| Nevada                                                              |  13-3140715                                                  |
|---------------------------------------------------------------------|-------------------------------------------------------------------|
|  (State or other jurisdiction of incorporation ororganization) |  (I.R.S. Employer Identification No.)    |

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|                                                                                                                                                                                               |   | September 30, |        |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                                                                                                                                                               |   | 2010               |        |   | 2009              |   |
|                                                                                                                                                                                               |   | Unaudited          |        |   |              |   |
| ASSETS                                                                                                                                                                                             |   |               |        |   |              |   |
| CURRENT ASSETS:                                                                                                                                                                                    |   |               |        |   |              |   |
| Cash                                                                                                                                                                                               |   | $                  | 117,866,998 |   |              | $      | 60,597,849 |   |
| Accounts receivable, trade, net of allowance of bad debt of $522,729 and $1,024,684 as of September 30, 2010 and December 31, 2009, respectively                                                   |   |               | 64,520,827  |   |              |   | 67,284,600 |   |
| Inventories                                                                                                                                                                                        |   |               | 22,702,154  |   |              |   | 10,875,782 |   |
| Notes receivables                                                                                                                                                                                  |   |               | 257,883     |   |              |   | 122,972 |   |
| Other receivables and prepaid expenses                                                                                                                                                             |   |               | 505,709     |   |              |   | 1,137,566 |   |
| Advances to suppliers                                                                                                                                                                              |   |               | 21,228,320  |   |              |   | 8,582,346 |   |
| Deposit in derivative hedge                                                                                                                                                                        |   |               | -           |   |              |   | 1,000,000 |   |
| Total current assets                                                                                                                                                                               |   |               | 227,081,891 |   |              |   | 149,601,115 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| PLANT AND EQUIPMENT, net                                                                                                                                                                           |   |               | 124,275,549 |   |              |   | 117,385,566 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| OTHER ASSETS:                                                                                                                                                                                      |   |               |        |   |              |   |   |   |
| Advances to suppliers, non-current                                                                                                                                                                 |   |               | 540,482     |   |              |   | 1,356,404 |   |
| Notes receivables, non-current                                                                                                                                                                     |   |               | 179,106     |   |              |   | 699,106 |   |
| Intangible assets, net of accumulated amortization                                                                                                                                                 |   |               | 13,662,152  |   |              |   | 11,924,056 |   |
| Goodwill                                                                                                                                                                                           |   |               | 1,669,789   |   |              |   | - |   |
| Deferred loan expense, net                                                                                                                                                                         |   |               | 181,514     |   |              |   | 2,045,349 |   |
| Deferred tax assets                                                                                                                                                                                |   |               | 15,407,083  |   |              |   | 14,283,528 |   |
| Total other assets                                                                                                                                                                                 |   |               | 31,640,126  |   |              |   | 30,308,443 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| Total assets                                                                                                                                                                                       |   | $                  | 382,997,566 |   |              | $      | 297,295,124 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                               |   |               |        |   |              |   |   |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| Revolver line of credit                                                                                                                                                                            |   | $                  | -           |   |              | $      | 4,033,783 |   |
| Accounts payable, trade                                                                                                                                                                            |   |               | 6,202,910   |   |              |   | 4,002,773 |   |
| Current portion of long-term debts                                                                                                                                                                 |   |               | 650,000     |   |              |   | 10,000,000 |   |
| Other payables and accrued liabilities                                                                                                                                                             |   |               | 5,009,902   |   |              |   | 3,928,374 |   |
| Taxes payable                                                                                                                                                                                      |   |               | 3,639,132   |   |              |   | 2,599,055 |   |
| Cross currency hedge payable                                                                                                                                                                       |   |               | -           |   |              |   | 436,702 |   |
| Obligation under capital lease, current                                                                                                                                                            |   |               | 79,084      |   |              |   | 71,503 |   |
| Loan payable to shareholder                                                                                                                                                                        |   |               | 15,000,000  |   |              |   | - |   |
| Total current liabilities                                                                                                                                                                          |   |               | 30,581,028  |   |              |   | 25,072,190 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| LONG-TERM LIABILITIES:                                                                                                                                                                             |   |               |        |   |              |   |   |   |
| Long-term debts                                                                                                                                                                                    |   |               | 5,850,000   |   |              |   | 25,000,000 |   |
| Obligation under capital lease, non-current                                                                                                                                                        |   |               | 88,232      |   |              |   | 153,626 |   |
| Deferred tax liabilities                                                                                                                                                                           |   |               | 669,540     |   |              |   | - |   |
| Fair value of derivative instrument                                                                                                                                                                |   |               | -           |   |              |   | 7,532,527 |   |
| Total long-term liabilities                                                                                                                                                                        |   |               | 6,607,772   |   |              |   | 32,686,153 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| Total liabilities                                                                                                                                                                                  |   |               | 37,188,800  |   |              |   | 57,758,343 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                      |   |               | 4,955,998   |   |              |   | - |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| SHAREHOLDERS' EQUITY:                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued or outstanding as of September 30, 2010 and December 31, 2009                                                          |   |               | -           |   |              |   | - |   |
| Common stock, $0.006  par value, 100,000,000 shares authorized, September 30, 2010: 37,779,839 shares issued and outstanding December 31, 2009: 29,772,780 shares issued and outstanding |   |               | 226,680     |   |              |   | 178,638 |   |
| Additional paid in capital                                                                                                                                                                         |   |               | 166,297,828 |   |              |   | 105,540,676 |   |
| Statutory reserves                                                                                                                                                                                 |   |               | 20,793,298  |   |              |   | 16,282,793 |   |
| Retained earnings                                                                                                                                                                                  |   |               | 122,113,829 |   |              |   | 92,312,280 |   |
| Accumulated other comprehensive income                                                                                                                                                             |   |               | 31,421,133  |   |              |   | 25,222,394 |   |
| Total shareholders' equity                                                                                                                                                                         |   |               | 340,852,768 |   |              |   | 239,536,781 |   |
|                                                                                                                                                                                               |   |               |        |   |              |   |   |   |
| Total liabilities and shareholders' equity                                                                                                                                                         |   | $                  | 382,997,566 |   |              | $      | 297,295,124 |   |

----

|                                                             |   | Three months ended September 30, |       |   | Nine months ended September 30, |   |
|------------------------------------------------------------------|--------|------------------------------------------------------|------------|--------|-----------------------------------------------------|--------|
|                                                             |   | 2010                                                 |       |   | 2009                                                |   |   | 2010 |   |   | 2009 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |
| REVENUES                                                         |   | $                                                    | 66,507,433 |   |                                                | $      | 47,676,346 |   |   | $ | 195,062,641 |   |   | $ | 131,234,427 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| COST OF GOODS SOLD                                               |   |                                                 | 46,842,955 |   |                                                |   | 32,506,879 |   |   |   | 137,986,750 |   |   |   | 93,672,906 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| GROSS PROFIT                                                     |   |                                                 | 19,664,478 |   |                                                |   | 15,169,467 |   |   |   | 57,075,891 |   |   |   | 37,561,521 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES:                                              |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                                                 |   |                                                 | 1,457,154  |   |                                                |   | 1,078,158 |   |   |   | 4,074,280 |   |   |   | 3,366,719 |   |
| General and administrative expenses                              |   |                                                 | 3,117,062  |   |                                                |   | 3,510,034 |   |   |   | 10,923,878 |   |   |   | 9,747,637 |   |
| Total operating expenses                                         |   |                                                 | 4,574,216  |   |                                                |   | 4,588,192 |   |   |   | 14,998,158 |   |   |   | 13,114,356 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| INCOME FROM OPERATIONS                                           |   |                                                 | 15,090,262 |   |                                                |   | 10,581,275 |   |   |   | 42,077,733 |   |   |   | 24,447,165 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                                          |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                  |   |                                                 | 200,295    |   |                                                |   | 76,094 |   |   |   | 590,236 |   |   |   | 242,715 |   |
| Interest expense                                                 |   |                                                 | (120,176   | )      |                                                |   | (1,201,014 | ) |   |   | (697,367 | ) |   |   | (4,150,085 | ) |
| Change in fair value of derivative instrument                    |   |                                                 | -          |   |                                                |   | 237,768 |   |   |   | 882,527 |   |   |   | (3,275,588 | ) |
| Loss on cross currency hedge                                     |   |                                                 | -          |   |                                                |   | (1,199,438 | ) |   |   | (753,666 | ) |   |   | (1,581,812 | ) |
| Gain (loss) on debt extinguishment                               |   |                                                 | -          |   |                                                |   | 3,842,935 |   |   |   | (2,395,778 | ) |   |   | 3,842,935 |   |
| Change in fair value of derivative liability - warrants          |   |                                                 | -          |   |                                                |   | - |   |   |   | - |   |   |   | (752,114 | ) |
| Change in fair value of derivative liability - conversion option |   |                                                 | -          |   |                                                |   | (2,058,352 | ) |   |   | - |   |   |   | (7,181,198 | ) |
| Other (expense) income, net                                      |   |                                                 | (176,001   | )      |                                                |   | 53,421 |   |   |   | (194,445 | ) |   |   | (193,060 | ) |
| Total other expense, net                                         |   |                                                 | (95,882    | )      |                                                |   | (248,586 | ) |   |   | (2,568,493 | ) |   |   | (13,048,207 | ) |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                                       |   |                                                 | 14,994,380 |   |                                                |   | 10,332,689 |   |   |   | 39,509,240 |   |   |   | 11,398,958 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| (PROVISION) BENEFIT FOR INCOME TAXES:                            |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Deferred income tax benefit                                      |   |                                                 | 158,599    |   |                                                |   | 807,537 |   |   |   | 1,123,555 |   |   |   | 4,366,785 |   |
| Current income tax expense                                       |   |                                                 | (2,230,608 | )      |                                                |   | (1,788,366 | ) |   |   | (6,320,742 | ) |   |   | (4,069,081 | ) |
| (Provision) benefit for income taxes, net                   |   |                                                 | (2,072,009 | )      |                                                |   | (980,829 | ) |   |   | (5,197,187 | ) |   |   | 297,704 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                                       |   |                                                 | 12,922,371 |   |                                                |   | 9,351,860 |   |   |   | 34,312,053 |   |   |   | 11,696,662 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME (LOSS):                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                          |   |                                                 | 4,433,165  |   |                                                |   | 72,136 |   |   |   | 6,198,740 |   |   |   | 112,094 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                                             |   | $                                                    | 17,355,536 |   |                                                | $      | 9,423,996 |   |   | $ | 40,510,793 |   |   | $ | 11,808,756 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| EARNINGS PER SHARE:                                              |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   | $                                                    | 0.34       |   |                                                | $      | 0.33 |   |   | $ | 0.94 |   |   | $ | 0.42 |   |
| Diluted                                                          |   | $                                                    | 0.34       |   |                                                | $      | 0.32 |   |   | $ | 0.93 |   |   | $ | 0.41 |   |
|                                                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE SHARES:                                         |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   |                                                 | 37,694,626 |   |                                                |   | 28,084,416 |   |   |   | 36,553,784 |   |   |   | 27,827,152 |   |
| Diluted                                                          |   |                                                 | 38,077,845 |   |                                                |   | 29,206,508 |   |   |   | 37,030,499 |   |   |   | 28,676,832 |   |

----

|                                                                  |   | 2010   |        |   | 2009   |   |
|-----------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| CASH FLOWS FROM OPERATING ACTIVITIES:                                 |   |   |        |   |   |   |
| Net income                                                            |   | $      | 34,312,053  |   |   | $      | 11,696,662 |   |
| Adjustments to reconcile net income provided by operating activities: |   |   |        |   |   |   |   |   |
| Change in fair value of derivative instrument                         |   |   | (882,527    | )      |   |   | 3,275,588 |   |
| Allowance for doubtful accounts adjustment                            |   |   | (513,846    | )      |   |   | - |   |
| Bad debt expense                                                      |   |   | -           |   |   |   | 862,302 |   |
| Write-off of non-current advances to suppliers                        |   |   | 527,095     |   |   |   | - |   |
| Write-off of patent                                                   |   |   | 131,250     |   |   |   | - |   |
| Reserve for inventories                                               |   |   | 255,027     |   |   |   | 62,914 |   |
| Write-off of inventories                                              |   |   | -           |   |   |   | 119,133 |   |
| Depreciation                                                          |   |   | 8,759,839   |   |   |   | 7,191,842 |   |
| Loss on sale of property and equipment                                |   |   | -           |   |   |   | 117,430 |   |
| Deferred taxes                                                        |   |   | (1,123,555  | )      |   |   | (4,366,785 | ) |
| Reserve for notes receivables                                         |   |   | 500,000     |   |   |   | - |   |
| Amortization of intangible assets                                     |   |   | 401,539     |   |   |   | 357,449 |   |
| Amortization of loan commission                                       |   |   | 251,097     |   |   |   | 817,349 |   |
| Amortization of stock compensation expense                            |   |   | 528,207     |   |   |   | 1,108,254 |   |
| Loss on cross currency hedge                                          |   |   | 753,666     |   |   |   | 1,581,812 |   |
| Loss (gain) on debt extinguishment                                    |   |   | 2,395,778   |   |   |   | (3,842,935 | ) |
| Change in fair value of derivative liability - conversion option      |   |   | -           |   |   |   | 7,181,198 |   |
| Change in fair value of derivative liability - warrants               |   |   | -           |   |   |   | 752,114 |   |
| Change in operating assets and liabilities:                           |   |   |        |   |   |   |   |   |
| Accounts receivable                                                   |   |   | 7,379,296   |   |   |   | (20,177,587 | ) |
| Inventories                                                           |   |   | (10,326,609 | )      |   |   | (3,756,514 | ) |
| Notes receivables                                                     |   |   | (112,473    | )      |   |   | 100,700 |   |
| Other receivables and prepayments                                     |   |   | 574,714     |   |   |   | 401,070 |   |
| Advances to suppliers - current                                       |   |   | (11,648,978 | )      |   |   | 15,073,210 |   |
| Accounts payable                                                      |   |   | (862,992    | )      |   |   | (3,839,555 | ) |
| Other payables and accrued liabilities                                |   |   | (1,790,015  | )      |   |   | (3,113,988 | ) |
| Taxes payable                                                         |   |   | 604,928     |   |   |   | 3,984,006 |   |
| Net cash provided by operating activities                             |   |   | 30,113,494  |   |   |   | 15,585,669 |   |
|                                                                  |   |   |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                 |   |   |        |   |   |   |   |   |
| Payment for purchase of subsidiaries                                  |   |   | (6,375,000  | )      |   |   | - |   |
| Cash acquired from acquisition of subsidiaries                        |   |   | 901,463     |   |   |   | - |   |
| Payments on cross currency hedge payable                              |   |   | (1,190,368  | )      |   |   | (614,580 | ) |
| Payment for unwind of cross currency hedge                            |   |   | (5,650,000  | )      |   |   | - |   |
| Proceeds from sale of property and equipment                          |   |   | -           |   |   |   | 424,444 |   |
| Purchases of property and equipment                                   |   |   | (1,926,580  | )      |   |   | (3,292,007 | ) |
| Net of payments on prepayment of equipment                            |   |   | -           |   |   |   | (1,877,177 | ) |
| Net of claimed VAT on purchases of property and equipment             |   |   | 57,551      |   |   |   | - |   |
| Net cash used in investing activities                                 |   |   | (14,182,934 | )      |   |   | (5,359,320 | ) |
|                                                                  |   |   |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                 |   |   |        |   |   |   |   |   |
| Proceeds from shareholder loan                                        |   |   | 15,000,000  |   |   |   | 4,552,000 |   |
| Net payments on revolver line of credit                               |   |   | (4,033,783  | )      |   |   | (723,566 | ) |
| Payments on short-term bank loans                                     |   |   | -           |   |   |   | (17,553,600 | ) |
| Proceeds from term loans                                              |   |   | 6,500,000   |   |   |   | - |   |
| Release of restricted cash                                            |   |   | -           |   |   |   | 1,000,000 |   |
| Payment on capital lease obligation                                   |   |   | (57,814     | )      |   |   | (23,575 | ) |
| Payment on high yield notes payable                                   |   |   | (35,600,000 | )      |   |   | (5,000,000 | ) |
| Proceeds on issuance of common stock                                  |   |   | 56,361,500  |   |   |   | 1,920,000 |   |
| Proceeds from exercise of warrants                                    |   |   | 1,180,599   |   |   |   | - |   |
| Proceeds from exercise of stock options                               |   |   | 27,225      |   |   |   | - |   |
| Net cash provided by (used in) financing activities                   |   |   | 39,377,727  |   |   |   | (15,828,741 | ) |
|                                                                  |   |   |        |   |   |   |   |   |
| EFFECT OF EXCHANGE RATE ON CASH                                       |   |   | 1,960,862   |   |   |   | 232 |   |
|                                                                  |   |   |        |   |   |   |   |   |
| CHANGE IN CASH                                                        |   |   | 57,269,149  |   |   |   | (5,602,160 | ) |
|                                                                  |   |   |        |   |   |   |   |   |
| CASH, beginning of period                                             |   |   | 60,597,849  |   |   |   | 65,611,770 |   |
|                                                                  |   |   |        |   |   |   |   |   |
| CASH, end of period                                                   |   | $      | 117,866,998 |   |   | $      | 60,009,610 |   |
|                                                                  |   |   |        |   |   |   |   |   |
| Supplemental cash flow disclosures:                                   |   |   |        |   |   |   |   |   |
| Interest paid                                                         |   | $      | 1,425,833   |   |   | $      | 3,650,785 |   |
| Income tax paid                                                       |   | $      | 6,161,271   |   |   | $      | 3,609,505 |   |

