EXHIBIT 99.3

                    NVC LIGHTING INVESTMENT HOLDINGS LIMITED

                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                               AS OF JUNE 30, 2005

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                 PAGE

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheet, June 30, 2005......................    1
Consolidated Statements of Operations,
     For the Six Months Ended June 30, 2005 and 2004...........    2
Consolidated Statement of Members' Equity,
     For the Six Months Ended June 30, 2005 ...................    3
Consolidated Statements of Cash Flows,
     For the Six Months Ended June 30, 2005 and 2004...........    4
Notes to the Consolidated Financial Statements.................    6



            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2005
                                   (Unaudited)
                            (Expressed in US dollars)

<TABLE>
<CAPTION>

                                     ASSETS

Current Assets:

<S>                                                              <C>
   Cash and equivalents                                          $ 4,488,110
   Restricted cash                                                   157,005
   Accounts receivable -

      Trade, net of allowance for bad debts of $101,418            1,392,536
      Employees and other                                            351,385
   Inventories                                                    11,696,220
   Advances to suppliers                                             846,212
   Deposit and prepayments                                           670,828
                                                                 -----------
      Total current assets                                        19,602,296
                                                                 -----------
Property, Plant and Equipment:
   Fixed assets, net of accumulated depreciation                   1,611,267
   Construction-in-progress                                        7,045,885
                                                                 -----------
                                                                   8,657,152
                                                                 -----------
Other Assets:
   Distribution agreements, net of accumulated amortization
       of $1,284,220                                               5,720,612
                                                                 -----------
                                                                   5,720,612
                                                                 -----------
                                                                 $33,980,060
                                                                 ===========
                 LIABILITIES AND MEMBERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                         $22,242,803
   Advances from customers                                         2,127,135
   Amounts due to directors                                        3,536,206
   Other taxes payable                                             2,286,648
                                                                 -----------
      Total current liabilities                                   30,192,792
                                                                 -----------
Minority Interest                                                     89,287
                                                                 -----------
Members' equity:
   Registered capital                                              1,410,257
   Capital reserve                                                   725,284
   Retained earnings                                               1,562,440
                                                                 -----------
                                                                   3,697,981
                                                                 -----------
                                                                 $33,980,060
                                                                 ===========

</TABLE>


The accompanying notes are an integral part of these financial statements.

                                        1
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (Unaudited)
                            (Expressed in US dollars)

<TABLE>
<CAPTION>
                                                   2005               2004
                                                   ----               ----
<S>                                            <C>               <C>
Sales                                          $ 33,252,550       $ 20,131,818
Cost of goods sold                               23,611,356         14,103,840
                                               ------------       ------------
                                                  9,641,194          6,027,978
   Gross Profit                                        --                 --
Operating Expenses:
   Selling expenses                               5,340,600          2,818,743
   Administrative expenses                        1,941,193          1,194,920
    Depreciation and amortization expense            81,084             37,670
                                               ------------       ------------
      Total operating expenses                    7,362,877          4,051,333
                                               ------------       ------------
Income from Operations                            2,278,317          1,976,645
                                               ------------       ------------
Other Income (Expense):
   Other revenues                                   323,180            267,784
   Interest income                                   21,679              8,030
                                               ------------       ------------
Total Other Income                                  344,859            275,814
                                               ------------       ------------
Income before Income Taxes                        2,623,176          2,252,459
Provision (Benefit) for Income Taxes                432,824            (17,170)
                                               ------------       ------------
Net Income before Minority Interests              2,190,352          2,269,629
Minority Interests in Earnings                      (65,711)           (28,485)
                                               ------------       ------------
Net Income                                     $  2,124,641       $  2,241,144
                                               ============       ============
</TABLE>



The accompanying notes are an integral part of these financial statements.

