**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form 10-Q**





**x**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934**




**For
      the Quarterly Period Ended September 30, 2008**





**OR**




** ̈**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934**





**For
      the transition period
      from            to**





**Commission
      File No. 000-52930**





**YINLIPS
      TECHNOLOGY, INC.**


(Exact
      name of Registrant as specified in its charter)





**Delaware**
            
            **20-8057623**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)





**ROOM
      2929-31, NANGUAN JIEJIA BUILDING**


**NO.
      3037 SHEN SOUTH-MID ROAD, FUTIAN DISTRICT**


**SHENZHEN,
      GUANGDONG**


**PEOPLE’S
      REPUBLIC OF CHINA**


(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)





**(86)
      755-2601-8046**


(COMPANY’S
      TELEPHONE NUMBER, INCLUDING AREA CODE)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the registrant
      was required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days. Yes x No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      definitions of “large accelerated filer,” “accelerated filer,” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
                accelerated filero
            
            Accelerated
                fileroNon-accelerated
                filero
            
            Smaller
                reporting companyx(Do
                not check if a smaller reporting company)





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





The
      number of shares outstanding of the registrant’s Common Stock, par value $0.0001
      per share, was 7,690,795 as of November 19, 2008.












**YINLIPS
        TECHNOLOGY, INC.**
 
 **FORM 10-Q**
 
 **For
        the Quarterly Period Ended September 30, 2008**
 
 **INDEX**
 
 **Part I**
              **Financial
                  Information**
              **[__]**Item
                  1.
              Financial
                  Statements
              [__]**YINLIPS
                  TECHNOLOGY, INC. (FORMERLY SRKP 17, INC.)**a)
              Balance
                  Sheets as of September 30, 2008 (Unaudited) and December 31,
                  2007
              [__]b)
              Statements
                  of Operations for the Three and Nine Months Ended September 30,
                  2008 and
                  2007 (Unaudited) and Cumulative from January 3, 2007 (inception)
                  to
                  September 30, 2008 (Unaudited)
              [__]c)
              Statements
                  of Cash Flows for the Nine Months Ended September 30, 2008 and
                  2007
                  (Unaudited) and Cumulative from January 3, 2007 (inception) to
                  September
                  30, 2008 (Unaudited)
              [__]d)
              Statements
                  of Changes in Stockholders’ Equity and Comprehensive Income for January 3,
                  2007 (inception) to December 31, 2007 and for the Nine Months Ended
                  September 30, 2008
              [__]e)
              Notes
                  to Financial Statements (Unaudited)
              [__]**PODIUM
                  TECHNOLOGY LIMITED**a)
              Condensed
                  Consolidated Balance Sheets as of September 30, 2008 (Unaudited)
                  and
                  December 31, 2007
              [__]b)
              Condensed
                  Consolidated Statements of Operations for the Nine Months Ended
                  September
                  30, 2008 (Unaudited) and from July 3, 2007 (inception) to December
                  31,
                  2007
              [__]c)
              Condensed
                  Consolidated Statements of Cash Flows for the Nine Months Ended
                  September
                  30, 2008 (Unaudited) and from July 3, 2007 (inception) to December
                  31,
                  2007 (Unaudited)
              [__]d)
              Notes
                  to Condensed Consolidated Financial Statements (Unaudited)
              [__]**YINLIPS
                  DIGITAL TECHNOLOGY (SHENZHEN) CO., LTD.**a)
              Balance
                  Sheets as of September 30, 2008 and 2007 (Unaudited) and December
                  31, 2007
                  and 2006
              [__]b)
              Statement
                  of Operations for the Three and Nine Months Ended September 30,
                  2008 and
                  2007 (Unaudited)
              [__]c)
              Statements
                  of Cash Flows for the Nine Months Ended September 30, 2008 and
                  2007
                  (Unaudited) and the Year Ended December 31, 2007 and 2006
              [__]d)
              Statement
                  of Changes in Stockholders’ Equity and Comprehensive Income for the Years
                  Ended December 31, 2007, 2006 and 2005 and for the Nine Months
                  Ended
                  September 30, 2008
              [__]e)
              Notes
                  to Financial Statements (Unaudited)
              [__]Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              [__]Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              [__]Item
                  4.
              Controls
                  and Procedures
              [__]**Part II**
              **Other
                  Information**
              **[__]**Item
                  1.
              Legal
                  Proceedings
              [__]Item
                  1A.
              Risk
                  Factors
              [__]Item
                  2.
              Unregistered
                  Sale of Equity Securities and Use of Proceeds
              [__]Item
                  3.
              Default
                  Upon Senior Securities
              [__]Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              [__]Item
                  5.
              Other
                  Information
              [__]Item
                  6.
              Exhibits
              [__]**Signatures**
              **[__]**




2


**Part I.
      Financial Information**





**Item
      1. Financial Statements**




**YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 
 **BALANCE
        SHEETS**
 
 **September
                  30,**
              
              **December
                  31,****2008**
              
              **2007****(Unaudited)****ASSETS****CURRENT
                  ASSETS:**Cash
              
              $
              1,872
              
              $
              869**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY (DEFICIT)****CURRENT
                  LIABILITIES**Due
                  to Stockholders
              
              $
              47,500
              
              $
              32,500**COMMITMENTS
                  AND CONTINGENCIES****STOCKHOLDERS’
                  EQUITY (DEFICIT):**Preferred
                  stock, $.0001 par value, 10,000,000 shares authorized, none
                  issuedCommon
                  stock, $.0001 par value, 100,000,000 shares authorized, 7,096,930
                  shares
                issued
                  and outstanding
              
              
              710
              
              
              710Additional
                  Paid in Capital
              
              
              6,790
              
              
              6,790(Deficit)
                  accumulated during development stage
              
              
              (53,129
              )
              
              (39,131
              )Total
                  Stockholders’ Equity (Deficit)
              
              
              (45,629
              )
              
              (31,131
              )**Total
                  Liabilities & Shareholders' Equity**
              
              $
              1,872
              
              $
              869
 
 
 
 
  
 The
        accompanying notes are an integral part of these financial
        statements.
  3
  
 **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 
 **STATEMENTS
        OF OPERATIONS**
 
 **Three
                  Months Ended**
              
              **Nine**
                **Months**
                **Ended**
              
              **For
                  the period January 3, 2007**
                **(Inception)
                  to**
              
              **Cumulative
                  from**
                **January
                  3, 2007**
                **(Inception)
                  to****September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,****2008**
              
              **2007**
              
              **2008**
              
              **2007**
              
              **2008****(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)****REVENUE**
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -**EXPENSES**
              
              
              689
              
              
              3,535
              
              
              13,998
              
              
              18,972
              
              
              53,129**NET
                  (LOSS)**
              
              $
              (689
              )
              $
              (3,535
              )
              $
              (13,998
              )
              $
              (18,972
              )
              $
              (53,129
              )**WEIGHTED
                  AVERAGE NUMBER**
                **OF
                  COMMON SHARES**
                **OUTSTANDING**
              
              
              7,096,390
              
              
              7,096,390
              
              
              7,096,390
              
              
              7,096,390
 
 
 
 
 
  
 
 The
        accompanying notes are an integral part of these financial
        statements.
 
  
  
 **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 
 **STATEMENTS
        OF CASH FLOWS**
 
 **For
                  Nine Months Ended**
              
              **For
                  the period**
                **January
                  3, 2007**
                **(Inception)
                  to**
              
              **Cumulative
                  from January 3, 2007**
                **(Inception)
                  to****September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,****2008**
                **(Unaudited)**
              
              **2007**
                **(Unaudited)**
              
              **2008**
                **(Unaudited)****CASH
                  FLOWS (TO) OPERATING ACTIVITIES:**Net
                  (loss)
              
              $
              (13,998
              )
              $
              (18,972
              )
              $
              (53,129
              )Increase
                  in accrued expense
              
              
              
              
              
              1,060Net
                  Cash (Used) by Operating Activities
              
              
              (13,998
              )
              
              (17,912
              )
              
              (53,129
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Advances
                  from Stockholders
              
              
              15,000
              
              
              22,500
              
              
              47,500Warrants
                  issued for cash
              
              
              
              
              
              2,500
              
              
              2,500Common
                  stock issued for cash
              
              
              
              
              
              5,000
              
              
              5,000Net
                  Cash Provided by Financing Activities
              
              
              15,000
              
              
              30,000
              
              
              55,000**NET
                  INCREASE IN CASH AND CASH EQUIVALENTS**
              
              
              1,003
              
              
              12,088
              
              
              1,872**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              869**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              1,872
              
              $
              12,088
              
              $
              1,872
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.
   
  **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 
 **STATEMENT
        OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)**
 **January
        3, 2007 to December 31, 2007 and January, 2008 to September 30, 2008
        (UNAUDITED)**
 
 
 **(Deficit)****Accumulated**
              
              **Total****Additional**
              
              **During**
              
              **Stockholders’****Common
                  Stock**
              
              **Paid**
              
              **Development**
              
              **Equity****Shares**
              
              **Amount**
              
              **in
                  Capital**
              
              **Stage**
              
              **(Deficit)****Balances,
                  January 3, 2007**Sale
                  of common stock on
                January
                  3, 2007 at $.0007046 per share
              
              
              7,096,390
              
              $
              710
              
              $
              4,290
              
              $
              -
              
              $
              5,000Sale
                  of warrants on January 3, 2007 at $.0003523 per warrant
              
              
              
              
              
              
              
              
              2,500
              
              
              
              
              
              2,500Net
                  (loss)
              
              
              
              
              
              
              
              
              
              
              
              (39,131
              )
              
              (39,131
              )**Balances,
                  December 31, 2007**
              
              
              7,096,390
              
              
              710
              
              
              6,790
              
              
              (39,131
              )
              
              (31,631
              )Net
                  income for nine monthsended
                  September 30, 2008
              
              
              
              
              
              
              
              
              
              
              
              (13,998
              )
              
              (13,998
              )**Balances,
                  September 30, 2008**
              
              
              7,096,390
              
              $
              710
              
              $
              6,790
              
              $
              (53,129
              )
              $
              (45,629
              )
 
 
 
  
 The
        accompanying notes are an integral part of these financial
        statements.
 
  
  
 **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 are
        unaudited)
 
 **NOTE
        1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **History**
 Yinlips
        Technology, Inc. (the “Company”), formerly known as SRKP 17, Inc., a
        development stage company, was incorporated under the laws of the State of
        Delaware on December 7, 2006. There was no activity during 2006 and no equity
        was issued. The common stock of the Company was sold and issued on January
        3,
        2007 and as such has been used as the date of inception for the Company.
        The
        Company is in the development stage as defined in Financial Accounting Standards
        Board Statement No. 7. The fiscal year end is December 31.
 
 The
        Company filed a Form 10-SB registration statement with the Securities and
        Exchange Commission (SEC) pursuant to Section 12(g) of the Securities Exchange
        Act of 1934. The registration statement has been declared effective as of
        January 25, 2008.
 
 On
        October 20, 2008, the Company changed its name from SRKP 17, Inc. to Yinlips
        Technology, Inc. pursuant to a business acquisition.
 
  **Going
        Concern and Plan of Operation**
 The
        Company's financial statements have been presented on the basis that it is
        a
        going concern, which contemplates the realization of assets and the satisfaction
        of liabilities in the normal course of business. The Company is in the
        development stage and has negative working capital, negative stockholders’
equity and has not earned any revenues from operations to date. These conditions
        raise substantial doubt about its ability to continue as a going concern.
 
 The
        Company is currently devoting its efforts to locating merger candidates.
        The
        Company's ability to continue as a going concern is dependent upon its ability
        to develop additional sources of capital, locate and complete a merger with
        another company, and ultimately, achieve profitable operations. The accompanying
        financial statements do not include any adjustments that might result from
        the
        outcome of these uncertainties.
 
  **Basis
        of Presentation**
 The
        accompanying financial statements have been prepared in accordance with
        accounting principles generally accepted in the United States of America
        for
        interim financial information and with the instructions to Form 10-Q. They
        do
        not include all of the information and footnotes required by generally accepted
        accounting principles.
 
 In
        the
        opinion of management, the financial statements reflect all adjustments,
        consisting only of normal recurring adjustments necessary to present fairly
        the
        financial condition, the results of operating , and cash flow of the Company
        for
        interim periods presented.
 
 The
        results for the period ended September 30, 2008 are not necessarily indicative
        of the results of operation for the full year. The financial statement and
        related footnotes should be read in conjunction with the financial statement
        and
        footnotes thereto included in the Company’s Form 10-KSB filed with Securities
        and Exchange Commission for the period ended December 31, 2007.
 
 
  
  
 **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 are
        unaudited)
 
 **NOTE
        1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 **Income
        Taxes**
 The
        Company uses the liability method of accounting for income taxes pursuant
        to
        Statement of Financial Accounting Standards No. 109.  Under this method,
        deferred income taxes are recorded to reflect the tax consequences in future
        years of temporary differences between the tax basis of the assets and
        liabilities and their financial amounts at
        year-end.
 
 For
        federal income tax purposes, substantially all startup and organizational
        expenses must be deferred until the Company commences business.  The
        Company may elect a limited deduction of up to $5,000 in the taxable year
        in
        which the trade or business begins.  The $5,000 must be reduced by the
        amount of startup costs in excess of $50,000.  The remainder of the
        expenses not deductible must be amortized over a 180-month period beginning
        with
        the month in which the active trade or business begins.  These expenses
        will not be deducted for tax purposes and will represent a deferred tax
        asset.  The Company will provide a valuation allowance in the full amount
        of the deferred tax asset since there is no assurance of future taxable
        income.  Tax deductible losses can be carried forward for 20 years until
        utilized.
 
  **Deferred
        Offering Costs**
 Deferred
        offering costs, consisting of legal, accounting and filing fees relating
        to an
        offering will be capitalized. The deferred offering costs will be offset
        against
        offering proceeds in the event the offering is successful. In the event the
        offering is unsuccessful or is abandoned, the deferred offering costs will
        be
        expensed.
 
  **Cash
        and Cash Equivalents**
 Cash
        and
        cash equivalents consist primarily of cash in banks and highly liquid
        investments with original maturities of 90 days or less.
 
  **Concentrations
        of Credit Risk**
 The
        Company maintains all cash in deposit accounts, which at times may exceed
        federally insured limits. The Company has not experienced a loss in such
        accounts.
 
  **Earnings
        per Common Share**
 Basic
        earnings per common share are computed based upon the weighted average number
        of
        common shares outstanding during the period. Diluted earnings per share consists
        of the weighted average number of common shares outstanding plus the dilutive
        effects of options and warrants calculated using the treasury stock method.
        In
        loss periods, dilutive common equivalent shares are excluded as the effect
        would
        be anti-dilutive.
 
 At
        September 30, 2008 and 2007, the only potential dilutive securities
        were 7,096,390 common stock warrants. Due to the net loss, none of the
        potentially dilutive securities were included in the calculation of diluted
        earnings per share since their effect would be anti-dilutive.
 
  
  
 **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 are
        unaudited)
 
 **NOTE
        1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
 
 **Use
        of Estimates in the Preparation of Financial
        Statements**
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities, the disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting periods.
        Actual results could differ from those estimates and assumptions.
 
  **Recently
        Issued Accounting Pronouncements**
 The
        Company has adopted all recently issued accounting pronouncements. The adoption
        of the accounting pronouncements, including those not yet effective, is not
        anticipated to have a material effect on the financial position or results
        of
        operations of the Company.
 
  **NOTE
        2 - STOCKHOLDERS' EQUITY**
 
 During
        January 2007, the Company sold for $5,000 for a subscription receivable,
        which
        was paid in April 2007, 7,096,390 shares of its $.0001 par value common stock
        to
        various investors. In addition, the Company also sold to these investors
        for
        $2,500 cash warrants to purchase 7,096,390 shares of common stock at an exercise
        price of $.0001. These warrants expire at the earlier date of 10 years from
        date
        of purchase or 5 years from the date the Company consummates a merger or
        other
        business combination with an operating business or any other event to which
        the
        Company ceases to be a “shell company.”
 
  **NOTE
        3 - RELATED PARTY TRANSACTIONS**
 
 The
        Company neither owns nor leases any real or personal property. Most office
        services are provided without charge by WestPark Capital.  The Company’s
        President is also the Chief Executive Officer of WestPark Capital. Such costs
        are immaterial to the financial statements. The officers and directors of
        the
        Company are involved in other business activities and may, in the future,
        become
        involved in other business opportunities that become available. Such persons
        may
        face a conflict in selecting between the Company and their other business
        interests. The Company has not formulated a policy for the resolution of
        such
        conflicts.
 
