stipulated under the construction contract. This guarantee made by the guarantor on behalf of the employer will ensure that the employer must make a payment guarantee for the contractor. While the employer is signing the construction contract, it must  - 8 -  submit the payment guarantee to the contractor. Failing the submission of the payment guarantee, the construction funds will be deemed as unavailable.  Advance payment guarantee: The guarantor promises the contractor that it will fulfill the advance payment guarantee, so as to prevent the contractor from appropriating the advance or declaring bankruptcy. After the contractor has paid up all the prepayments within the agreed time, the employer needs to return the advance payment guarantee.  Performance guarantee of sub-contract: When a construction project involves a general contractor and sub-contractors, the general contractor shall take up sub-contractors responsibilities. The general contractor always requests the subcontractors to provide a guarantee by means of a guarantor with a view to protecting its own rights and interests and preventing the subcontractors from violating the contract or getting into debt.  Application for bank guarantee: A guarantor will apply to a bank for line of credit of bank on behalf of an applicant so as to handle the guarantee business. After the application is approved, when the applicant wants to make cooperation with the guarantor again, the guarantor can submit some parts of the information to the bank on behalf of the applicant, and less information is needed and the bank guarantee can be obtained, which has eliminated the approval process for the applicants information before issuing the bank guarantee.  Performance bond: At the request of a labor party or a bidder (applicant), a guarantor will give a performance guarantee to the project owner (beneficiary). Once the bidder (applicant) is awarded the tender, the guarantor is able to continue giving the owner the performance bond on behalf of the winning bidder; otherwise, the guarantor will bear the liability for compensation for the beneficiary.  Credit certification: The background of credit certification: when a project needs open tender, the intended bidders will submit material for the tender. And sometimes, in view of various reasons, party A will conduct the prequalification, and only those builders who pass the prequalification can make the tender; when party A is conducting the prequalification, it will request those intended bidders to submit a lot of materials, and the credit certification is one of the materials that are often required to be submitted.  Guarantee of quality warranty: The guarantor gives the buyer (beneficiary) a guarantee to ensure the developer (applicant) fulfils the warranty obligation within the warranty period according to the Purchase Contract and Certificate of Quality. Unless it is the buyers reason or force majeure, if the developer fails to fulfill its warranty obligation agreed in the above document, the buyer has the right to require the guarantor to bear the contractual obligation or pay the damages.    DESCRIPTION OF INDUSTRY  Chinese guarantee industry was born with the reform in market economic structure and the increase in social credit demand. It is an indispensable part to Chinas market economy. Government promotes the development of this industry to accommodate the credit demand of small and medium-sized enterprise. It becomes an important part of Chinas policy-oriented financial framework. Those future commercial guarantee companies will have broad prospects and would be the leaders of segment market. A market scale effect is not formed between the current commercial guarantee companies, so a vertical and horizontal integration will be a  - 9 -  general trend for this industry. The rapid growth of Chinese guarantees industry will become an important force to promote the establishment of Chinas credit system.  GOVERNMENT REGULATION  The headquarter and the branches of CCG are established within PRC jurisdiction, where Chinese laws and regulations apply. The development of guarantee industry can promote the growth of enterprise, increase fiscal revenue and expand employment, economies of scale and social benefit. For this purpose, the government has successively promulgated a series of laws (such as Guaranty Law) and regulations (the project construction guarantee system enforced by many provinces) and policies (such as tax policy) in order to support this industry and make the market and guarantee industry develop in a healthy way.  CCG complies with the requirements of state laws and legislations in connection with the market permit, business scope, business type, professional aptitudes, internal control systems for guarantee agencies and obtained relevant approvals.    CUSTOMERS AND MARKETING  CCG provides services for government, enterprises, institutions and individuals. The government includes political and legal system, financial and tax system, traffic control system etc. Enterprises include financial industry, real estate industry, telecommunication industry and retail. Institutions cover various scientific research institutions, medical system and sports system institutions. Individuals cover job seeker, security guard, accountant and house purchaser, etc.  Over 5 years, CCG has formed a strong and well-established client base including the real estate giant industry Vanke Group, Zhonghai Real Estate Development Co., Ltd., Shenzhen Zhenye Group Co., Ltd., Baoli Group and engineering giants containing each branch of China State Construction Engineering Corporation, China Railway Construction Engineering Group and China Huashi Enterprises Company Limited and other famous enterprises such as Wal-Mart, Midea Group, Exxon Mobil Group, Citic Group etc.   CCG has formed a long-term strategic cooperative relationship with four large state-owned banks and commercial banks including China Construction Bank, Shanghai Pudong Development Bank, Shenzhen Ping An Bank, Industrial and Commercial Bank of China.   CCG has formed a complementary and cooperative league with companies of the same profession such as Shenzhen High Tech Investment & Guarantee Co., Ltd., Changan Guarantee Co., Ltd. and Shenzhen Small & Medium Enterprises Credit Guarantee Center Co., Ltd.   CCG has 19 branches across 28 provinces and 660 cities in China. Its strong sales team will provide clients with the comprehensive and one-stop service from pre-sales, sales and after-sales service.   CCG is building its brand image and marketing its main products by means of network platform, newspaper, TV media and 400 national customer service lines and exhibitions.  As a leader and innovator in market segment, CCG has always been standing at the forefront. It owns professional research and development capacity and is leading the industry to set standards.  - 10 -     COMPETITION  Chinas guarantee industry is still at a premature stage. More than 60% of the guarantee companies belong to the type of financing guarantee. The construction project guarantee industry which was born in 2003 as a result of the 2003 governmental mandatory implementation is always in an unsaturated state. Now that the Chinese economic stimulus package of RMB 4 trillion, out of 86% will be allocated to infrastructure works. The central government allots RMB 70 billion to reconstruct the disaster area in Sichuan Province and to begin their urbanization construction in Chinese rural areas. CCG will seize these opportunities and is ready to meet challenges.  Guarantee industry demonstrates the regional features. At present, the major competitors of CCG are Shenzhen Small & Medium Enterprises Credit Guarantee Center Co., Ltd., Credit Orienwise Group Limited and Shenzhen High Tech Investment & Guarantee Co., Ltd., etc. These companies are mainly engaged in financing guarantee for small & medium enterprises. But the financing guarantee involves great risk, and currently the risk control for domestic guarantee industry is weak. There is no established law and regulation concerning the industry. CCG takes the engineering guarantee which is of low risk, light assets, documents against payment and good cash flow as its main product, leading this industry by virtue of its professional service and brand advantage. Meanwhile, CCG has formed a cooperative alliance with other competitors to share the resources and take the complementary advantages of this industry.     EMPLOYEES  At the time of this report, SNAS had 155 employees, including 87 in sales and operations, and 68 in supporting and administrative functions.    REPORTS TO SECURITY HOLDERS  SNAS is subject to the reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder, and, accordingly, files reports, information statements or other information with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, annual reports on Form 10-K, reports of current events on Form 8-K, and proxy or information statements with respect to shareholder meetings.  Although SNAS may not be obligated to deliver an annual report to its shareholders, it intends to voluntarily send such a report, including audited financial statements, to its shareholders each year.  The public may read and copy any materials SNAS files with the SEC at the SECs Public Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The address is http://www.sec.gov.   ITEM 1A. RISK FACTORS  Risks associated with our financial condition   - 11 -  Current conditions in the global economy and the major industries we serve might materially and adversely affect our business and results of operations  Our business and operating results might be adversely affected by worldwide economic conditions.  As a result of slowing global economic growth, the credit market crisis, declining consumer and business confidence, shifts in consumer spending patterns, increased unemployment, reduced levels of capital expenditures, fluctuating commodity prices, bankruptcies and other challenges currently affecting the global economy, our clients might experience deterioration of their businesses, cash flow shortages, and difficulty obtaining financing.  As a result, existing or potential clients might delay or cancel plans to purchase our services.  If the global economic slowdown continues for a significant period or there is significant further deterioration in the global economy, our financial position and cash flows could be materially adversely affected.  We might require additional financing to fund operations or potential acquisitions.  If financing is not available, we might not be able to grow as we plan  At December 31, 2010, we had cash and cash equivalents of $7,074,893. However, in the future, we might be required to seek additional financing to fund operations or potential acquisition opportunities.  If we cannot raise sufficient capital, our ability to operate and to grow through acquisitions or otherwise respond to competitive pressures would be significantly limited.  If we are able to raise capital, but not on favorable terms, existing stockholders might suffer dilution of their ownership interests or otherwise lose value in their securities  If we raise additional funds through the issuance of equity securities or debt convertible into equity securities, the percentage of stock ownership by existing stockholders would be reduced. In addition, such securities could have rights, preferences and privileges senior to those of our stockholders, which could substantially decrease the value of our securities owned by them.  Risks Associated with the Companys Primary Business  Limited Operating History  There is a limited relevant operating history upon which an evaluation of the Companys prospects and future performance can be based. There can be no assurance that the Company will be able to raise additional capital to develop its business plan, generate meaningful revenues or become a viable business. Because the Companys markets are relatively new and constantly changing, the Company may need to change its business model frequently.  Risk of Payment of Guarantees  The Company may be obligated to pay on its tender and surety guarantees if the underlying transactions fail to close. While the Company tries to minimize these risks by performing due diligence and financial assessments of its clients and by taking a security interest in the collateral of its clients, there can be no assurance that the Company will not have to pay on its guarantees. Furthermore, the Company cannot assure you that the collateral in which the Company has a security interest will be sufficient to cover all or a portion of the amount of the Companys  - 12 -  guarantees. If the Companys clients fail to close the underlying transaction, the Companys business could be materially adversely affected.  Competition  Although the Company currently has few competitors, the Company expects competition to intensify in the future. The Companys current competitors have greater capabilities and resources than the Company has. Similarly, there can be no assurance that additional competitors with greater resources than that of the Company will not enter our market in the future. The State Economic and Trade Commission (SETC) SME Bureau in China may expand their existing services to SMEs and become the Companys competitor. If and when the Chinese government allows foreign financial institutions to enter into the financial guarantee industry in China, they may also become competitors of the Company. In the future, competitive pressures from competitors could cause the Companys services to lose market acceptance or result in significant price erosion, which would have a material adverse effect upon the Companys business, results of operations, or financial condition.  Risks associated with our officers, directors and employees  Any failure to adequately expand our direct sales force or to compensate sales personnel in appropriate ways will result in our being understaffed, which could reduce our sales and revenues  We expect to be substantially dependent on our direct sales force to obtain new customers. We believe that there is significant competition for direct sales personnel with advanced sales skills and technical knowledge. Our ability to achieve significant growth in revenue in the future will depend, in large part, on our success in recruiting, training and retaining sufficient direct sales personnel. New hires require significant training and, in some cases, might take more than a year before they achieve full productivity. Our existing personnel and planned hires might not become as productive as we would like, and we might not be able to hire sufficient numbers of qualified individuals in the future in the markets where we do business. We also must develop compensation packages that properly incentivize successful sales, including both selling to new customers and increasing sales to existing customers. If we are unable to hire and develop sufficient numbers of productive sales personnel, or develop compensation packages that properly incentivize successful sales, then we might not be able to maintain an adequate sales force, and the sales of our services could suffer.  Dependence on Key Personnel  The Company is highly dependent on the services of Guokang Tu, the Companys Chairman, Chief Executive Officer and director, Mengyou Tong, the Companys Chief Financial Officer, as well as other principal members of the Companys management team. The Companys executives not only manage the Companys day to day business operations but are essential to the Companys ability to establish and maintain relationships with its customers. The Company has no key man life insurance policies, although it may purchase such policies in the future. Continued growth and profitability will depend upon the Companys ability to maintain its current leadership infrastructure and recruit and retain qualified and experienced executive personnel. Competition in the Companys industry for executive-level personnel is strong and  - 13 -  there can be no assurance that the Company will be able to hire, motivate and retain highly effective executive employees. If the Company fails to attract, integrate and retain the necessary personnel, its ability to maintain and build its business could suffer significantly.  Risks Related to Our Securities  Limited Public Market for the Companys Common Stock  There is currently a limited public market for the shares of the Companys common stock. There can be no assurances that such limited market will continue or that any shares of the Companys common stock may be sold without incurring a loss. The market price of the Companys common stock may not necessarily bear any relationship to the Companys book value, assets, past operating results, financial condition or any other established criteria of value, and may not be indicative of the market price for its common stock in the future. Further, the market price for the Companys common stock may be volatile depending on a number of factors, including business performance, industry dynamics, news announcements or changes in general economic conditions.  Low-Priced Stocks  The Companys common stock is currently listed for trading on the OTC Bulletin Board, which is generally considered to be a less efficient market than markets such as NASDAQ or other national exchanges, and which make it more difficult for the Companys shareholders to conduct trades. It may also make it more difficult for the Company to obtain future financing. Further, the Companys securities are subject to the penny stock rules adopted pursuant to Section 15 (g) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The penny stock rules apply to non-NASDAQ companies whose common stock trades at less than $5.00 per share or which have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). Such rules require, among other things, that brokers who trade penny stock to persons other than established customers complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. In the event that the Company remains subject to the penny stock rules for any significant period, there may develop an adverse impact on the market, if any, for the Companys securities. Because the Companys securities are subject to the penny stock rules, investors will find it more difficult to dispose of the Companys securities. Further, for companies whose securities are traded in the over-the-counter market, it is more difficult to obtain accurate quotations and to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not publish press releases about such companies.  No Dividends  The Company has not paid any dividends on its common stock to date and there are no plans for paying dividends on its common stock in the foreseeable future. The Company intends to retain earnings, if any, to provide funds for the execution of its business plan. The Company does not  - 14 -  intend to declare or pay any dividends in the foreseeable future. Therefore, there can be no assurance that holders of common stock will receive any additional cash, stock or other dividends on their shares of common stock until the Company has funds, which our board of directors determines can be allocated to dividends.  PRC laws and our corporate structure may restrict our ability to receive dividends and payments from, and transfer funds to, our PRC operating company, which may negatively affect our results of operations and restrict our ability to act in response to changing market conditions. Substantially all of our operations are conducted through our PRC operating company, CCG. The ability of our PRC operating company to make dividend and other payments to us may be restricted by factors such as changes in applicable foreign exchange and other laws and regulations. For example, under the State Administration of Foreign Exchange (SAFE) regulations discussed above, the foreign exchange activities of our present or prospective PRC subsidiaries are conditioned upon the compliance with the SAFE registration requirements by the shareholders of our offshore entities who are PRC residents. Failure to comply with these SAFE registration requirements may substantially restrict or prohibit the foreign exchange inflow to and outflow from our PRC subsidiaries, including, remittance of dividends and foreign currency denominated borrowings by these PRC subsidiaries. In addition, our PRC operating company is required, where applicable, to allocate a portion of its net profit to certain funds before distributing dividends, including at least 10% of its net profit to certain reserve funds until the balance of such fund has reached 50% of its registered capital. These reserves can only be used for specific purposes, including making-up cumulative losses of previous years, conversion to equity capital, and application to business expansion, and are not distributable as dividends. Our PRC operating company is also required, where applicable, to allocate an additional 5% to 10% of its net profits to a statutory common welfare fund. The net profit available for distribution from our PRC operating company is determined in accordance with generally accepted accounting principles in China, which may materially differ from a determination performed in accordance with U.S. GAAP. As a result, we may not receive sufficient distributions or other payments from this entity to enable us to make dividend distributions to our shareholders in the future, even if our U.S. GAAP financial statements indicate that our operations have been profitable.  Fluctuations in the stock market as well as general economic, market and industry conditions might harm the market price of our common stock  The market price of our common stock has been subject to significant fluctuation.  The stock market in recent years has experienced price and volume fluctuations that, at times, have been unrelated or disproportionate to the operating performance of companies.  These fluctuations might harm the market price of our common stock, regardless of our operating results.  Risks Related to Doing Business In China  Government control of currency conversion and exchange rate fluctuations may materially and adversely affect our business  All of our revenue and expenses are denominated in Renminbi, the currency of China. A portion of such revenue may be converted into other currencies to meet our foreign currency obligations. In addition, we incur approximately 4.5% of our expenses in foreign currencies, mostly for  - 15 -  professional services such as auditors, attorneys and other intermediaries. Foreign exchange transactions under our capital account, including principal payments with respect to foreign currency-denominated obligations, continue to be subject to significant foreign exchange controls and require the approval of the SAFE in China. These limitations could affect our ability to obtain foreign exchange through debt or equity financing or to obtain foreign exchange for capital expenditures.  The Renminbi is reported to be measured against a basket of currencies determined by the Peoples Bank of China. The Renminbi may appreciate or depreciate significantly in value against the U.S. dollar in the long term, depending on the fluctuation of the basket of currencies against which it is currently valued, or it may be permitted to enter into a full float, which may also result in a significant appreciation or depreciation of the Renminbi against the U.S. dollar. Because all of our earnings and cash assets are denominated in Renminbi and our financial reporting is denominated in U.S. dollars, fluctuations in the exchange rates between the U.S. dollar and the Renminbi will affect our financial results reported in U.S. dollars terms without giving effect to any underlying change in our business, financial condition or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be exchanged into U.S. dollars and earnings from, and the value of, any U.S. dollar denominated investments we make in the future.  Historically, we have not engaged in exchange rate hedging activities. Although we may implement hedging strategies to mitigate exchange rate risk, these strategies may not eliminate our exposure to foreign exchange rate fluctuations and may involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategy and potential accounting implications.  Chinas Economic, Political and Social Conditions  Substantially all of the Companys operations and assets are located in China, and substantially all of its net revenue is derived from its operations in China. Accordingly, the Companys results of operations and future prospects are subject to economic, political and social developments in China. In particular, the Companys results of operations may be adversely affected by:  - changes in Chinas political, economic and social conditions; - changes in policies of the government or changes in laws and regulations, or the interpretation of laws and regulations; - changes in foreign exchange regulations; - measures that may be introduced to control inflation, such as interest rate increases; and - changes in the rate or method of taxation  The PRCs economy has historically been a planned economy. The majority of productive assets in China are still owned by various levels of the PRC government. In recent years the government has implemented economic reform measures emphasizing decentralization, utilization of market forces in the development of the economy and a high level of management autonomy. Such economic reform measures may be inconsistent or ineffectual, and the Company may not benefit from all such reforms. Furthermore, these measures may be adjusted or modified, possibly resulting in such economic liberalization measures being applied inconsistently from industry to industry, or across different regions of the country.  - 16 -   In the past twenty years, China has been one of the worlds fastest growing economies in terms of gross domestic product, or GDP. This growth may not be sustainable. Moreover, a slowdown in the economies of the United States, the European Union and certain Asian countries may adversely affect economic growth in China which depends on exports to those countries. The Companys financial condition and results of operations, as well as its future prospects, would be materially and adversely affected by an economic downturn in China.  The legal system in China has inherent uncertainties that may limit the legal protections available to you as an investor or to us in the event of any claims or disputes with third parties. The legal system in China is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, the central government has promulgated laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. As Chinas foreign investment laws and regulations are relatively new and the legal system is still evolving, the interpretation of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit the remedies available to our shareholders and to us in the event of any claims or disputes with third parties. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.  Internal political risks  Changes in laws and regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on the Companys business, results of operations and financial condition. Under its current leadership, the Chinese government has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization. There is no assurance, however, that the Chinese government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice. In addition, the Chinese government could enact laws which restrict or prohibit the Company from conducting its surety and loan guarantees.  Effecting Service of Legal Process and Enforcing Judgments Against Us and Our Management  Substantially all of our operations and assets are located in China. In addition, most of our directors and executive officers named in this document reside within China, and many of the assets of these persons are also located within China. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these directors or executive officers or some of the experts named in this document, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Moreover, management has been advised by the companys PRC legal counsel that China does not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of court judgments. As a result, recognition and enforcement in China of judgments of a court of the United States or any other jurisdiction, including judgments against us or our directors or executive officers, may be difficult or impossible.   - 17 -  A slowdown in the Chinese economy may negatively affect our growth and profitability  The Chinese economy on average grew approximately 9% per year for more than 25 years. Due to several factors, including those affecting the global economy as a whole, Chinas economic growth may be less compared to its historical growth, which may have a negative effect on our business. The recent global economic recession, which began in early 2008 has caused the global financial markets to undergo pervasive and fundamental disruption and loss, has affected the Chinese economy. This global economic recession has led to an increased level of commercial and consumer delinquencies, decline in consumer confidence, increased market volatility and widespread reduction of business activity generally. Current global economic pressures may further negatively impact Chinas economy. A worsening of global economic conditions and/or reduced business activity would likely negatively affect the Chinese economy which may slow our growth and reduce or eliminate our profitability.  