----

----

----

|            |   | September 30,2010 |        |   | September 30,2009 |   |
|-----------------|--------|------------------------|-------------|--------|------------------------|--------|
|            |   | (Un audited)           |        |   | (Unaudited)            |   |
| China           |   | $                      | 152,803,500 |   |                   | $      | 103,028,466 |   |
| USA             |   |                   | 31,494,741  |   |                   |   | 21,692,506 |   |
| Europe          |   |                   | 6,425,984   |   |                   |   | 3,357,305 |   |
| Other countries |   |                   | 4,338,416   |   |                   |   | 3,156,150 |   |
| Total sales     |   | $                      | 195,062,641 |   |                   | $      | 131,234,427 |   |

|            |   | September 30,2010 |       |   | September 30,2009 |   |
|-----------------|--------|------------------------|------------|--------|------------------------|--------|
|            |   | (Unaudited)            |       |   | (Unaudited)            |   |
| China           |   | $                      | 52,658,717 |   |                   | $      | 38,817,579 |   |
| USA             |   |                   | 10,622,814 |   |                   |   | 6,758,832 |   |
| Europe          |   |                   | 2,216,621  |   |                   |   | 1,414,149 |   |
| Other countries |   |                   | 1,009,281  |   |                   |   | 685,786 |   |
| Total sales     |   | $                      | 66,507,433 |   |                   | $      | 47,676,346 |   |

----

----

|                           |   | Estimated Useful Life |
|--------------------------------|--------|---------------------------------|
| Buildings and improvements     |   | 20-39.5 years                   |
| Machinery and equipment        |   | 7-15 years                      |
| Office furniture and equipment |   | 3-5 years                       |
| Transportation equipment       |   | 3-5 years                       |

----

----

----

----

|                           |   | September 30, 2010 |       |   | December 31, 2009 |   |
|--------------------------------|--------|------------------------------|------------|--------|-----------------------------|--------|
|                           |   | (Unaudited)                  |       |   |                        |   |
| Trade accounts receivable      |   | $                            | 65,043,556 |   |                        | $      | 68,309,284 |   |
| Allowance for bad debts        |   |                         | (522,729   | )      |                        |   | (1,024,684 | ) |
| Trade accounts receivable, net |   | $                            | 64,520,827 |   |                        | $      | 67,284,600 |   |

| Allowance for doubtful accounts at December 31, 2008              |   | $      | 318,529   |   |
|-------------------------------------------------------------------|--------|--------|-----------|--------|
| Additional reserves                                               |   |   | 862,302   |   |
| Effect of foreign currency translation                            |   |   | 534       |   |
| Allowance for doubtful accounts at September 30, 2009 (Unaudited) |   |   | 1,181,365 |   |
| Reserve adjustment                                                |   |   | (156,477  | )      |
| Effect of foreign currency translation                            |   |   | (204      | )      |
| Allowance for doubtful accounts at December 31, 2009              |   |   | 1,024,684 |   |
| Reserve adjustment                                                |   |   | (513,846  | )      |
| Effect of foreign currency translation                            |   |   | 11,891    |   |
| Allowance for doubtful accounts at September 30, 2010 (Unaudited) |   | $      | 522,729   |   |

|                                  |   | September 30, 2010 |       |   | December 31, 2009    |   |
|---------------------------------------|--------|------------------------------|------------|--------|--------------------------------|--------|
|                                  |   | (Unaudited)                  |       |   |       |   |
| Raw materials                         |   | $                            | 15,083,186 |   |                           | $      | 5,137,002 |   |
| Work in process                       |   |                         | 2,945,515  |   |                           |   | 2,777,890 |   |
| Finished goods                        |   |                         | 4,974,869  |   |                           |   | 3,007,279 |   |
| Totals                                |   |                         | 23,003,570 |   |                           |   | 10,922,171 |   |
| Less allowance for obsolete inventory |   |                         | (301,416   | )      |                           |   | (46,389 | ) |
| Totals                                |   | $                            | 22,702,154 |   |                           | $      | 10,875,782 |   |

| Allowance for obsolete inventory at December 31, 2008              |   | $      | 160,487  |   |
|--------------------------------------------------------------------|--------|--------|----------|--------|
| Additional reserves                                                |   |   | 62,914   |   |
| Allowance for obsolete inventory at September 30, 2009 (Unaudited) |   |   | 223,401  |   |
| Reserves write-off                                                 |   |   | (177,012 | )      |
| Allowance for obsolete inventory at December 31, 2009              |   |   | 46,389   |   |
| Additional reserves                                                |   |   | 255,027  |   |
| Allowance for obsolete inventory at September 30, 2010 (Unaudited) |   | $      | 301,416  |   |

----

|                          |   | September 30,2010 |        |   | December 31,2009 |   |
|-------------------------------|--------|------------------------|-------------|--------|-----------------------|--------|
|                          |   | (Unaudited)            |        |   |                  |   |
| Land                          |   | $                      | 100,726     |   |                  | $      | 100,726 |   |
| Buildings and improvements    |   |                   | 63,165,468  |   |                  |   | 43,665,594 |   |
| Transportation equipment      |   |                   | 4,286,386   |   |                  |   | 4,177,943 |   |
| Machinery and equipment       |   |                   | 85,010,764  |   |                  |   | 74,463,717 |   |
| Office furniture              |   |                   | 1,313,417   |   |                  |   | 1,172,121 |   |
| Construction in progress      |   |                   | 5,390,539   |   |                  |   | 19,449,384 |   |
| Totals                        |   |                   | 159,267,300 |   |                  |   | 143,029,485 |   |
| Less accumulated depreciation |   |                   | (34,991,751 | )      |                  |   | (25,643,919 | ) |
| Totals                        |   | $                      | 124,275,549 |   |                  | $      | 117,385,566 |   |

| No.    |   | Project Description                                     |   | September 30,2010 |      | CommencementDate |     | Expectedcompletiondate |      |
|--------|--------|--------------------------------------------------------------|--------|------------------------|-----------|------------------|----------|------------------------|-----------|
|   |   |                                                         |   |                   |      |             |     |                   |      |
| 1      |   | Manufacturing machinery and equipment for CCA/CCS (Multiple) |   | $                      | 2,595,298 |             | Dec 2007 |                   | Dec, 2010 |   |
| 2      |   | Manufacturing machinery and equipment for CCA/CCS (Multiple) |   |                   | 2,616,163 |             | Dec 2009 |                   | Mar, 2011 |   |
| 3      |   | Manufacturing machinery and equipment for CCA                |   |                   | 132,742   |             | Oct 2009 |                   | Dec, 2011 |   |
| 4      |   | Building attachment                                          |   |                   | 46,336    |             | Sep 2010 |                   | Dec, 2012 |   |
|   |   | Total                                                        |   | $                      | 5,390,539 |             |     |                   |      |   |

| No.    |   | Project Description                                     |   | December 31,2009 |       | CommencementDate |               | Expectedcompletion date |               |
|--------|--------|--------------------------------------------------------------|--------|-----------------------|------------|------------------|--------------------|------------------------------|--------------------|
|   |   |                                                         |   |                  |       |             |               |                         |               |
| 1      |   | Manufacturing machinery and equipment for CCA/CCS (Multiple) |   | $                     | 4,276,753  |             | Dec 2007           |                         | Mar, 2010          |   |
| 2      |   | Corporation administration office building                   |   |                  | 13,144,394 |             | May 2003           |                         | Dec, 2010          |   |
| 3      |   | Manufacture building (Dalian)                                |   |                  | 630,389    |             | Jan 2008           |                         | Jun, 2010          |   |
| 4      |   | Manufacturing machinery and equipment for CCA/CCS (Multiple) |   |                  | 1,322,848  |             | Dec 2009           |                         | Mar, 2011          |   |
| 5      |   | Manufacturing machinery and equipment for CCA                |   |                  | 75,000     |             | Oct 2009           |                         | Mar, 2010          |   |
|   |   | Total                                                        |   | $                     | 19,449,384 |             |     |                         |     |   |

|                                                 |   | Plant and equipment |        |
|------------------------------------------------------|--------|-------------------------------|-------------|
| Balance as of December 31, 2009                      |   | $                             | 143,029,485 |   |
| Acquired through acquisition of Jinchuan and Hongtai |   |                          | 11,222,868  |   |
| Acquired through cash payment                        |   |                          | 806,371     |   |
| Acquired from advanced payments                      |   |                          | 1,508,652   |   |
| Acquired from accounts payable                       |   |                          | 26,387      |   |
| Fixed assets transferred from CIP                    |   |                          | 15,134,299  |   |
| CIP transferred to fixed assets                      |   |                          | (15,134,299 | ) |
| VAT claimed on purchase of capital assets            |   |                          | (212,315    | ) |
| FX rate effect                                       |   |                          | 2,885,852   |   |
| Balance as of September 30, 2010 (Unaudited)         |   | $                             | 159,267,300 |   |

----

|                                       |   | September 30,2010 |       |   | December 31,2009 |   |
|--------------------------------------------|--------|------------------------|------------|--------|-----------------------|--------|
|                                       |   | (Unaudited)            |       |   |                  |   |
| Advances for inventories – current   |   | $                      | 21,228,320 |   |                  | $      | 8,582,346 |   |
| Advances for equipment – non current |   |                   | 540,482    |   |                  |   | 1,356,404 |   |
| Total advances to suppliers                |   | $                      | 21,768,802 |   |                  | $      | 9,938,750 |   |

|                           |   | September 30,2010 |       |   | December 31,2009 |   |
|--------------------------------|--------|------------------------|------------|--------|-----------------------|--------|
|                           |   | (Unaudited)            |       |   |                  |   |
| Patents                        |   | $                      | 1,966,578  |   |                  | $      | 1,754,270 |   |
| Land use rights                |   |                   | 14,453,075 |   |                  |   | 12,472,131 |   |
| Total:                         |   |                   | 16,419,653 |   |                  |   | 14,226,401 |   |
| Less: accumulated amortization |   |                   | (2,757,501 | )      |                  |   | (2,302,345 | ) |
| Intangible assets, net         |   | $                      | 13,662,152 |   |                  | $      | 11,924,056 |   |

| September 30, |                           | Amount |       |
|--------------------|--------------------------------|--------|------------|
| 2011               |                           | $      | 567,464    |   |
| 2012               |       |   | 567,464    |   |
| 2013               |                           |   | 445,822    |   |
| 2014               |                           |   | 423,311    |   |
| 2015               |                           |   | 423,311    |   |
| Thereafter         |                           |   | 11,849,952 |   |