  **NOTE
        4 - DUE TO STOCKHOLDERS**
 
 Since
        inception certain stockholders have advanced the Company $47,500 to pay for
        operating expenses. These funds have been advanced interest free, are unsecured,
        and are due on demand.
 
 
 
  
  
 
 **YINLIPS
        TECHNOLOGY, INC.**
 **(Formerly
        SRKP 17, Inc.)**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 are
        unaudited)
 
 **NOTE
        5 -SUBSEQUENT EVENTS**
 
 **Business
        Combinations**
 On
        October 17, 2008, the Company completed the acquisition of the common shares
        and
        warrants to purchase 300,000 shares of Podium Technology Limited (“Podium”)
        pursuant to a Share and Warrant Exchange Agreement. In consideration, the
        Company will issue an aggregate of 65,795 shares of the Company’s common stock,
        $0.0001 par value and warrants to purchase 300,000 shares of the Company
        to the
        shareholders of Podium. As a result of this transaction, the Podium became
        a
        wholly-owned subsidiary of the Company. Podium owns 100% of Yinlips Digital
        Technology (Shenzhen) Co., Ltd. (“Shenzhen Yinlips”), which was established in
        2001, and is a Chinese hi-tech company. Shenzhen Yinlips’ business includes
        design, manufacture, and marketing of CRTs, LCDs, and a series of portable
        digital devices, including portable DVDs, Palm PCs, MP3s, MP4s, PMPs, MP4+Games,
        game cards, and digital photo frames.
 
  **Common
        Stock Purchase and Share and Warrant Cancellation**
 On
        November 14, 2008, the Company entered into a Common Stock Purchase Agreement
        with Zhao Zifeng, its Chief Executive Officer and Chairman of the Board,
        whereby
        Mr. Zhao purchased and the Company issued 6,500,000 shares of the Company’s
        common stock at a purchase price of $0.415 per share.
 
 Pursuant
        to that certain Share and Warrant Cancellation Agreement dated as of October
        17,
        2008 by and between the Company and the shareholders and warrantholders of
        the
        Company prior to the share and warrant exchange transaction that closed on
        October 17, such shareholders to be known as the “Shareholders,” each of the
        Shareholders agreed to cancel 0.91867 shares of common stock and warrants
        to
        purchase 0.98943 shares of common stock held by each of them for each one
        (1)
        share of common stock purchased by Mr. Zhao pursuant to the Purchase Agreement.
        Accordingly, in connection with the purchase of the Shares by Mr. Zhao pursuant
        to the Purchase Agreement described above, the Company cancelled an aggregate
        of
        5,971,390 shares of common stock and warrants to purchase 6,431,299 shares
        of
        common stock held by the Shareholders (the “Share and Warrant
        Cancellation”).
 
 Upon
        the
        completion of the Share Purchase and Share and Warrant Cancellation, Mr.
        Zhao
        currently owns approximately 53.4% of the Company’s issued and outstanding
        voting securities (which includes the shares of Series A Convertible Preferred
        Stock).


3


**Item
      2. Management’s Discussion and Analysis of Financial Condition and Results of
      Operations**





The
      following discussion relates to a discussion of the financial condition and
      results of operations of Yinlips Technology, Inc. (the “Company”) and its
      wholly-owned subsidiary Podium Technology Limited, a company organized under
      the
      laws of the British Virgin Islands (“Podium”), and its wholly-owned subsidiary
      Yinlips Digital Technology (Shenzhen) Co., Ltd., a company organized under
      the
      laws of the People’s Republic of China (“Shenzhen Yinlips”). This management’s
      discussion and analysis of financial condition and results of operations should
      be read in conjunction with its financial statements and the related notes,
      and
      the other financial information included in this information statement.





**Forward-Looking
      Statements**





This
      report contains forward-looking statements. The words “anticipated,” “believe,”
“expect, “plan,” “intend,” “seek,” “estimate,” “project,” “could,” “may,” and
      similar expressions are intended to identify forward-looking statements. These
      statements include, among others, information regarding future operations,
      future capital expenditures, and future net cash flow. Such statements reflect
      our management’s current views with respect to future events and financial
      performance and involve risks and uncertainties, including, without limitation,
      general economic and business conditions, changes in foreign, political, social,
      and economic conditions, regulatory initiatives and compliance with governmental
      regulations, the ability to achieve further market penetration and additional
      customers, and various other matters, many of which are beyond our control.
      Should one or more of these risks or uncertainties occur, or should underlying
      assumptions prove to be incorrect, actual results may vary materially and
      adversely from those anticipated, believed, estimated or otherwise indicated.
      Consequently, all of the forward-looking statements made in this filing are
      qualified by these cautionary statements and there can be no assurance of the
      actual results or developments.




**SRKP
      17, INC.**





**Plan
      of Operations**





SRKP
      17,
      Inc. incurred a net loss of $689 and $13,998 for the three months and nine
      months ended September 30, 2008, respectively, and $3,535 and $18,972 for the
      corresponding periods in 2007, respectively.  It is management’s assertion
      that these circumstances may hinder the Company’s ability to continue as a going
      concern.  The Company has not realized any revenues from operations since
      inception, and its plan of operation for the next twelve months shall be to
      continue its efforts to locate suitable acquisition candidates. See below at
      “Management’s Discussion and Analysis of Financial Condition and Results of
      Operations—YINLIPS TECHNOLOGY, INC.” for information regarding the share and
      warrant exchange transaction which closed on October 17, 2008.





**Liquidity
      and Capital Resources**





As
      of
      September 30, 2008, the Company had assets equal to $1,872 consisting
      exclusively of cash.  The Company can provide no assurance that it can
      continue to satisfy its cash requirements for at least the next twelve months.




**Results
      of Operations**





The
      Company has not conducted any active operations since inception, except for
      its
      efforts to locate suitable acquisition candidates.  No revenue has been
      generated by the Company from December 7, 2006 (inception) to September 30,
      2008.  It is unlikely the Company will have any revenues unless it is able
      to effect an acquisition of, or merger with, an operating company, of which
      there can be no assurance.




**YINLIPS
      TECHNOLOGY, INC.**





**Overview**





We
      engage
      in the development, production and sales of portable electronic products such
      as
      Micro PCs, HD hard disk multimedia players, MP6s, MP5s, MP4s with gaming
      features, MP3s and digital photo frames. Our digital products have a solid
      reputation and established brand name in the PRC and abroad.





We
      sell
      our products to wholesalers and distributors of electronic products. For export
      sales and ODM production, we produce based on customer demand and orders. For
      products with our own brand names, customers generally do not provide us with
      any long-term commitments. As a result it is necessary for us to estimate,
      based
      in part on non-binding estimates by our customers and potential customers,
      the
      requirements for our products. In addition, in some instances, we develop
      products based on anticipated customer demand with no assurance that we will
      receive the anticipated orders. To the extent that we do not receive the
      anticipated orders or that our customers require products in greater quantities
      than anticipated, our revenue and margins will be affected.




4




A
      small
      number of customers account for a very significant percentage of our revenue.
      For nine months ended September 30, 2008, we had eight customers that each
      accounted for at least 5% of the revenues that we generated. These eight
      customers accounted for a total of approximately 64% of our revenue for that
      period. During the year ended December 31, 2007, we had three customers that
      generated revenues of at least 5% of our revenues. These three customers
      accounted for a total of approximately 18.56% of our revenue for the year ended
      December 31, 2007. For the year ended December 31, 2006, we had four customers
      that accounted for at least 5% of revenue, and these four customers accounted
      for approximately 24.31% of our revenue. Unless we replace a customer, the
      loss
      of any of these customers could have a material adverse effect upon our revenue
      and net income. We have long term supply contracts with stable supply source.
      This practice reduces our risk on shortage of raw material supply. But any
      future purchase price fluctuations will affect our production costs and gross
      margin





**Recent
      Events**





On
      September 22, 2008, SRKP 17, Inc., a Delaware corporation (“SRKP 17”), entered
      into a share and warrant exchange agreement (the “Exchange Agreement”), with
      Podium Technology Limited, a company organized in the British Virgin Islands
      (“Podium”), and the sole shareholder and all of the warrantholders of Podium,
      pursuant to which the shareholder would transfer all of the issued and
      outstanding shares of Podium to SRKP 17 in exchange for 65,795 shares of SRKP
      17’s common stock and the warrantholders would transfer all of the issued and
      outstanding warrants of Podium to SRKP 17 in exchange for warrants to purchase
      300,000 shares of our common stock at an exercise price of $1.10 per share
      (the
“Exchange”). On October 17, 2008, the Exchange closed and Podium became a
      wholly-owned subsidiary of SRKP 17, which immediately changed its name to
“Yinlips Technology, Inc.” A total of 65,795 shares and 300,000 warrants were
      issued to the former shareholder and warrantholders of Podium,
      respectively.





In
      addition, on October 31, 2008, we closed a private placement transaction (the
      “Private Placement”). Pursuant to subscription agreements entered into with the
      investors, we sold an aggregate of 4,473,583 shares of Series A Convertible
      Preferred Stock at $1.10 per share. As a result, we received gross proceeds
      in
      the amount of approximately $4.9 million.





On
      November 14, 2008, Zhao Zifeng, our Chief Executive Officer and Chairman of
      the
      Board, purchased 6,500,000 shares of our common stock at a per share purchase
      price of $0.415 (the “Purchase Right”). Each of the shareholders and
      warrantholders of SRKP 17 prior to the Exchange agreed to cancel 0.91867 shares
      of common stock and warrants to purchase 0.98943 shares of common stock held
      by
      each of them for each one (1) share of common stock purchased by Mr. Zhao
      pursuant to the Purchase Right (the “SRKP 17 Share and Warrant Cancellation”).
      As a result of the Purchase Right and SRKP 17 Share and Warrant Cancellation,
      we
      cancelled an aggregate of 5,971,390 shares of common stock and warrants to
      purchase 6,431,299 shares of common stock held by certain of our stockholders
      and warrantholders prior to the Exchange and Mr. Zhao owns approximately 53.43%
      of our outstanding common stock (assuming the conversion of the maximum number
      of shares of Series A Convertible Preferred Stock).





Our
      BVI
      subsidiary, Podium, was owned by a non-PRC individual. Podium obtained all
      the
      equity interests of Yinlips Digital Technology (Shenzhen) Co., Ltd., a company
      organized in the People’s Republic of China (“Shenzhen Yinlips”), further to an
      Equity Transfer Agreement dated December 28, 2007 (the “Original Equity
      Agreement”) by and among Podium, Zhao Zifeng, our Chief Executive Officer and
      Chairman of the Board, and Zhang Weiqiang. The Original Equity Agreement was
      amended and restated in September 2008 (the “Restated Equity Agreement”) to
      increase the total purchase price of the equity interests of Shenzhen Yinlips
      to
      RMB 19,200,000.





See
“Risk
      Factors” beginning on [__] below for a more complete description of the
      aforementioned restructuring and risks associated therewith.





**Critical
      Accounting Policies and Estimates**





The
      discussion and analysis of our financial condition and results of operations
      is
      based upon our financial statements which have been prepared in accordance
      with
      accounting principles generally accepted in the United States. The preparation
      of these financial statements requires us to make estimates and judgments that
      affect the reported amounts of assets and liabilities. On an on-going basis,
      we
      evaluate our estimates including the allowance for doubtful accounts, the
      salability and recoverability of inventory, income taxes and contingencies.
      We
      base our estimates on historical experience and on other assumptions that we
      believes to be reasonable under the circumstances, the results of which form
      our
      basis for making judgments about the carrying values of assets and liabilities
      that are not readily apparent from other sources. Actual results may differ
      from
      these estimates under different assumptions or conditions.





We
      cannot
      predict what future laws and regulations might be passed that could have a
      material effect on our results of operations. We assess the impact of
      significant changes in laws and regulations on a regular basis and update the
      assumptions and estimates used to prepare our financial statements when we
      deem
      it necessary.




5




***Revenue
      recognition.*** We
      recognize revenue from the sales of products. Sales are recognized when the
      following four revenue criteria are met: persuasive evidence of an arrangement
      exists, delivery has occurred, the selling price is fixed or determinable,
      and
      collectivity is reasonably assured. Sales revenue is presented net of value
      added tax (VAT), sales rebates and returns. No return allowance is made as
      product returns are insignificant based on historical experience.





***Allowance
      for doubtful accounts.*** In
      estimating the collectability of accounts receivable we analyze historical
      write-offs, changes in our internal credit policies and customer concentrations
      when evaluating the adequacy of our allowance for doubtful accounts. Differences
      may result in the amount and timing of expenses for any period if we make
      different judgments or uses difference estimates. Our accounts receivable
      represent a significant portion of our current assets and total assets. Our
      realization on accounts receivable, expressed in terms of United States dollars
      may be affected by fluctuations in currency rates since the customer ’ s
      currency is frequently a currency other than United States dollars.





***Inventories.*** Inventories comprise raw materials and finished goods are stated at the lower
      of
      cost or market. Substantially all inventory costs are determined using the
      weighted average basis. Costs of finished goods include direct labor, direct
      materials, and production overhead before the goods are ready for sale.
      Inventory costs do not exceed net realizable value.





***Taxation.*** Under
      the tax laws of PRC, Shenzhen Yinlips has had tax advantages granted by local
      government for corporate income taxes and sales taxes commencing from the
      establishment of the Company. ****** As a
      manufacturing enterprise established in Shenzhen, PRC, the Company was entitled
      to a preferential Enterprise Income Tax (”EIT”) rate, 15%. On March 16, 2007,
      the National People’s Congress of China enacted a new PRC Enterprise Income Tax
      Law, under which foreign invested enterprises and domestic companies will be
      subject to enterprise income tax at a uniform rate of 25%. The new law became
      effective on January 1, 2008. Since 2008, the local government has increased
      the
      EIT rate from 15% to 18%. During the transition period for enterprises
      established before March 16, the tax rate will be gradually increased starting
      in 2008 and be equal to the new tax rate in 2012. We believe that our
      profitability will be negatively affected in the near future as a result of
      the
      new EIT Law.





**Recently
      Issued Accounting Pronouncements**





On
      December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in
      Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 requires all
      entities to report noncontrolling (minority) interests in subsidiaries as equity
      in the consolidated financial statements. The statement establishes a single
      method of accounting for changes in a parent ’ s ownership interest in a
      subsidiary that do not result in deconsolidation and expands disclosures in
      the
      consolidated financial statements. SFAS No. 160 is effective for fiscal years
      beginning after December 15, 2008 and interim periods within those fiscal years.
      We have not yet determined the impact of the adoption of SFAS No. 160 on our
      consolidated financial statements and footnote disclosures.





On
      December 4, 2007, the FASB issued SFAS No. 141R, Business Combinations (SFAS
      No.
      141R). SFAS No. 141R requires the acquiring entity in a business combination
      to
      recognize all the assets acquired and liabilities assumed, establishes the
      acquisition date fair value as the measurement objective for all assets acquired
      and liabilities assumed, and requires the acquirer to expand disclosures about
      the nature and financial effect of the business combination. SFAS No. 141R
      is
      effective for business combinations for which the acquisition date is on or
      after the beginning of the first annual reporting period beginning on or after
      December 15, 2008. We have adopted SFAS No. 141R on our consolidated financial
      statements and footnote disclosures.





In
      March
      2008, the FASB issued SFAS 161, “ *Disclosures
      about Derivative Instruments and Hedging Activities* ” *.* The new
      standard is intended to improve financial reporting about derivative instruments
      and hedging activities by requiring enhanced disclosures to enable investors
      to
      better understand their effects on an entity ’ s financial position, financial
      performance, and cash flows. It is effective for financial statements issued
      for
      fiscal years and interim periods beginning after November 15, 2008, with early
      application encouraged. We are currently evaluating the impact of adopting
      SFAS
      161 on its consolidated financial statements.





**Recently
      Adopted Accounting Pronouncements**





In
      July
      2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for
      Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a
      company should recognize, measure, present and disclose in its financial
      statements uncertain tax positions that the company has taken or expects to
      take
      on a tax return (including a decision whether to file or not to file a return
      in
      a particular jurisdiction). The accounting provisions of FIN No. 48 are
      effective for fiscal years beginning after December 15, 2006. The adoption
      of
      this Interpretation had no impact on our financial position or results of
      operations.