Operating risk on loan business  Given that the demand for SME loans in future years is expected to remain high, the Company will study to put effort in financing service segment to capture such growth opportunity. However, the Company will continue being conservative in developing new business in order to maintain the quality of the loan portfolio. The Company will seek to explore new business to provide full spectrum of financial services to customers. We believe that this will greatly enhance the level of service that we provide to our customers in China and further expand our market share financing services business. Now the Company commence few business related to the loan borrowing but the China government not yet approves it. The Company is consulting the application of such kind of business for the approval by China government. Both the extent to which we are able to implement and the timing of its implementation will depend, largely, on the availability of working capital and the application approval from the China Government. Because there is no assurance that working capital and application approval will be available to us, there is also no assurance regarding the extent to which we will be able to implement our plan within the foreseeable future.  ITEM 1B. UNRESOLVED STAFF COMMENTS  N/A  ITEM 2. PROPERTIES  SNAS rents its facilities from companies owned by the third parties.  As of December 31, 2010, SNAS leased approximately 2,906 square meter of office space for its operations.  Its current leased properties are:  LocationSizeDescriptionShenzhen, China817 sq. mHeadquarters  - 18 -   Others, China2,089 sq. mBranches  SNASs current total rental payment for its facilities is approximately US$399,163 in the fiscal year 2010.  We intend to renew both of these leases upon their expiration.   ITEM 3. LEGAL PROCEEDINGS  SNAS is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.  None of SNASs directors, officers or affiliates, and no owner of record or owner of more than five percent (5%) of its securities, or any associate of any such directors, officer or security holder is a party adverse to SNAS or has a material interest adverse to it in reference to pending litigation.   ITEM 4. (REMOVED AND RESERVED)    PART II   ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  Our shares are approved for trading on the OTC Bulletin Board under the symbol SNAS.  The following table sets forth the quarterly high and low sales prices of a share of our common stock as reported by the OTC Bulletin Board for the periods indicated. The quotations listed below reflect inter-dealer prices, without retail mark-ups, mark-downs or commissions and may not necessarily represent actual transactions. Closing Bid PricesHighLowYear Ended December 31, 20101st Quarter$0.200$0.2002nd Quarter0.5950.2003rd Quarter0.5950.3504th Quarter0.5000.500Year Ended December 31, 20091st Quarter$1.000$1.0002nd Quarter1.0000.0703rd Quarter0.0700.0504th Quarter0.2000.060  None of SNASs common equities are subject to any outstanding options, warrants to purchase, or securities convertible into, common stock.   - 19 -  As of December 31, 2010, SNAS had 60,200,000 shares of common stock issued and outstanding.  The shares are held by 126 stockholders of record.  On or about January 14, 2010, the Company issued 200,000 shares of restricted stock to an investment banker to exchange the exclusive corporate finance advisory services  SNAS currently has no securities authorized for issuance under any equity compensation plans.  SNAS has never declared any cash dividends on its common stock and does not anticipate declaring dividends in the foreseeable future.    ITEM 6. SELECTED FINANCIAL DATA  N/A     ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PLAN OF OPERATIONS  Management Team's 2011 Operational Plan  I.     Operational Environment of Year 2011  1. In terms of legal environment, the country has established the Assurance Law framework based on two basic legislations, known as the "Contract Law" and the "Civil Law", the whole framework is further pivoted on the "Assurance Law" as supplemented by the Judicial Interpretation to it. Recently, in addition to the already existing fundamental laws and regulations that govern the industry of assurance (e.g. the "Company Law"); the country has passed the first "Property Law". 2. With regard to the policy aspect, in order to regulate the assurance business while promoting the growth of this industry, relating governmental bodies have enacted a series of laws, regulations and policies represented by the "Small to Medium Enterprises Promoting Law", the Interim Administrative Rules Guiding the Risk Control Work of Small to Medium Enterprises Engaged in the Assurance Business", the "Notice Regarding the Establishment of Credit Assurance System for Small to Medium Enterprises ", the "Administrative Rules for Small-Sum Guaranteed Loan for Unemployed Persons", the "Trial Methods for Undertaking Housing Credit Insurance Business" and the "Certain Trial Rules for the Introduction of Construction Contract Guarantee in Real Estate Developing Projects". All such rules and regulations have on one hand described the common practices of the assurance industry, strengthened the management of risk control, and on the other hand improved the industrial environment of the assurance business, thus have expanded the assurance business scope and boosted the growth of this industry.   - 20 -   3. As for the credit environment, the gradual establishment of social credit system in China has attracted the general public's attention. It is emphasized during the 16th National Congress of Communist Party of China that the country will start to straighten up and improve the order of the market economy, and will implement the construction work of social credit system as a strategic task. It is further clearly stated by the Third Plenary Sessions of the Sixteenth Central Committee that: the whole society's credit awareness shall be enhanced, the social credit system shall be established with the morality as the prop, the property as the foundation and the law as the assurance. Within the scope of five years, the basic framework and operational mechanism for China's social credit system shall be completed."  II.   Market Opportunity  1. In the field of construction projects, with 385.6 billion central government budget arranged and 200 billion local government bonds promised as stated in the plan of the state government, six key areas will be given priority for development, the prior two areas are the social welfare housing development, the construction projects for rural infrastructure and the construction projects for the improvement of rural citizens livelihood. Meanwhile, almost all local governments have identified their own significant construction projects, for instance, the city of Beijing plans to invest 161 billion RMB in year 2011 to develop 230 key projects, which represents a 15% growth comparing with last year. These important projects include the construction of Beijings new airport and connected highways, the establishment of the new airport surrounding economic zone in southern Beijing, the infrastructure construction projects for rail transit facilities and urban roads, the reconstruction of the old town and the urbanization of 50 major villages. Xinjiang province, however, will continue to invest in the fields of railway, highway, pipelines, and electric power facilities. The provincial government of Xinjiang has identified 252 important projects with 40 projects newly launched; the budget has been loaded with over 150 billion RMB. By the end of September 2010, the total turnover of Chinas project contract undertaken abroad has exceeded 400 billion USD with the contract amount reaching 642.3 billion USD. From January 2010 to September 2010, completed turnover of Chinas project undertaken abroad has increased by 16.6% and reached the amount of 59.3 billion USD, the total amount of newly signed contracts also reached 81.98 billion USD. As for the performance guarantee business, the letter of guarantee for foreign contract performance alone, calculated as of 10% of the total contract amount, will account for 6 billion USD.  2. As for the sector of railway material purchase, according to the announcement of the Ministry of Railways, Chinas railway fixed assets investment will be around 850 billion RMB with 700 billion RMB known as investment for infrastructure. Based on the national collection of completion indicators for major railway development projects as released by the Ministry of Railways on February 12th, last years railway related fixed assets investment has increased by 18.8% comparing with the figure of 702 billion RMB of year 2009. Meanwhile, last years railway infrastructure investment has also increased by 18.1% comparing with the figure of 600.4 billion RMB of year 2009. Drawing a comparison between the two types of investments in previous two years, it could be noted that the scale  - 21 -  of infrastructure investment remains unchanged while the fixed assets investment has been expanded. 3. Other business sectors. The State Grid has revealed in its annual working conference that, in the next five years, four major areas that will be preferentially developed, are the extra-high voltage, the smart grid, the new round of rural grid construction and the internationalization. The Annual Working Plan of State Grid has mapped out that the investment for smart transformer substation will grow by 2000%, the investment for distribution automation will grow by 100%, and the intelligent ammeter will grow by 4%. Thus, it could be expected that demands for the letter of guarantee business for the State Grids purchase of power equipment and the grid construction projects will also experience a tide of considerable growth.  III.   2011 Market Expansion Proposal and Safeguard Measures  Market Expansion Proposal (Research for New Products and Market)  1. The Company will accelerate the process of expansion by targeting new markets, 5 subsidiaries will be established in 2011 to make the sales network covering all major medium to large cities of China. Additionally, the sales model will be diversified to comprehensively use the sales modes of call-center, internet and shop-at-home. 2. The Company will further extend its business scope, by strengthening the existing relationship with China Construction Bank and Shanghai Pudong Development Bank, to acquire more favorable treatments for the companys existing business and broaden the business scope.  3. The Company will endeavor to create more products to further cultivate the letter of guarantee business for railway material purchase as well as touching the business of commercial letter of guarantee and the international letter of guarantee, for example: Letter of Guarantee of International Leasing, Performance Guarantee Letter for Commercial Property, Letter of Guarantee for International Projects, Letter of Guarantee for Temporary Custom Import Tax and the Letter of Guarantee for the Risk Security for foreign labor cooperation.   Safeguard Measures  1. The Company will develop innovative risk control mechanism to reduce the risk. The guarantee industry is a high risk industry, and one negative business may bring in tremendous burden to the operation of the company. To effectively avoid the risk, the internal control system needs to be enhanced and improved. The Company will set up a project assessment panel in 2011 to build up a risk-control and discussion mechanism to ensure a steady growth of business with comparatively low risks.  - 22 -    2. The Company will try to ensure the talent-oriented developing strategy by redesigning the current employing mechanism. As a new industry in China, the assurance industry is often quoted as a high risky and strongly professional industry, thus this industry would impose strict requirements for the practitioners. Inferring from the development status of the whole countrys assurance entities, lack of human resource now becomes a universal phenomenon. In order to promote sustainable development, the Company will start to form a professional team in 2011. Also, the Company will recruit intelligent graduates from developed regions such as Beijing, Shanghai and Shenzhen to establish a better environment for educating and selecting talents, while creating a better employing and reserve of talents system.  3. The Company will continue to be client-centric in 2011, the whole Company will act more closely and professionally to increase clients confidence in the company. Post-sale service will become the major task in year 2011, the Companys service will not end when the client makes the purchase, instead, the Company will track the new status of the client after the service to promptly reduce the business risks and maintain a good relationship between the Company and clients.  4. The Company will reinforce the communication with business partners by more actively participating in various activities organized by the industrial association, the construction bodies and the cooperating banks. Therefore, the Company will be able to acquire the most up-to-date information of the industry, to embrace the new operational theories to enable the Company to develop in the same pace of time. We do not have any material off-balance sheet arrangements.  RESULTS OF OPERATIONS  Year Ended December 31, 2010 compared with 2009  Net revenue: Net revenue for the year ended December 31, 2010, was $12,152,741 as compared to $6,201,287 for the same period in 2009. The increase of $5,951,454 or approximately 96% was due to achieved significant year-over-year growth of our customer base in the tender and surety guarantee business and market share in China. The gross margin increased to 85% from 78% for the year ended December 31, 2009, it was due to increase in the percentage of the guarantee fee income, and tightening of control of our cost of sales.  Income before income tax: Income before income tax for the year ended December 31, 2010 was $6,514,978 compared with $2,602,750 for the whole year of 2009. The increase was mainly due to increase in guarantee fee income by increasing bank referral business and employed more agents to promote guarantee business, and tightening of control of our selling, general and administrative expenses.  Operating expenses: Total operating expenses were $3,713,837 for year ended December 31, 2010, as compared to $2,190,331 for the same period in 2009.  The increase of $1,523,506 or  - 23 -  70% was mainly due to increase in provision of guarantee losses, rent, depreciation and staff cost. The reasons for the changes in the major items are as follows:  (1) Provision of guarantee losses - increase by $575,610 or 552% from $104,273 in 2009 to $679,883 in 2010. The increase was mainly due to the increase in revenue. (2) Rent - increase by $98,703 or 33% from $300,460 in 2009 to $399,163 in 2010. The increase was mainly due to expansion of the business during the year 2010. (3) Depreciation - increase by $27,631 or 33 % from $83,507 in 2009 to $111,138 in 2010. The increase was primarily due to the addition of fixed assets during the year 2010. (4) Staff costs - increase by $453,121 or 43 % from $1,063,571 in 2009 to $1,516,692 in 2010. The increase was mainly due to increase in headcounts and pay rates during the year of 2010.  We anticipate that our operating expenses will increase in future periods, as we increase sales and marketing operations, and fulfill our obligation as a listing company under the Exchange Act.  LIQUIDITY AND CAPITAL RESOURCES  Cash flow  For the year ended December 31, 2010, cash provided by operating activities totaled $8,043,993 compared to $2,658,199 for the fiscal year ended December 31, 2009. The receipt of funds was primarily due to net income for the year plus increase in income tax payable, deferred revenue, trade payable, accrued liabilities and other payable, and off-set by increase in guarantee fee receivable, prepayment and other receivable.  For the year ended December 31, 2010, cash used in investing activities amounted to $1,722,022 compared to $2,189,731 for the fiscal year ended December 31, 2009. The use of funds was for the purchase of plant and equipment, advances for loans receivable, as well as change in restricted cash, net of customer collateral, which partially offset by the receipts from loans receivable.  Assets and liabilities  For the year ended December 31, 2010, the Companys balance sheet reflects total current assets of $23,247,141 and total current liabilities $13,345,486. These items increase by $13,403,827 (or 136%) and $8,233,072 (or 161%) respectively as compared to the year ended December 31, 2009. The increase of total current assets was mainly due to increase of cash and cash equivalents, restricted cash, prepayments and other receivable, partially offset by decrease in loans receivable. The increase in total current liabilities was mainly due to increase in accounts payable, customer collateral, deferred revenue, income tax payable, deferred tax liabilities, accrued liabilities and other payable.  As of December 31, 2010, cash and cash equivalent was $7,074,893, as compared to December 31, 2009 balances of $559,105. The increase was mainly due to the increase in cash generated  - 24 -  from operation. As of December 31, 2010, restricted cash and customer collateral was $13,050,117 and $8,830,517 respectively, as compared to December 31, 2009 balances of $5,817,191 and 3,729,734 respectively. The increase was mainly due to the increase of the tender and surety guarantee business.  As of December 31, 2010, deferred revenue was $915,847 as compared to $364,636 for the same period in 2009.  The increase was due to the increase of surety guarantee business with which the services lasted for more than one year. As of December 31, 2010, accrued liabilities and other payable was $1,455,009 as compared to $576,768 for the same period in 2009.  The increase was due to the increase in provision for guarantee loss which in line with the increase in revenue.  The Company maintained cash and cash equivalent $7,074,893 as of December 31, 2010. The Company has sufficient funds to satisfy its financial commitments and working capital requirements for the next twelve months. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our marketing and sales activities, the expansion of our operating capacity, and the continuing market acceptance of our services.  As of December 31, 2010, The Company owed $61,614 to Mr. Guokang Tu, a director. The loan was unsecured, interest-free with no fixed repayment term.  As of December 31, 2010, The Company had surety and tendering guarantees outstanding resulting in restricted cash with approximately $8,830,517 from customer collateral and $4,219,600 for escrow deposits at the bank. Restricted cash represents (i) fund received from customers for the purpose of trust deposits held at the banks by the Company to pledge against the surety and tendering guarantee under the contractual guarantee period and (ii) escrow deposits as security to the bank for the provision of banking surety guarantee service. Such restricted cash under item (i) is an asset of the Company and is recorded as customer collateral payable to the customers upon the expiry of the guarantee contracts.  In December 2010, the Company also provided a loan sum of $2,842,001 to Party B in a term of 12 months, receivable by December 30, 2011, with an interest rate of 2.52% per annum payable at its due date.  For the year ended December 31, 2010, The Company had the total future lease commitments under non-cancellable operating leases are $1,135,820. The Company currently has working capital sufficient to fund these lease commitments.  As of December 31, 2010, The Company has contingent liabilities in respect of guarantees granted under the surety and tendering guarantee services business in the aggregate amount of $118,543,088. As of December 31, 2010, The Company has 514 surety and tendering guarantees outstanding. If all the Companys customers fail to complete their performance obligation in a timely manner so that the Company is obligated to pay on its guarantees, the Company would have the maximum potential amount of future payments of approximately $118,543,088 (RMB783,783,186) in total. The Company has significant concentration risk related to its guarantees on potential loss if the customers fail to the completion of their performance obligation in a timely manner under the surety guarantees. To reduce these potential losses, the  - 25 -  Company holds collateral in the form of cash equivalents, which are reflected in customer collateral on the balance sheets as they are held in restricted cash in the Companys name.  Provision for guarantee losses reflects the Companys best projection of defaults and the Company believes that it is more likely as a result of loss events that have occurred through December 31, 2010. However, the uncertainty in macroeconomic factors and the uncertainty of the effect of any current or future government actions to the global economic crisis make forecasting of default rates increasingly imprecise. The Company regularly reviews actual guarantee loss claims experience to determine if any necessary adjustments may be recognized to the reserve in the period in which those differences arise or are identified. The Company has no actual guarantee loss claims for during the year. At December 31, 2010, the Company has accrued $1,031,803 on the reserve for guarantee losses for any potential claims.  OFF-BALANCE SHEET ARRANGEMENTS  We did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.  CRITICAL ACCOUNTING POLICIES  Critical Accounting Policies  We prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities, (ii) the disclosure of our contingent assets and liabilities at the end of each fiscal period and (iii) the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.  When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgment and other uncertainties affecting the application of such policies, (iii) the sensitivity of reported results to changes in conditions and assumptions. We believe the following accounting policies involve the most significant judgment and estimates used in the preparation of our financial statements.  Basis of consolidation  The consolidated financial statements include the financial statements of SNAS and its subsidiaries and variable interest entity (VIE). All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.  Revenue Recognition   - 26 -  The Company provides guarantee services to corporations and individuals in issuing and obtaining surety or tendering guarantees for their business operations and/or personal use. In exchange for the Companys guarantee services, the customers pay the Company a certain percentage of the surety amount as an upfront guarantee fee. Maturities of surety and tendering guarantees will generally range from 2 days to 2 years, and are secured by bank deposits made by the Company. If a customer fails to fulfill its performance obligations under surety or tendering guarantees, the bank will take possession of the Companys deposit.  The Company follows ASC Topic 605-20-25-8, Fees for Guaranteeing a Loan and recognizes the guarantee fee income over the term of the contract on a straight line basis, net of business taxes, the price to the client is fixed or determinable, and collectability of the resulting receivable is reasonably assured.  At the balance sheet date, any fees received in advance under the guarantee contracts are recorded as deferred revenue and amortized as revenue over the term of the guarantee period on a straight-line basis.  Concurrently, the Company recognizes the bank charges associated with the guarantee as cost of revenue when incurred.  Guarantee fee receivable  Guarantee fee receivables are fees owed to the Company for its guarantee services but not yet received from its customers. In the guarantee transactions, the Company will place funds on deposit with the banks to guaranty the completeness of performance obligation by the Companys customers. Fees received in advance under the guarantee transactions are recorded as deferred revenue and amortized as revenue over the term of the guarantee period on a straight-line basis.  The Company regularly monitors the guarantee activities to ensure that the performance obligation was completed in a timely manner and that the Company is allowed to receive its guarantee fee. If necessary, the Company charges against as a deduction in the customer collateral held to recover the guarantee fee receivable. Guarantee fee receivables are considered impaired if payment of the fee is not received by the Company in accordance with the terms of the guarantee agreement with each customer. When any receivable balances are determined to be uncollectible, these balances are written off immediately.  Income taxes  The provision for income taxes is determined in accordance with ASC Topic 740, Income Taxes (ASC 740). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.   - 27 -  ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  For the years ended December 31, 2010 and 2009, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2010, the Company did not have any significant unrecognized uncertain tax positions.  The Company conducts major businesses in the PRC and is subject to tax in its own jurisdiction. As a result of its business activities, the Company files separate tax returns that are subject to examination by the foreign tax authorities. For the year ended December 31, 2010, the Company filed and cleared a 2009 tax return with its local tax authority in the PRC.  Provision for guarantee losses  In connection with the nature of its guarantor business, the Company regularly reviews actual guarantee loss claims experience to determine if any necessary adjustments may be recognized to the reserve in the period in which those differences arise or are identified. Provision for guarantee losses reflects the Companys best projection of defaults and the Company believes that it is more likely as a result of loss events that have occurred through December 31, 2010.  As of December 31, 2010, the Company has 514 surety and tendering guarantees outstanding. If the Companys customers fail to complete their performance obligation in a timely manner so that the Company is obligated to pay on its guarantees, the Company would have the maximum potential amount of future payments of approximately $118,543,088 (RMB783,783,186) as follows:  Surety Guarantee$118,519,191Employee Guarantee23,897$118,543,088  In order to reduce a certain level of default risk under the guarantee contracts, the Company also requests the required amount of cash deposits from the customers as security to the Company to assure the satisfaction of their performance obligations arising from the surety or tendering guarantees. These cash collaterals are recorded under the caption of Restricted cash as assets and Customer collateral as liabilities on the balance sheet. Upon the expiry of the guarantee contract, the Company will refund the cash deposit to the customers in full.  In connection with the nature of its guarantee business, the Company is exposed to the potential losses from the shortfall of the guaranteed amount over its customer collateral, if the customers fail to the completion of their performance obligation in a timely manner under the surety guarantees. Therefore, the Company regularly reviews actual claims from guarantee loss to  - 28 -  determine if any necessary adjustments may be recognized to the reserve in the period in which those differences arise or are identified. The Company follows ASC Topic 450-20-25, Loss Contingencies and assesses the estimated losses from a loss contingency among the outstanding guarantee contracts at the balance sheet date. Provision for guarantee losses reflects the Companys best projection of defaults and the Company believes that it is more likely as a result of loss events that have occurred through the balance sheet date.  Foreign currencies translation  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.  The reporting currency of the Company is the United States Dollars ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Companys operating entity in the PRC maintains its books and records in its local currency, Renminbi Yuan ("RMB"), which is functional currency as being the primary currency of the economic environment in which its operation is conducted.  In general, for consolidation purposes, assets and liabilities of its operating entity whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign entities are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholders equity.  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS N/A     - 29 -