----

|                |   | September 30,2010 |      |   | December 31 ,2009 |   |
|---------------------|--------|------------------------|-----------|--------|------------------------|--------|
|                |   | (Unaudited)            |      |   |                   |   |
| Income tax          |   | $                      | 2,229,310 |   |                   | $      | 1,796,019 |   |
| VAT provision       |   |                   | 1,229,523 |   |                   |   | 769,025 |   |
| Others              |   |                   | 180,299   |   |                   |   | 34,011 |   |
| Total taxes payable |   | $                      | 3,639,132 |   |                   | $      | 2,599,055 |   |

|                     |   | September 30,2010 |    |   | December 31,2009 |   |
|--------------------------|--------|------------------------|---------|--------|-----------------------|--------|
|                     |   | (Unaudited)            |    |   |                  |   |
| Deferred tax liabilities |   | $                      | 669,540 |   |                  | $      | - |   |

|                             |      |   | 2010          |   |   | 2010      |   |   | 2009           |   |   | 2009      |   |
|----------------------------------|-----------|--------|---------------|--------|--------|-----------|--------|--------|----------------|--------|--------|-----------|--------|
|                             |      |   | Statutory     |   |   | Income    |   |   | Statutory      |   |   | Income    |   |
|                             |      |   | Income        |   |   | Tax       |   |   | Income         |   |   | Tax       |   |
| Entities                         |      |   | Tax Rate |   |   | Exemption |   |   | Tax  Rate |   |   | Exemption |   |
| Fushi International              | China (a) |   |          | 25     | %      |      |   | 12.5   | %              |   |   | 25        | %      |   |   | 12.5 | % |
| Dalian Fushi                     | China (a) |   |          | 25     | %      |      |   | -      |           |   |   | 25        | %      |   |   | - |   |
| Jinchuan                         | China (a) |   |          | 25     | %      |      |   | -      |           |   |   | n/a       |   |   |   | n/a |   |
| Hongtai                          | China (a) |   |          | 25     | %      |      |   | -      |           |   |   | n/a       |   |   |   | n/a |   |
| Fushi JiangSu                    | China (a) |   |          | 25     | %      |      |   | -      |           |   |   | n/a       |   |   |   | n/a |   |
| Copperweld UK                    | UK (b)    |   |          | 21     | %      |      |   | -      |           |   |   | 21        | %      |   |   | - |   |
| Fushi, Fushi holding, Copperweld | US (c)    |   |          | 34     | %      |      |   | -      |           |   |   | 34        | %      |   |   | - |   |
| Copperweld US                    | State     |   |          | 6.5    | %      |      |   | -      |           |   |   | 6.5       | %      |   |   | - |   |

----

|                                           |   | Three months ended September 30, |       |   | Nine months ended September30, |   |
|------------------------------------------------|--------|------------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                                           |   | 2010                                                 |       |   | 2009                                          |   |   | 2010 |   |   | 2009 |   |
|                                           |   | (Unaudited)                                          |       |   | (Unaudited)                                   |   |   | (Unaudited) |   |   | (Unaudited) |   |
|                                           |   |                                                 |       |   |                                          |   |   |   |   |   |   |   |
| Effective foreign income taxes – current |   |                                                 | (2,230,608 | )      |                                          |   | (1,788,366 | ) |   |   | (6,320,742 | ) |   |   | (4,069,081 | ) |
| US federal income tax – deferred         |   |                                                 | 158,599    |   |                                          |   | 807,537 |   |   |   | 1,123,555 |   |   |   | 4,366,785 |   |
| Provision for income tax                       |   |                                                 | (2,072,009 | )      |                                          |   | (980,829 | ) |   |   | (5,197,187 | ) |   |   | 297,704 |   |
|                                           |   |                                                 |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Effective tax rate                             |   |                                                 | 13.8       | %      |                                          |   | 9.5 | % |   |   | 13.2 | % |   |   | -2.6 | % |

|                                                  |   | Amount |       |
|-------------------------------------------------------|--------|--------|------------|
| The deferred tax activity consisted of the following: |   |   |       |
| Deferred tax assets at December 31, 2008              |   | $      | 9,292,233  |   |
| Additions to deferred tax assets                      |   |   | 4,991,295  |   |
| Deferred tax assets at December 31, 2009              |   | $      | 14,283,528 |   |
| Additions to deferred tax assets                      |   |   | 1,123,555  |   |
| Deferred tax assets at September 30, 2010 (unaudited) |   | $      | 15,407,083 |   |

----

| Name of lender                   |   | September 30,2010 |   |   | December 31,2009 |   |
|--------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                       |   | (Unaudited)            |   |   |                  |   |
| Wells Fargo Bank revolving credit line (1) |   | $                      | -      |   |                  | $      | 4,033,783 |   |
| Total                                      |   | $                      | -      |   |                  | $      | 4,033,783 |   |

| Name of lender                               |   | September 30,2010 |      |   | December 31,2009 |   |
|--------------------------------------------------------|--------|------------------------|-----------|--------|-----------------------|--------|
|                                                   |   | (Unaudited)            |      |   |                  |   |
| Regions bank term loan – current portion (2)     |   | $                      | 650,000   |   |                  | $      | - |   |
| Regions bank term loan – non current portion (2) |   |                   | 5,850,000 |   |                  |   | - |   |
| Total                                                  |   | $                      | 6,500,000 |   |                  | $      | - |   |

| September 30, |                           | Amount |      |
|--------------------|--------------------------------|--------|-----------|
| 2011               |                           | $      | 650,000   |   |
| 2012               |       |   | 650,000   |   |
| 2013               |                           |   | 650,000   |   |
| 2014               |                           |   | 650,000   |   |
| 2015               |                           |   | 650,000   |   |
| Thereafter         |                           |   | 3,250,000 |   |

----

|                                                                   |   | September 30,2010 |   |   | December 31,2009 |   |
|------------------------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                                                   |   | (Unaudited)            |   |   |                  |   |
| Guaranteed senior secured floating rate notes (“HY Notes”) |   |                   | -      |   |                  |   | 35,000,000 |   |
|                                                                   |   |                   |   |   |                  |   |   |   |
| Less current portion                                                   |   |                   | -      |   |                  |   | 10,000,000 |   |
|                                                                   |   |                   |   |   |                  |   |   |   |
| Total notes payable, noncurrent                                        |   | $                      | -      |   |                  | $      | 25,000,000 |   |

----

|                           |   | September 30,2010 |    |   | December 31,2009 |   |
|--------------------------------|--------|------------------------|---------|--------|-----------------------|--------|
| Plant facility                 |   | $                      | 266,598 |   |                  | $      | 266,598 |   |
| Less: accumulated depreciation |   |                   | (28,881 | )      |                  |   | (8,887 | ) |
| Net leased plant facility      |   | $                      | 237,717 |   |                  | $      | 257,711 |   |

----

| Year ending September 30,       |   | Minimum leasePayment |    |
|------------------------------------------------|--------|---------------------------|---------|
| 2011                                           |   | $                         | 100,976 |   |
| 2012                                           |   |                      | 84,147  |   |
| Thereafter                                     |   |                      | -       |   |
| Total minimum lease payments                   |   |                      | 185,123 |   |
| Less: interest *1                              |   |                      | (17,807 | ) |
| Present value of net minimum lease payments *2 |   | $                         | 167,316 |   |

----

|                                                      |   | Three months ended September 30, |       |   | Nine months ended September 30, |   |
|-----------------------------------------------------------|--------|------------------------------------------------------|------------|--------|-----------------------------------------------------|--------|
|                                                      |   | 2010                                                 |       |   | 2009                                                |   |   | 2010 |   |   | 2009 |   |
|                                                      |   | (Unaudited)                                          |       |   | (Unaudited)                                         |   |   | (Unaudited) |   |   | (Unaudited) |   |
| Net income for basic and diluted earnings per share       |   | $                                                    | 12,922,371 |   |                                                | $      | 9,351,860 |   |   | $ | 34,312,053 |   |   | $ | 11,696,662 |   |
|                                                      |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares used in basic computation         |   |                                                 | 37,694,626 |   |                                                |   | 28,084,416 |   |   |   | 36,553,784 |   |   |   | 27,827,152 |   |
| Dilutive effect of warrants, options and convertible note |   |                                                 | 383,219    |   |                                                |   | 1,122,092 |   |   |   | 476,715 |   |   |   | 849,680 |   |
| Weighted average shares used in diluted computation       |   |                                                 | 38,077,845 |   |                                                |   | 29,206,508 |   |   |   | 37,030,499 |   |   |   | 28,676,832 |   |
|                                                      |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share                                        |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                     |   | $                                                    | 0.34       |   |                                                | $      | 0.33 |   |   | $ | 0.94 |   |   | $ | 0.42 |   |
| Diluted                                                   |   | $                                                    | 0.34       |   |                                                | $      | 0.32 |   |   | $ | 0.93 |   |   | $ | 0.41 |   |

| Dateissued/granted       |   | Nature   |   | Excise price |        |   | Shares excludedfor year dilutedEPS calculation |   | Reason forexclusion |
|--------------------------|--------|----------|--------|-------------------|-------------|--------|--------------------------------------------------------------------|--------|--------------------------|
|                     |   |     |   |              |        |   |                                                               |   |                     |
| 11/31/2007               |   | Warrants |   | $                 | 16.80       |   |                                                               |   | 100,000                  |   | Anti-dilutive |
| 05/21/2007 to 11/13/2007 |   | Options  |   | $       | 11.75-20.94 |   |                                                               |   | 495,000                  |   | Anti-dilutive |
| 04/10/2008 to 6/25/2008  |   | Options  |   | $                 | 15.04-23.25 |   |                                                               |   | 126,000                  |   | Anti-dilutive |

| ExercisePrice |   | Number |   |    | AverageRemaining Life(years) |   |
|---------------|--------|--------|--------|---------|-----------------------------------|--------|
|          |   |   |   |    |                              |   |
| $             | 3.11   |   |   | 245,778 |                              |   |   | 1.25 |   |
| $             | 16.80  |   |   | 100,000 |                              |   |   | 1.15 |   |
| $             | 6.00   |   |   | 100,000 |                              |   |   | 0.29 |   |
|          |   |   |   | 445,778 |                              |   |   | 1.01 |   |

----

|                                       |   | Number ofWarrantsOutstanding |     |    | Weighted-AverageExercisePrice |   | AverageRemainingContractualLife |
|--------------------------------------------|--------|-----------------------------------|----------|---------|-------------------------------|--------|---------------------------------|
| Balance, at December 31, 2008              |   |                              | 432,124  |    |                          | $      | 6.28                            |   | 2.92 years |
| Granted                                    |   |                              | 300,000  |    |                          | $      | 5.58                            |   |   |
| Forfeited                                  |   |                              | -        |    |                          |   |                            |   |   |
| Exercised                                  |   |                              | (52,352  | )       |                          | $      | 3.11                            |   |   |
| Balance, at December 31, 2009              |   |                              | 679,772  |    |                          | $      | 6.22                            |   | 1.24 years |
| Granted                                    |   |                              | -        |    |                          |   |                            |   |   |
| Forfeited                                  |   |                              | -        |    |                          |   |                            |   |   |
| Exercised                                  |   |                              | (233,994 | )  |                          | $      | 5.05                       |   |   |
| Balance, at September 30, 2010 (unaudited) |   |                              | 445,778  |    |                          | $      | 6.83                            |   | 1.01 years |

| GrantYear |   | GrantedOptions(Shares) |      |   | Forfeited and ExpiredOption(Shares) |   |    | Exercise PriceOption($) |   |
|-----------|--------|------------------------|-----------|--------|-----------------------------------------------|--------|---------|------------------------------|--------|
| 2007      |   |                   | 335,000   |   |                                          |   | 190,000 |                         |   | $ | 16.44-$20.94 |   |
| 2008      |   |                   | 151,000   |   |                                          |   | 25,000  |                         |   | $ | 15.04-$23.25 |   |
| 2009      |   |                   | 688,000   |   |                                          |   | 166,725 |                         |   | $ | 4.95-$7.93 |   |
| 2010      |   |                   | 1 64 ,530 |   |                                          |   | 32,928  |                         |   | $ | 8.61-$9.13 |   |
| Total     |   |                   | 1,338,530 |   |                                          |   | 414,653 |                         |   |   |   |   |

| GrantYear |   | GrantedRestricted Stock(Shares) |    |   | Forfeited andExpiredRestricted Stock(Shares) |   |   | VestedRestricted S tock(Shares) |   |   | Grant D ate FairMarket Value($) |   |
|-----------|--------|--------------------------------------|---------|--------|--------------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|-----------------------------------------------------|--------|
| 2009      |   |                                 | 50,000  |   |                                                   |   | -      |                                      |   |   | -                                                   |   |   | $ | 8.08 |   |
| 2010      |   |                                 | 51,000  |   |                                                   |   | -      |                                      |   |   | 38,250                                              |   |   | $ | 8.61 |   |
| Total     |   |                                 | 101,000 |   |                                                   |   | -      |                                      |   |   | 38,250                                              |   |   |   |   |   |

----

|                                           |   | Nine months ended ,2010 |   | Year ended,2009 |   | Year ended2008 |   | Year ended2007 |   |
|------------------------------------------------|--------|----------------------------------------|--------|----------------------|--------|---------------------|--------|---------------------|--------|
| Risk-free interest rate (1)               |   | 0.87%-1.18%                            |   | 0.78%-2.2%           |   | 1.84%-2.82%         |   | 3.54%-4.57%         |   |
| Expected dividend yield (2)               |   | -                                      |   | -                    |   | -                   |   | -                   |   |
| Expected option life (3)                  |   | 2-4 Years                              |   | 2-5 Years            |   | 0.5-2 Years         |   | 2 Years             |   |
| Expected stock price volatility (4)       |   | 60%                                    |   | 60%                  |   | 50%                 |   | 50%                 |   |
| Weighted average fair value of options granted |   | $2.95                                  |   | $2.77                |   | $4.57               |   | $4.08               |   |

| (1) | Risk-free interest rate  – Risk-free interest rate is based on US Treasury zero-coupon issues with maturity terms similar to the expected term on the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Expected dividend yield  – The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. The Company has no plans to pay any dividend in the foreseeable future. Therefore, the Company considers the dividend yield to be zero. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Expected option life  – Because the Company has no historical share option exercise experience to estimate future exercise patterns, the expected life was determined using the simplified method as these awards meet the definition of “plain-vanilla” options under the rules prescribed by accounting standards. An increase in expected life will increase compensation expense. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Expected stock price volatility  – This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. As a forward-looking measure, the Company uses implied volatility of Company’s 225 days call options with strike price of $5.00 on March 7, 2009 (source: Morningstar.com), adjusted by the 2-year historical volatility of the Company’s stock as well as 2-year historical volatilities of the Company’s comparable public companies, to calculate the expected stock price volatility. An increase in the expected volatility will increase compensation expense. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                    |   | Number ofOptionsOutstanding |      |   | Weighted-AverageExercisePrice |   |   | AggregateIntrinsicValue |   |
|-----------------------------------------|--------|----------------------------------|-----------|--------|-------------------------------|--------|--------|-------------------------|--------|
| Balance, December 31, 2008              |   |                             | 1,067,333 |   |                          | $      | 14.90  |                    |   |   | - |   |
| Granted                                 |   |                             | 488,000   |   |                          | $      | 5.48   |                    |   |   | - |   |
| Forfeited                               |   |                             | (40,050   | )      |                          | $      | 4.95   |                    |   |   | - |   |
| Expired                                 |   |                             | -         |   |                          | $      |   |                    |   |   | - |   |
| Exercised                               |   |                             | (10,250   | )      |                          | $      | 4.95   |                    |   |   | - |   |
| Balance, September 30, 2009 (unaudited) |   |                             | 1,505,033 |   |                          | $      | 12.15  |                    |   |   | - |   |
| Granted                                 |   |                             | 200,000   |   |                          | $      | 7.93   |                    |   |   | - |   |
| Forfeited                               |   |                             | (9,000    | )      |                          | $      | 4.95   |                    |   |   | - |   |
| Expired                                 |   |                             | (95,000   | )      |                          | $      | 17.19  |                    |   |   | - |   |
| Exercised                               |   |                             | (2,750    | )      |                          | $      | 4.95   |                    |   |   | - |   |
| Balance, December 31, 2009              |   |                             | 1,598,283 |   |                          | $      | 11.38  |                    |   | $ | 2,383,162 |   |
| Granted                                 |   |                             | 164,530   |   |                          | $      | 8.64   |                    |   |   | - |   |
| Forfeited                               |   |                             | (139,678  | )      |                          | $      | 7.46   |                    |   |   | - |   |
| Expired                                 |   |                             | (362,258  | )      |                          | $      | 12.70  |                    |   |   | - |   |
| Exercised                               |   |                             | (41,500   | )      |                          | $      | 4.95   |                    |   |   | - |   |
| Balance, September 30, 2010 (unaudited) |   |                             | 1,219,377 |   |                          | $      | 11.30  |                    |   | $ | 1,159,627 |   |