                                        2
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                    CONSOLIDATED STATEMENT OF MEMBERS' EQUITY
                     FOR THE SIX MONTHS ENDED JUNE 30, 2005
                                   (Unaudited)
                            (Expressed in US dollars)

<TABLE>
<CAPTION>
                                                                                                         Total
                                      Registered         Capital        Retained       Minority          Members'
                                       Capital           Reserve        Earnings       Interests         Equity
                                       -------           -------        --------       ---------         ------
<S>                                     <C>            <C>           <C>                 <C>            <C>
Balance at December 31, 2004          $ 1,410,257      $   725,284     $ 1,377,799      $    83,576     $ 3,596,916
Dividend paid                          (1,940,000)         (60,000)     (2,000,000)
Net income for the six months ended
June 30, 2005                                --               --         2,124,641           65,711       2,190,352
                                      -----------      -----------     -----------      -----------     -----------

                                      -----------      -----------     -----------      -----------     -----------
Balance at June 30, 2005              $ 1,410,257      $   725,284     $ 1,562,440      $    89,287     $ 3,787,268
                                      ===========      ===========     ===========      ===========     ===========
</TABLE>



The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (Unaudited)
                            (Expressed in US dollars)

<TABLE>
<CAPTION>
                                                                      2005                 2004
                                                                      ----                 ----
 Cash Flows from Operating Activities:

<S>                                                               <C>                  <C>
 Net income                                                       $ 2,124,641          $ 2,242,144
 Adjustments to reconcile net income to net cash provided
    by provided by operating activities -
      Amortization of distribution agreements                         289,854              244,566
      Depreciation                                                    147,243               71,635
      Minority interests in earnings                                   65,711               28,435
 Changes in assets and liabilities:
   (Increase) decrease in -
      Restricted cash                                                (157,005)             157,005
      Accounts receivable                                             482,776           (1,089,347)
      Inventories                                                  (4,624,959)            (432,017)
      Advances to suppliers                                          (613,884)             (18,020)
      Prepayments                                                    (170,209)                --
      Amount due from a related company                                  --                 46,845
   Increase (decrease) in -
      Accounts payable and accrued expenses                         7,494,499              511,251
      Advances from customers                                       1,279,602              142,319
      Tax payable                                                     128,416              225,878
                                                                  -----------          -----------
      Net cash provided by operating activities                     6,446,685            2,130,745
                                                                  -----------          -----------
 Cash Flows from Investing Activities:
   Construction-in-progress                                        (4,367,522)            (439,965)
   Acquisition of  intangible assets                               (1,811,594)          (2,985,509)
   Purchases of fixed assets                                         (731,704)            (337,724)
                                                                  -----------          -----------
      Net cash (used in) investing activities                      (6,910,820)          (3,763,198)
                                                                  -----------          -----------
 Cash Flows from Financing Activities:
   (Repayment of) Advances from directors                           2,965,522           (1,574,832)
   Repayments of long-term debts                                         --                 (4,042)
   Dividends paid                                                  (1,940,000)                --
                                                                  -----------          -----------
      Net cash (used in) financing activities                       1,025,522           (1,578,874)
                                                                  -----------          -----------
Net (Decrease) Increase  in Cash                                      561,387
                                                                                        (3,211,326)
 Cash and Cash Equivalents, Beginning of Period                     3,926,723            5,661,466
                                                                  -----------          -----------
 Cash and Cash Equivalents, End of Period                         $ 4,488,110          $ 2,507,399
                                                                  ===========          ===========
</TABLE>



The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (Unaudited)
                            (Expressed in US dollars)

<TABLE>
<CAPTION>
                                                                                         2005            2004
                                                                                         ----            ----
Supplemental disclosure of cash flow information:
<S>                                                                                  <C>            <C>
Interest paid                                                                        $        216   $           -
Income taxes paid                                                                    $          -   $           -
</TABLE>



The accompanying notes are an integral part of these financial statements.