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA       SINO ASSURANCE INC.   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS    PageReport of Independent Registered Public Accounting Firm31Consolidated Balance Sheets32Consolidated Statements of Operations And Comprehensive Income33Consolidated Statements of Cash Flows34Consolidated Statements of Changes in Stockholders Equity35Notes to Consolidated Financial Statements36 - 51      - 30 -   [snas2010_10ka22010final003.gif]   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of Directors and Stockholders of Sino Assurance Inc.  We have audited the accompanying consolidated balance sheets of Sino Assurance Inc. and its subsidiaries (the Company) as of December 31, 2010 and 2009 and the related consolidated statements of operations and comprehensive income, cash flows and changes in stockholders equity and for the years ended December 31, 2010 and 2009. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of the Companys internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years ended December 31, 2010 and 2009, in conformity with accounting principles generally accepted in the United States of America.      HKCMCPA Company Limited /s/ HKCMCPA Company Limited   HKCMCPA Company Limited (Formerly ZYCPA Company Limited) Certified Public Accountants  Hong Kong, China March 18, 2011  - 31 - [snas2010_10ka22010final004.gif]     SINO ASSURANCE INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)  As of December 31,20102009ASSETSCurrent assets:Cash and cash equivalents$7,074,893$559,105Restricted cash13,050,1175,817,191Guarantee fee receivables18,003790Loans receivable, unsecured2,842,0013,268,244Prepayments and other receivables262,127197,984Total current assets23,247,1419,843,314Non-current assets:Plant and equipment, net410,807275,232TOTAL ASSETS$23,657,948$10,118,546LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable, trade$130,209$7,004Customer collateral8,830,5173,729,734Deferred revenue915,847364,636Amount due to a related party61,61459,582Income tax payable529,44729,113Deferred tax liabilities1,422,843345,577Accrued liabilities and other payables1,455,009576,768Total current liabilities13,345,4865,112,414Commitments and contingenciesStockholders equity:Common stock, $0.001 par value; 200,000,000 shares authorized; 60,200,000 and 60,000,000 shares issued and outstanding, respectively60,20060,000Additional paid-in capital2,970,0452,915,121Accumulated other comprehensive income468,837172,065Statutory reserve332,153158,314Retained earnings6,481,2271,700,632Total stockholders equity10,312,4625,006,132TOTAL LIABILITIES AND STOCKHOLDERS EQUITY$23,657,948$10,118,546      See accompanying notes to consolidated financial statements.  - 32 -    SINO ASSURANCE INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)  Years ended December 31,20102009REVENUES, NETGuarantee fee income$12,036,998$6,132,725Interest income115,74368,562Total revenues, net12,152,7416,201,287COST OF REVENUE(1,923,926)(1,411,503)GROSS PROFIT10,228,8154,789,784Operating expenses:Depreciation111,13883,507Selling, general and administrative2,922,8162,002,551Provision for guarantee losses679,883104,273Total operating expenses3,713,8372,190,331INCOME FROM OPERATIONS6,514,9782,599,453Other income:Other income-3,297INCOME BEFORE INCOME TAXES6,514,9782,602,750Income tax expense(1,560,544)(443,835)NET INCOME$4,954,434$2,158,915Other comprehensive income:- Foreign currency translation gain296,7728,226COMPREHENSIVE INCOME$5,251,206$2,167,141Net income per share  Basic and diluted$0.08$0.04Weighted average common shares outstanding  Basic and diluted60,192,22260,000,000         See accompanying notes to consolidated financial statements.  - 33 -    SINO ASSURANCE INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$))  Years ended December 31,20102009Cash flows from operating activities:Net income$4,954,434$2,158,915Adjustments to reconcile net income to net cash provided by operating activities:Depreciation111,13883,507Stock based compensation40,000-Loss on disposal of plant and equipment1,9957,492Provision for guarantee losses679,883104,273Deferred tax expense1,039,244345,390Changes in operating assets and liabilities:Guarantee fee receivable(16,763)16,797Prepayments and other receivable(55,980)(71,455)Accounts payable, trade119,938(63,890)Deferred revenue525,511(37,599)Income tax payable487,04484,309Accrued liabilities and other payable157,54930,460Net cash provided by operating activities8,043,9932,658,199Cash flows from investing activities:Change in restricted cash, net of customer collateral(2,010,222)(819,503)Receipts from loans receivable5,719,344-Advances on loans receivable(5,194,926)(3,266,476)Receipts from notes receivable-1,900,335Proceeds from disposal of plant and equipment1,020835Purchase of plant and equipment(237,238)(4,922)Net cash used in investing activities(1,722,022)(2,189,731)Cash flows from financing activities:Proceeds from capital contribution15,124-Net cash provided by financing activities15,124-Effect of exchange rate changes in cash and cash equivalents178,693479NET CHANGE IN CASH AND CASH EQUIVALENTS6,515,788468,947CASH AND CASH EQUIVALENT, BEGINNING OF YEAR559,10590,158CASH AND CASH EQUIVALENT, END OF YEAR$7,074,893$559,105SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for income taxes$34,256$15,235Cash paid for interest$-$-  See accompanying notes to consolidated financial statements.  - 34 -