|   | Outstanding Option |   | Exercisable Options |      |
|--------|-------------------------|--------|--------------------------|-----------|
|   | ExercisePrice           |   | Number                   |      | AverageRemainingContractualLife |   | AverageExercisePrice |   |   | Number |   |   | WeightedAverageExercisePrice |   |
| $      | 12.30                   |   |                     | 75,000    |   | 0.64 years |   | $ | 12.30 |   |   |   | 75,000 |   |   | $ | 12.30 |   |
| $      | 11.75                   |   |                     | 150,000   |   | 1.76 years |   | $ | 11.75 |   |   |   | 150,000 |   |   | $ | 11.75 |   |
| $      | 13.70                   |   |                     | 125,000   |   | 0.99 years |   | $ | 13.70 |   |   |   | 125,000 |   |   | $ | 13.70 |   |
| $      | 16.44                   |   |                     | 33,750    |   | 0.57 years |   | $ | 16.44 |   |   |   | 33,750 |   |   | $ | 16.44 |   |
| $      | 17.94                   |   |                     | 33,750    |   | 1.07 years |   | $ | 17.94 |   |   |   | 33,750 |   |   | $ | 17.94 |   |
| $      | 19.44                   |   |                     | 33,750    |   | 1.57 years |   | $ | 19.44 |   |   |   | 33,750 |   |   | $ | 19.44 |   |
| $      | 20.94                   |   |                     | 33,750    |   | 2.07 years |   | $ | 20.94 |   |   |   | 33,750 |   |   | $ | 20.94 |   |
| $      | 16.36                   |   |                     | 10,000    |   | 1.12 years |   | $ | 16.36 |   |   |   | 10,000 |   |   | $ | 16.36 |   |
| $      | 23.25                   |   |                     | 59,000    |   | 1.25 years |   | $ | 23.25 |   |   |   | 59,000 |   |   | $ | 23.25 |   |
| $      | 15.04                   |   |                     | 17,000    |   | 1.53 years |   | $ | 15.04 |   |   |   | 17,000 |   |   | $ | 15.04 |   |
| $      | 20.04                   |   |                     | 50,000    |   | 2.64 years |   | $ | 20.04 |   |   |   | 50,000 |   |   | $ | 20.04 |   |
| $      | 4.95                    |   |                     | 266,775   |   | 2.25 years |   | $ | 4.95 |   |   |   | 266,775 |   |   | $ | 4.95 |   |
| $      | 7.93                    |   |                     | 200,000   |   | 9.13 years |   | $ | 7.93 |   |   |   | - |   |   | $ | 7.93 |   |
| $      | 8.61                    |   |                     | 123,602   |   | 6.24 years |   | $ | 8.61 |   |   |   | 46,445 |   |   | $ | 8.61 |   |
| $      | 9.13                    |   |                     | 8,000     |   | 8.82 years |   | $ | 9.13 |   |   |   | - |   |   | $ | 9.13 |   |
|   | Total                   |   |                     | 1,219,377 |   |   |   |   |   |   |   |   | 934,220 |   |   |   |   |   |

----

----

|                                                                |      |   | As of February 5, 2010 |        |
|---------------------------------------------------------------------|-----------|--------|--------------------------------------------|-------------|
|                                                                |      |   |                                       | USD         |   |
| Consideration                                                       |      |   |                                       |        |   |
| Cash                                                                |      |   |                                       | 5,075,000   |   |
| Contingent consideration                                            |  (i) |   |                                       | 4,819,107   |   |
|                                                                |      |   |                                       | 9,894,107   |   |
|                                                                |      |   |                                       |        |   |
| Fair values of identifiable assets acquired and liabilities assumed |      |   |                                       |        |   |
| Cash                                                                |      |   |                                       | 859,243     |   |
| Other current assets                                                |      |   |                                       | 3,879,155   |   |
| Property and equipment                                              |      |   |                                       | 6,132,168   |   |
| Land use right                                                      |      |   |                                       | 1,693,759   |   |
| Current liabilities                                                 |      |   |                                       | (2,977,257) |   |
| Non-current deferred income tax liabilities                         |      |   |                                       | (260,853)   |   |
| Total identifiable assets acquired and liabilities assumed          |      |   |                                       | 9,326,215   |   |
| Goodwill                                                            |      |   |                                       | 567,892     |   |
|                                                                |      |   |                                       | 9,894,107   |   |

| (i) | On February 5, 2010, the Company estimated the possibility that Jinchuan would meet the performance target was 100% and the expected payment date was one year after the acquisition date. Thus the fair value of the contingent consideration arrangement was determined at $ 4,819,107 by using an annual discount rate of 5.31%. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                |   | As of May 31, 2010 |        |
|---------------------------------------------------------------------|--------|--------------------|-------------|
|                                                                |   |               | USD         |   |
| Consideration                                                       |   |               |        |   |
| Cash                                                                |   |               | 1,300,000   |   |
| 263,158 ordinary shares of the Company                              |   |               | 2,600,000   |   |
|                                                                |   |               | 3,900,000   |   |
|                                                                |   |               |        |   |
| Fair values of identifiable assets acquired and liabilities assumed |   |               |        |   |
| Cash                                                                |   |               | 42,199      |   |
| Other current assets                                                |   |               | 807,122     |   |
| Property and equipment                                              |   |               | 5,090,700   |   |
| Intangible assets                                                   |   |               | 292,942     |   |
| Current liabilities                                                 |   |               | (3,026,173) |   |
| Non-current deferred income tax liabilities                         |   |               | (408,687)   |   |
| Total identifiable assets acquired and liabilities assumed          |   |               | 2,798,103   |   |
| Goodwill                                                            |   |               | 1,101,897   |   |
|                                                                |   |               | 3,900,000   |   |

----

| Pro forma           |   | For the threemonths endedSeptember 30, |       |   | For the threemonths endedSeptember 30, |   |       | For the ninemonths endedSeptember 30, |   |   | For the ninemonths endedSeptember 30, |   |
|--------------------------|--------|------------------------------------------------------------|------------|--------|------------------------------------------------------------|--------|------------|-----------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|
|                     |   | 2010                                                       |       |   | 2009                                                       |   |       | 2010                                                      |   |   | 2009                                                      |   |
| Sales                    |   | $                                                          | 66,507,433 |   |                                                       | $      | 57,775,081 |                                                      |   | $      | 200,427,323                                               |   |   | $ | 157,287,111 |   |
| Cost of goods sold       |   |                                                       | 46,842,955 |   |                                                       |   | 40,241,170 |                                                      |   |   | 141,777,460                                               |   |   |   | 113,382,155 |   |
| Gross profit             |   |                                                       | 19,664,478 |   |                                                       |   | 17,533,911 |                                                      |   |   | 58,649,863                                                |   |   |   | 43,904,956 |   |
| Operating expenses       |   |                                                       | 4,574,216  |   |                                                       |   | 4,835,746  |                                                      |   |   | 15,256,645                                                |   |   |   | 13,879,172 |   |
| Income from operations   |   |                                                       | 15,090,263 |   |                                                       |   | 12,698,165 |                                                      |   |   | 43,393,218                                                |   |   |   | 30,025,784 |   |
| Other expense, net       |   |                                                       | (95,882    | )      |                                                       |   | (228,491   | )                                                         |   |   | (2,591,176                                                | )      |   |   | (13,020,429 | ) |
| Income before income tax |   |                                                       | 14,994,381 |   |                                                       |   | 12,469,675 |                                                      |   |   | 40,802,042                                                |   |   |   | 17,005,355 |   |
| Income tax expense       |   |                                                       | 2,072,009  |   |                                                       |   | 1,510,052  |                                                      |   |   | 5,521,902                                                 |   |   |   | 1,096,951 |   |
| Net income               |   | $                                                          | 12,922,372 |   |                                                       | $      | 10,959,623 |                                                      |   | $      | 35,280,140                                                |   |   | $ | 15,908,405 |   |

----

----

|       |   | For the nine monthsended September 30,2010 |      |   | For the nine monthsended September 30,2009 |   |
|------------|--------|---------------------------------------------------------------------|-----------|--------|---------------------------------------------------------------------|--------|
| Revenue    |   | $                                                                   | 3,329,059 |   |                                                                | $      | 2,253,213 |   |
| Net income |   |                                                                | 30,915    |   |                                                                |   | 210,290 |   |

|              |   | For the three monthsended September 30,2010 |      |    | For the three monthsended September 30,2009 |   |
|-------------------|--------|----------------------------------------------------------------------|-----------|---------|----------------------------------------------------------------------|--------|
| Revenue           |   | $                                                                    | 1,043,741 |    |                                                                 | $      | 855,283 |   |
| Net (loss) income |   |                                                                 | (29,118   | )  |                                                                 |   | 24,058 |   |

|   |   | September 30,2010 |      |   | December 31,2009 |   |
|--------|--------|------------------------|-----------|--------|-----------------------|--------|
| Assets |   | $                      | 3,223,186 |   |                  | $      | 2,673,254 |   |

| For the nine months endedSeptember 30, 2010   |   |   |        |   |   |   |       |      |   |   |         |   |   |   |       |
|-----------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|------------|-----------|--------|--------|--------------|--------|--------|--------|------------|
|                                                                        |   | PRC    |        |   | US     |   |       | Corporate |   |   | Eliminations |   |   | Total  |       |
| Revenues                                                                    |   | $      | 158,093,089 |   |   | $      | 40,519,519 |      |   | $      | -            |   |   | $      | (3,549,967 | ) |   | $ | 195,062,641 |   |
| Gross profit                                                                |   |   | 51,588,236  |   |   |   | 5,487,655  |      |   |   | -            |   |   |   | -          |   |   |   | 57,075,891 |   |
| Selling, general and administrative expenses                                |   |   | 8,146,059   |   |   |   | 3,618,800  |      |   |   | 3,233,299    |   |   |   | -          |   |   |   | 14,998,158 |   |
| Operating income (loss)                                                     |   |   | 43,442,177  |   |   |   | 1,868,855  |      |   |   | (3,233,299   | )      |   |   | -          |   |   |   | 42,077,733 |   |
| Capital expenditures                                                        |   |   | 1,682,179   |   |   |   | 244,401    |      |   |   | -            |   |   |   | -          |   |   |   | 1,926,580 |   |
| Depreciation expense (included in cost of goods sold and operating expense) |   | $      | 7,303,479   |   |   | $      | 1,456,360  |      |   | $      | -            |   |   | $      | -          |   |   | $ | 8,759,839 |   |

| For the three months endedSeptember 30, 2010  |   |   |       |   |   |   |       |      |   |   |         |   |   |   |       |
|-----------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|-----------|--------|--------|--------------|--------|--------|--------|------------|
|                                                                        |   | PRC    |       |   | US     |   |       | Corporate |   |   | Eliminations |   |   | Total  |       |
| Revenues                                                                    |   | $      | 54,995,104 |   |   | $      | 13,093,644 |      |   | $      | -            |   |   | $      | (1,581,315 | ) |   | $ | 66,507,433 |   |
| Gross profit                                                                |   |   | 18,031,526 |   |   |   | 1,632,952  |      |   |   | -            |   |   |   | -          |   |   |   | 19,664,478 |   |
| Selling, general and administrative expenses                                |   |   | 2,530,340  |   |   |   | 962,070    |      |   |   | 1,081,806    |   |   |   | -          |   |   |   | 4,574,216 |   |
| Operating income (loss)                                                     |   |   | 15,501,186 |   |   |   | 670,882    |      |   |   | (1,081,806   | )      |   |   | -          |   |   |   | 15,090,262 |   |
| Capital expenditures                                                        |   |   | 88,030     |   |   |   | 102,156    |      |   |   | -            |   |   |   | -          |   |   |   | 190,186 |   |
| Depreciation expense (included in cost of goods sold and operating expense) |   | $      | 2,567,081  |   |   | $      | 482,728    |      |   | $      | -            |   |   | $      | -          |   |   | $ | 3,049,809 |   |