6




In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS
      157"). SFAS 157 defines fair value, establishes a framework and gives guidance
      regarding the methods used for measuring fair value, and expands disclosures
      about fair value measurements. In February 2008, the FASB issued FASB Staff
      Position 157-1, "Application of FASB Statement No. 157 to FASB Statement No.
      13
      and Other Accounting Pronouncements That Address Fair Value Measurements for
      Purposes of Lease Classification or Measurement under Statement 13" ("FSP
      157-1") and FASB Staff Position 157-2, "Effective Date of FASB Statement No.
      157" ("FSP 157-2"). FSP 157-1 amends SFAS 157 to remove certain leasing
      transactions from its scope. FSP 157-2 delays the effective date of SFAS 157
      for
      all non-financial assets and non-financial liabilities, except for items that
      are recognized or disclosed at fair value in the financial statements on a
      recurring basis (at least annually), until fiscal years beginning after November
      15, 2008. SFAS 157 is effective for financial statements issued for fiscal
      years
      beginning after November 15, 2007, and interim periods within those fiscal
      years. The Company adopted SFAS 157 effective January 1, 2008 for all financial
      assets and liabilities as required. The adoption of SFAS 157 was not material
      to
      our financial statements or results of operations.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities — Including an Amendment of FASB
      Statement No. 115,” (“SFAS 159”) which is effective for fiscal years beginning
      after November 15, 2007. SFAS 159 is an elective standard which permits an
      entity to choose to measure many financial instruments and certain other items
      at fair value at specified election dates. Subsequent unrealized gains and
      losses on items for which the fair value option has been elected will be
      reported in earnings. We have not elected the fair value option for any assets
      or liabilities under SFAS 159.





**Results
      of Operations**





The
      following table sets forth our statements of operations for the three months
      and
      nine months ended September 30, 2008 and 2007 in U.S. dollars
      (unaudited):





**For Three Months Ended**
            
            **For Nine Months Ended****September 30,**
            
            **September 30,****2008**
            
            **2007**
            
            **2008**
            
            **2007****(Unaudited)**
            
            **(Unaudited)**
            
            **(Unaudited)**
            
            **(Unaudited)****Revenue**Sales
            
            $
            5,509,358
            
            $
            5,033,171
            
            $
            17,829,169
            
            $
            14,305,912Cost
                of goods sold
            
            
            (4,244,747
            )
            
            (4,062,013
            )
            
            (13,865,754
            )
            
            (11,607,047
            )**Gross
                Profit**
            
            
            1,264,612
            
            
            971,157
            
            
            3,963,416
            
            
            2,698,864Selling
                expenses
            
            
            144,176
            
            
            112,943
            
            
            469,995
            
            
            325,439Other
                general and administrative
            
            
            93,578
            
            
            63,693
            
            
            411,118
            
            
            137,536Research
                and development
            
            
            246,521
            
            
            216,078
            
            
            716,818
            
            
            640,929Depreciation
                of property, plant and equipment
            
            
            19,291
            
            
            15,046
            
            
            56,726
            
            
            44,503**Total
                operating expenses**
            
            
            503,567
            
            
            407,759
            
            
            1,654,656
            
            
            1,148,406**Income
                from operations**
            
            
            761,044
            
            
            563,399
            
            
            2,308,759
            
            
            1,550,458**Other
                income (expenses)**Interest
                income (expense), net
            
            
            531
            
            
            523
            
            
            1,256
            
            
            1,793Penalty
                on renovation contract
            
            
            (459
            )
            
            
            
            
            (43,011
            )Other
                income (expense), net
            
            
            (36
            )
            
            (89
            )
            
            
            
            
            50**Total
                other income (expenses)**
            
            
            36
            
            
            435
            
            
            (41,755
            )
            
            1,844**Income
                before income taxes**
            
            
            761,080
            
            
            563,834
            
            
            2,267,004
            
            
            1,552,302Income
                taxes
            
            
            (122,929
            )
            
            (84,575
            )
            
            (399,554
            )
            
            (232,845
            )Net
                income
            
            
            638,152
            
            
            479,258
            
            
            1,867,451
            
            
            1,319,456Other
                Comprehensive Income:Foreign
                currency translation adjustment
            
            
            15,035
            
            
            49,616
            
            
            366,492
            
            
            119,254**Comprehensive
                Income**
            
            $
            653,187
            
            $
            528,874
            
            $
            2,233,943
            
            $
            1,438,710




7




***Three
      Months Ended September 30, 2008 and 2007***





Revenues,
      which consist of sales of our products, were $5,509,358 for the three months
      ended September 30, 2008, an increase of $476,188, or 9.46%, compared to
      $5,033,171 for the same period in 2007. The increase in revenue was attributed
      mainly to the increased demand for our products.





In
      the
      past, we have relied on sales to original equipment manufacturers (ODMs) for
      a
      significant portion of our revenues. ODM sales accounted for 60% of our revenues
      for the three months ended September 30, 3008 and sales of products with our
      own
      brand accounted for 40% of our revenues for the same period. We have increased
      our focus on and investment of resources in sales of our own brand which we
      believe will help decrease any reliance on ODM sales.





Cost
      of
      sales, which include raw material, labor and manufacturing overhead, were
      $4,244,747 for the three months ended September 30, 2008, an increase of
      $182,734, or 4.50%, compared to $4,062,013 for the same period in 2007. This
      increase in cost of sales was caused by the increase in the sales of our
      products. As a percentage of revenues, cost of sales for the three months ended
      September 30, 2008 and 2007 were 77.05% and 80.70%, respectively.





Gross
      profit for the three months ended September 30, 2008 was $1,264,612, or 22.95%
      of revenues, compared to $971,157, or 19.30% of revenues, for the comparable
      period in 2007. Management considers gross profit to be a key performance
      indicator in managing our business. Gross profit margins are a factor of cost
      of
      sales, product mix and product demand. The increase in our gross profit margin
      for the three months ended September 30, 2008 is primarily due to the increase
      of sales and the decrease in the price of raw materials.





Various
      factors may impact our company’s performance in different ways. For example, the
      average selling price for certain of our existing products, such as MP3 players,
      is declining. By upgrading our products, adding functionality, and improving
      technological specifications, we can increase the value of such products and
      the
      resulting product price. This can help compensate for losses associated with
      decreasing prices for products with simple functions and can help increase
      our
      revenue and gross profit.





Also,
      gross profits and sales of more sophisticated products such as Micro PCs, HP
      hard disk multimedia players, MP6s and MP5s are currently higher due to higher
      price command for these products. As our sales mix shifts towards increasing
      sales of products such as these, our gross margins and profitability should
      be
      positively affected.





Selling
      expenses, which mainly include marketing, shipping, insurance, wage and other
      expenses, were $144,176 for the three months ended September 30, 2008, an
      increase of $31,233, or 27.65%, compared to $112,943 for the same period in
      2007. The increase was primarily due to the increase in advertising expenses
      and
      the payment of sales commissions.





Research
      and development expenses, which were approximately $246,521 for the three months
      ended September 30, 2008, an increase of approximately $30,443, or 14.09%,
      compared to $216,078 million for the same period in 2007. The increase was
      primarily due to the development of new products . We expect research and
      development expenses to increase as a result of increasing efforts to develop
      more sophisticated technology products.





General
      and administrative expenses, which include wage, benefit, bad debts, utility,
      consulting, professional fees, various taxes and levies and other expenses,
      were
      $93,578 for the three months ended September 30, 2008, an increase of $29,885,
      or 46.92%, compared to $63,693 for the same period in 2007. The increase was
      primarily a result of an increase in professional service fees and wages. We
      expect our general and administrative expenses to increase as a result of
      professional fees incurred as a result of being a publicly reporting company
      in
      the United States.





We
      do not
      have loans and therefore, we do not pay any interest.





Income
      tax provisions for the three months ended September 30, 2008 were approximately
      $122,929, as compared to approximately $84,575 for the three months ended
      September 30, 2007. Shenzhen Yinlips is registered in the PRC and has had tax
      advantages granted by local government for corporate income taxes and sales
      taxes commencing in 2001. Our effective income tax rates for the three months
      ended September 30, 2008 and September 30, 2007 were 18% and 15%, respectively.
      On March 16, 2007, the National People’s Congress of China enacted a new PRC
      Enterprise Income Tax Law, under which foreign invested enterprises and domestic
      companies will be subject to an enterprise income tax at a uniform rate of
      25%.
      The new law became effective on January 1, 2008. During the transition period
      for enterprises established before March 16, the tax rate will be gradually
      increased starting in 2008 and be equal to the new tax rate in 2012. We believe
      that our profitability will be negatively affected in the near future as a
      result of the new EIT Law.




We
      had
      net income of $638,152 for the three months ended September 30, 2008, an
      increase of $158,894, or 33.15%, compared to $479,258 for the same period in
      2007.




8




***Nine
      Months Ended September 30, 2008 and 2007***





Revenues,
      which consist of sales of our products, were $17,829,169 for the nine months
      ended September 30, 2008, an increase of $3,523,258, or 24.63%, compared to
      $14,305,912 for the same period in 2007. The increase in revenue was attributed
      mainly to the increased sales of our products.





In
      the
      past, we have relied on sales to original equipment manufacturers (ODMs) for
      a
      significant portion of our revenues. ODM sales accounted for 60% of our revenues
      for the nine months ended September 30, 3008 and sales of products with our
      own
      brand accounted for 40% of our revenues for the same period. We have increased
      our focus on and investment of resources in sales of our own brand which we
      believe will help decrease any reliance on ODM sales.





Cost
      of
      sales, which include raw material, labor and manufacturing overhead, were
      $13,865,754 for the nine months ended September 30, 2008, an increase of
      $2,258,707, or 19.46%, compared to $11,607,047 for the same period in 2007.
      This
      increase in cost of sales was caused by the increase of sales of our products.
      As a percentage of revenues, cost of sales for the nine months ended September
      30, 2008 and 2007 were 77.77% and 81.13%, respectively.





Gross
      profit for the nine months ended September 30, 2008 was $ 3,963,416, or 22.23%
      of revenues, compared to $2,698,864, or 18.87% of revenues, for the comparable
      period in 2007. Management considers gross profit to be a key performance
      indicator in managing our business. Gross profit margins are a factor of cost
      of
      sales, product mix and product demand. The increase in our gross profit margin
      for the nine months ended September 30, 2008 is primarily due to the increase
      of
      sales and the decrease in the price of raw materials.





Various
      factors may impact our company’s performance in different ways. For example, the
      average selling price for certain of our existing products, such as MP3 players,
      is declining. By upgrading our products, adding functionality, and improving
      technological specifications, we can increase the value of such products and
      the
      resulting product price. This can help compensate for losses associated with
      decreasing prices for products with simple functions and can help increase
      our
      revenue and gross profit.





Also,
      gross profits and sales of more sophisticated products such as Micro PCs, HP
      hard disk multimedia players, MP6s and MP5s are currently higher due to higher
      price command for these products. As our sales mix shifts towards increasing
      sales of products such as these, our gross margins and profitability should
      be
      positively affected.





Selling
      expenses, which mainly include marketing, shipping, insurance, wage and other
      expenses, were $469,995 for the nine months ended September 30, 2008, an
      increase of $144,556, or 44.42%, compared to $325,439 for the same period in
      2007. The increase was primarily due to the increase in advertising expenses
      and
      the payment of sales commissions.





Research
      and development expenses, which were approximately $716,818 for the nine months
      ended September 30, 2008, an increase of approximately $75,889, or 11.84%,
      compared to $640,929 for the same period in 2007. The increase was primarily
      due
      to the development of new products. We expect research and development expenses
      to increase as a result of increasing efforts to develop more sophisticated
      technology products.





General
      and administrative expenses, which include wage, benefit, bad debts, utility,
      consulting, professional fees, various taxes and levies and other expenses,
      were
      $411,118 for the nine months ended September 30, 2008, an increase of $273,582,
      or 198.92%, compared to $137,536 for the same period in 2007. The increase
      was
      primarily a result of an increase in professional service fees and wages. We
      expect our general and administrative expenses to increase as a result of
      professional fees incurred as a result of being a publicly reporting company
      in
      the United States.





We
      do not
      have loans and therefore, we do not pay any interest.





Income
      tax provisions for the nine months ended September 30, 2008 were approximately
      $399,554, as compared to approximately $232,845 for the nine months ended
      September 30, 2007. Shenzhen Yinlips is registered in the PRC and has had tax
      advantages granted by local government for corporate income taxes and sales
      taxes commencing in 2001. Our effective income tax rates for the nine months
      ended September 30, 2008 and September 30, 2007 were 18% and 15%, respectively.
      On March 16, 2007, the National People’s Congress of China enacted a new PRC
      Enterprise Income Tax Law, under which foreign invested enterprises and domestic
      companies will be subject to an enterprise income tax at a uniform rate of
      25%.
      The new law became effective on January 1, 2008. During the transition period
      for enterprises established before March 16, the tax rate will be gradually
      increased starting in 2008 and be equal to the new tax rate in 2012. We believe
      that our profitability will be negatively affected in the near future as a
      result of the new EIT Law.




9




We
      had
      net income of $1,867,451 for the nine months ended September 30, 2008, an
      increase of $ 547,995, or 41.53%, compared to $1,319,456 for the same period
      in
      2007.





**Liquidity
      and Capital Resources**





We
      had
      working capital of approximately $5,481,193, $2,251,750, $3,374,135 and $926,564
      as at September 30, 2008 and 2007 and as of December 31, 2007 and 2006,
      respectively. The increase of working capital was largely caused by an increase
      in accounts receivable and inventory.





Our
      accounts receivable has been an increasingly significant portion of our current
      assets, representing $4,738,661, $1,731,120, $2,020,275 and $1,479,870, or
      60.26%, 41.08%, 39.19%, and 60.19% of current assets, as at September 30, 2008
      and 2007 and as of December 31, 2007 and 2006, respectively. If customers
      responsible for a significant amount of accounts receivable were to become
      insolvent or otherwise unable to pay for our products, or to make payments
      in a
      timely manner, our liquidity and results of operations could be materially
      adversely affected. An economic or industry downturn could materially adversely
      affect the servicing of these accounts receivable, which could result in longer
      payment cycles, increased collections costs and defaults in excess of
      management’s expectations. A significant deterioration in our ability to collect
      on accounts receivable could affect our cash flow and working capital position
      and could also impact the cost or availability of financing available to
      us.




We
      provide our major customers with payment terms ranging from 30 to 90 days.
      Additionally, our production lead time is approximately three weeks, from the
      inspection of incoming materials, to production, testing and packaging. We
      need
      to keep a large supply of raw materials and work in process and finished goods
      inventory on hand to ensure timely delivery of our products to our customers.
      We
      typically offer certain of our customers 30 to 90 days credit terms for payment.
      We maintain an allowance for doubtful accounts for estimated losses resulting
      from the inability of our customers to make required payments. Allowance for
      doubtful accounts is based on our assessment of the collectability of specific
      customer accounts, the aging of accounts receivable, our history of bad debts,
      and the general condition of the industry. If a major customer’s credit
      worthiness deteriorates, or our customers’ actual defaults exceed historical
      experience, our estimates could change and impact our reported results. We
      have
      not experienced any significant amount of bad debt since the inception of our
      operation.




As
      of
      September 30, 2008, inventories amounted to $2,728,223, compared to $1,039,026
      at September 30, 2007. As of December 31, 2007, inventories amounted to
      $1,622,372, compared to $955,021 as of December 31, 2006. As sales volume
      increases 32.86% semi-annually in 2008 and 50% annually in 2007, inventories
      increase accordingly. We keep certain reserve amounts of raw materials in our
      inventories and engage in long-term agreements with certain suppliers to assure
      minimum additional expense from any condition of rising prices and shortages
      of
      raw materials used to manufacture our products.





As
      of
      September 30, 2008, accounts receivable amounted to $4,738,661, compared to
      $1,731,120 at September 30, 2007. As of December 31, 2007, accounts receivable
      amounted to $2,020,275, compared to $1,479,870 as of December 31, 2006. As
      our
      sales volume increases, accounts receivable increases accordingly.





As
      of
      September 30, 2008, accounts payable and accrued liabilities amounted to
      $1,156,428, compared to $1,504,683 at September 30, 2007. As of December 31,
      2007, accounts payable and accrued liabilities amounted to $1,120,591, compared
      to $ 1,097,725 as of December 31, 2006. The increase in accounts payable and
      accrued liabilities compared to end of last year is due to the increase in
      payables to our suppliers.





As
      of
      September 30, 2008, various taxes payable amounted to $54,267, compared to
      $
      61,434 at September 30, 2007. As of December 31, 2007, various taxes payable
      amounted to $81,277, compared to $55,835 as of December 31, 2006. The decrease
      in various taxes payable is due to the decrease in VAT which was caused by
      the
      increase in our purchases.