SINO ASSURANCE INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)


|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |            | 
|--------------------------------------- |  | ------------- |  | -------------------------- | ------ | -------------------------------------- | - | ----------------- |  | --------------------------------------- | ------- | -------------------------- | - | ------- |  | - | --------- |  | - | ---------- | 
|                                        |  | Common Stock  |  | Additional paid-in capital |        | Accumulated other comprehensive income |   | Statutory reserve |  | (Accumulated deficit) retained earnings |         | Total stockholders equity
|                                        |  | No. of shares |  | Amount                     |        |                                        |   |                   | 
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Balance as of January 1, 2009           |  | 60,000,000    |  | $                          | 60,000 |                                        | $ | 2,915,121         |  | $                                       | 163,839 |                            | $ | 104,230 |  | $ | (404,199) |  | $ | 2,838,991 
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Net income for the year                 |  | -             |  |                            | -      |                                        |   | -                 |  |                                         | -       |                            |   | -       |  |   | 2,158,915 |  |   | 2,158,915 
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Foreign currency translation adjustment |  | -             |  |                            | -      |                                        |   | -                 |  |                                         | 8,226   |                            |   | -       |  |   | -         |  |   | 8,226     
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Appropriation to statutory reserve      |  | -             |  |                            | -      |                                        |   | -                 |  |                                         | -       |                            |   | 54,084  |  |   | (54,084)  |  |   | -         
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Balance as of December 31, 2009         |  | 60,000,000    |  |                            | 60,000 |                                        |   | 2,915,121         |  |                                         | 172,065 |                            |   | 158,314 |  |   | 1,700,632 |  |   | 5,006,132 
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Common stock issued for service         |  | 200,000       |  |                            | 200    |                                        |   | 39,800            |  |                                         | -       |                            |   | -       |  |   | -         |  |   | 40,000    
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Capital contribution from stockholders  |  | -             |  |                            | -      |                                        |   | 15,124            |  |                                         | -       |                            |   | -       |  |   | -         |  |   | 15,124    
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Net income for the year                 |  | -             |  |                            | -      |                                        |   | -                 |  |                                         | -       |                            |   | -       |  |   | 4,954,434 |  |   | 4,954,434 
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Foreign currency translation adjustment |  | -             |  |                            | -      |                                        |   | -                 |  |                                         | 296,772 |                            |   | -       |  |   | -         |  |   | 296,772   
|                                        |  |               |  |                            |        |                                        |   |                   |  |                                         |         |                            |   |         |  |   |           |  |   |           
|Appropriation to statutory reserve      |  | -             |  |                            | -      |                                        |   | -                 |  |                                         | -       |                            |   | 173,839 |  |   | (173,839) |  |   | -         
|Balance as of December 31, 2010         |  | 60,200,000    |  | $                          | 60,200 |                                        | $ | 2,970,045         |  | $                                       | 468,837 |                            | $ | 332,153 |  | $ | 6,481,227 |  | $ | 10,312,462