----

| For the nine months endedSeptember 30, 2009   |   |          |        |   |   |          |       |      |   |          |         |   |   |          |     |
|-----------------------------------------------------------------------------|--------|---------------|-------------|--------|--------|---------------|------------|-----------|--------|---------------|--------------|--------|--------|---------------|----------|
|                                                                        |   | PRC           |        |   | US     |          |       | Corporate |   |          | Eliminations |   |   | Total         |     |
| Revenues                                                                    |   | $   | 105,226,285 |   |   | $   | 26,506,874 |      |   | $   | -            |   |   | $   | (498,732 | )  |   | $   | 131,234,427 |   |
| Gross profit                                                                |   |          | 34,361,859  |   |   |          | 3,199,662  |      |   |          | -            |   |   |          | -        |   |   |   | 37,561,521 |   |
| Selling, general and administrative expenses                                |   |          | 6,161,221   |   |   |          | 4,251,538  |      |   |          | 2,701,597    |   |   |          | -        |   |   |   | 13,114,356 |   |
| Operating income (loss)                                                     |   |          | 28,200,638  |   |   |          | (1,051,876 | )         |   |          | (2,701,597   | )      |   |          | -        |   |   |   | 24,447,165 |   |
| Capital expenditures                                                        |   |          | 5,770,109   |   |   |          | 261,267    |      |   |          | -            |   |   |          | -        |   |   |   | 6,031,376 |   |
| Depreciation expense (included in cost of goods sold and operating expense) |   | $             | 5,853,457   |   |   | $             | 1,338,385  |      |   | $             | -            |   |   | $             | -        |   |   | $ | 7,191,842 |   |

| For the three months endedSeptember 30, 2009  |   |          |       |   |   |          |      |      |   |          |                            |   |   |          |                           |
|-----------------------------------------------------------------------------|--------|---------------|------------|--------|--------|---------------|-----------|-----------|--------|---------------|---------------------------------|--------|--------|---------------|--------------------------------|
|                                                                        |   | PRC           |       |   | US     |          |      | Corporate |   |          | Eliminations                    |   |   | Total         |                           |
| Revenues                                                                    |   | $   | 39,408,804 |   |   | $   | 8,857,027 |      |   | $   |             |   |   | $   | (589,485                       | ) |   | $   | 47,646,346 |   |
| Gross profit                                                                |   |          | 13,472,985 |   |   |          | 1,696,482 |      |   |          |                            |   |   |          |                           |   |   |   | 15,169,467 |   |
| Selling, general and administrative expenses                                |   |          | 2,667,761  |   |   |          | 1,319,654 |      |   |          | 600,777                         |   |   |          |                           |   |   |   | 4,588,192 |   |
| Operating income (loss)                                                     |   |          | 10,805,224 |   |   |          | 376,828   |      |   |          | (600,777                        | )      |   |          |                           |   |   |   | 10,581,275 |   |
| Capital expenditures                                                        |   |          | 416,220    |   |   |          | 5,622     |      |   |          |                            |   |   |          |                           |   |   |   | 421,842 |   |
| Depreciation expense (included in cost of goods sold and operating expense) |   | $             | 2,073,116  |   |   | $             | 506,321   |      |   | $             |        |   |   | $             |       |   |   | $ | 2,579,437 |   |

|                               |   | PRC           |        |   | US     |          |       | Corporate |   |          | Total      |   |
|------------------------------------|--------|---------------|-------------|--------|--------|---------------|------------|-----------|--------|---------------|------------|--------|
| As of September 30, 2010           |   |          |        |   |   |          |       |      |   |          |       |   |
| Property, plant and equipment, net |   | $   | 113,396,305 |   |   | $   | 10,879,244 |      |   | $   | -          |   |   | $   | 124,275,549 |   |
|                               |   |          |        |   |   |          |       |      |   |          |       |   |   |   |   |   |
| Total assets                       |   | $             | 328,454,953 |   |   | $             | 33,240,947 |      |   | $             | 21,301,666 |   |   | $ | 382,997,566 |   |
|                               |   |          |        |   |   |          |       |      |   |          |       |   |   |   |   |   |
| As of December 31, 2009            |   |          |        |   |   |          |       |      |   |          |       |   |   |   |   |   |
| Property, plant and equipment, net |   | $             | 105,190,257 |   |   | $             | 12,195,309 |      |   | $             | -          |   |   | $ | 117,385,566 |   |
|                               |   |          |        |   |   |          |       |      |   |          |       |   |   |   |   |   |
| Total assets                       |   | $             | 254,054,799 |   |   | $             | 25,902,180 |      |   | $             | 17,338,145 |   |   | $ | 297,295,124 |   |

----

----

|                                                                                                                                                                                              |   | September 30, |        |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                                                                                                                                                              |   | 2010               |        |   | 2009              |   |
|                                                                                                                                                                                              |   | Unaudited          |        |   |              |   |
| ASSETS                                                                                                                                                                                            |   |               |        |   |              |   |
| CURRENT ASSETS:                                                                                                                                                                                   |   |               |        |   |              |   |
| Cash                                                                                                                                                                                              |   | $                  | 5,762,820   |   |              | $      | 98,839 |   |
| Other receivables and prepaid expenses                                                                                                                                                            |   |               | 131,763     |   |              |   | - |   |
| Deposit in derivative hedge                                                                                                                                                                       |   |               | -           |   |              |   | 1,000,000 |   |
| Total current assets                                                                                                                                                                              |   |               | 5,894,583   |   |              |   | 1,098,839 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| OTHER ASSETS:                                                                                                                                                                                     |   |               |        |   |              |   |   |   |
| Investments in subsidiaries                                                                                                                                                                       |   |               | 354,690,147 |   |              |   | 290,640,043 |   |
| Deferred loan expense, net                                                                                                                                                                        |   |               | -           |   |              |   | 1,955,778 |   |
| Deferred tax assets                                                                                                                                                                               |   |               | 15,407,083  |   |              |   | 14,283,528 |   |
| Total other assets                                                                                                                                                                                |   |               | 370,097,230 |   |              |   | 306,879,349 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| Total assets                                                                                                                                                                                      |   | $                  | 375,991,813 |   |              | $      | 307,978,188 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                              |   |               |        |   |              |   |   |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| Notes payable, current                                                                                                                                                                            |   | $                  | -           |   |              | $      | 10,000,000 |   |
| Other payables and accrued liabilities                                                                                                                                                            |   |               | 1,025,660   |   |              |   | 2,609,037 |   |
| Cross currency hedge payable                                                                                                                                                                      |   |               | -           |   |              |   | 436,702 |   |
| Loan payable to shareholder                                                                                                                                                                       |   |               | 15,000,000  |   |              |   | - |   |
| Total current liabilities                                                                                                                                                                         |   |               | 16,025,660  |   |              |   | 13,045,739 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| LONG-TERM  LIABILITIES:                                                                                                                                                                 |   |               |        |   |              |   |   |   |
| Intercompany payables                                                                                                                                                                             |   |               | 19,113,385  |   |              |   | 22,863,141 |   |
| Notes payable, non-current                                                                                                                                                                        |   |               | -           |   |              |   | 25,000,000 |   |
| Fair value of derivative instrument                                                                                                                                                               |   |               | -           |   |              |   | 7,532,527 |   |
| Total long-term liabilities                                                                                                                                                                       |   |               | 19,113,385  |   |              |   | 55,395,668 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| Total liabilities                                                                                                                                                                                 |   |               | 35,139,045  |   |              |   | 68,441,407 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                     |   |               |        |   |              |   |   |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| SHAREHOLDERS' EQUITY:                                                                                                                                                                             |   |               |        |   |              |   |   |   |
| Preferred stock,$0.001 par value, 5,000,000 shares authorized, none issued or outstanding as of September 30, 2010 and December 31, 2009                                                          |   |               | -           |   |              |   | - |   |
| Common stock,$0.006  par value, 100,000,000 shares authorized, September 30, 2010: 37,779,839 shares issued and outstanding December 31, 2009: 29,772,780 shares issued and outstanding |   |               | 226,680     |   |              |   | 178,638 |   |
| Additional paid in capital                                                                                                                                                                        |   |               | 166,297,828 |   |              |   | 105,540,676 |   |
| Statutory reserves                                                                                                                                                                                |   |               | 20,793,298  |   |              |   | 16,282,793 |   |
| Retained earnings                                                                                                                                                                                 |   |               | 122,113,829 |   |              |   | 92,312,280 |   |
| Accumulated other comprehensive income                                                                                                                                                            |   |               | 31,421,133  |   |              |   | 25,222,394 |   |
| Total shareholders' equity                                                                                                                                                                        |   |               | 340,852,768 |   |              |   | 239,536,781 |   |
|                                                                                                                                                                                              |   |               |        |   |              |   |   |   |
| Total liabilities and shareholders' equity                                                                                                                                                        |   | $                  | 375,991,813 |   |              | $      | 307,978,188 |   |

----

|                                               |   | Three months ended September 30, |       |   | Nine months ended September 30, |   |
|----------------------------------------------------|--------|------------------------------------------------------|------------|--------|-----------------------------------------------------|--------|
|                                               |   | 2010                                                 |       |   | 2009                                                |   |   | 2010 |   |   | 2009 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                 |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |
| General and administrative expenses                |   | $                                                    | 1,081,804  |   |                                                | $      | 600,777 |   |   | $ | 3,233,300 |   |   | $ | 2,701,597 |   |
| Total operating expenses                           |   |                                                 | 1,081,804  |   |                                                |   | 600,777 |   |   |   | 3,233,300 |   |   |   | 2,701,597 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                             |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Interest income (expense), net                     |   |                                                 | -          |   |                                                |   | (1,055,023 | ) |   |   | (444,420 | ) |   |   | (3,859,033 | ) |
| Loss on cross currency hedge                       |   |                                                 | -          |   |                                                |   | (1,199,438 | ) |   |   | (753,666 | ) |   |   | (1,581,812 | ) |
| Gain (loss) on debt extinguishment                 |   |                                                 | -          |   |                                                |   | 3,842,935 |   |   |   | (2,395,778 | ) |   |   | 3,842,935 |   |
| Change in derivative liability - warrants          |   |                                                 | -          |   |                                                |   | - |   |   |   | - |   |   |   | (752,114 | ) |
| Change in derivative liability - conversion option |   |                                                 | -          |   |                                                |   | (2,058,352 | ) |   |   | - |   |   |   | (7,181,198 | ) |
| Change in fair value of derivative instrument      |   |                                                 | -          |   |                                                |   | 237,768 |   |   |   | 882,527 |   |   |   | (3,275,588 | ) |
| Other income, net                                  |   |                                                 | -          |   |                                                |   | - |   |   |   | 306,040 |   |   |   | - |   |
| Total other expense, net                           |   |                                                 | -          |   |                                                |   | (232,110 | ) |   |   | (2,405,297 | ) |   |   | (12,806,810 | ) |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| EQUITY INCOME EARNINGS OF SUBSIDIARIES             |   |                                                 | 13,845,576 |   |                                                |   | 9,377,210 |   |   |   | 38,827,095 |   |   |   | 22,838,284 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                         |   |                                                 | 12,763,772 |   |                                                |   | 8,544,323 |   |   |   | 33,188,498 |   |   |   | 7,329,877 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| BENEFIT FOR INCOME TAXES                           |   |                                                 | 158,599    |   |                                                |   | 807,537 |   |   |   | 1,123,555 |   |   |   | 4,366,785 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                         |   |                                                 | 12,922,371 |   |                                                |   | 9,351,860 |   |   |   | 34,312,053 |   |   |   | 11,696,662 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME:                        |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment            |   |                                                 | 4,433,165  |   |                                                |   | 72,136 |   |   |   | 6,198,740 |   |   |   | 112,093 |   |
|                                               |   |                                                 |       |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                               |   | $                                                    | 17,355,536 |   |                                                | $      | 9,423,996 |   |   | $ | 40,510,793 |   |   | $ | 11,808,755 |   |

----

|                                               |   | 2010   |        |   | 2009   |   |
|----------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| CASH FLOWS FROM OPERATING ACTIVITIES:              |   |   |        |   |   |   |
| Net Income                                         |   | $      | 34,312,053  |   |   | $      | 11,696,662 |   |
| Adjustments to reconcile net income                |   |   |        |   |   |   |   |   |
| used in operating activities:                      |   |   |        |   |   |   |   |   |
| Change in fair value of derivative instrument      |   |   | (882,527    | )      |   |   | 3,275,588 |   |
| Equity in earnings of subsidiaries                 |   |   | (38,827,095 | )      |   |   | (22,838,284 | ) |
| Deferred taxes                                     |   |   | (1,123,555  | )      |   |   | (4,366,785 | ) |
| Amortization of loan commission                    |   |   | 160,000     |   |   |   | 787,492 |   |
| Amortization of stock compensation expense         |   |   | 528,207     |   |   |   | 1,108,254 |   |
| Loss on cross currency hedge                       |   |   | 753,666     |   |   |   | 1,581,812 |   |
| Loss on derivative instrument settlement           |   |   | -           |   |   |   | - |   |
| Loss (gain) on debt extinguishment                 |   |   | 2,395,778   |   |   |   | (3,842,935 | ) |
| Change in derivative liability - warrants          |   |   | -           |   |   |   | 752,114 |   |
| Change in derivative liability - conversion option |   |   | -           |   |   |   | 7,181,198 |   |
| Change in operating assets and liabilities:        |   |   |        |   |   |   |   |   |
| Other receivables and prepayments                  |   |   | (24,100     | )      |   |   |   |   |
| Other payables and accrued liabilities             |   |   | (1,583,377  | )      |   |   | (2,866,051 | ) |
| Net cash used in operating activities              |   |   | (4,290,950  | )      |   |   | (7,530,935 | ) |
|                                               |   |   |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:              |   |   |        |   |   |   |   |   |
| Investment in subsidiaries                         |   |   | (19,024,270 | )      |   |   | (3,130,132 | ) |
| Payment for unwind of cross currency hedge         |   |   | (5,650,000  | )      |   |   | - |   |
| Payments on cross currency hedge payable           |   |   | (1,190,368  | )      |   |   | (614,580 | ) |
| Net cash used in investing activities              |   |   | (25,864,638 | )      |   |   | (3,744,712 | ) |
|                                               |   |   |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:              |   |   |        |   |   |   |   |   |
| Proceeds from shareholder loan                     |   |   | 15,000,000  |   |   |   | - |   |
| Intercompany                                       |   |   | (1,149,755  | )      |   |   | 13,330,755 |   |
| Release of restricted cash                         |   |   | -           |   |   |   | 1,000,000 |   |
| Payment of high yield notes payable                |   |   | (35,600,000 | )      |   |   | (5,000,000 | ) |
| Proceeds on issuance of common stock and warrants  |   |   | 56,361,500  |   |   |   | 1,920,000 |   |
| Proceeds from exercise of warrants                 |   |   | 1,180,599   |   |   |   | - |   |
| Proceeds from exercise of stock options            |   |   | 27,225      |   |   |   | - |   |
| Net cash provided by financing activities          |   |   | 35,819,569  |   |   |   | 11,250,755 |   |
|                                               |   |   |        |   |   |   |   |   |
| CHANGE IN CASH                                     |   |   | 5,663,981   |   |   |   | (24,892 | ) |
|                                               |   |   |        |   |   |   |   |   |
| CASH, beginning of period                          |   |   | 98,839      |   |   |   | 30,414 |   |
|                                               |   |   |        |   |   |   |   |   |
| CASH, end of period                                |   | $      | 5,762,820   |   |   | $      | 5,522 |   |
|                                               |   |   |        |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOWS DISCLOSURE:                |   |   |        |   |   |   |   |   |
| Interest paid                                      |   | $      | 1,343,849   |   |   | $      | 3,375,092 |   |