As
      of
      September 30, 2008, wages payable amounted to $523,288, compared to $305,221
      at
      September 30, 2007. As of December 31, 2007, wages payable amounted to $368,594,
      compared to $184,175 as of December 31, 2006. The increase in wages payable
      is
      due to an increase in the number of employees and an increase in
      wages.





As
      of
      September 30, 2008, corporate taxes payable amounted to $129,749, compared
      to
      $91,011 at September 30, 2007. As of December 31, 2007, corporate taxes payable
      amounted to $195,041, compared to $184,511 as of December 31, 2006. The increase
      in corporate taxes payable is due to the increase in our income.





On
      October 31, 2008, upon the closing of a private placement, we received gross
      proceeds of approximately $4.9 million in a private placement transaction (the
      “Private Placement”). Pursuant to subscription agreements entered into with the
      investors, we sold an aggregate of 4,473,583 shares of Series A Convertible
      Preferred Stock (the “Series A Preferred Stock”) at $1.10 per share. We agreed
      to file a registration statement covering the common stock underlying the Series
      A Preferred Stock sold in the Private Placement within 60 days of the closing
      of
      the Exchange pursuant to the subscription agreement with each investor. For
      its
      services as placement agent, the placement agent received an aggregate
      commission equal to 9% of the gross proceeds from the financing, in addition
      to
      a $90,000 success fee for the Exchange, for an aggregate fee of
      $533,000.




10


We
      are
      required to contribute a portion of our employees’ total salaries to the Chinese
      government’s social insurance funds, including pension insurance, medical
      insurance, unemployment insurance, and job injuries insurance, and maternity
      insurance, in accordance with relevant regulations. Total contributions to
      the
      funds are approximately $6,400 and $4,700 for the years ended December 31,
      2007
      and 2006, respectively. We expect that the amount of our contribution to the
      government’s social insurance funds will increase in the future as we expand our
      workforce and operations and commence contributions to an employee housing
      fund.





The
      ability of Shenzhen Yinlips to pay dividends may be restricted due to the
      foreign exchange control policies and availability of cash balance. A majority
      of our revenue being earned and currency received are denominated in RMB, which
      is subject to the exchange control regulation in China, and, as a result, we
      may
      be unable to distribute any dividends outside of China due to PRC exchange
      control regulations that restrict our ability to convert RMB into US Dollars.
      Accordingly, Shenzhen Yinlips’ funds may not be readily available to us to
      satisfy obligations which have been incurred outside the PRC, which could
      adversely affect our business and prospects or our ability to meet our cash
      obligations.





Net
      cash
      used in operating activities was $615,525 for the nine months ended September
      30, 2008, compared to net cash provided by operations of $77,435 for the nine
      months ended September 30, 2007. The $538,089 increase was primarily due to
      the
      increase in accounts receivable and inventory. Net cash used in operating
      activities was $48,314 for the year ended December 31, 2007, compared to net
      cash provided by operations of $891,120 for the year ended December 31, 2006.
      The $842,807 decrease was primarily due to the refundable purchase price paid
      which was advanced for a business cooperation.




Net
      cash
      used in investing activities amounted to approximately $172,730 for the nine
      months ended September 30, 2008, compared to net cash used in investing
      activities of $151,230 for the nine months ended September 30, 2007. The change
      was due to the purchase of models and equipment for manufacturing. Net cash
      used
      in investing activities amounted to approximately $209,275 for the year ended
      December 31, 2007, compared to net cash used in investing activities of $906,717
      for the year ended December 31, 2006. The change was due to the decrease in
      purchases of property and equipment.




Net
      cash
      provided by financing activities amounted to $518,625 for the nine months ended
      September 30, 2008, compared to net cash used by financing activities of $7,913
      for the nine months ended September 30, 2007. The increase of cash provided
      was
      primarily a result of the loan from Podium. Net cash used by financing
      activities amounted to $7,913 for the year ended December 31, 2007, compared
      to
      net cash used in financing activities of $2,518 for the year ended December
      31,
      2006. The increase of cash used was primarily a result of payments due to
      employees.





Our
      ability to maintain sufficient liquidity depends partially on our ability to
      achieve anticipated levels of revenue, while continuing to control costs. If
      we
      did not have sufficient available cash, we would have to seek additional debt
      or
      equity financing through other external sources, which may not be available
      on
      acceptable terms, or at all. Failure to maintain financing arrangements on
      acceptable terms would have a material adverse effect on our business, results
      of operations and financial condition.




**Seasonality**




Sales
      of
      our products are somewhat seasonal due to consumer spending patterns, which
      tend
      to result in significantly stronger sales in our third and fourth fiscal
      quarters, especially as a result of the holiday season. This pattern will
      probably not change significantly in the future. Although we believe that the
      seasonality of our business is based primarily on the timing of consumer demand
      for our products, fluctuations in operating results can also result from other
      factors affecting us and our competitors, including new product developments
      or
      introductions, availability of products for resale, competitive pricing
      pressures, changes in product mix, pricing and product reviews and other media
      coverage.





**Off-Balance
      Sheet Arrangements**





We
      have
      no material off-balance sheet transactions.


11


**Item
      3. Quantitative and Qualitative Disclosures About Market Risk**





Not
      applicable.





**Item
      4. Controls and Procedures**





**Evaluation
      of Disclosure Controls and Procedures**





We
      maintain disclosure controls and procedures, which are designed to ensure that
      information required to be disclosed in the reports we file or submit under
      the
      Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
      and reported within the time periods specified in the Securities and Exchange
      Commission’s rules and forms, and that such information is accumulated and
      communicated to our management, including our Chief Executive Officer, or CEO,
      and Chief Financial Officer, or CFO, as appropriate to allow timely decisions
      regarding required disclosure.





Based
      on
      an evaluation carried out as of the end of the period covered by this quarterly
      report, under the supervision and with the participation of our management,
      including our CEO and CFO, our CEO and CFO have concluded that, as of the end
      of
      such period, our disclosure controls and procedures (as defined in
      Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
      1934) were effective as of September 30, 2008.





**Changes
      in Internal Control Over Financial Reporting**




Based
      on
      the evaluation of our management as required by paragraph (d) of Rule 13a-15
      or
      15d-15 of the Exchange Act, there were no changes in our internal control over
      financial reporting that occurred during the second quarter of the fiscal year
      that have materially affected, or are reasonably likely to materially affect,
      our internal control over financial reporting. Please see Item 5 of Part II
      for
      a discussion of our internal control over financial reporting subsequent to
      the
      closing of the Share Exchange.





**Part II.
      Other Information**





**Item
      1. Legal Proceedings**





We
      are
      not currently a party to any material legal proceedings.





**Item
      1A. Risk Factors**





Any
      investment in our common stock involves a high degree of risk. Investors should
      carefully consider the risks described below and all of the information
      contained in this report before deciding whether to purchase our common stock.
      Our business, financial condition or results of operations could be materially
      adversely affected by these risks if any of them actually occur. Our shares
      of
      common stock are not currently listed or quoted for trading on any national
      securities exchange or national quotation system. If and when our common stock
      is traded, the trading price could decline due to any of these risks, and an
      investor may lose all or part of his or her investment. Some of these factors
      have affected our financial condition and operating results in the past or
      are
      currently affecting us. This Report also contains forward-looking statements
      that involve risks and uncertainties. Our actual results could differ materially
      from those anticipated in these forward-looking statements as a result of
      certain factors, including the risks described below and elsewhere in this
      report.





**SRKP
      17, INC.**





For
      a
      discussion of the risk factors related to SRKP 17, Inc., please refer to the
      Annual Report for the year ended December 31, 2007 filed with the SEC on March
      5, 2008, in addition to the risks discussed below.





**YINLIPS
      TECHNOLOGY, INC.**





**RISKS
      RELATED TO OUR OPERATIONS**





**If
      we are unsuccessful in establishing and increasing awareness of our brand and
      recognition of our products, or if we incur excessive expense promoting and
      maintaining our brand or our products, our potential revenues could be limited,
      our costs could increase and our operating results and financial condition
      would
      be harmed.**


12





We
      believe that acceptance of our digital products by an expanding customer base
      depends in large part on increasing awareness of the Yinlips brand and that
      brand recognition will be even more important as competition in our market
      increases. Successful promotion of our brand depends largely on the
      effectiveness of our marketing efforts and on our ability to develop reliable
      and quality products at competitive prices. In addition, globalizing and
      extending our brand and recognition of our products and services is costly
      and
      involves extensive management time to execute successfully. Further, the markets
      in which we operate are highly competitive and some of our competitors already
      have substantially more brand name recognition and greater marketing resources
      than we do. Our future brand promotion activities may involve significant
      expense and may not generate desired levels of increased revenue, and even
      if
      such activities generate some increased revenue, such increased revenue may
      not
      offset the expenses we incurred in endeavoring to build our brand. If we fail
      to
      successfully promote and maintain our brand, or incur substantial expenses
      in
      our attempts to promote and maintain our brand, we may fail to attract enough
      new customers or retain our existing customers to the extent necessary to
      realize a sufficient return on our brand-building efforts, and as a result
      our
      operating results and financial condition would suffer.





**We
      derive a substantial portion of our revenues from sales in the PRC and any
      downturn in the Chinese economy could have a material adverse effect on our
      business and financial condition.**





A
      substantial portion of our revenues are generated from sales in the PRC. We
      anticipate that revenues from sales of our products in the PRC will continue
      to
      represent a substantial proportion of our total revenues in the near future.
      Our
      sales and earnings can also be affected by changes in the general economy since
      purchases of portable electronic devices are generally discretionary for
      consumers. Our success is influenced by a number of economic factors which
      affect disposable consumer income, such as employment levels, business
      conditions, interest rates, oil and gas prices and taxation rates. Adverse
      changes in these economic factors, among others, may restrict consumer spending,
      thereby negatively affecting our sales and profitability.





**We
      are and will continue to be subject to rapidly declining average selling prices,
      which may harm our results of operations.**





Consumer
      electronic devices such as those we offer are subject to rapid declines in
      average selling prices due to rapidly evolving technologies, industry standards
      and consumer preferences. Consumer electronics products are subject to rapid
      technological changes which often cause product obsolescence. Companies within
      the consumer electronics industry are continuously developing new products
      with
      heightened performance and functionality. This puts pricing pressure on existing
      products and constantly threatens to make them, or causes them to be, obsolete.
      Our typical product’s life cycle is extremely short, generating lower average
      selling prices as the cycle matures. If we fail to accurately anticipate the
      introduction of new technologies, we may possess significant amounts of obsolete
      inventory that can only be sold at substantially lower prices and profit margins
      than we anticipated. In addition, if we fail to accurately anticipate the
      introduction of new technologies, we may be unable to compete effectively due
      to
      our failure to offer products most demanded by the marketplace. If any of these
      failures occur, our sales, profit margins and profitability will be adversely
      affected.





In
      addition, electronic device distributors expect suppliers, such as our company,
      to cut their costs and lower the price of their products to lessen the negative
      impact on the electronic device distributor’s own profit margins. As a result,
      we have previously reduced the price of some of our portable electronic products
      and expect to continue to face market-driven downward pricing pressures in
      the
      future. Our results of operations will suffer if we are unable to offset any
      declines in the average selling prices of our products by developing new or
      enhanced products with higher selling prices or gross profit margins, increasing
      our sales volumes or reducing our production costs.





**We
      are subject to intense competition in the industry in which we operate, which
      could cause material reductions in the selling price of our products or losses
      of our market share.**





The
      consumer electronics industry is highly competitive, especially with respect
      to
      pricing and the introduction of new products and features. Our products compete
      in the medium- to high- priced sector of the consumer electronics market and
      compete primarily on the basis of:





·
            reliability;




·
            brand
                recognition;




·
            quality;




·
            price;




·
            design;




·
            consumer
                acceptance of our trademark; and




·
            quality
                service and support to retailers and our
                customers.




13




In
      recent
      years, we and many of our competitors, have regularly lowered prices, and we
      expect these pricing pressures to continue. If these pricing pressures are
      not
      mitigated by increases in volume, cost reductions from our supplier or changes
      in product mix, our revenues and profits could be substantially reduced. As
      compared to us, many of our competitors have:





·
            significantly
                longer operating histories;




·
            significantly
                greater managerial, financial, marketing, technical and other competitive
                resources; and




·
            greater
                brand recognition.




As
      a
      result, our competitors may be able to:





·
            adapt
                more quickly to new or emerging technologies and changes in customer
                requirements;




·
            devote
                greater resources to the promotion and sale of their products and
                services; and




·
            respond
                more effectively to pricing
                pressures.




These
      factors could materially adversely affect our operations and financial
      condition. In addition, competition could increase if:





·
            new
                companies enter the market;




·
            existing
                competitors expand their product mix;
                or




·
            we
                expand into new markets.




An
      increase in competition could result in material price reductions or loss of
      our
      market share.





**Our
      revenues and earnings could be materially and adversely affected if we cannot
      anticipate market trends or enhance existing products or achieve market
      acceptance of new products.**





Consumers
      for portable electronic devices have many products to choose from and we must
      compete with these devices in order to sell our products and generate revenues.
      Our success is dependent on our ability to successfully anticipate and respond
      to changing consumer demands and trends in a timely manner, as well as expanding
      into new markets and developing new products. In addition, to increase our
      penetration of current markets and gain footholds in new markets for our
      products, we must maintain our existing products as well as integrate them
      with
      new products. We may not be successful in developing, marketing and releasing
      new products that respond to technological developments or changing customer
      needs and preferences. We may also experience difficulties that could delay
      or
      prevent the successful development, introduction and sale of these new products.
      In addition, these new products may not adequately meet the requirements of
      the
      marketplace and may not achieve any significant degree of market acceptance.
      If
      release dates of any future products or enhancements to our products are
      delayed, or if these products or enhancements fail to achieve market acceptance
      when released, our sales volume may decline and earnings would be materially
      and
      adversely affected. In addition, new products or enhancements by our competitors
      may cause customers to defer or forego purchases of our products, which could
      also materially and adversely affect our revenues and earnings.





**If
      we do not correctly forecast demand for our products, we could have costly
      excess production or inventories and we may not be able to secure sufficient
      or
      cost effective quantities of our products or production materials and our
      revenues, cost of revenues and financial condition could be adversely
      affected.**





The
      demand for our products depends on many factors, including pricing and inventory
      levels, and is difficult to forecast due in part to variations in economic
      conditions, changes in consumer and business preferences, relatively short
      product life cycles, changes in competition, seasonality and reliance on key
      third party carriers. It is particularly difficult to forecast demand by
      individual product. Significant unanticipated fluctuations in demand, the timing
      and disclosure of new product releases or the timing of key sales orders could
      result in costly excess production or inventories or the inability to secure
      sufficient, cost-effective quantities of our products or production materials.
      This could adversely impact our revenues, cost of revenues and financial
      condition.





**Our
      products may contain errors or defects, which could result in the rejection
      of
      our products, damage to our reputation, lost revenues, diverted development
      resources and increased service costs, warranty claims and
      litigation.**


14





Our
      products are complex and must meet stringent user requirements. In addition,
      we
      must develop our products to keep pace with the rapidly changing portable
      electronic device market. Sophisticated electronic products like ours are likely
      to contain undetected errors or defects, especially when first introduced or
      when new models or versions are released. Our products may not be free from
      errors or defects after commercial shipments have begun, which could result
      in
      the rejection of our products and jeopardize our relationship with carriers.
      End
      users may also reject or find issues with our products and have a right to
      return them even if the products are free from errors or defects. In either
      case, returns or quality issues could result in damage to our reputation, lost
      revenues, diverted development resources, increased customer service and support
      costs, and warranty claims and litigation which could harm our business, results
      of operations and financial condition.





**The
      loss or significant reduction in business of any of our key customers, including
      Shenzhen Yuanjinda Import & Export Co., Ltd and Shenzhen Eway Computer
      Technology Co., Ltd., could materially and adversely affect our revenues and
      earnings.**





We
      are
      highly dependent upon sales of our products to certain of our customers,
      including Shenzhen Wei Tong Industrial Co., Ltd., Shenzhen Yagu Technology
      Co.,
      Ltd., Zhuhai Gongbei Li Weilin Shenzhen Yuanjinda Import & Export Co., Ltd,
      Shenzhen Ao Zhong Industrial Co., Ltd, Qingdao Tianyue Technology Co., Ltd.
      and
      Shenzhen Ao Zhong Industrial Co., Ltd. During the nine months ended September
      30, 2008, they accounted for approximately 16%, 11.5%, 11.2%, 10.1%, 8.6%,
      6.8%
      and 6.2% our net revenues , respectively. No other customer accounted for
      greater than 5% of our net revenues for the periods. All purchases of our
      products by customers are made through purchase orders and we do not have
      long-term contracts with any of our customers. The loss of the above customers,
      or any of our other customers to which we sell a significant amount of our
      products or any significant portion of orders from the above customers, or
      such
      other customers or any material adverse change in the financial condition of
      such customers could negatively affect our revenues and decrease our earnings.