See accompanying notes to consolidated financial statements.  -35-


SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   1. ORGANIZATION AND BUSINESS BACKGROUND  Sino Assurance Inc. (the Company or SNAS) was incorporated in the State of Delaware on August 19, 1997 as Sheffield Products, Inc. On November 30, 2004, the Company changed its name to Digital Network Alliance International, Inc. On November 20, 2008, the Company further changed its current name to Sino Assurance Inc.  The Company, through its subsidiaries and variable interest entity, is principally engaged in the provision of surety and tendering guarantees and financial service to corporations and individuals in the Peoples Republic of China (the PRC).  Details of subsidiaries and variable interest entity  NamePlace of incorporation
and kind of
legal entityPrincipal activities
and place of operationParticulars of issued/
registered capitalEffective interest
heldLinking Target Limited (LTL)British Virgin Island (BVI), a limited liability companyInvestment holding1 issued shares of US$1 each100%Century Maker Limited (CML)Hong Kong, a limited liability companyInvestment holding1 issued shares of HK$1 each100%Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited (ZHJ)The PRC, a limited liability companyProvision of business consulting service in the PRCRMB100,000100%China Construction Guaranty Company Ltd (CCG) #The PRC, a limited liability companyProvision of guarantee and financial service in the PRCRMB50,000,000- # represents variable interest entity  SNAS and its subsidiaries including its variable interest entity are hereinafter collectively referred to as (the Company).   2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  l Basis of presentation  These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).  l Use of estimates  -36-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)    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 years reported. Actual results may differ from these estimates.  l Basis of consolidation  The consolidated financial statements include the accounts of SNAS and its subsidiaries and variable interest entity (VIE). All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.  l Variable interest entity  To comply with the PRC laws and regulations, the Company currently conducts substantially all of its businesses through CCG, which is considered as a VIE.  Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited (ZHJ), a wholly-owned subsidiary of the Company, entered into a series of contractual arrangements with CCG. Through the contractual arrangements, described below, the Company has variable interest of CCG and consequently is the primary beneficiary of CCG. Agreements that provide ZHJ effective control over CCG are as follows:


|   |                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Operating Agreement                                                                                                                                                                                                                                                                                                                         
|   | CCG and the registered legal owner of CCG mutually agree to grant CCG with the principal operating decision making rights, such as appointment of directors and senior executive officers of the VIE. Also, ZHJ is a guarantor to CCG in connection with the operational performance of all contracts entered between CCG and third parties.
|   |                                                                                                                                                                                                                                                                                                                                             
|2. | Exclusive Management Service and Business Consulting Agreement                                                                                                                                                                                                                                                                              
|   | ZHJ is an exclusive provider of the business consulting, related services and financial support to CCG for a period of 20 years, in return for a service fee which is equal to all of CCGs annual net profit. The service fees are eliminated upon consolidation.                                                                          
|   |                                                                                                                                                                                                                                                                                                                                             
|3. | Option Agreement                                                                                                                                                                                                                                                                                                                            
|   | ZHJ has the irrecoverable right to purchase the equity interests of CCG from the registered legal equity owners of CCG, to the extent permitted under PRC laws and regulations at the request of the Company.                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                             
|4. | Proxy Statement                                                                                                                                                                                                                                                                                                                             
|   | All of the registered legal equity owners of CCG irrecoverably grant and entrust with their voting rights and vote on their behalf on all matters they are entitled to vote on, under the laws of the PRC and the Articles of Association of CCG.                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                             
|5. | Equity Pledge Agreement                                                                                                                                                                                                                                                                                                                     
|   | All of the registered legal equity owners of CCG have pledged their respective equity interests in CCG as a security the obligations of the registered legal equity owners and CCG under the agreements and for the payment by CCS under the exclusive management service and business consulting agreement.                                