                                        5
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

1. DESCRIPTION OF BUSINESS

Nature of organization

NVC Lighting Investment Holdings Limited ("NVC Holdings") was incorporated in
the Hong Kong Special Administrative Region in The People's Republic of China
("PRC"), as a private limited liability company on June 11, 2004 with an
authorized capital of $10,256,410 (HK$80,000,000) divided into 80,000,000
ordinary shares of par value $0.12 (HK$1.00) each.

Pursuant to the reorganization and restructuring of the Company, NVC Lighting
Company Limited ("NVC Lighting") ceased operations on April 30, 2003 and, on the
same date, certain net assets were distributed totaling $1,767,655 to the
registered equity holders. On May 1, 2003, the business operations of NVC
Lighting were transferred to NVC Industrial Development Company Limited ("NVC
Industrial").

On June 13, 2004 NVC Holdings acquired 97% of the outstanding registered capital
of NVC Industrial and 100% of the registered capital of NVC Lighting.

The above two transactions were treated as recapitalization of the existing
business in accordance with the requirements of Financial Accounting Standards
Opinion No. 141, Business Combination, Exhibit D. The effect of these
recapitalizations was rolled back to December 31, 2002 for financial reporting
purposes.

NVC Holdings and its two subsidiaries, NVC Industrial and NVC Lighting are
hereinafter collectively referred to as the "Company" or "NVC Group".

NVC Industrial Development Company Limited was registered as a limited liability
Sino-foreign joint investment enterprise on January 28, 2003 in Huizhou,
Guangdong Province, in the PRC with a registered capital of $1,282,051
(HK$10,000,000) and a defined period of existence of 15 years to January 27,
2018

NVC Lighting Company Limited was registered as a limited liability company on
November 13, 1998 in Huizhou, Guangdong Province in the PRC with a registered
capital of $120,773 (Rmb.1,000,000) and a defined period of existence of 6
years. The registered capital was held by Wu Chang-jiang as to 45% or $54,347
(Rmb.450,000), Hu Yong-hong as to 27.5% or $33,213 (Rmb.275,000) and Du Gang as
to 27.5% or $33,213 (Rmb.275,000) in trust for and on behalf of NVC Holdings.

Description of business

The principal activities of the Company are investment holdings, manufacturing
and distribution of lighting products. The principal activities of the Company's
subsidiaries, NVC Industrial and NVC Lighting, are manufacturing and
distribution of lighting products. NVC Group's has operations in The People's
Republic of China, Europe, the Middle East and Hong Kong.

                                        6
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

1. DESCRIPTION OF BUSINESS, Continued

As a result of the restructuring and re-organization of the NVC Group, certain
of the NVC Lighting's assets and liabilities together with the business then in
existence as of April 30, 2003, were distributed in kind to the three registered
equity holders on record in proportion to their relative equity holdings as of
that date. Pursuant to the Tax Clearance Certificate issued by the Huizhou
Municipal Government Tax Authority on May 6, 2003, NVC Lighting ceased its
operations and all of its tax liabilities were cleared with the local tax
authority.

2. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

The Company's consolidated financial statements include the accounts of NVC
Lighting Investment Holdings Limited, its 97% owned subsidiary, NVC Industrial
Development Company Limited and its 100% owned subsidiary, NVC Lighting Company
Limited, after elimination of all material intercompany accounts, transactions,
and profits.. The consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America.
The consolidated financial statements are prepared under the historical cost
convention. This basis of accounting differs from that used in the preparation
of NVC Holdings' statutory financial statements which are prepared in accordance
with generally accepted accounting principles and the relevant Hong Kong
Companies Ordinance applicable to enterprises in the Hong Kong Special
Administrative Region, and NVC Industrial and NVC Lighting's statutory financial
statements which are prepared in accordance with generally accepted accounting
principles and the relevant financial regulations applicable to enterprises in
the PRC.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies:

Consolidation policy - All significant inter-company transactions and balances
within the Company are eliminated on consolidation.