We
      cannot
      rely on long-term purchase orders or commitments to protect us from the negative
      financial effects of a decline in demand for our products. The limited certainty
      of product orders can make it difficult for us to forecast our sales and
      allocate our resources in a manner consistent with our actual sales. Moreover,
      our expense levels are based in part on our expectations of future sales and,
      if
      our expectations regarding future sales are inaccurate, we may be unable to
      reduce costs in a timely manner to adjust for sales shortfalls. Furthermore,
      because we depend on a small number of customers for the vast majority of our
      sales, the magnitude of the ramifications of these risks is greater than if
      our
      sales were less concentrated with a small number of customers. As a result
      of
      our lack of long-term purchase orders and purchase commitments we may experience
      a rapid decline in our sales and profitability.





**We
      depend on a limited number of suppliers for components for our products. The
      inability to secure components for our products could reduce our revenues and
      adversely affect our relationship with our customers.**





We
      rely
      on a limited number of suppliers for our component parts and raw materials.
      Although there are many suppliers for each of our component parts and raw
      materials, we are dependent on a limited number of suppliers for many of the
      significant components and raw materials. This reliance involves a number of
      significant potential risks, including:





·
            lack
                of availability of materials and interruptions in delivery of components
                and raw materials from our
                suppliers;




·
            manufacturing
                delays caused by such lack of availability or interruptions in
                delivery;




·
            fluctuations
                in the quality and the price of components and raw materials, in
                particular due to the petroleum price impact on such materials;
                and




·
            risks
                related to foreign operations.




We
      generally do not have any long-term or exclusive purchase commitments with
      any
      of our suppliers. Shenzhen Lian Run Digital Technology Co., Ltd., Shenzhen
      Huafuyang Import & Export Co., Ltd., Shenzhen Kamei Electronic Technology
      Co., Ltd., and Shenzhen Bolang Manufacture Co., Ltd are our largest suppliers
      of
      components for our products, each of which accounted for more than 10% of our
      purchases of components for our products for the fiscal year ended December
      31,
      2007 and for the nine months ended September 30, 2008. Our failure to maintain
      existing relationships with our suppliers or to establish new relationships
      in
      the future could also negatively affect our ability to obtain our components
      and
      raw materials used in our products in a timely manner. If we are unable to
      obtain ample supply of products from our existing suppliers or alternative
      sources of supply, we may be unable to satisfy our customers’ orders which could
      materially and adversely affect our revenues and our relationship with our
      customers.





**Certain
      disruptions in supply of and changes in the competitive environment for raw
      materials integral to our products may adversely affect our
      profitability.**





We
      use a
      broad range of materials and supplies, including displays, control ICs, Flashes,
      Wifi modules, GPS modules and other electronic components in our products.
      A
      significant disruption in the supply of these materials could decrease
      production and shipping levels, materially increase our operating costs and
      materially adversely affect our profit margins. Shortages of materials or
      interruptions in transportation systems, labor strikes, work stoppages, war,
      acts of terrorism or other interruptions to or difficulties in the employment
      of
      labor or transportation in the markets in which we purchase materials,
      components and supplies for the production of our products, in each case may
      adversely affect our ability to maintain production of our products and sustain
      profitability. If we were to experience a significant or prolonged shortage
      of
      critical components from any of our suppliers and could not procure the
      components from other sources, we would be unable to meet our production
      schedules for some of our key products and to ship such products to our
      customers in a timely fashion, which would adversely affect our sales, margins
      and customer relations.


15


**Substantial
      defaults by our customers on accounts receivable or the loss of significant
      customers could have a material adverse effect on our
      business.**





A
      substantial portion of our working capital consists of accounts receivable
      from
      customers. If customers responsible for a significant amount of accounts
      receivable were to become insolvent or otherwise unable to pay for products
      and
      services, or to make payments in a timely manner, our business, results of
      operations or financial condition could be materially adversely affected. An
      economic or industry downturn could materially adversely affect the servicing
      of
      these accounts receivable, which could result in longer payment cycles,
      increased collection costs and defaults in excess of management’s expectations.
      A significant deterioration in our ability to collect on accounts receivable
      could also impact the cost or availability of financing available to
      us.





In
      addition, our business is characterized by long periods for collection from
      our
      customers and short periods for payment to our suppliers, the combination of
      which may cause us to have liquidity problems. We experience an average accounts
      settlement period ranging from one month to as high as four months from the
      time
      we sell our products to the time we receive payment from our customers. In
      contrast, we typically need to place certain deposits and advances with our
      suppliers on a portion of the purchase price in advance and for some suppliers
      we must maintain a deposit for future orders. Because our payment cycle is
      considerably shorter than our receivable cycle, we may experience working
      capital shortages. Working capital management, including prompt and diligent
      billing and collection, is an important factor in our results of operations
      and
      liquidity. We cannot assure you that system problems, industry trends or other
      issues will not extend our collection period, adversely impact our working
      capital.





**Our
      operations would be materially adversely affected if third-party carriers were
      unable to transport our products on a timely basis.**





All
      of
      our products are shipped through third party carriers. If a strike or other
      event prevented or disrupted these carriers from transporting our products,
      other carriers may be unavailable or may not have the capacity to deliver our
      products to our customers. If adequate third party sources to ship our products
      were unavailable at any time, our business would be materially adversely
      affected.





**The
      seasonality of our business, as well as changes in consumer spending and
      economic conditions, may cause our quarterly operating results to fluctuate
      and
      cause our stock price to decline.**





Our
      net
      revenue and operating results may vary significantly from quarter to quarter.
      The main factors that may cause these fluctuations are:





·
            seasonal
                variations in operating results;




·
            variations
                in the sales of our products to our significant
                customers;




·
            increases
                in returned consumer electronics products in the first quarter which
                follows our peak third and fourth quarter
                sales;




·
            variations
                in manufacturing and supplier
                relationships;




·
            if
                we are unable to correctly anticipate and provide for inventory
                requirements from quarter to quarter, we may not have sufficient
                inventory
                to deliver our products to our customers in a timely fashion or we
                may
                have excess inventory that we are unable to
                sell;




·
            the
                discretionary nature of our customers’ demands and spending
                patterns;




·
            changes
                in market and economic conditions;
                and




·
            competition.




In
      addition, our quarterly operating results could be materially adversely affected
      by political instability, war, acts of terrorism or other
      disasters.


16





Sales
      of
      our products are somewhat seasonal due to consumer spending patterns, which
      tend
      to result in significantly stronger sales in our third and fourth fiscal
      quarters, especially as a result of the holiday season. This pattern will
      probably not change significantly in the future. Although we believe that the
      seasonality of our business is based primarily on the timing of consumer demand
      for our products, fluctuations in operating results can also result from other
      factors affecting us and our competitors, including new product developments
      or
      introductions, availability of products for resale, competitive pricing
      pressures, changes in product mix, pricing and product reviews and other media
      coverage. Due to the seasonality of our business, our results for interim
      periods are not necessarily indicative of our results for the year.





As
      a
      result of these and other factors, revenues for any quarter are subject to
      significant variation, which may adversely affect our results of operations
      and
      the market price for our common stock.




**We
      depend upon patents we license from a third party, Zhao Zifeng, our Chief
      Executive Officer and Chairman of the Board. The loss of these licenses, an
      increase in the costs of these licenses or Mr. Zhao’s failure to properly
      maintain or enforce the patents underlying such licenses may require us to
      suspend our operations until we obtain replacements and/or redesign our
      products.**




We
      rely
      upon certain patents licensed from our Chief Executive Officer and Chairman
      of
      the Board, Zhao Zifeng, which gives us rights to third party intellectual
      property that is necessary or useful for our business. We may also enter into
      additional licenses to third party intellectual property in the future. In
      addition, because we do not own any patents relating to our technologies, we
      do
      not have the right to defend perceived infringements of patents relating to
      such
      technologies. Thus, our success will depend in part on the ability and
      willingness of our licensors to obtain, maintain and enforce patent protection
      for our licensed intellectual property, in particular, those patents to which
      we
      have secured exclusive rights. Our licensors may not successfully prosecute
      the
      patent applications for the intellectual property we have licensed. Even if
      patents issue in respect of these patent applications, our licensors may fail
      to
      maintain these patents, may determine not to pursue litigation against other
      companies that are infringing these patents, or may pursue such litigation
      less
      aggressively than we would. Without protection for the intellectual property
      we
      license, other companies might be able to offer substantially identical products
      for sale, which could adversely affect our competitive business position and
      harm our business prospects.





Our
      ability to compete partly depends on the superiority, uniqueness and value
      of
      our technologies, including both internally developed technology and technology
      licensed from third parties. To protect our proprietary rights, we rely on
      a
      combination of trademark, patent, copyright and trade secret laws,
      confidentiality agreements with our employees and third parties, and protective
      contractual provisions. Despite our efforts to protect our intellectual
      property, any of the following occurrences may reduce the value of our
      intellectual property:





·
            our
                applications for trademarks or patents may not be granted and, if
                granted,
                may be challenged or invalidated;




·
            issued
                patents, copyrights and trademarks may not provide us with any competitive
                advantages;




·
            our
                efforts to protect our intellectual property rights may not be effective
                in preventing misappropriation of our technology or dilution of our
                trademarks;




·
            our
                efforts may not prevent the development and design by others of products
                or technologies similar to or competitive with, or superior to those
                that
                we develop; or




·
            another
                party may obtain a blocking patent that would force us to either
                obtain a
                license or design around the patent to continue to offer the contested
                feature or service in our
                technologies.




**We
      rely on trade secret protections through confidentiality agreements with our
      employees, customers and other parties; the breach of such agreements could
      adversely affect our business and results of operations.**





We
      also
      rely on trade secrets, which we seek to protect, in part, through
      confidentiality and non-disclosure agreements with our employees, customers
      and
      other parties. There can be no assurance that these agreements will not be
      breached, that we would have adequate remedies for any such breach or that
      our
      trade secrets will not otherwise become known to or independently developed
      by
      competitors. To the extent that consultants, key employees or other third
      parties apply technological information independently developed by them or
      by
      others to our proposed projects, disputes may arise as to the proprietary rights
      to such information that may not be resolved in our favor. We may be involved
      from time to time in litigation to determine the enforceability, scope and
      validity of our proprietary rights. Any such litigation could result in
      substantial cost and diversion of effort by our management and technical
      personnel.


17





**We
      may need additional capital to implement our current business strategy, which
      may not be available to us, and if we raise additional capital, it may dilute
      your ownership in us.**





We
      currently depend on bank loans and net revenues to meet our short-term cash
      requirements. In order to grow revenues and sustain profitability, we will
      need
      additional capital. We may conduct additional financing transactions in the
      future. Obtaining additional financing will be subject to a number of factors,
      including market conditions, our operating performance and investor sentiment.
      These factors may make the timing, amount, terms and conditions of additional
      financing unattractive to us. We cannot assure you that we will be able to
      obtain any additional financing. If we are unable to obtain the financing needed
      to implement our business strategy, our ability to increase revenues will be
      impaired and we may not be able to sustain profitability.





**Adverse
      capital and credit market conditions may significantly affect our ability to
      meet liquidity needs, access to capital and cost of
      capital.**





The
      capital and credit markets have been experiencing extreme volatility and
      disruption for more than twelve months. In recent weeks, the volatility and
      disruption have reached unprecedented levels. In some cases, the markets have
      exerted downward pressure on availability of liquidity and credit capacity
      for
      certain issuers. We have historically relied on credit to fund our business
      and
      we need liquidity to pay our operating expenses. Without sufficient liquidity,
      we will be forced to curtail our operations, and our business will suffer.
      Disruptions, uncertainty or volatility in the capital and credit markets may
      also limit our access to capital required to operate our business. Such market
      conditions may limit our ability to replace, in a timely manner, maturing
      liabilities and access the capital necessary to operate and grow our business.
      As such, we may be forced to delay raising capital or bear an unattractive
      cost
      of capital which could decrease our profitability and significantly reduce
      our
      financial flexibility. Our results of operations, financial condition, cash
      flows and capital position could be materially adversely affected by disruptions
      in the financial markets.





**Our
      failure to effectively manage growth could harm our
      business.**




We
      have
      rapidly and significantly expanded the number and types of products we sell,
      and
      we will endeavor to further expand our product portfolio. We must continually
      introduce new products and technologies, enhance existing products in order
      to
      remain competitive, and effectively stimulate customer demand for new products
      and upgraded versions of our existing products.




This
      expansion of our products places a significant strain on our management,
      operations and engineering resources. Specifically, the areas that are strained
      most by our growth include the following:





·
            *New
                Product Launch*:
                With the growth of our product portfolio, we experience increased
                complexity in coordinating product development, manufacturing, and
                shipping. As this complexity increases, it places a strain on our
                ability
                to accurately coordinate the commercial launch of our products with
                adequate supply to meet anticipated customer demand and effective
                marketing to stimulate demand and market acceptance. If we are unable
                to
                scale and improve our product launch coordination, we could frustrate
                our
                customers and lose retail shelf space and product
                sales;




·
            *Forecasting,
                Planning and Supply Chain Logistics*:
                With the growth of our product portfolio, we also experience increased
                complexity in forecasting customer demand and in planning for production,
                and transportation and logistics management. If we are unable to
                scale and
                improve our forecasting, planning and logistics management, we could
                frustrate our customers, lose product sales or accumulate excess
                inventory; and




·
            *Support
                Processes*:
                To manage the growth of our operations, we will need to continue
                to
                improve our transaction processing, operational and financial systems,
                and
                procedures and controls to effectively manage the increased complexity.
                If
                we are unable to scale and improve these areas, the consequences
                could
                include: delays in shipment of product, degradation in levels of
                customer
                support, lost sales, decreased cash flows, and increased inventory.
                These
                difficulties could harm or limit our ability to
                expand.




**We
      are dependent on certain key personnel and loss of these key personnel could
      have a material adverse effect on our business, financial condition and results
      of operations.**





Our
      success is, to a certain extent, attributable to the management, sales and
      marketing, and operational and technical expertise of certain key personnel.
      Each of the named executive officers performs key functions in the operation
      of
      our business. The loss of a significant number of these employees could have
      a
      material adverse effect upon our business, financial condition, and results
      of
      operations.


18





**We
      are dependent on a technically trained workforce and an inability to retain
      or
      effectively recruit such employees could have a material adverse effect on
      our
      business, financial condition and results of operations.**





We
      must
      attract, recruit and retain a sizeable workforce of technically competent
      employees to develop and manufacture our products and provide service support.
      Our ability to implement effectively our business strategy will depend upon,
      among other factors, the successful recruitment and retention of additional
      highly skilled and experienced engineering and other technical and marketing
      personnel. There is significant competition for technologically qualified
      personnel in our business and we may not be successful in recruiting or
      retaining sufficient qualified personnel consistent with our operational
      needs.





**Our
      labor costs are likely to increase as a result of changes in Chinese labor
      laws.**




We
      expect
      to experience an increase in our cost of labor. Recent changes in Chinese labor
      laws that became effective January 1, 2008 are likely to increase costs further
      and impose restrictions on our relationship with our employees. There can be
      no
      assurance that the labor laws will not change further or that their
      interpretation and implementation will vary, which may have a negative effect
      upon our business and results of operations.





**We
      do not carry any business interruption insurance, products liability insurance
      or any other insurance policy except for a limited property insurance policy.
      As
      a result, we may incur uninsured losses, increasing the possibility that you
      would lose your entire investment in our company.**




We
      could
      be exposed to liabilities or other claims for which we would have no insurance
      protection. We do not currently maintain any business interruption insurance,
      products liability insurance, or any other comprehensive insurance policy except
      for property insurance policies with limited coverage. As a result, we may
      incur
      uninsured liabilities and losses as a result of the conduct of our business.
      There can be no guarantee that we will be able to obtain additional insurance
      coverage in the future, and even if we are able to obtain additional coverage,
      we may not carry sufficient insurance coverage to satisfy potential claims.
      Should uninsured losses occur, any purchasers of our common stock could lose
      their entire investment.





Because
      we do not carry products liability insurance, a failure of any of the products
      marketed by us may subject us to the risk of product liability claims and
      litigation arising from injuries allegedly caused by the improper functioning
      or
      design of our products. We cannot assure that we will have enough funds to
      defend or pay for liabilities arising out of a products liability claim. To
      the
      extent we incur any product liability or other litigation losses, our expenses
      could materially increase substantially. There can be no assurance that we
      will
      have sufficient funds to pay for such expenses, which could end our operations
      and you would lose your entire investment.