-37-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)


| | 
| | 

Management believes that all these contractual agreements with CCG are in compliance with PRC law and are legally enforceable.  The Company has adopted ASC Topic 810-10-5-8, Variable Interest Entities. ASC Topic 810-10-5-8 requires a variable interest entity or VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIEs residual returns. With the above agreements, the Company, through ZHJ demonstrates its ability to control CCG as the primary beneficiaries and the operating results of the VIE was included in the consolidated financial statements for the years ended December 31, 2010 and 2009.  l 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.  The Company maintains cash accounts with a number of financial institutions in the PRC. As of December 31, 2010, the Company has cash concentration risk of $5,077,370 which held by two financial institutions in the PRC as follow:


|                              |   |          
|----------------------------- | - | ---------
|Ping An Bank                  | $ | 3,024,979
|Zhongshan Xiaolan County Bank |   | 2,052,391
|                              | $ | 5,077,370

l Restricted cash  The Company mainly maintains restricted cash in depository accounts with financial institutions in the PRC, which are generally insured by the Peoples Bank of China.  l Guarantee fee receivable  Guarantee fee receivables are fees owed to the Company for its guarantee services but not yet received from its customers. In the guarantee transactions, the Company will place funds on deposit with the banks to guaranty the completeness of performance obligation by the Companys customers. Fees received in advance under the guarantee transactions are recorded as deferred revenue and amortized as revenue over the term of the guarantee period on a straight-line basis.  The Company regularly monitors the guarantee activities to ensure that the performance obligation was completed in a timely manner and that the Company is allowed to receive its guarantee fee. If necessary, the Company charges against as a deduction in the customer collateral held to recover the guarantee fee receivable. Guarantee fee receivables are considered impaired if payment of the fee is not received by the Company in accordance with the terms of the guarantee agreement with each customer. When any receivable balances are determined to be uncollectible, these balances are written off immediately.  l Plant and equipment  -38-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)    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:


|                                      |                       |  |               
|------------------------------------- | --------------------- |  | --------------
|                                      | Expected useful lives |  | Residual value
|Leasehold improvement                 | 3-5 years             |  | -             
|Furniture, fittings, office equipment | 3-10 years            |  | 5%            
|Motor vehicles                        | 5 years               |  | 5%            

Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.  l Impairment of long-lived assets  Long-lived assets primarily include plant and equipment. In accordance with the provisions of Accounting Standards Codification ("ASC") Topic 360-10-5, Impairment or Disposal of Long-Lived Assets, the Company periodically reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value using an undiscounted cash flow analysis. There has been no impairment change for the years presented.  l Customer collateral  The Company maintains and safeguards cash deposits from certain customers in order to ensure the satisfaction of their performance obligations arising from the surety or tendering guarantees. The cash collateral assets are restricted under the caption of Restricted cash and are presented on the balance sheet.  l Deferred revenue  Guarantee fee received in advance from rendering of service are recorded as deferred revenue and are amortized into revenue ratably over the related contract period.  l Revenue recognition  In accordance with ASC Topic 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured.  (a) Guarantee revenue  The Company provides guarantees service to corporations and individuals in issuing and obtaining surety or tendering guarantees for their business operations and/or personal use. In exchange for the Companys  -39-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   guarantee services, the borrower pays the Company a certain percentage of the surety amount as an upfront guarantee fee. Maturities of surety and tendering guarantees will generally range from 2 days to 2 years, and are secured by bank deposits made by the Company. If a customer fails to fulfill its obligations to a lender, the bank will take possession of the Companys deposit.  The Company follows ASC Topic 605-20-25-8, Fees for Guaranteeing a Loan and recognizes the guarantee fee income over the term of the contract on a straight line basis, net of business taxes, the price to the client is fixed or determinable, and collectability of the resulting receivable is reasonably assured.  At the balance sheet date, any fees received in advance under the guarantee contracts are recorded as deferred revenue and amortized as revenue over the term of the guarantee period on a straight-line basis.  Concurrently, the Company recognizes the bank charges associated with the guarantee as cost of revenue when incurred.  (b) Interest income  Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable.  l Advertising expense  Advertising costs are expensed as incurred under ASC Topic 720-35, Advertising Costs. The Company incurred $8,195 and $21,149 for the years ended December 31, 2010 and 2009, respectively.  l Provision for guarantee losses  In connection with the nature of its guarantee business, the Company is exposed to the potential losses from the shortfall of the guaranteed amount over its customer collateral, if the customers fail to the completion of their performance obligation in a timely manner under the surety guarantees. Therefore, the Company regularly reviews actual claims from guarantee loss to determine if any necessary adjustments may be recognized to the reserve in the period in which those differences arise or are identified. The Company follows ASC Topic 450-20-25, Loss Contingencies and assesses the estimated losses from a loss contingency among the outstanding guarantee contracts at the balance sheet date. Provision for guarantee losses reflects the Companys best projection of defaults and the Company believes that it is more likely as a result of loss events that have occurred through the balance sheet date.  For the years ended December 31, 2010 and 2009, the Company has recognized $679,883 and $104,273 on the provision for guarantee losses for any potential claims, respectively.  l Income taxes  The provision for income taxes is determined in accordance with ASC Topic 740, Income Taxes (ASC 740). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary  -40-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and discloses in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  For the years ended December 31, 2010 and 2009, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2010, the Company did not have any significant unrecognized uncertain tax positions.  The Company conducts major businesses in the PRC and is subject to tax in its own jurisdiction. As a result of its business activities, the Company files separate tax returns that are subject to examination by the foreign tax authorities. For the year ended December 31, 2010, the Company filed and cleared a 2009 tax return with its local tax authority in the PRC.  l Comprehensive income  ASC Topic 220, 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 a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of changes in stockholders equity 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.  l Net income per share  The Company calculates net income per share in accordance with ASC Topic 260,Earnings per Share. Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution of securities by including common stock equivalents, such as stock options, stock warrants and convertible preferred stock, in the weighted average number of common shares outstanding for a period, if dilutive.  l Foreign currencies translation  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.  The reporting currency of the Company is the United States Dollars ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Companys operating  -41-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   entity in the PRC maintains its books and records in its local currency, Renminbi Yuan ("RMB"), which is functional currency as being the primary currency of the economic environment in which its operation is conducted.  In general, for consolidation purposes, assets and liabilities of its operating entity whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign entities are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholders equity.  Translation of amounts from RMB into US$1 has been made at the following exchange rates for the respective years:


|                                        |  |        |  |       
|--------------------------------------- |  | ------ |  | ------
|                                        |  |       
|                                        |  | 2010   |  | 2009  
|Year-end RMB : US$1 exchange rate       |  | 6.6118 |  | 6.8372
|Annual average RMB : US$1 exchange rate |  | 6.7788 |  | 6.8409