Cash and equivalents - The Company considers all highly liquid debt instruments
purchased with maturity period of three months or less to be cash equivalents.
The carrying amounts reported in the accompanying consolidated balance sheet for
cash and cash equivalents approximate their fair value.

                                        7
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Accounts receivable - Provision is made against accounts receivable to the
extent, which they are considered to be doubtful. Accounts receivable, all of
which are unsecured, are shown in the balance sheet are stated net of such
provision. As of June 30, 2005, provision for doubtful accounts amounted to
$101,418. Accounts receivable are charged against the allowance for bad debts at
such time as they are determined to be uncollectible.

Inventories - Inventories are stated at the lower of cost or market. The cost of
inventories comprises all costs of purchases, costs of conversion and other
costs incurred in bringing the inventories to their present location and
condition. The costs of conversion of inventories include fixed and variable
production overheads, taking into account the stage of completion. The cost of
inventories is determined using the weighted average method.

Market value represents the estimated selling price in the ordinary course of
business less the estimated costs necessary to complete the sale.

Construction-in-progress - All facilities purchased for installation, self-made
or subcontracted are accounted for as construction-in-progress.
Construction-in-progress is recorded at acquisition cost, including cost of
facilities, and installation expenses. Upon completion and readiness for use of
the project, the cost of construction-in-progress is to be transferred to fixed
assets.

Long-lived assets and depreciation - The Company recognizes impairment losses on
long-lived assets used in operations when impairment indicators are present and
the undiscounted cash flows estimated to be generated by these assets are less
than their carrying values. As of June 30, 2005, the Company had no impaired
long-lived assets.

The cost of property, plant and equipment less anticipated salvage values is
being depreciated on a straight-line basis over the estimated useful lives of
the related assets. Estimated useful lives used for computing depreciation are
as follows:

Plant and machinery                5 years
Molds                              5 years
Furniture and fixtures             5 years
Motor vehicles                     5 years
Office equipment                   3 years

Distribution agreements - The Company has entered into a number of distribution
agreements with distributors, whereby the distributor agrees to be an exclusive
distributor of NVC lighting products and has guaranteed to generate specified
sales volumes over a 10 year period. Each of these distributors was paid
$120,773 for entering into this agreement. The cost of this distribution
agreement is being amortized on a straight-line basis over the life of the
agreement. As prescribed by the Emerging Issues Task Force Issue 01-09:
Accounting for Consideration Given by a Vendor to a Customer, the Company has
reduced sales by the amortization for the six months ended June 30, 2005 and 200
totaling $289,854 and $244,566, respectively. The estimated amortization related
to these distribution agreements over the next five years and thereafter are as
follows:

                                        8
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Year Ended December 31,                    Amortization

-----------------------                    ------------

       2005                                 $  519,324
       2006                                    519,324
       2007                                    519,324
       2008                                    519,324
       2009                                    519,324
       Thereafter                            1,487,517
                                            ----------
                 Total                      $4,084,137
                                            ==========

Computer Software The Company is currently in the process of installing new
business software. As of June 30, 2005 the Company had invested $368,550 in
software related to this new installation. When it is fully implemented, the
Company will amortize the cost over five years.

Advances from customers - Revenue from the sale of goods or services is
recognized when goods are delivered or services are rendered. Receipts in
advance for goods to be delivered or services to be rendered in the subsequent
year are carried forward as advances from customers.

Revenue recognition - Revenue from the sale of goods and services is recognized
on the transfer of risks and rewards of ownership, which generally coincides
with the time when the goods are delivered to customers and the title has passed
and services have been rendered and invoiced. Other income is recognized when it
is earned. Sales to all customers are final. As prescribed by the Emerging
Issues Task Force Issue 01-09:

Accounting for Consideration Given by a Vendor to a Customer, the Company has
reduced sales by the amortization for the six months ended June 30, 2005 and
2004 totaling $289,854 and $244,566, respectively.