**We
      are subject to market risk through our sales to international
      markets.**





A
      growing
      percentage of our sales are being derived from international markets. These international sales
      are
      primarily focused in Europe, Southeast Asia, and North America. These operations
      are subject to risks that are inherent in operating in foreign countries,
      including the following:





·
            foreign
                countries could change regulations or impose currency restrictions
                and
                other restraints;




·
            changes
                in foreign currency exchange rates and hyperinflation or deflation
                in the
                foreign countries in which we
                operate;




·
            exchange
                controls;




·
            some
                countries impose burdensome tariffs and
                quotas;




·
            political
                changes and economic crises may lead to changes in the business
                environment in which we operate;




·
            international
                conflict, including terrorist acts, could significantly impact our
                financial condition and results of operations;
                and




·
            economic
                downturns, political instability and war or civil disturbances may
                disrupt
                distribution logistics or limit sales in individual
                markets.




In
      addition, we utilize third-party distributors to act as our representative
      for
      the geographic region that they have been assigned. Sales through distributors
      represent approximately 15% of total revenue. Significant terms and conditions
      of distributor agreements include FOB source, net 30 days payment terms, with
      no
      return or exchange rights, and no price protection. Since the product transfers
      title to the distributor at the time of shipment by us, the products are not
      considered inventory on consignment. Our success is dependent on these
      distributors finding new customers and receiving new orders from existing
      customers.


19





**Our
      facilities and information systems could be damaged as a result of disasters
      or
      unpredictable events, which could have an adverse effect on our business
      operations.**




Our
      headquarters and major facilities including manufacturing plants, sales offices
      and research and development centers are located in China. We also operate
      procurement, logistics, sales and marketing facilities in other parts of the
      world. If major disasters such as earthquakes, fires, floods, wars, terrorist
      attacks, computer viruses, transportation disasters or other events occur,
      or
      our information system or communications network breaks down or operates
      improperly as a result of such events, our facilities may be seriously damaged,
      and we may have to stop or delay production and shipment. We may incur expenses
      relating to such damages.





**Our
      quarterly results may fluctuate because of many factors and, as a result,
      investors should not rely on quarterly operating results as indicative of future
      results.**





Fluctuations
      in operating results or the failure of operating results to meet the
      expectations of public market analysts and investors may negatively impact
      the
      value of our securities. Quarterly operating results may fluctuate in the future
      due to a variety of factors that could affect revenues or expenses in any
      particular quarter. Fluctuations in quarterly operating results could cause
      the
      value of our securities to decline. Investors should not rely on
      quarter-to-quarter comparisons of results of operations as an indication of
      future performance. As a result of the factors listed below, it is possible
      that
      in future periods results of operations may be below the expectations of public
      market analysts and investors. This could cause the market price of our
      securities to decline. Factors that may affect our quarterly results
      include:





·
            vulnerability
                of our business to a general economic downturn in China and
                globally;




·
            fluctuation
                and unpredictability of costs related to the raw material used to
                manufacture our products;




·
            seasonality
                of our business;




·
            changes
                in the laws of the PRC that affect our
                operations;




·
            competition
                from our competitors; and




·
            our
                ability to obtain necessary government certifications and/or licenses
                to
                conduct our business.




**RISKS
      RELATED TO DOING BUSINESS IN CHINA**





**Substantially
      all of our assets are located in the PRC and substantially all of our revenues
      are derived from our operations in China, and changes in the political and
      economic policies of the PRC government could have a significant impact upon
      the
      business we may be able to conduct in the PRC and accordingly on the results
      of
      our operations and financial condition.**





Our
      business operations may be adversely affected by the current and future
      political environment in the PRC. The Chinese government exerts substantial
      influence and control over the manner in which we must conduct our business
      activities. Our ability to operate in China may be adversely affected by changes
      in Chinese laws and regulations, including those relating to taxation, import
      and export tariffs, raw materials, environmental regulations, land use rights,
      property and other matters. Under the current government leadership, the
      government of the PRC has been pursuing economic reform policies that encourage
      private economic activity and greater economic decentralization. There is no
      assurance, however, that the government of the PRC will continue to pursue
      these
      policies, or that it will not significantly alter these policies from time
      to
      time without notice.





**Our
      operations are subject to PRC laws and regulations that are sometimes vague
      and
      uncertain. Any changes in such PRC laws and regulations, or the interpretations
      thereof, may have a material and adverse effect on our
      business.**





The
      PRC’s
      legal system is a civil law system based on written statutes. Unlike the common
      law system prevalent in the United States, decided legal cases have little
      value
      as precedent in China. There are substantial uncertainties regarding the
      interpretation and application of PRC laws and regulations, including but not
      limited to, the laws and regulations governing our business, or the enforcement
      and performance of our arrangements with customers in the event of the
      imposition of statutory liens, death, bankruptcy or criminal proceedings.
      The Chinese government has been developing a comprehensive system of commercial
      laws, and considerable progress has been made in introducing laws and
      regulations dealing with economic matters such as foreign investment, corporate
      organization and governance, commerce, taxation and trade. However, because
      these laws and regulations are relatively new, and because of the limited volume
      of published cases and judicial interpretation and their lack of force as
      precedents, interpretation and enforcement of these laws and regulations involve
      significant uncertainties. New laws and regulations that affect existing and
      proposed future businesses may also be applied retroactively.


20




Our
      principal operating subsidiary, Yinlips Digital Technology (Shenzhen) Co.,
      Ltd.,
      (“Shenzhen Yinlips”) is considered a foreign invested enterprise under PRC laws,
      and as a result is required to comply with PRC laws and regulations, including
      laws and regulations specifically governing the activities and conduct of
      foreign invested enterprises. We cannot predict what effect the interpretation
      of existing or new PRC laws or regulations may have on our businesses. If the
      relevant authorities find us in violation of PRC laws or regulations, they
      would
      have broad discretion in dealing with such a violation, including, without
      limitation:





·
            levying
                fines;




·
            revoking
                our business license, other licenses or
                authorities;




·
            requiring
                that we restructure our ownership or operations;
                and




·
            requiring
                that we discontinue any portion or all of our
                business.




**Investors
      may experience difficulties in effecting service of legal process, enforcing
      foreign judgments or bringing original actions in China based upon U.S. laws,
      including the federal securities laws or other foreign laws against us or our
      management.**





Most
      of
      our current operations, including the manufacturing and distribution of our
      products, are conducted in China. Moreover, all of our directors and officers
      are nationals and residents of China or Hong Kong. All or substantially all
      of
      the assets of these persons are located outside the United States and in the
      PRC. As a result, it may not be possible to effect service of process within
      the
      United States or elsewhere outside China upon these persons. In addition,
      uncertainty exists as to whether the courts of China would recognize or enforce
      judgments of U.S. courts obtained against us or such officers and/or directors
      predicated upon the civil liability provisions of the securities laws of the
      United States or any state thereof, or be competent to hear original actions
      brought in China against us or such persons predicated upon the securities
      laws
      of the United States or any state thereof.





**The
      scope of our business license in China is limited, and we may not expand or
      continue our business without government approval and renewal,
      respectively.**





Our
      principal operating subsidiary, Shenzhen Yinlips, is a wholly foreign-owned
      enterprise, commonly known as a WFOE. A WFOE can only conduct business within
      its approved business scope, which ultimately appears on its business license.
      Our license permits us to design, manufacture, sell and market portable
      electronic products throughout the PRC. Any amendment to the scope of our
      business requires further application and government approval. In order for
      us
      to expand our business beyond the scope of our license, we will be required
      to
      enter into a negotiation with the PRC authorities for the approval to expand
      the
      scope of our business. We cannot assure investors that Shenzhen Yinlips will
      be
      able to obtain the necessary government approval for any change or expansion
      of
      its business.





**We
      are subject to a variety of environmental laws and regulations related to our
      manufacturing operations. Our failure to comply with environmental laws and
      regulations may have a material adverse effect on our business and results
      of
      operations.**





We
      are
      subject to various environmental laws and regulations that require us to obtain
      environmental permits for our manufacturing operations. Our environmental permit
      from the Shenzhen Environment Protection Bureau Nanshan Bureau (the “Bureau”)
      covering our manufacturing operations are currently in effect and do not expire
      until February 5, 2010. If we are unable to renew our permit when it expires
      or
      we fail to comply with the provisions of the permit, we could be subject to
      fines, criminal charges or other sanctions by regulators, including the
      suspension or termination of our manufacturing operations.





We
      cannot
      assure you that at all times we will be in compliance with environmental laws
      and regulations or our environmental permits or that we will not be required to
      expend significant funds to comply with, or discharge liabilities arising under,
      environmental laws, regulations and permits.





**Recent
      PRC regulations relating to acquisitions of PRC companies by foreign entities
      may create regulatory uncertainties that could restrict or limit our ability
      to
      operate. Our failure to obtain required prior approval for the share and warrant
      exchange, and the listing and trading of our common stock could have a material
      adverse effect on our business, operating results, reputation and trading price
      of our common stock.**





The
      PRC
      State Administration of Foreign Exchange, or “SAFE,” issued a public notice in
      November 2005, known as Circular 75, concerning the use of offshore holding
      companies controlled by PRC residents in mergers and acquisitions in China.
      This
      circular requires that (1) a PRC resident shall register with a local branch
      of
      the SAFE before he or she establishes or controls an overseas special purpose
      vehicle, or SPV, for the purpose of overseas equity financing (including
      convertible debt financing); (2) when a PRC resident contributes the assets
      of
      or his or her equity interests in a domestic enterprise to an SPV, or engages
      in
      overseas financing after contributing assets or equity interests to an SPV,
      such
      PRC resident must register his or her interest in the SPV and any changes in
      such interest with a local branch of the SAFE; and (3) when the SPV undergoes
      a
      material change outside of China, such as a change in share capital or merger
      or
      acquisition, the PRC resident shall, within 30 days from the occurrence of
      the
      event that triggers the change, register such change with a local branch of
      the
      SAFE. In addition, SAFE issued updated internal implementing rules, or the
      Implementing Rules in relation to Notice 75. The Implementing Rules were
      promulgated and became effective on May 29, 2007. Such Implementing Rules
      provide more detailed provisions and requirements regarding the overseas
      investment foreign exchange registration procedures. However, even after the
      promulgation of Implementing Rules there still exist uncertainties regarding
      the
      SAFE registration for PRC residents’ interests in overseas companies.




21


In
      connection with the Purchase Right, Mr. Zhao made a SAFE registration with
      respect to his investment in the Company - however, as of the date hereof,
      such
      registration has not been approved and there can be no assurance that it will
      be
      approved. If Mr. Zhao's SAFE registration is not approved or if any other PRC
      resident stockholder fails to make the required SAFE registration, the onshore
      PRC subsidiaries of that offshore company may be prohibited from distributing
      their profits and the proceeds from any reduction in capital, share transfer
      or
      liquidation to the offshore entity. Failure to comply with the SAFE registration
      and amendment requirements described above could result in liability under
      PRC
      laws for evasion of applicable foreign exchange restrictions. Because of
      uncertainty in how the SAFE notice will be interpreted and enforced, we cannot
      be sure how it will affect our business operations or future plans. For example,
      Shenzhen Yinlips’ ability to conduct foreign exchange activities, such as the
      remittance of dividends and foreign currency-denominated borrowings, may be
      subject to compliance with the SAFE notice by Mr. Zhaoand any other of our
      PRC
      resident beneficial holders over whom we have no control. In addition, we cannot
      assure you that either Mr. Zhao or any other such PRC residents will be able
      to
      complete the necessary approval and registration procedures required by the
      SAFE
      regulations. Failure by Mr. Zhao or any other PRC resident beneficial holder
      to
      register as required with the relevant branch of SAFE could subject these PRC
      resident beneficial holders to fines or legal sanctions, restrict our overseas
      or cross-border investment activities, limit Shenzhen Yinlips’ ability to make
      distributions or pay dividends or affect our ownership structure, which could
      adversely affect our business and prospects.





On
      August
      8, 2006, the PRC Ministry of Commerce (“MOFCOM”), joined by the State-owned
      Assets Supervision and Administration Commission of the State Council, the
      State
      Administration of Taxation, the State Administration for Industry and Commerce,
      the China Securities Regulatory Commission and SAFE, released a substantially
      amended version of the Provisions for Foreign Investors to Merge with or Acquire
      Domestic Enterprises (the “Revised M&A Regulations”), which took effect
      September 8, 2006. These new rules significantly revised China’s regulatory
      framework governing onshore-to-offshore restructurings and foreign acquisitions
      of domestic enterprises. These new rules signify greater PRC government
      attention to cross-border merger, acquisition and other investment activities,
      by confirming MOFCOM as a key regulator for issues related to mergers and
      acquisitions in China and requiring MOFCOM approval of a broad range of merger,
      acquisition and investment transactions. Further, the new rules establish
      reporting requirements for acquisition of control by foreigners of companies
      in
      key industries, and reinforce the ability of the Chinese government to monitor
      and prohibit foreign control transactions in key industries.





Among
      other things, the revised M&A Regulations include new provisions that
      purport to require that an offshore special purpose vehicle, or a SPV, formed
      for listing purposes and controlled directly or indirectly by PRC companies
      or
      individuals must obtain the approval of the CSRC prior to the listing and
      trading of such SPV’s securities on an overseas stock exchange. On September 21,
      2006, the CSRC published on its official website procedures specifying documents
      and materials required to be submitted to it by SPVs seeking CSRC approval
      of
      their overseas listings. However, the application of this PRC regulation remains
      unclear with no consensus currently existing among the leading PRC law firms
      regarding the scope and applicability of the CSRC approval
      requirement.





According
      to the M&A Regulations, a “Related Party Acquisition” is defined as having
      taken place when a PRC business that is owned by PRC individual(s) is sold
      to a
      non-PRC entity that is established or controlled, directly or indirectly, by
      those same PRC individual(s). Under the M&A Regulations, any Related Party
      Acquisition must be approved by MOFCOM and any indirect arrangement or series
      of
      arrangements which achieves the same end result without the approval of MOFCOM
      is a violation of PRC law.





Our
      BVI
      subsidiary, Podium, was owned by a non-PRC individual. Podium obtained all
      the
      equity interests of Shenzhen Yinlips further to an Equity Transfer Agreement
      dated December 28, 2007 (the “Original Equity Agreement”) by and among Podium,
      Zhao Zifeng, our Chief Executive Officer and Chairman of the Board, and Zhang
      Weiqiang. The Original Equity Agreement received approval by the Shenzhen Bureau
      of Trade and Industry on January 15, 2008 and Shenzhen Yinlips filed all
      required applications and received all appropriate SAFE approvals from the
      Shenzhen branch of MOFCOM. The Original Equity Agreement was amended and
      restated in September 2008 (the “Restated Equity Agreement”) to increase the
      total purchase price of the equity interests of Shenzhen Yinlips to RMB
      19,200,000 although no additional governmental approvals were obtained for
      the
      Restated Equity Agreement.




22


Our
      Chief
      Executive Officer, Zhao Zifeng, purchased 6,500,000 shares of our common stock
      at a per share purchase price of $0.415 (the “Purchase Right”). Each of the
      shareholders and warrantholders of SRKP 17 prior to the Exchange agreed to
      cancel 0.91867 shares of common stock and warrants to purchase 0.98943 shares
      of
      common stock held by each of them for each one (1) share of common stock
      purchased by Mr. Zhao pursuant to the Purchase Right. As a result of the full
      exercise of the Purchase Right, Mr. Zhao owns approximately 53.43% of our
      outstanding common stock.