l Retirement plan costs  Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the consolidated statements of operations and comprehensive income as and when the related employee service is provided.  l Stock based compensation  For non-employee stock based compensation, the Company adopts ASC Topic 505-50, Equity-Based Payments to Non-Employees, stock based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC 718.  During the year ended December 31, 2010, the Company issued 200,000 shares of its common stock to a consultant for corporate financial advisory service at its grant date, at a fair market price of $0.2 per share or a total value of $40,000.  l Related parties  Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.  l Segment reporting  ASC Topic 280, Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Companys internal organization structure as well as information  -42-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   about geographical areas, business segments and major customers in financial statements. The Company operates in one reportable operating segment in the PRC.  l Fair value of financial instruments  The carrying value of the Companys financial instruments (excluding loans receivable): cash and cash equivalents, restricted cash, guarantee fee receivable, prepayments and other receivables, accounts payable, customer collateral, deferred revenue, income tax payable, amount due to a related party, accrued liabilities and other payables approximate at their fair values because of the short-term nature of these financial instruments.  Management believes, based on the discounted cash flows using current interest rates, the fair value of loans receivable approximates the carrying value at December 31, 2010.  The Company also follows the guidance of the ASC Topic 820-10, Fair Value Measurements and Disclosures ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:  ·Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;  ·Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and  ·Level 3: Inputs are generally unobservable and typically reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.  Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.  l Recent accounting pronouncements    The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.   In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-14 to amend ASC 605 Revenue Recognition. The amendments in this update change the accounting model for revenue arrangements that include both tangible products and software elements. The amendments in ASU 2009-14 will be effective for the fiscal years beginning January 1, 2011. The Company believes that ASU 2009-13 will not have a material impact on its consolidated financial statements.   -43-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   In October 2009, the FASB issued ASU 2009-13 amending ASC 605 related to revenue arrangements with multiple deliverables. Among other things, ASU 2009-13 provides guidance for entities in determining the accounting for multiple deliverable arrangements and establishes a hierarchy for determining the amount of revenue to allocate to the various deliverables. The amendments in ASU 2009-13 will be effective for the fiscal years beginning January 1, 2011. The Company believes that ASU 2009-13 will not have a material impact on its consolidated financial statements  In January 2010, the FASB issued further guidance under ASC No. 820, Fair Value Measurements and Disclosures ("ASC 820"). ASC 820 requires disclosures about the transfers of investments between levels in the fair value hierarchy and disclosures relating to the reconciliation of fair value measurements using significant unobservable inputs (level 3 investments). ASC 820 is effective for the fiscal years and interim periods beginning after December 15, 2010. The Company will adopt the update on January 1, 2011 and expects that ASC 820 will not have a material impact on its consolidated financial statements.  3. RESTRICTED CASH  Restricted cash represents (i) fund received from customers for the purpose of trust deposits held at the banks by the Company to pledge against the surety and tendering guarantee under the contractual guarantee period and (ii) escrow deposits as security to the bank for the provision of banking surety guarantee service. Such restricted cash under item (i) is an asset of the Company and is recorded as customer collateral payable to the customers upon the expiry of the guarantee contracts.  As of December 31, 2010, the Company had surety and tendering guarantees outstanding resulting in restricted cash with approximately $8,830,517 from customer collateral and $4,219,600 for escrow deposits at the bank.  4. LOANS RECEIVABLE, UNSECURED  Loans receivable, unsecured consist of the following: As of December 31,20102009Due from Party A, in a term of 12 months, repayable on October 30, 2010, with an interest rate of 2.52% per annum payable at its due date$-$877,552Due from Party A, in a term of 12 months, repayable on November 29, 2010, with an interest rate of 2.52% per annum payable at its due date-585,035Due from Party A, in a term of 12 months, repayable on December 30, 2010, with an interest rate of 2.52% per annum payable at its due date-726,906Due from Party B, in a term of 12 months, repayable on December 30, 2010, with an interest rate of 2.52% per annum payable at its due date-1,073,539  -44-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)    Due from Party B, in a term of 12 months, repayable on December 30, 2011, with an interest rate of 2.52% per annum payable at its due date2,836,611-Interest receivable5,3905,212Total:$2,842,001$3,268,244  5. PLANT AND EQUIPMENT  Plant and equipment consisted of the following: As of December 31,20102009Leasehold improvement$97,817$89,232Furniture, fittings and office equipment243,645169,969Motor vehicles155,058148,815Foreign translation difference187,84426,782684,364434,798Less: accumulated depreciation(265,443)(156,557)Less: foreign translation difference(8,114)(3,009)Plant and equipment, net$410,807$275,232  Depreciation expense for the years ended December 31, 2010 and 2009 was $111,138 and $83,507, respectively.  6. AMOUNT DUE TO A RELATED PARTY  As of December 31, 2010 and 2009, amount due to a related party represented temporary advances made by Mr. Guokang Tu, chief executive officer and a director of the Company, which were unsecured, interest-free with no fixed repayment term. Imputed interest is considered insignificant.  7. ACCRUED LIABILITIES AND OTHER PAYABLES  Accrued liabilities and other payables consisted of following: As of December 31,20102009Business tax payable$-$80,294Provision for guarantee losses1,031,803323,717Accrued payroll and employee welfare196,376109,163Accrued operating expenses134,22841,957Advance from customers41,986-Other tax payable-16,185  -45-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)    Other payables50,6165,452$1,455,009$576,768  8. INCOME TAXES  For the years ended December 31, 2010 and 2009, the local (United States) and foreign components of income from operations before income taxes were comprised of the following:  Years ended December 31,20102009Tax jurisdictions from: Local$(40,000)$- Foreign6,554,9782,602,750Income before income taxes$6,514,978$2,602,750  The provision for income taxes consisted of the following:  Years ended December 31,20102009Current: Local$-$- Foreign521,30098,445Deferred: Local-- Foreign1,039,244345,390Income tax expense$1,560,544$443,835  The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has operations in various countries: United States, BVI, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate, as follows:  United States of America  SNAS is registered in the State of Delaware and is subject to United States of America tax law.  As of December 31, 2010, the operations in the United States of America incurred $40,000 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2030, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $14,000 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.   -46-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   British Virgin Island  Under the current BVI law, LTL is not subject to tax on income.  Hong Kong  CML is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income. For the years ended December 31, 2010 and 2009, CML does not have operations in Hong Kong.  The PRC  The Company generated substantially its net income from its subsidiary, ZHJ and its VIE, CCG in the PRC. ZHJ and CCG are subject to the Corporate Income Tax governed by the Income Tax Law of the Peoples Republic of China with a unified statutory income tax rate of 25%.  CCG is registered and operates in Shenzhen City, the PRC and is recognized as Enterprise Located in Special Economic Zone. Hence, the Company is entitled to Corporate Income Taxes (CIT) at a preferential tax rate of 15%. For the years ended December 31, 2010 and 2009, the Company has established various provincial and municipal branches, as well as representative offices in the PRC, which are generally subject to the statutory tax rate of 25%. Under a transitional policy under the CIT Law, the Company will continue to enjoy the unexpired tax holiday in a special economic zone in Shenzhen City and its applicable tax rate will be increased progressively to 25% over a 5-years period, starting from January 1, 2008.  The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2010 and 2009 is as follows:  Years ended December 31,20102009Income before income taxes$6,554,978$2,602,750Statutory income tax rate25%25%Income tax expense at statutory tax rate1,638,744650,688Effect of tax holiday(83,020)(35,402)Effect of non-taxable items-(156,629)Effect of non-deductible items3,112413Effect of utilizing net operating loss carryforwards-(15,235)Tax adjustments1,708-Income tax expense$1,560,544$443,835  The following table sets forth the significant components of the aggregate deferred tax (assets) and liabilities of the Company as of December 31, 2010 and 2009:     As of December 31,20102009  -47-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)    Deferred tax (assets):Net operating loss carryforward$(14,000)$-Deferred revenue(215,224)(79,936)Total deferred tax assets(229,224)(79,936)Less: valuation allowance14,000-Deferred tax assets$(215,224)(79,936)Deferred tax liabilities:Provision for guarantee losses1,638,067425,513Deferred tax liabilities, net$1,422,843$345,577  Deferred tax liabilities on the provision for guarantee losses reflect the temporary differences between the tax basis of such provision under PRC local tax law and the accounting basis of the estimated losses under U.S. GAAP.   9. NET INCOME PER SHARE  Basic net income per share is computed using the weighted average number of the common share outstanding during the year. The dilutive effect of potential common shares outstanding is included in diluted net income per share. The following table sets forth the computation of basic and diluted net income per share for the years ended December 31, 2010 and 2009:  Years ended December 31,20102009Net income attributable to common stockholders$4,954,434$2,158,915Weighted average common shares outstanding60,192,22260,000,000Basic and diluted net income per share$0.08$0.04   10. CHINA CONTRIBUTION PLAN  Under the PRC Law, full-time employees of the Companys subsidiary and VIE in the PRC, are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a China government-mandated multi-employer defined contribution plan. It is required to accrue for these benefits based on certain percentages of the employees salaries. The total contributions made for such employee benefits were $100,785 and $82,988 for the years ended December 31, 2010 and 2009, respectively.   11. STATUTORY RESERVE  -48-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)    Under the PRC Law, the Companys subsidiary and VIE in the PRC are required to make appropriation to the statutory reserve based on after-tax net earnings and determined in accordance with generally accepted accounting principles of the Peoples Republic of China (the PRC GAAP). Appropriation to the statutory reserve should be at least 10% of the after-tax net income until the reserve is equal to 50% of the registered capital. The statutory reserve is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable other than in liquidation.  For the years ended December 31, 2010 and 2009, the Company made an appropriation of $173,839 and $54,084 to the statutory reserve, respectively.   12. CONCENTRATIONS OF RISK  The Company is exposed to the following concentrations of risk:  (a) Major customers  For the years ended December 31, 2010 and 2009, there was no single customer who accounted for 10% or more of the Companys revenues.  (b) Major vendors  For the years ended December 31, 2010 and 2009, there was no single vendor who accounted for 10% or more of the Companys purchases.  (c) Credit risk  Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash, restricted cash and guarantee fee receivable. Substantially all of cash and restricted cash are held by the recognized financial institutions in the PRC. The Company also performs ongoing credit evaluations of its customers financial condition, but does not require collateral to support such receivables.  (d) Political and country risk  The Companys operations are carried out in the PRC. Accordingly, the Companys business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, by the general state of the PRCs economy. The Companys business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.  (e) Guarantee default risk  The Company has a significant concentration risk related to its guarantees on potential loss if the customers fail to the completion of their performance obligation in a timely manner under the surety guarantees. To reduce these potential losses, the Company holds collateral in the form of cash  -49-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   equivalents, which are reflected in customer collateral on the balance sheets as they are held in restricted cash in the Companys name.  (f) Exchange rate risk  The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.  13. COMMITMENTS AND CONTINGENCIES  (a) Operating lease commitments  The Company is committed under various non-cancelable operating leases with fixed monthly rentals, due through September 2015. Total rent expenses for the years ended December 31, 2010 and 2009 was $399,163 and $300,460, respectively.  As of December 31, 2010, the Company has future minimum rent payments due under various non-cancelable operating leases in the next five years, as follows:  Years ending December 31:2011$344,4352012268,2972013268,2972014244,599201510,192Total:$1,135,820  (b) Guarantees  As of December 31, 2010, the Company has 514 surety and tendering guarantees outstanding. If the Companys customers fail to complete their performance obligation in a timely manner so that the Company is obligated to pay on its guarantees, the Company would have the maximum potential amount of future payments of approximately $118,543,088 (RMB783,783,186) in total.  Provision for guarantee losses reflects the Companys best projection of defaults and the Company believes that it is more likely as a result of loss events that have occurred through December 31, 2010. However, the uncertainty in macroeconomic factors and the uncertainty of the effect of any current or future government actions to the global economic crisis make forecasting of default rates increasingly imprecise. The Company regularly reviews actual guarantee loss claims experience to determine if any necessary adjustments may be recognized to the reserve in the period in which those differences arise or are identified. For the years ended December 31, 2010 and 2009, the Company experienced no claims for  -50-  SINO ASSURANCE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (Currency expressed in United States Dollars (US$), except for number of shares)   actual guarantee loss. At December 31, 2010, the Company has accrued $1,031,803 on the provision for guarantee losses for any potential claims.   14. SUBSEQUENT EVENTS  In accordance with ASC Topic 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2010 up through the date the Company issued the audited consolidated financial statements. During the period, the Company did not have any material recognizable subsequent events.  ---    -51-    ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  None.   ITEM 9A. CONTROLS AND PROCEDURES  Disclosure Controls and Procedures  The Securities and Exchange Commission defines the term disclosure controls and procedures to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported with the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  Management's Annual Report on Internal Control over Financial Reporting  The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.  The Companys internal control over financial reporting is designed to provide reasonable assurance for the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting  - 52 -    principles.  Because of its inherent limitations (further discussed in next paragraphs below), internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  The Companys management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2010.  In this assessment, the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework were used.  Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2010.  This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.  Inherent Limitations in Control Systems  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.  As a result, our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal control over financial reporting, will prevent all error and all fraud.     - 53 -    Changes in Internal Control over Financial Reporting  There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) or any other factors during the quarter of the fiscal year ended December 31, 2010,that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.    ITEM 9B. OTHER INFORMATION  None  PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  DIRECTORS AND OFFICERS  The directors and executive officers currently serving SNAS are as follows:  NameAgePositionDirector/Officer SinceGuokang Tu47Chairman, Chief Executive Officer and Director2008Mengyou Tong42Chief Financial Officer and Director2008Zhiqun Li40Director2008  BIOGRAPHICAL INFORMATION  Guokang TuMr. Tu became our Chief Executive Officer and a Director on or about November 20, 2008.  He has been the vice president of China Construction Guaranty, Inc. since 2007.  From 2001 to 2006, he served as the general manager of Jiangxi Jiuding Digital Technology Limited Company.  He held the position of the general manager of Jiangxi Jiuding Health Products Limited Company during the period 1996 and 2000.  He received a bachelor degree from the Medicine School of Soochow University and is studying Master of Business Management Zhongnan University at Economics and Law.  Mengyou Tong Mr. Tong became our Chief Financial Officer and a Director on or about November 20, 2008. Mr. Tong has been the vice president and chief financial officer of China Construction Guaranty, Inc. since 2007.  He was the assistant to the president of a US listed company during 2006 and 2007.  He was the financial manager of Asia Plastic Limited Company (Nigeria) from 2005 to 2006 and the chief budget officer of Financial Bureau in Lusong District, Zhuzhou City, Hunan Province from 1990 to 2000.  He is a graduate of the Master of Business Administration of Ateneo De Manila University.  - 54 -     Zhiqun LiMs. Li  was appointed as a Director on or about November 20, 2008.  She has been serving Jiangxi Jiuding Digital Technology Limited Company since 1995.  She received a bachelor degree from Wuxi University of Light Industry. FAMILY RELATIONSHIPS Mr. Guokang Tu is the brother-in-law of Ms. Zhiqun Li.  Aside from the foregoing, there are no family relationships among any other of our officers or directors. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS  None of our officers, directors, promoters or control persons has been involved in the past five (5) years in any of the following:  (1) Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;  (2) Any conviction in a criminal proceedings or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);  (3) Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or  (4) Being found by a court of competent jurisdiction (in a civil action), the SEC or the U.S. Commodity Futures Trading Commission to have violated a federal or state securities laws or commodities law, and the judgment has not been reversed, suspended, or vacated.  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT  Section 16(a) of the Securities Exchange Act of 1934, as amended, requires each of our officers and directors and each person who owns more than 10% of a registered class of our equity securities to file with the SEC an initial report of ownership and subsequent reports of changes in such ownership.  Such persons are further required by SEC regulation to furnish us with copies of all Section 16(a) forms (including Forms 3, 4 and 5) that they file.  Based solely on our review of the copies of such forms received by us with respect to fiscal year 2010, or written representations from certain reporting persons, we believe all of our directors and executive officers met all applicable filing requirements.  CODE OF ETHICS   - 55 -    We do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers however we plan to implement one in the near future.  COMMITTEES OF BOARD OF DIRECTORS  We currently do not have standing audit, nominating or compensation committees. Our board of directors handles the functions that would otherwise be handled by each of the committees.  Additionally, because we do not have an audit committee, we do not have an audit committee financial expert.   ITEM 11. EXECUTIVE COMPENSATION  The following table provides summary information concerning compensation awarded to, earned by, or paid to any of SNASs officers and directors for all services rendered to SNAS and its consolidated subsidiaries and VIE, in all capacities for the fiscal years ended December 31, 2008, 2009 and 2010.