Other income consists primarily of sales of scrap materials.

Selling expenses - Included in selling expenses are advertising, sales
commissions, outgoing freight, and sales salaries and related expenses.
Advertising costs are charged to expense as they are incurred and totaled
$1,285,284 and $666,001 for the six months ended June 30, 2005 and 2004
respectively. Freight out totaled $818,943 and $410,565 for the six months ended
June 30, 2005 and 2004 respectively.

Foreign currencies - The financial position and results of operations of the
Company are determined using the local currencies (Hong Kong Renminbi or PRC
"Renminbi" or "Yuan") as the functional currencies. Foreign currency
transactions during the year are converted at the average rate of exchange
during the reporting period. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet dates are translated at the market rates
of exchange ruling at those dates. All exchange differences are dealt with in
the statements of operations. The Company's principal country of operations is
in the PRC.

The registered equity capital and fixed assets denominated in the functional
currency are translated at the historical rate of exchange at the time of
capital contribution and purchases of fixed assets and exchange differences
arising from translating equity capital, reserves and fixed assets at exchange
rate ruling at the balance sheet date are dealt with as an exchange fluctuation
reserve.

                                        9
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Retirement benefit costs - According to the PRC regulations on pensions, the
Company contributes to a defined contribution retirement plan organized by
municipal government in the province in which the Company was registered; all
qualified employees are eligible to participate in the plan. Contributions to
the plan are calculated at 18% of the employees' salaries above a fixed
threshold amount and the employees contribute 8% while the Company contributes
the balance contribution of 10%. The Company has no other material obligation
for the payment of retirement benefits beyond the annual contributions under
this plan.

For the six months ended June 30, 2005 and 2004, the Company's pension cost
charged to the statements of operations under the scheme amounted to $10,044 and
$0, respectively.

Capital reserve - Capital reserve represents that amount of reserve appropriated
from the net distributable profit after income tax in each year when a net
profit after operations is generated. In accordance with the provisions of the
Company's Memorandum and Articles of Association, the Company is required to
appropriate 5% to 15% of the net distributable profit after enterprise income
tax to capital reserve. Two-third of the capital reserve is set aside for
possible use for general reserve and one-third is for staff welfare.

Management believes it has accrued sufficient funds to cover all anticipated
staff welfare payments as of June 30, 2005 and that this reserve is not impaired
at this date. The Company shall not be required to appropriate any amount to
capital reserve when the balance standing in capital reserve is equal to or
exceeds 50% of the registered capital.

Taxation - Taxation on overseas profits has been calculated on the estimated
assessable profits for the year at the rates of taxation prevailing in the
country in which the Company operates.

Provision for the PRC enterprise income tax is calculated at the prevailing rate
based on the estimated assessable profits less available tax relief for losses
brought forward.

Enterprise income tax

Under the Provisional Regulations of the PRC Concerning Income Tax on
Enterprises promulgated by the State Council and which came into effect on
January 1, 1994, income tax is payable by enterprises at a rate of 33% of their
taxable income. Preferential tax treatment may, however, be granted pursuant to
any law or regulations from time to time promulgated by the State Council.

No enterprise taxes were accrued for the year ended December 31, 2004 as the
Company was granted a full tax exemption for this year. During the next three
years, the Company has been granted a reduction in the tax rates to 50% of the
applicable statutory enterprise tax rates. For the six months ended June 30,
2005, $432,824 in enterprise taxes were accrued.

Value added tax

The Provisional Regulations of the People's Republic of China Concerning Value
Added Tax promulgated by the State Council came into effect on January 1, 1994.
Under these regulations and the Implementing Rules of the Provisional
Regulations of the PRC Concerning Value Added Tax, value added tax is imposed on
goods sold in or imported into the PRC and on processing, repair and replacement
services provided within the PRC.