The
      PRC
      regulatory authorities may take the view that the acquisition of Shenzhen
      Yinlips by Podium, the Exchange and the Purchase Right are part of an overall
      series of arrangements which constitute a Related Party Acquisition, because
      at
      the end of these transactions, PRC individuals become majority owners and
      effective controlling parties of a foreign entity that acquired ownership of
      Shenzhen Yinlips. The PRC regulatory authorities may also take the view that
      the
      registration of the acquisition of Shenzhen Yinlips by Podium with the Shenzhen
      Bureau of Trade and Industry and the filings with the Shenzhen SAFE and MOFCOM
      may not evidence that the acquisition has been properly approved because the
      relevant parties did not fully disclose to the Shenzhen Bureau of Trade and
      Industry, SAFE or MOFCOM of the overall restructuring arrangements, the
      existence of the Exchange and its link with the acquisition of Shenzhen Yinlips
      by Podium. The PRC legal counsel of Shenzhen Yinlips has opined that: (1) the
      Original Equity Agreement and the transactions thereunder have received all
      requisite approvals from the competent authorities, and all required
      registrations, certifications and approvals for the Original Equity Agreement
      and the transactions thereunder have been received by Shenzhen Yinlips; (2)
      Shenzhen Yinlips has filed all required applications for the Original Equity
      Agreement and the transactions thereunder and has received any and all required
      foreign exchange registrations, certifications and approvals as required,
      including, but not limited to, those as required from the appropriate national
      and local branches of SAFE and MOFCOM; (3) to their best knowledge, the Original
      Equity Agreement and the transactions thereunder do not (a) contravene or
      circumvent any provision of applicable PRC laws and regulations, including
      without limitation, the M&A Regulations, the Circular on Certain
      Administrative Measures on Financing and Inbound Investments by PRC Residents
      Through Offshore Special Purpose Vehicle effectives as of November 1, 2005
      and
      its implementing rules; or (b) contravene the articles of association, business
      license or other constituent documents of Shenzhen Yinlips; and (4) to their
      best knowledge, they are not aware of any issue, fact or circumstance which
      would lead them to believe that the PRC regulatory authorities would revoke
      the
      Original Equity Agreement and the transactions thereunder which the Shenzhen
      Bureau of Trade and Industry has duly approved and that although approval of
      the
      Restated Equity Agreement has not been obtained, the Restated Equity Agreement
      is in compliance with the applicable PRC laws and regulations.





We,
      however, cannot assure you that the PRC regulatory authorities, MOFCOM in
      particular, may take the same view as the PRC legal counsel. If the PRC
      regulatory authorities take the view that the acquisition constitutes a Related
      Party Acquisition under the M&A Regulations, we cannot assure you we may be
      able to obtain the approval required from the national offices of
      MOFCOM.





If
      the
      PRC regulatory authorities take the view that the acquisition of Shenzhen
      Yinlips by Podium constitutes a Related Party Acquisition without the approval
      of the national offices of MOFCOM, they could invalidate our acquisition and
      ownership of Shenzhen Yinlips. Additionally, the PRC regulatory authorities
      may
      take the view that the Exchange constitutes a transaction which requires the
      prior approval of the China Securities Regulatory Commission, or CSRC. If this
      takes place, we would attempt to find a way to re-establish control of Shenzhen
      Yinlips’ business operations through a series of contractual arrangements rather
      than an outright purchase of Shenzhen Yinlips. But we cannot assure you that
      any
      such contractual arrangements will be protected by PRC law or that the Company
      can receive as complete or effective economic benefit and overall control of
      Shenzhen Yinlips’ business than if the Company had direct ownership of Shenzhen
      Yinlips. In addition, we cannot assure you that any such contractual
      arrangements can be successfully effected under PRC law. If we cannot obtain
      MOFCOM or CSRC approval if required by the PRC regulatory authorities to do
      so,
      and if we cannot put in place or enforce relevant contractual arrangements
      as an
      alternative and equivalent means of control of Shenzhen Yinlips, our business
      and financial performance will be materially adversely affected.





If
      the
      CSRC approval is not obtained, we may face regulatory actions or other sanctions
      from the CSRC or other PRC regulatory agencies. These regulatory agencies may
      impose fines and penalties on our operations in the PRC, limit our operating
      privileges in the PRC, delay or restrict the repatriation of the proceeds from
      this offering into the PRC, or take other actions that could have a material
      adverse effect on our business, financial condition, results of operations,
      reputation and prospects, as well as the trading price of our common
      stock.





Any
      uncertainties and/or negative publicity regarding this CSRC approval requirement
      could have a material adverse effect on the trading price of our common stock.
      Furthermore, published news reports in China recently indicated that the CSRC
      may have curtailed or suspended overseas listings for Chinese private companies.
      These news reports have created further uncertainty regarding the approach
      that
      the CSRC and other PRC regulators may take with respect to us.





It
      is
      uncertain how our business operations or future strategy will be affected by
      the
      interpretations and implementation of the aforementioned rules and regulations.
      It is anticipated that application of the new rules will be subject to
      significant administrative interpretation, and we will need to closely monitor
      how MOFCOM and other ministries apply the rules to ensure that our domestic
      and
      offshore activities continue to comply with PRC law. Given the uncertainties
      regarding interpretation and application of the new rules, we may need to expend
      significant time and resources to maintain compliance.




23


**The
      ability of our Chinese operating subsidiaries to pay dividends may be restricted
      due to foreign exchange control regulations of China.**





The
      ability of our Chinese operating subsidiaries to pay dividends may be restricted
      due to the foreign exchange control policies and availability of cash balance
      of
      the Chinese operating subsidiaries. Because substantially all of our operations
      are conducted in China and a substantial majority of our revenues are generated
      in China, a majority of our revenue being earned and currency received are
      denominated in Renminbi (RMB). RMB is subject to the exchange control regulation
      in China, and, as a result, we may unable to distribute any dividends outside
      of
      China due to PRC exchange control regulations that restrict our ability to
      convert RMB into US Dollars. Accordingly, Shenzhen Yinlips’ funds may not be
      readily available to us to satisfy obligations which have been incurred outside
      the PRC, which could adversely affect our business and prospects or our ability
      to meet our cash obligations.





**The
      foreign currency exchange rate between U.S. Dollars and Renminbi could adversely
      affect our financial condition.**





To
      the
      extent that we need to convert U.S. Dollars into Renminbi for our operational
      needs, our financial position and the price of our common stock may be adversely
      affected should the Renminbi appreciate against the U.S. Dollar at that time.
      Conversely, if we decide to convert our Renminbi into U.S. Dollars for the
      operational needs or paying dividends on our common stock, the dollar equivalent
      of our earnings from our subsidiaries in China would be reduced should the
      U.S.
      Dollar appreciate against the Renminbi.





Until
      1994, the Renminbi experienced a gradual but significant devaluation against
      most major currencies, including U.S. Dollars, and there was a significant
      devaluation of the Renminbi on January 1, 1994 in connection with the
      replacement of the dual exchange rate system with a unified managed floating
      rate foreign exchange system. Since 1994, the value of the Renminbi relative
      to
      the U.S. Dollar has remained stable and has appreciated slightly against the
      U.S. Dollar. Countries, including the United States, have argued that the
      Renminbi is artificially undervalued due to China’s current monetary policies
      and have pressured China to allow the Renminbi to float freely in world markets.
      In July 2005, the PRC government changed its policy of pegging the value of
      the
      Renminbi to the U.S. Dollar. Under the new policy the Renminbi is permitted
      to
      fluctuate within a narrow and managed band against a basket of designated
      foreign currencies. While the international reaction to the Renminbi revaluation
      has generally been positive, there remains significant international pressure
      on
      the PRC government to adopt an even more flexible currency policy, which could
      result in further and more significant appreciation of the Renminbi against
      the
      U.S. Dollar.





**Inflation
      in the PRC could negatively affect our profitability and
      growth.**





While
      the
      PRC economy has experienced rapid growth, such growth has been uneven among
      various sectors of the economy and in different geographical areas of the
      country. Rapid economic growth can lead to growth in the money supply and rising
      inflation. During the past decade, the rate of inflation in China has been
      as
      high as approximately 20% and China has experienced deflation as low as
      approximately minus 2%. If prices for our products and services rise at a rate
      that is insufficient to compensate for the rise in the costs of supplies such
      as
      raw materials, it may have an adverse effect on our profitability. In order
      to
      control inflation in the past, the PRC government has imposed controls on bank
      credits, limits on loans for fixed assets and restrictions on state lending.
      The
      implementation of such policies may impede economic growth. In October 2004,
      the
      People’s Bank of China, the PRC’s central bank, raised interest rates for the
      first time in nearly a decade and indicated in a statement that the measure
      was
      prompted by inflationary concerns in the Chinese economy. In April 2006, the
      People’s Bank of China raised the interest rate again. Repeated rises in
      interest rates by the central bank would likely slow economic activity in China
      which could, in turn, materially increase our costs and also reduce demand
      for
      our products and services.





**Because
      our funds are held in banks which do not provide insurance, the failure of
      any
      bank in which we deposit our funds could affect our ability to continue in
      business.**





Banks
      and
      other financial institutions in the PRC do not provide insurance for funds
      held
      on deposit. A significant portion of our assets are in the form of cash
      deposited with banks in the PRC, and in the event of a bank failure, we may
      not
      have access to our funds on deposit. Depending upon the amount of money we
      maintain in a bank that fails, our inability to have access to our cash could
      impair our operations, and, if we are not able to access funds to pay our
      suppliers, employees and other creditors, we may be unable to continue in
      business.




24


**Failure
      to comply with the United States Foreign Corrupt Practices Act could subject
      us
      to penalties and other adverse consequences.**





As
      our
      ultimate holding company is a Delaware corporation, we are subject to the United
      States Foreign Corrupt Practices Act, which generally prohibits United States
      companies from engaging in bribery or other prohibited payments to foreign
      officials for the purpose of obtaining or retaining business. Foreign companies,
      including some that may compete with us, are not subject to these prohibitions.
      Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices
      may occur from time-to-time in the PRC. We can make no assurance, however,
      that
      our employees or other agents will not engage in such conduct for which we
      might
      be held responsible. If our employees or other agents are found to have engaged
      in such practices, we could suffer severe penalties and other consequences
      that
      may have a material adverse effect on our business, financial condition and
      results of operations.





**If
      we make equity compensation grants to persons who are PRC citizens, they may
      be
      required to register with the State Administration of Foreign Exchange of the
      PRC, or SAFE. We may also face regulatory uncertainties that could restrict
      our
      ability to adopt an equity compensation plan for our directors and employees
      and
      other parties under PRC law.**





On
      April
      6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic
      Individuals Participating in the Employee Stock Ownership Plan or Stock Option
      Plan of An Overseas Listed Company, also know as “Circular 78.” It is not clear
      whether Circular 78 covers all forms of equity compensation plans or only those
      which provide for the granting of stock options. For any plans which are so
      covered and are adopted by a non-PRC listed company after April 6, 2007,
      Circular 78 requires all participants who are PRC citizens to register with
      and
      obtain approvals from SAFE prior to their participation in the plan. In
      addition, Circular 78 also requires PRC citizens to register with SAFE and
      make
      the necessary applications and filings if they participated in an overseas
      listed company’s covered equity compensation plan prior to April 6, 2007. We
      intend to adopt an equity compensation plan in the future and make substantial
      option grants to our officers and directors, most of who are PRC citizens.
      Circular 78 may require our officers and directors who receive option grants
      and
      are PRC citizens to register with SAFE. We believe that the registration and
      approval requirements contemplated in Circular 78 will be burdensome and time
      consuming. If it is determined that any of our equity compensation plans are
      subject to Circular 78, failure to comply with such provisions may subject
      us
      and participants of our equity incentive plan who are PRC citizens, including
      or
      Chief Executive Officer, to fines and legal sanctions and prevent us from being
      able to grant equity compensation to our PRC employees. In that case, our
      ability to compensate our employees and directors through equity compensation
      would be hindered and our business operations may be adversely
      affected.





**Shenzhen
      Yinlips has enjoyed certain preferential tax concessions and the loss of these
      preferential tax concessions may cause our tax liabilities to increase and
      our
      profitability to decline.**





Under
      the
      tax laws of the PRC, Shenzhen Yinlips has had tax advantages granted by local
      government for corporate income taxes and sales taxes commencing April 6, 2004.
      As a manufacturing enterprise established in Shenzhen, PRC, the Company was
      entitled to a preferential Enterprise Income Tax (”EIT”) rate. Since 2008, the
      local government has increased the EIT rate from 15% to 18%. On March 16, 2007,
      the National People’s Congress of China enacted a new PRC Enterprise Income Tax
      Law, under which foreign invested enterprises and domestic companies will be
      subject to enterprise income tax at a uniform rate of 25%. The new law became
      effective on January 1, 2008. During the transition period for enterprises
      established before March 16, the tax rate will be gradually increased starting
      in 2008 and be equal to the new tax rate in 2012. The expiration of the
      preferential tax treatment will increase our tax liabilities and reduce our
      profitability.





**Any
      recurrence of Severe Acute Respiratory Syndrome (SARS), Avian Flu, or another
      widespread public health problem in the PRC could adversely affect our
      operations.**





A
      renewed
      outbreak of SARS, Avian Flu or another widespread public health problem in
      China, where our manufacturing facilities are located and where the substantial
      portion of our sales occur, could have a negative effect on our operations.
      Our
      business is dependent upon its ability to continue to manufacture products.
      Such
      an outbreak could have an impact on our operations as a result of:





·
            quarantines
                or closures of some of our manufacturing facilities, which would
                severely
                disrupt our operations;




·
            the
                sickness or death of our key officers and employees;
                or




·
            a
                general slowdown in the Chinese
                economy.




Any
      of
      the foregoing events or other unforeseen consequences of public health problems
      could adversely affect our operations.




25


**A
      downturn in the economy of the PRC may slow our growth and
      profitability.**





The
      growth of the Chinese economy has been uneven across geographic regions and
      economic sectors. There can be no assurance that growth of the Chinese economy
      will be steady or that any downturn will not have a negative effect on our
      business, especially if it results in either a decreased use of our products
      or
      in pressure on us to lower our prices.





**Because
      our business is located in the PRC, we may have difficulty establishing adequate
      management, legal and financial controls, which we are required to do in order
      to comply with U.S. securities laws.**





PRC
      companies have historically not adopted a Western style of management and
      financial reporting concepts and practices, which includes strong corporate
      governance, internal controls and, computer, financial and other control
      systems. Most of our middle and top management staff are not educated and
      trained in the Western system, and we may difficulty hiring new employees in
      the
      PRC with such training. In addition, we may have difficulty in hiring and
      retaining a sufficient number of qualified employees to work in the PRC. As
      a
      result of these factors, we may experience difficulty in establishing
      management, legal and financial controls, collecting financial data and
      preparing financial statements, books of account and corporate records and
      instituting business practices that meet Western standards. Therefore, we may,
      in turn, experience difficulties in implementing and maintaining adequate
      internal controls as required under Section 404 of the Sarbanes-Oxley Act of
      2002. This may result in significant deficiencies or material weaknesses in
      our
      internal controls which could impact the reliability of our financial statements
      and prevent us from complying with SEC rules and regulations and the
      requirements of the Sarbanes-Oxley Act of 2002. Any such deficiencies,
      weaknesses or lack of compliance could have a materially adverse effect on
      our
      business.





**Investors
      may experience difficulties in effecting service of legal process, enforcing
      foreign judgments or bringing original actions in China based upon U.S. laws,
      including the federal securities laws or other foreign laws against us or our
      management.**





Most
      of
      our current operations, including the manufacturing and distribution of our
      products, are conducted in China. Moreover, most of our directors and officers
      are nationals and residents of China. All or substantially all of the assets
      of
      these persons are located outside the United States and in the PRC. As a result,
      it may not be possible to effect service of process within the United States
      or
      elsewhere outside China upon these persons. In addition, uncertainty exists
      as
      to whether the courts of China would recognize or enforce judgments of U.S.
      courts obtained against us or such officers and/or directors predicated upon
      the
      civil liability provisions of the securities laws of the United States or any
      state thereof, or be competent to hear original actions brought in China against
      us or such persons predicated upon the securities laws of the United States
      or
      any state thereof.





**RISKS
      RELATED TO OUR CAPITAL STRUCTURE**





**There
      is no current trading market for our common stock, and there is no assurance
      of
      an established public trading market, which would adversely affect the ability
      of our investors to sell their securities in the public
      market.**




Our
      common stock is not currently listed or quoted for trading on any national
      securities exchange or national quotation system. We intend to apply for the
      listing of our common stock on the NYSE Alternext US (formerly known as the
      American Stock Exchange) in the future. There is no guarantee that the NYSE
      Alternext US, or any other exchange or quotation system, will permit our shares
      to be listed and traded. If we fail to obtain a listing on the NYSE Alternext
      US, we may seek quotation on the OTC Bulletin Board. The NASD has enacted
      changes that limit quotations on the OTC Bulletin Board to securities of issuers
      that are current in their reports filed with the Securities and Exchange
      Commission. The effect on the OTC Bulletin Board of these rule changes and
      other
      proposed changes cannot be determined at this time. The OTC Bulletin Board
      is an
      inter-dealer, over-the-counter market that provides significantly less liquidity
      than the NASDAQ Global Market (the “NASDAQ Global Market”). Quotes for stocks
      included on the OTC Bulletin Board are not listed in the financial sections
      of
      newspapers as are those for the NASDAQ Global Market. Therefore, prices for
      securities traded solely on the OTC Bulletin Board may be difficult to obtain
      and holders of common stock may be unable to resell their securities at or
      near
      their original offering price or at any price.