|                            |         |            |            |                  |                   |                                            |                                                                         |                            |                       
|--------------------------- | ------- | ---------- | ---------- | ---------------- | ----------------- | ------------------------------------------ | ----------------------------------------------------------------------- | -------------------------- | ----------------------
|Name and Principal Position | Year    | Salary ($) | Bonus  ($) | Stock Awards ($) | Option Awards ($) | Non-equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total Compensation ($)
|                            |         |            |            |                  |                   |                                            |                                                                         |                            |                       
|Guokang
Tu
CEO              | 2008    | $59,770    | $4,309     | --               | --                | --                                         | --                                                                      | --                         | $64,079               
|2009                        | $81,729 | --         | --         | --               | --                | --                                         | --                                                                      | $81,729                   
|2010                        | $96,030 | $8,705     | --         | --               | --                | --                                         | --                                                                      | $104,735                  
|Mengyou
Tong
CFO            | 2008    | $39,612    | $2,873     | --               | --                | --                                         | --                                                                      | --                         | $42,485               
|2009                        | $57,719 | --         | --         | --               | --                | --                                         | --                                                                      | $57,719                   
|2010                        | $71,121 | $6,597     | --         | --               | --                | --                                         | --                                                                      | $77,718                   

Director Compensation  The following table provides summary information concerning compensation awarded to, earned by, or paid to any of our directors for all services rendered to the Company in all capacities for the fiscal year ended December 31, 2010.


|             |                                        |                  |                   |                                            |                                                                         |                            |                   
|------------ | -------------------------------------- | ---------------- | ----------------- | ------------------------------------------ | ----------------------------------------------------------------------- | -------------------------- | ------------------
|Name         | Salary/Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total Compensation
|             |                                        |                  |                   |                                            |                                                                         |                            |                   
|Guokang Tu   | $104,735                               | --               | --                | --                                         | --                                                                      | --                         | $104,735          
|Mengyou Tong | $77,718                                | --               | --                | --                                         | --                                                                      | --                         | $77,718           

- 56 -    We do not have employment agreements with any of our officers.  We did not award any stock, stock options, or other equity-based award to any of our officers during the fiscal years ended December 31, 2008, 2009, and 2010.  There are no outstanding equity awards as of December 31, 2010.  We have no agreements for providing compensation of any kind to officers after their retirement or resignation.    ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS  The following table sets forth, as of the date of this report, the stock ownership of each executive officer of SNAS, of all the executive officers and directors of SNAS as a group, and of each person known by SNAS to be a beneficial owner of 5% or more of its Common Stock.  Except as otherwise noted, each person listed below is the sole beneficial owner of the shares and has sole investment and voting power as to such shares.  No person listed below has any options, warrant or other right to acquire additional securities of SNAS, except as may be otherwise noted.


|                                                                                                                                           |               |                 
|------------------------------------------------------------------------------------------------------------------------------------------ | ------------- | ----------------
|Name                                                                                                                                       | No. of shares | Percent of Class
|Zhiqun Li, Director (1)
9WN LnBan Office Building
Hong Li Xi Road, Futian District,
Shenzhen P.R.C.                                        | 11,068,000    | 18.39%          
|Guokang Tu, Chairman, Chief Executive Officer and Director (2)
9WN LnBan Office Building
Hong Li Xi Road, Futian District,
Shenzhen P.R.C. | 6,600,000     | 10.96%          
|Mengyou Tong, Chief Financial Officer and Director (2)
9WN LnBan Office Building
Hong Li Xi Road, Futian District,
Shenzhen P.R.C.         | 1,000,000     | 1.66%           
|Beiquan Ling
9WN LnBan Office Building
Hong Li Xi Road, Futian District,
Shenzhen P.R.C.                                                   | 9,600,000     | 15.95%          
|Cai Jin Yu
Room D604, Meijia Square,
Hua Qiao Cheng, Nanshan District,
Shenhen City, Guangdong Province, P.R.C.                            | 3,330,000     | 5.53%           
|All Officers and Directors as a group (3 in number)                                                                                        | 18,668,000    | 31.01%          

(1) The person named is a director. (2) The person named is an officer and director.  - 57 -      ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE  As of December 31, 2010, $61,614 was due to Mr. Guokang Tu, chief executive officer and a director of the Company for temporary advances made by Mr. Guokang Tu, which were unsecured, interest-free with no fixed repayment term.  Aside from the foregoing, no officer, director, promoter, or affiliate of SNAS has, or proposes to have, any direct or indirect material interest in any asset proposed to be acquired by SNAS through security holdings, contracts, options, or otherwise.  Director Independence The NASDAQ Stock Market has instituted director independence guidelines that have been adopted by the Securities & Exchange Commission.  These guidelines provide that a director is deemed independent only if the board of directors affirmatively determines that the director has no relationship with the company which, in the boards opinion, would interfere with the directors exercise of independent judgment in carrying out his or her responsibilities.  Significant stock ownership will not, by itself, preclude a board finding of independence. For NASDAQ Stock Market listed companies, the director independence rules list six types of disqualifying relationships that preclude an independence filing.  The Companys board of directors may not find independent a director who:  1. is an employee of the company or any parent or subsidiary of the company;  2. accepts, or who has a family member who accepts, more than $60,000 per year in payments from the company or any parent or subsidiary of the company other than (a) payments from board or committee services; (b) payments arising solely from investments in the companys securities; (c) compensation paid to a family member who is a non-executive employee of the company (d) benefits under a tax qualified retirement plan or non-discretionary compensation; or (e) loans to directors and executive officers permitted under Section 13(k) of the Exchange Act;  3. is a family member of an individual who is employed as an executive officer by the company or any parent or subsidiary of the company;  4. is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services that exceed 5% of the recipients consolidated gross revenues for that year, or $200,000, whichever is more, other than (a) payments arising solely from investments in the companys securities or (b) payments under non-discretionary charitable contribution matching programs;  - 58 -     5. is employed, or who has a family member who is employed, as an executive officer of another company whose compensation committee includes any executive officer of the listed company; or  6. is, or has a family member who is, a current partner of the companys outside auditor, or was a partner or employee of the companys outside auditor who worked on the companys audit. Based upon the foregoing criteria, our Board of Directors has determined that Guokang Tu is not an independent director under these rules as he is also employed by the Registrant as its CEO and Mengyou Tong is not an independent director under these rules as he is also employed by the Registrant as its CFO.  ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES  Audit-Related Fees  (1) The aggregate fees billed by HKCMCPA Company Limited (HKCMCPA) (Formerly ZYCPA Company Limited) for audit of the Companys annual financial statements and reviews of the Companys financial statements included in its quarterly reports on Form 10-Q were $72,000 and $80,086 for the fiscal year ended December 31, 2009 and December 31, 2010 respectively.  (2) HKCMCPA did not bill the Company any amounts for assurance and related services that were related to its audit or review of the Companys financial statements during the fiscal year ended 2010.  Tax Fees  (3) HKCMCPA did not bill the Company for tax compliance, tax advice and tax planning services for the fiscal year ended December 31, 2010.  All Other Fees  (4) HKCMCPA did not bill the Company for any products and services other than the foregoing during the fiscal year ended December 31, 2010.  Audit Committees Pre-approval policies and procedures  (5) SNAS, which is not yet publicly traded, does not have an audit committee.  The current board of directors functions as the audit committee.  PART IV    ITEM 15. EXHIBITS   - 59 -    The Exhibits listed below are filed as part of this Annual Report.  2.1 Agreement for Share Exchange dated September 23, 2008, by and among DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC., a Delaware corporation, LINKING TARGET LIMITED (LTL), a British Virgin Islands corporation, and the Shareholders of LTL (herein incorporated by reference from report on Form 8-K for report dated September 23, 2008 and filed with the Securities and Exchange Commission on September 26, 2008).  3.1 Articles of Incorporation (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on September 12, 2002).  3.2 Bylaws (herein incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on September 12, 2002).  10.4 Exclusive Cooperation Agreement between Linking Target Limited, a British Virgin Islands corporation, and China Construction Guaranty, Inc., dated August 1, 2008, (herein incorporated by reference from report on Form 8-K/A for report dated September 23, 2008 and filed with the Securities and Exchange Commission on December 9, 2008).  10.5 Operating Agreement between to Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited, China Construction Guaranty, Inc., and the shareholders of China Construction Guaranty, Inc. dated November 2, 2009.  10.6 Exclusive Management Service and Business Consulting Agreement between to Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited and China Construction Guaranty, Inc. dated November 2, 2009.  10.7 Option Agreement between to Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited and China Construction Guaranty, Inc., and the shareholders of China Construction Guaranty, Inc., dated November 2, 2009.  10.8 Proxy Statement between to Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited and the shareholders of China Construction Guaranty, Inc., dated November 2, 2009.  10.9 Equity Pledge Agreement between to Zhong Heng Jiang Investment Consulting (Shenzhen) Company Limited and China Construction Guaranty, Inc., and the shareholders of China Construction Guaranty, Inc., dated November 2, 2009.  31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.   - 60 -    31.2 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.  32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) 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. SINO ASSURANCE INC.(Registrant)  By: /s/ Guokang Tu, CEO and Chairman Date: August 9, 2011  Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.  By: /s/ Guokang Tu, Chief Executive Officer and Chairman, Director Date:  August 9, 2011  By: /s/ Mengyou Tong, Chief Financial Officer, Director Date:  August 9, 2011   - 61 -