                                       10
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Value added tax payable in the PRC is charged on an aggregated basis at a rate
of 13% or 17% (depending on the type of goods involved) on the full price
collected for the goods sold or, in the case of taxable services provided, at a
rate of 17% on the charges for the taxable services provided, but excluding, in
respect of both goods and services, any amount paid in respect of value added
tax included in the price or charges, and less any deductible value added tax
already paid by the taxpayer on purchases of goods and services in the same
financial year.

Fair value of financial instruments - The carrying amounts of certain financial
instruments, including cash, accounts receivable, other receivables, accounts
payable, accrued expenses, and other payables approximate their fair values as
at June 30, 2005 because of the relatively short-term maturity of these
instruments.

Use of estimates - The preparation of financial statements in accordance with
generally accepted accounting principles require management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Recent accounting pronouncements - In May 2003, the Financial Accounting
Standards Board issued SFAS No. 150 Accounting for Certain Financial Instruments
with Characteristics of both Liability and Equity. This standard establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. As of June 30,
2005, the Company had no financial instruments with these characteristics.

In April 2003, the Financial Accounting Standards Board issued SFAS No. 149,
Amendment of Statement 133 on Derivative Instruments and Hedging Activities.
This statement amends and clarifies financial accounting and reporting for
derivative instruments and for hedging activities under FASB No. 133, Accounting
for Derivative Instruments and Hedging Activities. As of June 30, 2005, the
Company had no derivative or hedging activities.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs - an amendment
of ARB No. 43, Chapter 4. SFAS No. 151 requires that certain abnormal costs
associated with the manufacturing, freight, and handling costs associated with
inventory be charged to current operations in the period in which they are
incurred. The adoption of SFAS 151 had no impact on the Company's financial
position, results of operations, or cash flows.

In December 2004, the FASB issued a revision of SFAS No. 123, Share-Based
Payment. The statement establishes standards for the accounting for transactions
in which an entity exchanges its equity investments for goods and services. It
also addresses transactions in which an entity incurs liabilities in exchange
for goods or services that are based on the fair value of the entity's equity
instruments or that may be settled by the issuance of those equity instruments.
The statement does not change the accounting guidance for share-based payments
with parties other than employees.

The statement requires a public entity to measure the cost of employee service
received in exchange for an award of equity instruments based on the grant-date
fair value of the award (with limited exception). That cost will be recognized
over the period during which an employee is required to provide service in
exchange for the award (usually the vesting period). A public entity will
initially measure the cost of employee services received in exchange for an
award of liability instrument based

                                       11
<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

on its current fair value; the fair value of that award will be remeasured
subsequently at each reporting date through the settlement date. Changes in fair
value during the requisite service period will be recognized as compensation
over that period.

The grant-date for fair value of employee share options and similar instruments
will be estimated using option-pricing models adjusted for the unique
characteristics of these instruments.

The statement is effective for the quarter beginning January 1, 2006.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary
Assets-amendment of APB Opinion No. 29. SFAS No. 153 eliminates the exception to
fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance, defined as transactions that are not expected to result in
significant changes in the cash flows of the reporting entity. This statement is
effective for exchanges of nonmonetary assets occurring after June 15, 2005.

Management believes adoption of these new statements will not have any
significant effect on the Company's financial condition or results of
operations.

4. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

Substantially all of the Company's bank accounts are in banks located in the PRC
which are not protected by the FDIC insurance or other insurance.

The Company provides credit in the normal course of business. The Company
performs ongoing credit evaluations of its customers and clients and maintains
allowances for doubtful accounts based on factors surrounding the credit risk of
specific customers and clients, historical trends, and other information. The
Company had no single customer that represented 10% or more of sales in either
of the six months ended June 30, 2005 and 2004.

During the six months ended June 30, 2005 the Company had no suppliers
representing 10% or more of purchases.

The Company is self insured for all risks and carries no liability or property
insurance coverage of any kind.