----

| 1. | Basis of presentation |
|----|-----------------------|

| 2. | Restricted net assets |
|----|-----------------------|

| 3. | Notes payable consisted of the following: |
|----|-------------------------------------------|

|                                                                   |   | September 30,2010 |   |   | December 31,2009 |   |
|------------------------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                                                   |   | (Unaudited)            |   |   |                  |   |
| Guaranteed senior secured floating rate notes (“HY Notes”) |   |                   | -      |   |                  |   | 35,000,000 |   |
| Less current portion                                                   |   |                   | -      |   |                  |   | 10,000,000 |   |
| Total notes payable, noncurrent                                        |   | $                      | -      |   |                  | $      | 25,000,000 |   |

| 4. | Derivative instrument |
|----|-----------------------|

----

| 5. | Related party transaction |
|----|---------------------------|

| 6. | Reclassification |
|----|------------------|

| 7. | Subsequent event |
|----|------------------|

----

| Balance Sheet sheet items |   | September 30 |        |   | September 30 |   |        | December 31 |   |    | December 31 |   |
|------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|-------------|------------------|--------|---------|------------------|--------|
|                                     |   | 2010              |        |   | 2010              |   |        | 2009             |   |    | 2009             |   |
|                                     |   | Restated          |        |   | Original          |   |        | Restated         |   |    | Original         |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |
| Plant and Equipment, net                 |   | $                 | 124,275,549 |   |              | $      | 129,748,890 |             | $      |  - |             | $      |  - |   |
| Intangible assets, net                   |   |              | 13,662,152  |   |              |   | 14,277,324  |             |   |  - |             |   |  - |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |
| Goodwill                                 |   |              | 1,669,789   |   |              |   | -           |             |   |  - |             |   |  - |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Deferred tax assets                      |   |              | -           |   |              |   | -           |             |   |    | 14,283,528       |   |   |   | 11,722,469 |   |
| Tax payable                              |   |              | 3,639,132   |   |              |   | 4,267,648   |             |   |    | -                |   |   |   | - |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Deferred Tax Liabilities                 |   |              | 669,540     |   |              |   | -           |             |   |    | -                |   |   |   | - |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Commitment and Contingencies             |   |              | 4,955,998   |   |              |   | 5,075,000   |             |   |    | -                |   |   |   | - |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Retained earnings                        |   |              | 122,113,829 |   |              |   | 126,454,576 |             |   |    | 92,312,280       |   |   |   | 97,283,748 |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Accumulated other comprehensive income   |   |              | -           |   |              |   | -           |             |   |    | 25,222,394       |   |   |   | 17,689,867 |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Total shareholders' equity               |   |              | 340,852,768 |   |              |   | 345,193,514 |             |   |    | 239,536,781      |   |   |   | 236,975,722 |   |
|                                     |   |              |        |   |              |   |        |             |   |    |             |   |   |   |   |   |
| Total Assets                             |   | $                 | 382,997,566 |   |              | $      | 387,416,290 |             |   | $       | 297,295,124      |   |   | $ | 294,734,065 |   |

----

| Income Statement items                           |   | FOR THE THREE MONTHS ENDED SEPTEMBER 30, |       |
|------------------------------------------------------------|--------|------------------------------------------------------------------------|------------|
|                                                       |   | 2010                                                                   |       |   | 2010 |   |   | 2009 |   |   | 2009 |   |
|                                                       |   | Restated                                                               |       |   | Original |   |   | Restated |   |   | Original |   |
|                                                       |   |                                                                   |       |   |   |   |   |   |   |   |   |   |
| General and administrative expenses                        |   | $                                                                      | 3,117,062  |   |   | $ | 3,242,826 |   | $ |  - |   | $ |  - |   |
| Interest expense                                           |   |                                                                   | (120,176   | ) |   |   | (46,021 | ) |   |  - |   |   |  - |   |
| Change in fair value of derivative instrument- gain/(loss) |   |                                                                   | -          |   |   |   | - |   |   |   | 237,768 |   |   |   | - |   |
| Deferred income tax expense (benefit)                      |   |                                                                   | -          |   |   |   | - |   |   |   | (807,537 | ) |   |   | (888,378 | ) |
| Net Income                                                 |   |                                                                   | 12,922,371 |   |   |   | 12,870,762 |   |   |   | 9,351,860 |   |   |   | 9,194,933 |   |
| Other Comprehensive Income                                 |   |                                                                   | -          |   |   |   | - |   |   |   | 72,136 |   |   |   | 309,904 |   |
| Comprehensive Income                                       |   | $                                                                      | 17,355,536 |   |   | $ | 17,303,927 |   |   | $ | 9,423,996 |   |   | $ | 9,504,837 |   |
|                                                       |   |                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                        |   |                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                      |   | $                                                                      | 0.34       |   |   | $ | 0.34 |   |   | $ | 0.33 |   |   | $ | 0.33 |   |
| Diluted                                                    |   | $                                                                      | 0.34       |   |   | $ | 0.34 |   |   | $ | 0.32 |   |   | $ | 0.31 |   |

| Income Statement items                                     |   | FOR THE NINE MONTHS ENDED SEPTEMBER 30, |       |
|------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                       |   | 2010                                    |       |   | 2010 |   |   | 2009 |   |   | 2009 |   |
|                                                       |   | Restated                                |       |   | Original |   |   | Restated |   |   | Original |   |
|                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses                        |   | $                                       | 10,923,878 |   |   | $ | 11,161,896 |   | $ |  - |   | $ |  - |   |
| Acquisition gain                                           |   |                                    | -          |   |   |   | 5,070,389 |   |   |  - |   |   |  - |   |
| Loss on extinguishment of derivative instrument            |   |                                    | -          |   |   |   | (6,650,000 | ) |   |  - |   |   |  - |   |
| Interest expense                                           |   |                                    | (697,367   | ) |   |   | (560,476 | ) |   |  - |   |   |  - |   |
| Change in fair value of derivative instrument- gain/(loss) |   |                                    | 882,527    |   |   |   | - |   |   |   | (3,275,588 | ) |   |   | - |   |
|                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred income tax expense (benefit)                      |   |                                    | (1,123,555 | ) |   |   | (3,684,614 | )  |   |   | (4,366,785 | ) |   |   | (3,253,085 | ) |
| Current income tax expense                                 |   |                                    | 6,320,742  |   |   |   | 6,949,258 |   |   |   | - |   |   |   | - |   |
| Net Income                                                 |   |                                    | 34,312,053 |   |   |   | 33,681,331 |   |   |   | 11,696,662 |   |   |   | 13,858,550 |   |
| Other Comprehensive Income (loss)                          |   |                                    | 6,198,740  |   |   |   | 13,731,267 |   |   |   | 112,094 |   |   |   | (3,163,495 | ) |
| Comprehensive Income                                       |   |                                    | 40,510,793 |   |   |   | 47,412,598 |   |   |   | 11,808,756 |   |   |   | 10,695,055 |   |
|                                                       |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                        |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                      |   | $                                       | 0.94       |   |   | $ | 0.92 |   |   | $ | 0.42 |   |   | $ | 0.50 |   |
| Diluted                                                    |   | $                                       | 0.93       |   |   | $ | 0.91 |   |   | $ | 0.41 |   |   | $ | 0.48 |   |

----

----

|   | · | Investing in organic and inorganic growth in both infrastructure-based and fast-growing markets; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Focusing on new, higher-margin products, applications and markets through investment in new machinery and research and development; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Improving business processes throughout the Company by focusing on key performance indicators and operational excellence; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | Strategically hiring and developing  talent, to improve the effectiveness of our performance management processes; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Protecting and enhancing the Fushi Copperweld brand. |
|--------|--------|------------------------------------------------------|

----

|   | · | Gross profit increased 29.6% to $19.7 million, or 29.6% of revenue, from $15.2 million in the third quarter of 2009; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | Operating margin increased 50 basis points to 22.7% from 22.2% compared to the third quarter of 2009; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Further strengthened presence in Southeastern China through investment in Fushi International (Jiangsu); and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | Metric tons shipped at US facility increased 32.2% compared to the third quarter of 2009. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Government stimulus packages focused on infrastructure: high-speed railways, transmission and distribution and power grid build out; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Worldwide underlying long-term growth trends in the electric utility and infrastructure markets; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Population growth and urbanization in developing countries with growing middle classes which influence demand for wire and cable; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continuing demand for cost effective, energy saving alternatives. |
|--------|--------|-------------------------------------------------------------------|

----

| (in millions, except percentages) |   | Three Months Ended |   |   |               |   |   | Nine Months Ended |   |   |               |   |
|--------------------------------------------------|--------|------------------------------|--------|--------|--------------------|--------|--------|-----------------------------|--------|--------|--------------------|--------|
|                                        |   | September 30,           |   |   | September 30, |   |   |                        |   |   | September 30, |   |   | September 30, |   |   |   |   |
|                                        |   | 2010(Unaudited)              |   |   | 2009(Unaudited)    |   |   | % Change               |   |   | 2010(Unaudited)    |   |   | 2009(Unaudited) |   |   | % Change |   |
| Revenues                                         |   | $                            | 66.5   |   |               | $      | 47.7   |                        |   |   | 39.4               | %      |   | $ | 195.1 |   |   | $ | 131.2 |   |   |   | 48.7 | % |
| Gross Profit                                     |   |                         | 19.7   |   |               |   | 15.2   |                        |   |   | 29.6               | %      |   |   | 57.1 |   |   |   | 37.6 |   |   |   | 51.9 | % |
| Selling, general and administrative expenses     |   |                         | 4.6    |   |               |   | 4.6    |                        |   |   | 0.0                | %      |   |   | 15.0 |   |   |   | 13.1 |   |   |   | 14.5 | % |
| Operating Income                                 |   |                         | 15.1   |   |               |   | 10.6   |                        |   |   | 42.5               | %      |   |   | 42.1 |   |   |   | 24.4 |   |   |   | 72.5 | % |
| Income Before Taxes                              |   |                         | 15.0   |   |               |   | 10.3   |                        |   |   | 45.6               | %      |   |   | 39.5 |   |   |   | 11.4 |   |   |   | 246.5 | % |
| Net Income Tax Provision                         |   |                         | 2.1    |   |               |   | 1.0    |                        |   |   | 110                | %      |   |   | 5.2 |   |   |   | (0.3 | )  |   |   | -1833.3 | % |
| Net Income                                       |   | $                            | 12.9   |   |               | $      | 9.4    |                        |   |   | 37.2               | %      |   | $ | 34.3 |   |   | $ | 11.7 |   |   |   | 193.2 | % |

----

|                                            |   | Net Sales                                       |   |   |                    |   |   |              |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|-------------------------|--------|--------|-------------------|--------|
| (in millions, except percentage) |   | Three Months Ended September 30, |   |   |                    |   |   |              |   |
|                                       |   | 2010                                                 |   |   | 2009                    |   |   |              |   |   |   |   |
|                                       |   | Amount(Unaudited)                                    |   |   | % of NetSales |   |   | Amount(Unaudited) |   |   | % of NetSales |   |   | DollarChange |   |   | % Change |   |
| PRC                                             |   | $                                                    | 53.4   |   |                    |   | 80.3   | %                 |   | $ | 38.9 |   |   |   | 81.6 | % |   | $ | 14.5 |   |   |   | 37.3 | % |
| US                                              |   |                                                 | 13.1   |   |                    |   | 19.7   | %                 |   |   | 8.8 |   |   |   | 18.4 | % |   |   | 4.3 |   |   |   | 48.9 | % |
| Total net sales                                 |   | $                                                    | 66.5   |   |                    |   | 100.0  | %                 |   | $ | 47.7 |   |   |   | 100.0 | % |   | $ | 18.8 |   |   |   | 39.4 | % |

|      |   | Metric Tons Sold                           |   |   |                   |   |   |   |   |
|---------------------|--------|------------------------------------------------------|--------|--------|------------------------|--------|--------|--------|--------|
|           |   | Three Months Ended September 30, |   |   |                   |   |   |   |   |
|           |   | 2010                                                 |   |   | 2009                   |   |   |   |   |   |   |   |
|           |   | MT                                                   |   |   | % of MTSales |   |   | MT     |   |   | % of MTSales |   |   | TonnageChange |   |   | % Change |   |
| PRC *          |   |                                                 | 7,388  |   |                   |   | 75.7   | %      |   |   | 8,017 |   |   |   | 81.6 | % |   |   | -629 |   |   |   | -7.8 | % |
| US                  |   |                                                 | 2,372  |   |                   |   | 24.3   | %      |   |   | 1,812 |   |   |   | 18.4 | % |   |   | 560 |   |   |   | 30.9 | % |
| Total sales volume* |   |                                                 | 9,760  |   |                   |   | 100.0  | %      |   |   | 9,829 |   |   |   | 100.0 | % |   |   | - 69 |   |   |   | -0.7 | % |

