EXHIBIT 99.3


                    NVC LIGHTING INVESTMENT HOLDINGS LIMITED
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF JUNE 30, 2005


<PAGE>


            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                                           PAGE

<S>                                                                                          <C>
            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

</TABLE>


<PAGE>


            NVC LIGHTING INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES

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

                               ASSETS

<TABLE>
<CAPTION>

 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
                                                                                     ----                 ----
<S>                                                                             <C>                  <C>
  Cash Flows from Operating Activities:

  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
                                                                                           ----            ----
<S>                                                                                    <C>                <C>
  Supplemental disclosure of cash flow information:
  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.


                                       13

<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.


                                       14