5. LONG-TERM BANK DEPOSITS

As of June 30, 2005, the Company had pledged $134,058 in long-term bank deposits
to banks to secure a motor vehicle loan. The long-term deposits mature in 2008.

                                       12

<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

6. INVENTORIES

Inventories consist of the following as of June 30, 2005:

Raw materials                               $     5,642,476
Finished goods                                    6,053,744
                                              --------------
                                            $    11,696,220
                                              ==============



7. AMOUNTS DUE TO DIRECTORS

As of June 30, 2005, the Company had the following balances due to its
directors:

               Name                                  Security held
               ----                                  -------------
WU Chang-jiang               $   (1,216,872)              none
HU Yong-hong                     (1,167,350)              none
DU Gang                          (1,151,984)              none
                              --------------
                             $   (3,536,206)
                              ==============



The amounts due to the Directors from the Company are unsecured, interest free
and have no fixed repayment terms.

8. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, stated at cost less accumulated depreciation,
consist of the following as of June 30, 2005:

Plant and machinery                            $      311,242
Molds                                                 885,907
Furniture and fixtures                                  8,071
Motor vehicles                                        413,565
Office equipment                                      394,729
ERP / SAP Computer system                             368,550
                                                 -------------
                                                    2,382,064
Less: Accumulated depreciation                       (770,797)
                                                 -------------
                                               $    1,611,267
                                                 =============


Depreciation taken on property and equipment for the six months ended June 30,
2005 and 2004 totaled $147,243 and $71,635, respectively.

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<PAGE>

            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US dollars)

9. CONSTRUCTION-IN-PROGRESS

Construction-in-progress represents construction cost and design fee of
$7,045,885 in respect of the construction of the new factory premises in
Huizhou. The balance of the outstanding construction contracts totaling
$2,278,350, at June 30, 2005, is anticipated to be paid during the year ending
December 31, 2005.

Construction-in-progress includes the purchase of land use right of $1,304,348
(Rmb.10,800,000) the land use right certificate applied from Economic Union at
Ru Hu Town, Huizhou during the year.

10. MINORITY INTEREST

Minority interest represents the proportionate share (3%) of equity of NVC
Industrial. At June 30, 2005, the Company owned 97% of NVC Industrial's
registered capital stock. NVC Industrial Development Company Limited was
registered as a limited liability Sino-foreign joint investment enterprise on
January 28, 2003 in Huizhou, Guangdong Province, in the PRC with a registered
capital of $1,282,051 (HK$10,000,000) and a defined period of existence of 15
years to January 27, 2018.

11. INCOME TAX

Enterprise income tax ("EIT") in the PRC is provided on the basis of the
statutory profit for financial reporting purposes, adjusted for income and
expense items, which are not assessable or deductible for income tax purposes.
Enterprise income tax has been provided in NVC Lighting's financial statements
at the rate of 33% on the estimated assessable income derived during the year.

No provision for EIT has been made in the financial statements of NVC Industrial
for the year ended December 31 2004 as NVC Industrial has been approved to be
recognized as a joint foreign investment enterprise and is therefore exempted
from EIT for two years starting from the first year of profitable operation
followed by a 50% reduction for the next three years.

There have been no substantial differences between financial and tax reporting
of income and expenses, which would give rise to deferred taxes.

Reconciliations between the expected rate and the effective rate for 2005 and
2004 are as follows:

                             Six Months ended June 30,
                             -------------------------
                                 2005        2004
                                 ----        ----

Statutory tax rate               33%         33%
Benefit of tax holiday          (16%)       (33%)
                               ------       -----

Effective tax rate               17%          0%
                               =====        =====


12. COMMITMENTS

As of June 30, 2005, the Company has future commitments for
construction-in-progress of $2,003,713, to pay supervision of construction sites
of $10,869, and to pay future advertising costs totaling $121,575.

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