----

|                                        |   | Net Sales                                       |   |   |                    |   |   |              |   |
|--------------------------------------------------|--------|------------------------------------------------------|--------|--------|-------------------------|--------|--------|-------------------|--------|
|                                             |   | Three Months Ended September 30, |   |   |                    |   |   |              |   |
| (in millions, except percentages) |   | 2010                                                 |   |   | 2009                    |   |   |              |   |   |   |   |
|                                             |   | Amount(Unaudited)                                    |   |   | % of NetSales |   |   | Amount(Unaudited) |   |   | % of NetSales |   |   | DollarChange |   |   | % Change |   |
| Telecommunication                                |   | $                                                    | 23.9   |   |                    |   | 35.9   | %                 |   | $ | 24.5 |   |   |   | 51.4 | % |   | $ | -0.6 |   |   |   | -2.4 | % |
| Utility                                          |   |                                                 | 39.6   |   |                    |   | 59.5   | %                 |   |   | 20.3 |   |   |   | 42.6 | % |   |   | 19.3 |   |   |   | 95.1 | % |
| Transportation                                   |   |                                                 | 1.1    |   |                    |   | 1.7    | %                 |   |   | 0.5 |   |   |   | 1.0 | % |   |   | 0.6 |   |   |   | 120.0 | % |
| Other                                            |   |                                                 | 1. 9   |   |                    |   | 2.9    | %                 |   |   | 2.4 |   |   |   | 5.0 | % |   |   | - 0 . 5 |   |   |   | -20.8 | % |
| Total net sales                                  |   | $                                                    | 66.5   |   |                    |   | 100.0  | %                 |   | $ | 47.7 |   |   |   | 100.0 | % |   | $ | 18.8 |   |   |   | 39.4 | % |

|                 |   | Three Months Ended September 30, |   |   |                   |   |   |   |   |
|---------------------------|--------|------------------------------------------------------|--------|--------|------------------------|--------|--------|--------|--------|
|                      |   | 2010                                                 |   |   | 2009                   |   |   |   |   |   |   |   |
|                      |   | MT                                                   |   |   | % of MTSales |   |   | MT     |   |   | % of MTSales |   |   | TonnageChange |   |   | % Change |   |
| Telecommunication         |   |                                                 | 4,169  |   |                   |   | 42.7   | %      |   |   | 4,999 |   |   |   | 50.8 | % |   |   | -830 |   |   |   | -16.6 | % |
| Utility *            |   |                                                 | 4,941  |   |                   |   | 50.6   | %      |   |   | 3,988 |   |   |   | 40.6 | % |   |   | 953 |   |   |   | 23.9 | % |
| Transportation            |   |                                                 | 135    |   |                   |   | 1.4    | %      |   |   | 67 |   |   |   | 0.7 | % |   |   | 68 |   |   |   | 101.5 | % |
| Other                     |   |                                                 | 515    |   |                   |   | 5.3    | %      |   |   | 775 |   |   |   | 7.9 | % |   |   | - 260 |   |   |   | -33.5 | % |
| Total sales volume * |   |                                                 | 9,760  |   |                   |   | 100.0  | %      |   |   | 9,829 |   |   |   | 100.0 | % |   |   | -6 9 |   |   |   | -0.7 | % |

|   |   | Three Months Ended September 30, 2010 |   |
|--------|--------|----------------------------------------------------------------|--------|
|   |   | PRC                                                            |   |   | US |   |
|   |   | Capacity(MT)                                                   |   |   | Sold(MT) |   |   | Capacity(MT) |   |   | Sold(MT) |   |
| CCA    |   |                                                           | 10,000 |   |   |   | 7,227 |   |   |   | 3,062 |   |   |   | 760 |   |
| CCS    |   |                                                           | 2,050  |   |   |   | 31 |   |   |   | 4,274 |   |   |   | 1,569 |   |
| Total  |   |                                                           | 12,050 |   |   |   | 7,258 |   |   |   | 7,336 |   |   |   | 2,329 |   |

----

|                   |   | Metric Tons Sold                           |   |   |                   |   |   |   |   |
|------------------------|--------|------------------------------------------------------|--------|--------|------------------------|--------|--------|--------|--------|
|                   |   | Three Months Ended September 30, |   |   |                   |   |   |   |   |
|                   |   | 2010                                                 |   |   | 2009                   |   |   |   |   |   |   |   |
|                   |   | MT                                                   |   |   | % of MTSales |   |   | MT     |   |   | % of MTSales |   |   | TonnageChange |   |   | % Change |   |
| CCA                    |   |                                                 | 7,987  |   |                   |   | 81.8   | %      |   |   | 8,155 |   |   |   | 83.0 | % |   |   | -168 |   |   |   | -2.1 | % |
| CCS                    |   |                                                 | 1,600  |   |                   |   | 16.4   | %      |   |   | 1,272 |   |   |   | 12.9 | % |   |   | 328 |   |   |   | 25.8 | % |
| Others *               |   |                                                 | 1 73   |   |                   |   | 1.8    | %      |   |   | 402 |   |   |   | 4.1 | % |   |   | - 229 |   |   |   | -57.0 | % |
| Total net sales * |   |                                                 | 9, 760 |   |                   |   | 100.0  | %      |   |   | 9,829 |   |   |   | 100.0 | % |   |   | -6 9 |   |   |   | -0.7 | % |

|                                            |   | Three Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                      |   |   | 2009(Unaudited) |   |   | Dollar |   | % |   |
| Gross Profit                                    |   | $                                                    | 19.7   |   |            | $      | 15.2 |   |   | $             | 4.5 |       |               | 29.6 | % |
| Gross Margin                                    |   |                                                 | 29.6   | %      |            |   | 31.8 | % |   |   |   |   |   | -2.2 | % |

----

|                                            |   | Three Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                      |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| Selling Expenses                                |   | $                                                    | 1.5    |   |            | $      | 1.1 |   |   | $             | 0.4 |   |   |              | 36.4 | % |
| as a percentage of net sales                    |   |                                                 | 2.3    | %      |            |   | 2.3 | % |   |   |   |   |   |   | 0 | % |

|                                            |   | Three Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                      |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| General and Administrative Expenses             |   | $                                                    | 3.1    |   |            | $      | 3.5 |   |   | $             | (0.4 | ) |   |              | -11.2 | % |
| as a percentage of net sales                    |   |                                                 | 4.7    | %      |            |   | 7.4 | % |   |   |   |   |   |   | -2.7 | % |

|                                            |   | Three Months Ended September 30, |   |   |                     |   |   |              |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|--------------------------|--------|--------|-------------------|
| (in millions, except percentage) |   | 2010                                                 |   |   | 2009                     |   |   |              |   |   |   |
|                                            |   | Amount(Unaudited)                                    |   |   | % ofOperatingincome |   |   | Amount(Unaudited) |   |   | % ofOperatingincome |   | DollarChange |   |   | % Change |   |
| PRC                                             |   | $                                                    | 15.5   |   |                     |   | 102.7  | %                 |   | $ | 10.8 |   |   |   | 101.9 | % |   | $ | 4.7 |   |   |   | 43.5 | % |
| US                                              |   |                                                 | 0.7    |   |                     |   | 4.6    | %                 |   |   | 0.4 |   |   |   | 3.8 | % |   |   | 0.3 |   |   |   | 75.0 | % |
| Corporate                                       |   |                                                 | (1.1   | )      |                     |   | -7.3   | %                 |   |   | (0.6 | ) |   |   | -5.7 | % |   |   | (0.5 | ) |   |   | 83.3 | % |
| Total operating income                          |   | $                                                    | 15.1   |   |                     |   | 100.0  | %                 |   | $ | 10.6 |   |   |   | 100.0 | % |   | $ | 4.5 |   |   |   | 42.5 | % |

----

|                                            |   | Three Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                      |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| Interest Income                                 |   | $                                                    | 0.2    |   |            | $      | 0.1 |   |   | $             | 0.1 |   |   |              | 100.0 | % |
| Interest (Expense)                              |   |                                                 | (0.1   | )      |            |   | (1.2 | ) |   |   | 1.1 |   |   |   | -91.7 | % |
| Net Interest Income / (Expense)                 |   | $                                                    | 0.1    |   |            | $      | (1.1 | ) |   | $ | 1.2 |   |   |   | -109.1 | % |
| as a percentage of net sales                    |   |                                                 | 0.1    | %      |            |   | -2.3 | % |   |   |   |   |   |   | 2.4 | % |

|                            |   | Three Months Ended September 30, 2010(Unaudited) |   |
|---------------------------------|--------|---------------------------------------------------------------------------|--------|
| (in millions)              |   | PRC                                                                       |   |   | US |   |   | Parent Company |   |   | Consolidated |   |
| Profit (Loss) before income tax |   | $                                                                         | 15.5   |   |   | $ | 0.6 |   |   | $ | (1.1 | ) |   | $ | 15.0 |   |
| Income tax expense (credit)     |   |                                                                      | 2.2    |   |   |   | - |   |   |   | (0.1 | ) |   |   | 2.1 |   |
| Profit (loss) after income tax  |   | $                                                                         | 13.3   |   |   | $ | 0.6 |   |   | $ | (1.0 | ) |   | $ | 12.9 |   |

|                                            |   | Three Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                      |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| Income Before Taxes                             |   | $                                                    | 15.0   |   |            | $      | 10.3 |   |   | $             | 4.7 |   |   |              | 45.6 | % |
| Provision for Income Taxes                 |   |                                                 | 2.1    |   |            |   | 1.0 |   |   |   | 1.2 |   |   |   | 110 | % |
| Net Income After Taxes                          |   | $                                                    | 12.9   |   |            | $      | 9.4 |   |   | $ | 3.5 |   |   |   | 37.2 | % |
| as a percentage of net sales                    |   |                                                 | 19.4   | %      |            |   | 19.6 | % |   |   |   |   |   |   | -0.2 | % |

----

|                                      |   | Three Months Ended September 30, |       |
|-------------------------------------------|--------|------------------------------------------------------|------------|
|                                      |   | 2010                                                 |       |   | 2009 |   |
|                                      |   | Unaudited                                            |       |   | Unaudited |   |
| Net Income for Basic Earnings Per Share   |   | $                                                    | 12,922,371 |   |   | $ | 9,351,860 |   |
| Basic Weighted Average Number of Shares   |   |                                                 | 37,694,626 |   |   |   | 28,084,416 |   |
| Net Income per Share – Basic        |   | $                                                    | 0.34       |   |   | $ | 0.33 |   |
| Net Income for Diluted Earnings Per Share |   | $                                                    | 12,922,371 |   |   | $ | 9,351,860 |   |
| Diluted Weighted Average Number of Shares |   |                                                 | 38,077,845 |   |   |   | 29,206,508 |   |
| Net Income per Share – Diluted      |   | $                                                    | 0.34       |   |   | $ | 0.32 |   |

|                                            |   | Net Sales                                      |   |   |                    |   |   |              |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-------------------------|--------|--------|-------------------|
|                                       |   | Nine Months Ended September 30, |   |   |                    |   |   |              |
|                                       |   | 2010                                                |   |   | 2009                    |   |   |              |   |   |   |
| (In millions, except percentage) |   | Amount(Unaudited)                                   |   |   | % of NetSales |   |   | Amount(Unaudited) |   |   | % of NetSales |   | DollarChange |   |   | % Change |   |
| PRC                                             |   | $                                                   | 154.6  |   |                    |   | 79.2   | %                 |   | $ | 104.7 |   |   |   | 79.8 | % |   | $ | 49.9 |   |   |   | 47.7 | % |
| US                                              |   |                                                | 40.5   |   |                    |   | 20.8   | %                 |   |   | 26.5 |   |   |   | 20.2 | % |   |   | 14.0 |   |   |   | 52.8 | % |
| Total net sales                                 |   | $                                                   | 195.1  |   |                    |   | 100.0  | %                 |   | $ | 131.2 |   |   |   | 100.0 | % |   | $ | 63.9 |   |   |   | 48.7 | % |

|                 |   | Nine Months Ended September 30, |   |   |                    |   |   |    |
|----------------------|--------|-----------------------------------------------------|--------|--------|-------------------------|--------|--------|---------|
|            |   | 20 10                                          |   |   | 2009                    |   |   |    |   |   |   |
|            |   | Tonnage                                             |   |   | % of NetSales |   |   | Tonnage |   |   | % of NetSales |   |   | TonnageChange |   | % Change |   |
| PRC *                |   |                                                | 21,510 |   |                    |   | 74.6   | %       |   |   | 22,964 |   |   |   | 79.6 | % |   |   | -1,454 |   |   |   | -6.3 | % |
| US                   |   |                                                | 7,324  |   |                    |   | 25.4   | %       |   |   | 5,868 |   |   |   | 20.4 | % |   |   | 1,456 |   |   |   | 24.8 | % |
| Total sales volume * |   |                                                | 28,834 |   |                    |   | 100.0  | %       |   |   | 28,832 |   |   |   | 100.0 | % |   |   | 2 |   |   |   | 0.0 | % |

----

|                                            |   | Net Sales                                      |   |   |                    |   |   |              |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-------------------------|--------|--------|-------------------|
|                                       |   | Nine Months Ended September 30, |   |   |                    |   |   |              |
|                                       |   | 2010                                                |   |   | 2009                    |   |   |              |   |   |   |
| (In millions, except percentage) |   | Amount(Unaudited)                                   |   |   | % of NetSales |   |   | Amount(Unaudited) |   |   | % of NetSales |   | DollarChange |   |   | % Change |   |
| Telecommunication                               |   | $                                                   | 76.7   |   |                    |   | 39.3   | %                 |   | $ | 62.2 |   |   |   | 47.4 | % |   | $ | 14.5 |   |   |   | 23.3 | % |
| Utility                                         |   |                                                | 107.4  |   |                    |   | 55.1   | %                 |   |   | 61.3 |   |   |   | 46.7 | % |   |   | 46.1 |   |   |   | 75.2 | % |
| Transportation                                  |   |                                                | 2.8    |   |                    |   | 1.4    | %                 |   |   | 1.3 |   |   |   | 1.0 | % |   |   | 1.5 |   |   |   | 115.4 | % |
| Other                                           |   |                                                | 8.2    |   |                    |   | 4 . 2  | %                 |   |   | 6.4 |   |   |   | 4.9 | % |   |   | 1. 8 |   |   |   | 28.1 | % |
| Total net sales                                 |   | $                                                   | 195.1  |   |                    |   | 100.0  | %                 |   | $ | 131.2 |   |   |   | 100.0 | % |   | $ | 63 . 9 |   |   |   | 48.7 | % |

|                 |   | Net Sales                                      |   |   |                    |   |   |    |
|----------------------|--------|-----------------------------------------------------|--------|--------|-------------------------|--------|--------|---------|
|            |   | Nine Months Ended September 30, |   |   |                    |   |   |    |
|            |   | 2010                                                |   |   | 2009                    |   |   |    |   |   |   |
|            |   | Tonnage                                             |   |   | % of NetSales |   |   | Tonnage |   |   | % of NetSales |   |   | TonnageChange |   | % Change |   |
| Telecommunication    |   |                                                | 13,404 |   |                    |   | 46.5   | %       |   |   | 13,761 |   |   |   | 47.7 | % |   |   | (357 | ) |   |   | -2.6 | % |
| Utility*             |   |                                                | 13,162 |   |                    |   | 45.6   | %       |   |   | 12,903 |   |   |   | 44.7 | % |   |   | 259 |   |   |   | 2.0 | % |
| Transportation       |   |                                                | 356    |   |                    |   | 1.2    | %       |   |   | 192 |   |   |   | 0.7 | % |   |   | 164 |   |   |   | 85.4 | % |
| Other                |   |                                                | 1,912  |   |                    |   | 6.7    | %       |   |   | 1,976 |   |   |   | 6.9 | % |   |   | (64 | ) |   |   | -3.2 | % |
| Total sales volume * |   |                                                | 28,834 |   |                    |   | 100.0  | %       |   |   | 28,832 |   |   |   | 100.0 | % |   |   | 2 |   |   |   | 0.0 | % |

----

|         |   | Nine Months Ended September 30, 2010 |   |
|--------------|--------|---------------------------------------------------------------|--------|
|    |   | PRC                                                           |   |   | US |   |
| (MT)         |   | Capacity                                                      |   |   | Sold |   |   | Capacity |   |   | Sold |   |
| CCA          |   |                                                          | 30,000 |   |   |   | 21,067 |   |   |   | 9,186 |   |   |   | 2,421 |   |
| CCS          |   |                                                          | 6,150  |   |   |   | 63 |   |   |   | 12,821 |   |   |   | 4,794 |   |
| Total        |   |                                                          | 36,150 |   |   |   | 21,130 |   |   |   | 22,007 |   |   |   | 7,215 |   |

|                      |   | Metric Tons Sold                          |   |   |                    |   |   |    |   |
|---------------------------|--------|-----------------------------------------------------|--------|--------|-------------------------|--------|--------|---------|--------|
|                 |   | Nine Months Ended September 30, |   |   |                    |   |   |    |   |
|                 |   | 2010                                                |   |   | 2009                    |   |   |    |   |   |   |   |
| (MT)                      |   | Tonnage                                             |   |   | % of NetSales |   |   | Tonnage |   |   | % of NetSales |   |   | TonnageChange |   |   | % Change |   |
| CCA                       |   |                                                | 23,488 |   |                    |   | 81.5   | %       |   |   | 23,787 |   |   |   | 82.5 | % |   |   | -299 |   |   |   | -1.3 | % |
| CCS                       |   |                                                | 4,857  |   |                    |   | 16.8   | %       |   |   | 4,337 |   |   |   | 15.0 | % |   |   | 520 |   |   |   | 12.0 | % |
| Others *             |   |                                                | 489    |   |                    |   | 1.7    | %       |   |   | 708 |   |   |   | 2.5 | % |   |   | -219 |   |   |   | -30.9 | % |
| Total sales volume * |   |                                                | 28,834 |   |                    |   | 100.0  | %       |   |   | 28,832 |   |   |   | 100.0 | % |   |   | 2 |   |   |   | 0.0 | % |

----

|                                            |   | Nine Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                     |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| Gross Profit                                    |   | $                                                   | 57.1   |   |            | $      | 37.6 |   |   | $             | 19.5 |   |   |              | 51.9 | % |
| Gross margin                                    |   |                                                | 29.3   | %      |            |   | 28.6 | % |   |   |   |   |   |   | 0.7 | % |

|                                            |   | Nine Months Ended September 30, |   | Change |            |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-----------------|
| (in millions, except percentage) |   | 2010(Unaudited)                                     |   |   | 2009(Unaudited) |   | Dollar |   | % |   |
| Selling Expenses                                |   | $                                                   | 4.1    |   |            | $ | 3.4 |   | $             | 0.7 |       |              | 20.6 | % |
| as a percentage of net sales                    |   |                                                | 2.1    | %      |            |   | 2.6 | %   |   |   |   |   | -0.5 | % |

|                                            |   | Nine Months Ended September 30, |   | Change |            |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-----------------|
| (in millions, except percentage) |   | 2010(Unaudited)                                     |   |   | 2009(Unaudited) |   | Dollar |   |   | % |   |
| General and Administrative Costs                |   | $                                                   | 10.9   |   |            | $ | 9.8 |   | $             | 1.1 |   |   |              | 11.2 | % |
| as a percentage of net sales                    |   |                                                | 5.6    | %      |            |   | 7.4 | %    |   |   |   |   |   | -1.8 | % |

----

|                                            |   | Nine Months Ended September 30, |   |   |                     |   |   |              |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|--------------------------|--------|--------|-------------------|
|                                       |   | 2010                                                |   |   | 2009                     |   |   |              |   |   |   |
| (in millions, except percentage) |   | Amount(Unaudited)                                   |   |   | % ofoperatingincome |   |   | Amount(Unaudited) |   |   | % ofoperatingincome |   | DollarChange |   |   | % Change |   |
| PRC                                             |   | $                                                   | 43.5   |   |                     |   | 103.3  | %                 |   | $ | 28.2 |   |   |   | 115.1 | % |   | $ | 15.3 |   |   |   | 54.3 | % |
| US                                              |   |                                                | 1.8    |   |                     |   | 4.3    | %                 |   |   | (1.0 | ) |   |   | -4.1 | % |   |   | 2.8 |   |   |   | -280.0 | % |
| Corporate                                       |   |                                                | (3.2   | )      |                     |   | -7. 6  | %                 |   |   | (2.7 | ) |   |   | -11.0 | % |   |   | - 0.5 |   |   |   | -18.5 | % |
| Total operating income                          |   | $                                                   | 42.1   |   |                     |   | 100.0  | %                 |   | $ | 24.5 |   |   |   | 100.0 | % |   | $ | 17.6 |   |   |   | 71.8 | % |

|                                            |   | Nine Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                     |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| Interest Income                                 |   | $                                                   | 0.6    |   |            | $      | 0.2 |   |   | $        | 0.4 |   |   |           | 200.0 | % |
| Interest Expense                                |   |                                                | (0.7   | )      |            |   | (4.2 | ) |   |   | 3.5 |   |   |   | -83.3 | % |
| Net Interest Expense                            |   | $                                                   | (0.1   | )      |            | $      | (4.0 | ) |   | $ | 3.9 |   |   |   | -97.5 | % |
| as a percentage of net sales                    |   |                                                | 0.0    | %      |            |   | -3.0 | % |   |   |   |   |   |   | 3.0 | % |

|                            |   | Nine Months Ended September 30, 2010(Unaudited) |   |
|---------------------------------|--------|--------------------------------------------------------------------------|--------|
| (in millions)         |   | PRC                                                                      |   |   | US |   |   | Parent Company |   |   | Consolidated |   |
| Profit (loss) before income tax |   | $                                                                        | 40.3   |   |   | $ | 1.6 |   |   | $ | (2.4 | ) |   | $ | 39.5 |   |
| Income tax expense (credit)     |   |                                                                     | 6.3    |   |   |   | - |   |   |   | (1.1 | ) |   |   | 5.2 |   |
| Profit after income tax         |   | $                                                                        | 34.0   |   |   | $ | 1.6 |   |   | $ | (1.3 | ) |   | $ | 34.3 |   |

----

|                                            |   | Nine Months Ended September 30, |   |   | Change          |   |
|-------------------------------------------------|--------|-----------------------------------------------------|--------|--------|-----------------|--------|
| (in millions, except percentage) |   | 2010(Unaudited)                                     |   |   | 2009(Unaudited) |   |   | Dollar |   |   | % |   |
| Income Before Taxes                             |   | $                                                   | 39.5   |   |            | $      | 11.4 |   |   | $             | 28.1 |   |   |              | 246.5 | % |
| Provision for Income Taxes                      |   |                                                | 5.2    |   |            |   | (0.3 | )  |   |   | 5.5 |   |   |   | -1833.3 | % |
| Net Income After Taxes                          |   | $                                                   | 34.3   |   |            | $      | 11.7 |   |   | $ | 22.6 |   |   |   | 193.2 | % |
| as a percentage of net sales                    |   |                                                | 17.6   | %      |            |   | 8.9 | % |   |   |   |   |   |   | 8.7 | % |

|                                      |   | Nine Months Ended September 30, |       |
|-------------------------------------------|--------|-----------------------------------------------------|------------|
|                                      |   | 2010                                                |       |   | 2009 |   |
|                                      |   | Unaudited                                           |       |   | Unaudited |   |
| Net Income for Basic Earnings Per Share   |   | $                                                   | 34,312,053 |   |   | $ | 11,696,662 |   |
| Basic Weighted Average Number of Shares   |   |                                                | 36,553,784 |   |   |   | 27,827,152 |   |
| Net Income per Share - Basic              |   | $                                                   | 0.94       |   |   | $ | 0.42 |   |
| Net Income for Diluted Earnings Per Share |   | $                                                   | 34,312,053 |   |   | $ | 11,696,662 |   |
| Diluted Weighted Average Number of Shares |   |                                                | 37,030,499 |   |   |   | 28,676,832 |   |
| Net Income per Share - Diluted            |   | $                                                   | 0.93       |   |   | $ | 0.41 |   |

----

|                                            |   | Selected Balance Sheet Data |   |
|-------------------------------------------------|--------|--------------------------------------------|--------|
|                                            |   | September 30,2010                     |   |   | December 31, 2009 |   |   | Change |   |
| (in millions, except percentage) |   | Unaudited                                  |   |   |   |   |   | Dollar |   |   | % |   |
| Cash                                            |   | $                                          | 117.9  |   |   | $ | 60.6 |   |   | $ | 57.3 |   |   |   | 94.6 | % |
| Accounts Receivable, net                        |   | $                                          | 64.5   |   |   | $ | 67.3 |   |   | $ | (2.8 | ) |   |   | -4.2 | % |
| PP&E (a)                                    |   | $                                          | 124.3  |   |   | $ | 117.4 |   |   | $ | 6.9 |   |   |   | 5.9 | % |
| Total Assets                                    |   | $                                          | 383.0  |   |   | $ | 297.3 |   |   | $ | 85.7 |   |   |   | 28.8 | % |
| Short Term Debt                                 |   | $                                          | -      |   |   | $ | 14.0 |   |   | $ | (14.0 | ) |   |   | -100.0 | % |
| Long Term Debt                                  |   | $                                          | 6.6    |   |   | $ | 32.7 |   |   | $ | (26.1 | ) |   |   | -79.8 | % |
| Shareholders' Equity                            |   | $                                          | 340.9  |   |   | $ | 239.5 |   |   | $ | 101.4 |   |   |   | 42.3 | % |

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|                                                |   | Nine Months Ended September 30, |   |
|-----------------------------------------------------|--------|-----------------------------------------------------|--------|
| (in millions)                                  |   | 2010(Unaudited)                                     |   |   | 2009(Unaudited) |   |
| Net cash provided by operating activities           |   | $                                                   | 30.1   |   |   | $ | 15.6 |   |
| Net cash used in investing activities               |   | $                                                   | (14.2  | ) |   | $ | (5.4 | ) |
| Net cash provided by (used in) financing activities |   | $                                                   | 39.4   |   |   | $ | (15.8 | )  |
| Effect of exchange rate on cash                     |   | $                                                   | 2.0    |   |   | $ | (0.0 | )  |
| Cash and cash equivalents at beginning of period    |   | $                                                   | 60.6   |   |   | $ | 65.6 |   |
| Cash and cash equivalents at end of period          |   | $                                                   | 117.9  |   |   | $ | 60.0 |   |

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|                  |   | Year ended December 31, 2009 |   | Nine months ended September 30, 2010 |
|-----------------------|--------|--------------------------------------------------|--------|---------------------------------------------------------------|
| Customer Payment Term |   | Payment in advance up to 120 days                |   | Payment in advance up to 120 days                             |
| Supplier Payment Term |   | Payment in advance up to 30 days                 |   | Payment in advance up to 30 days                         |

|                |   | September 30, 2010 |       |   | December 31, 2009    |   |
|---------------------|--------|------------------------------|------------|--------|--------------------------------|--------|
|      |   | (Unaudited)                  |       |   |       |   |
| 1-30 days           |   | $                            | 24,698,033 |   |                           | $      | 19,055,520 |   |
| 31-60 days          |   |                         | 20,353,886 |   |                           |   | 17,199,485 |   |
| 61-90 days          |   |                         | 19,260,155 |   |                           |   | 15,029,899 |   |
| 91-180 days         |   |                         | 726,699    |   |                           |   | 12,776,229 |   |
| 180-365 days        |   |                         | 257        |   |                           |   | 4,027,988 |   |
| Over 365 days       |   |                         | 4,526      |   |                           |   | 220,163 |   |
| Bad debts allowance |   |                         | (522,729   | )      |                           |   | (1,024,684 | ) |
| Total               |   | $                            | 64,520,827 |   |                           | $      | 67,284,600 |   |

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| Contractual obligations                                      |   | Total  |       |   | Payment due byless than 1 year |   |       | 2 – 3 years |   |   | 4-5 years |   |   | More than 5Y ears |      |
|-------------------------------------------------------------------|--------|--------|------------|--------|---------------------------------------------------------|--------|------------|----------------------------------|--------|--------|----------------|--------|--------|----------------------------------|-----------|
| Contingent second installment payment for Jinchuan acquisition *1 |   | $      | 4,955,998  |   |                                                    | $      | 4,955,998  |                             |   | $      | -              |   |   | $                                | -         |   |   | $ | - |   |
| Long-term debt                                                    |   |   | 6,500,000  |   |                                                    |   | 650,000    |                             |   |   | 1,300,000      |   |   |                             | 1,300,000 |   |   |   | 3,250,000 |   |
| Registered capital of Fushi International (Jiangsu) *2            |   |   | 34,980,000 |   |                                                    |   | 10,000,000 |                             |   |   | 24,980,000     |   |   |                             |      |   |   |   |   |   |
| Capital-lease obligation                                          |   |   | 167,316    |   |                                                    |   | 79,084     |                             |   |   | 88,232         |   |   |                             | -         |   |   |   | - |   |
| Total                                                             |   | $      | 46,603,314 |   |                                                    | $      | 15,685,082 |                             |   | $      | 26,368,232     |   |   | $                                | 1,300,000 |   |   | $ | 3,250,000 |   |

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| ·   | Insufficient competent accounting personnel in applying U.S. GAAP in our financial reporting process |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | Insufficient competent accounting personnel in determination of the measurement of derivative financial instruments and assets acquired and liabilities assumed in business combinations |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b) | Changes in Internal Control over Financial Reporting |
|----|------------------------------------------------------|

| ExhibitNo. |   | Document Description                                                                                                                                                                                          |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                               |
| 31.1       |   | Certification of the Principal Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                |
|       |   |                                                                                                                                                                                                               |
| 31.2       |   | Certification of the Principal Accounting and Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|       |   |                                                                                                                                                                                                               |
| 32.1       |   | Certification of the Principal Executive Officer and of the Principal Accounting and Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).                                 |

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|                | FUSHI COPPERWELD, INC.                                                     |
|---------------------|----------------------------------------------------------------------------|
|                |                                                                       |   |
| Date: April 4, 2011 | By:                                                              | /s/ Craig H. Studwell |
|                | Name: Craig H. Studwell                                                    |
|                | Title: Chief Financial Officer(Principal Accounting and Financial Officer) |

----

| ExhibitNo. |   | Document Description                                                                                                                                                                                          |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                               |
| 31.1       |   | Certification of the Principal Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                |
|       |   |                                                                                                                                                                                                               |
| 31.2       |   | Certification of the Principal Accounting and Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|       |   |                                                                                                                                                                                                               |
| 32.1       |   | Certification of the Principal Executive Officer and of the Principal Accounting and Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).                                 |

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