**Shares
      eligible for future sale may adversely affect the market price of our common
      stock, as the future sale of a substantial amount of outstanding stock in the
      public marketplace could reduce the price of our common
      stock.**





Pursuant
      to the terms of the Exchange, we agreed to file a registration statement with
      the Securities and Exchange Commission to register the 4,473,583 shares of
      common stock underlying our Series A Convertible Preferred Stock issued in
      an
      equity financing that was conducted concurrently with the Exchange. The
      registration statement must be filed within 60 days of the closing of the
      Exchange. Each investor may sell or transfer any shares of the common stock
      after the effective date of the registration statement except that they entered
      into a lock-up agreement pursuant to which they agreed not to conduct any sales
      until 90 days after our common stock is listed or quoted on a national
      securities exchange, at which time one-twelfth of the shares purchased may
      be
      sold, and thereafter the shares will be automatically released from the lock-up
      restrictions every 30 days in eleven equal installments. In addition, WestPark
      Capital, Inc., in its discretion, may release some or all the shares earlier
      than the schedule set forth in this section. Any early release by WestPark
      Capital, Inc. will apply equally to each of the investors in the Private
      Placement.




26


We
      also
      intend to register with the Private Placement the 1,125,000 shares of common
      stock and the 665,091 shares of common stock underlying the warrants held by
      our
      stockholders immediately prior to the Exchange. Of the shares, 229,613 shares
      of
      common stock and 135,745 shares of common stock underlying warrants will be
      included in the registration statement filed in connection with the Private
      Placement and 895,387 shares of common stock and 529,346 shares of common stock
      underlying warrants will be included in a subsequent registration statement
      filed by us within ten (10) days after the end of the six-month period that
      immediately follows the date on which we file the registration statement to
      register the shares issued in the Private Placement. All of the shares included
      in an effective registration statement may be freely sold and transferred,
      subject to a lock-up agreement.





Additionally,
      the former stockholders of Podium and their designees, may be eligible to sell
      all or some of our shares of common stock by means of ordinary brokerage
      transactions in the open market pursuant to Rule 144, promulgated under the
      Securities Act (“Rule 144”) as early as October 23, 2009, subject to certain
      limitations. Under Rule 144, an affiliate stockholder who has satisfied the
      required holding period may, under certain circumstances, sell within any
      three-month period a number of securities which does not exceed the greater
      of
      1% of the then outstanding shares of common stock or the average weekly trading
      volume of the class during the four calendar weeks prior to such sale. As of
      the
      date hereof, 1% of our issued and outstanding shares of common stock was
      approximately 121,644 shares (assuming the conversion of the maximum number
      of
      shares of the Series A Convertible Preferred Stock). Non-affiliate stockholders
      are not subject to volume limitations. Any substantial sale of common stock
      pursuant to any resale prospectus or Rule 144 may have an adverse effect on
      the
      market price of our common stock by creating an excessive supply.





**Our
      Chief Executive Officer and Chairman of the Board exercises significant
      influence over us.**





Our
      Chief
      Executive Officer and Chairman of the Board, Zhao Zifeng, beneficially owns
      or
      controls approximately 53.43% of our outstanding shares (assuming the conversion
      of the maximum number of shares of Series A Convertible Preferred Stock). Mr.
      Zhao has a controlling influence in determining the outcome of any corporate
      transaction or other matters submitted to our stockholders for approval,
      including mergers, consolidations and the sale of all or substantially all
      of
      our assets, election of directors, and other significant corporate actions.
      Mr.
      Zhao may also have the power to prevent or cause a change in control. In
      addition, without the consent of Mr. Zhao, we could be prevented from entering
      into transactions that could be beneficial to us. The interests of Mr. Zhao
      may
      differ from the interests of our other stockholders.





**If
      we fail to maintain effective internal controls over financial reporting, the
      price of our common stock may be adversely affected.**





We
      are
      required to establish and maintain appropriate internal controls over financial
      reporting. Failure to establish those controls, or any failure of those controls
      once established, could adversely impact our public disclosures regarding our
      business, financial condition or results of operations. Any failure of these
      controls could also prevent us from maintaining accurate accounting records
      and
      discovering accounting errors and financial frauds. Rules adopted by the SEC
      pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual
      assessment of our internal control over financial reporting, and attestation
      of
      this assessment by our independent registered public accountants. The SEC
      extended the compliance dates for non-accelerated filers, as defined by the
      SEC.
      Accordingly, we believe that the annual assessment of our internal controls
      requirement will first apply to our annual report for the 2008 fiscal year
      and
      the attestation requirement of management’s assessment by our independent
      registered public accountants will first apply to our annual report for the
      2009
      fiscal year. The standards that must be met for management to assess the
      internal control over financial reporting as effective are new and complex,
      and
      require significant documentation, testing and possible remediation to meet
      the
      detailed standards. We may encounter problems or delays in completing activities
      necessary to make an assessment of our internal control over financial
      reporting. In addition, the attestation process by our independent registered
      public accountants is new and we may encounter problems or delays in completing
      the implementation of any requested improvements and receiving an attestation
      of
      our assessment by our independent registered public accountants. If we cannot
      assess our internal control over financial reporting as effective, or our
      independent registered public accountants are unable to provide an unqualified
      attestation report on such assessment, investor confidence and share value
      may
      be negatively impacted.





In
      addition, management’s assessment of internal controls over financial reporting
      may identify weaknesses and conditions that need to be addressed in our internal
      controls over financial reporting or other matters that may raise concerns
      for
      investors. Any actual or perceived weaknesses and conditions that need to be
      addressed in our internal control over financial reporting, disclosure of
      management’s assessment of our internal controls over financial reporting, or
      disclosure of our public accounting firm’s attestation to or report on
      management’s assessment of our internal controls over financial reporting may
      have an adverse impact on the price of our common stock.




27


**Because
      most of our sales are made in U.S. Dollars and most of our expenses are paid
      in
      RMB, devaluation of the U.S. Dollar could negatively impact our results of
      operations.**





The
      value
      of RMB is subject to changes in China’s governmental policies and to
      international economic and political developments. In January 1994, the PRC
      government implemented a unitary managed floating rate system. Under this
      system, the People’s Bank of China, or PBOC, began publishing a daily base
      exchange rate with reference primarily to the supply and demand of RMB against
      the U.S. Dollar and other foreign currencies in the market during the previous
      day. Authorized banks and financial institutions are allowed to quote buy and
      sell rates for RMB within a specified band around the central bank’s daily
      exchange rate. On July 21, 2005, PBOC announced an adjustment of the
      exchange rate of the U.S. Dollar to RMB from 1:8.27 to 1:8.11 and modified
      the
      system by which the exchange rates are determined. This modification has
      resulted in an approximate 7.3% appreciation of the RMB against the U.S. Dollar
      from July 21, 2005 to May 2, 2007. While the international reaction to
      the RMB revaluation has generally been positive, there remains significant
      international pressure on the PRC government to adopt an even more flexible
      currency policy, which could result in further fluctuations of the exchange
      rate
      of the U.S. Dollar against the RMB, including future devaluations. Because
      most
      of our net sales are made in U.S. Dollars and most of our expenses are paid
      in
      RMB, any future devaluation of the U.S. Dollar against the RMB could negatively
      impact our results of operations.





**We
      may not be able to achieve the benefits we expect to result from the
      Exchange.**




On
      September 22, 2008, we entered into the Exchange Agreement with all of the
      shareholders and warrantholders of Podium, pursuant to which we agreed to
      acquire 100% of the issued and outstanding securities of Podium in exchange
      for
      shares of our common stock and warrants to purchase our common stock. On October
      17, 2008, the Exchange closed, Podium became our 100%-owned subsidiary and
      our
      sole business operations became that of Podium and its subsidiaries. We also
      have a new Board of Directors and management consisting of persons from Podium
      and Shenzhen Yinlips and changed our corporate name from SRKP 17, Inc. to
      Yinlips Technology, Inc.





We
      may
      not realize the benefits that we hoped to receive as a result of the Exchange,
      which include:





·
            access
                to the capital markets of the United
                States;




·
            the
                increased market liquidity expected to result from exchanging stock
                in a
                private company for securities of a public company that may eventually
                be
                traded;




·
            the
                ability to use registered securities to make acquisition of assets
                or
                businesses;




·
            increased
                visibility in the financial
                community;




·
            enhanced
                access to the capital markets;




·
            improved
                transparency of operations; and




·
            perceived
                credibility and enhanced corporate image of being a publicly traded
                company.




There
      can
      be no assurance that any of the anticipated benefits of the Exchange will be
      realized in respect to our new business operations. In addition, the attention
      and effort devoted to achieving the benefits of the Exchange and attending
      to
      the obligations of being a public company, such as reporting requirements and
      securities regulations, could significantly divert management’s attention from
      other important issues, which could materially and adversely affect our
      operating results or stock price in the future.





**Compliance
      with changing regulation of corporate governance and public disclosure will
      result in additional expenses.**




Changing
      laws, regulations and standards relating to corporate governance and public
      disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC
      regulations, have created uncertainty for public companies and significantly
      increased the costs and risks associated with accessing the public markets
      and
      public reporting. Our management team will need to invest significant management
      time and financial resources to comply with both existing and evolving standards
      for public companies, which will lead to increased general and administrative
      expenses and a diversion of management time and attention from revenue
      generating activities to compliance activities.




28


**Our
      common stock may be considered a “penny stock,” and thereby be subject to
      additional sale and trading regulations that may make it more difficult to
      sell.**




Our
      common stock, which is not currently listed or quoted for trading, may be
      considered to be a “penny stock” if it does not qualify for one of the
      exemptions from the definition of “penny stock” under Section 3a51-1 of the
      Securities Exchange Act for 1934, as amended (the “Exchange Act”) once, and if,
      it starts trading. Our common stock may be a “penny stock” if it meets one or
      more of the following conditions: (i) the stock trades at a price less than
      $5.00 per share; (ii) it is NOT traded on a “recognized” national exchange;
      (iii) it is NOT quoted on the Nasdaq Capital Market, or even if so, has a price
      less than $5.00 per share; or (iv) is issued by a company that has been in
      business less than three years with net tangible assets less than $5
      million.




The
      principal result or effect of being designated a “penny stock” is that
      securities broker-dealers participating in sales of our common stock will be
      subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9
      promulgated under the Exchange Act. For example, Rule 15g-2 requires
      broker-dealers dealing in penny stocks to provide potential investors with
      a
      document disclosing the risks of penny stocks and to obtain a manually signed
      and dated written receipt of the document at least two business days before
      effecting any transaction in a penny stock for the investor’s account. Moreover,
      Rule 15g-9 requires broker-dealers in penny stocks to approve the account of
      any
      investor for transactions in such stocks before selling any penny stock to
      that
      investor. This procedure requires the broker-dealer to (i) obtain from the
      investor information concerning his or her financial situation, investment
      experience and investment objectives; (ii) reasonably determine, based on that
      information, that transactions in penny stocks are suitable for the investor
      and
      that the investor has sufficient knowledge and experience as to be reasonably
      capable of evaluating the risks of penny stock transactions; (iii) provide
      the
      investor with a written statement setting forth the basis on which the
      broker-dealer made the determination in (ii) above; and (iv) receive a signed
      and dated copy of such statement from the investor, confirming that it
      accurately reflects the investor’s financial situation, investment experience
      and investment objectives. Compliance with these requirements may make it more
      difficult and time consuming for holders of our common stock to resell their
      shares to third parties or to otherwise dispose of them in the market or
      otherwise.





**We
      do not foresee paying cash dividends in the foreseeable future and, as a result,
      our investors’ sole source of gain, if any, will depend on capital appreciation,
      if any.**





We
      do not
      plan to declare or pay any cash dividends on our shares of common stock in
      the
      foreseeable future and currently intend to retain any future earnings for
      funding growth. As a result, investors should not rely on an investment in
      our
      securities if they require the investment to produce dividend income. Capital
      appreciation, if any, of our shares may be investors’ sole source of gain for
      the foreseeable future. Moreover, investors may not be able to resell their
      shares of the Company at or above the price they paid for them.





**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**





The
      information contained in this report, including in the documents incorporated
      by
      reference into this report, includes some statement that are not purely
      historical and that are “forward-looking statements” as defined by the Private
      Securities Litigation Reform Act of 1995. Such forward-looking statements
      include, but are not limited to, statements regarding Yinlips and its
      management’s expectations, hopes, beliefs, intentions or strategies regarding
      the future, including Yinlips’ financial condition, results of operations, and
      the expected impact of the Exchange on the parties’ individual and combined
      financial performance. In addition, any statements that refer to projections,
      forecasts or other characterizations of future events or circumstances,
      including any underlying assumptions, are forward-looking statements. The words
      “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,”
“projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the
      negatives of such terms, may identify forward-looking statements, but the
      absence of these words does not mean that a statement is not
      forward-looking.





The
      forward-looking statements contained in this report are based on current
      expectations and beliefs concerning future developments and the potential
      effects on the parties and the transaction. There can be no assurance that
      future developments actually affecting us will be those anticipated. These
      forward-looking statements involve a number of risks, uncertainties (some of
      which are beyond the parties’ control) or other assumptions that may cause
      actual results or performance to be materially different from those expressed
      or
      implied by these forward-looking statements, including the
      following:





·
            our
                ability to develop and maintain awareness of our brand;·
            our
                ability to develop and market new products;·
            competitive
                nature of our industry;·
            market
                acceptance of our products;·
            compliance
                and changes in the laws of the PRC that affect our
                operations;·
            continued
                maintenance of certificates, permits and licenses required to conduct
                business in China;·
            vulnerability
                of our business to general economic downturn, especially in the PRC;
                and·
            the
                other factors referenced in this Current Report, including, without
                limitation, under the sections entitled “Risk Factors,” “Management’s
                Discussion and Analysis of Financial Condition and Results of Operations,”
                and “Business.”




29


These
      risks and uncertainties, along with others, are also described above under
      the
      heading “Risk Factors.” Should one or more of these risks or uncertainties
      materialize, or should any of the parties’ assumptions prove incorrect, actual
      results may vary in material respects from those projected in these
      forward-looking statements. We undertake no obligation to update or revise
      any
      forward-looking statements, whether as a result of new information, future
      events or otherwise, except as may be required under applicable securities
      laws.





**Item
      2. Unregistered Sale of Equity Securities and Use of Proceeds**





Not
      applicable.





**Item
      3. Default Upon Senior Securities**





Not
      applicable.





**Item
      4. Submission of Matters to a Vote of Security Holders**





Not
      applicable.





**Item
      5. Other Information**





On
      October 17, 2008, we consummated a share and warrant exchange transaction (the
      “Exchange”) pursuant to a share and warrant exchange agreement (the “Exchange
      Agreement”) dated as of September 22, 2008, with Podium Technology Limited, a
      company organized in the British Virgin Islands (“Podium”), and the sole
      shareholder and all of the warrantholders of Podium, pursuant to which we (i)
      became the 100% parent of Podium and its subsidiaries, including its 100%
      subsidiary, Yinlips Digital Technology (Shenzhen) Co., Ltd., a company organized
      in the People’s Republic of China (“Shenzhen Yinlips”); (ii) assumed the
      operations of Podium and its subsidiaries; and (iii) changed our name from
      SRKP
      17, Inc. to Yinlips Technology, Inc. Upon the closing of the Exchange on October
      17, 2008, which occurred after the end of the period covered by this report,
      the
      internal control over financial reporting utilized by Shenzhen Yinlips prior
      to
      the Exchange became the internal control over financial reporting of our
      company. Following the Exchange the sole business conducted by our company
      became the business conducted by Shenzhen Yinlips, and we appointed new officers
      and directors.




**Item
      6. Exhibits**





(a)  Exhibits





**Exhibit**
              **Number**
            
            **Description of Document**31.1
            
            Certification
                of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation
                S-K,
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2
            
            Certification
                of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation
                S-K,
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                of the Chief Executive Officer and Chief Financial Officer pursuant
                to 18
                U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.*





*
            This
                exhibit shall not be deemed “filed” for purposes of Section 18 of the
                Securities Exchange Act of 1934 or otherwise subject to the liabilities
                of
                that section, nor shall it be deemed incorporated by reference in
                any
                filing under the Securities Act of 1933 or the Securities Exchange
                Act of
                1934, whether made before or after the date hereof and irrespective
                of any
                general incorporation language in any
                filings.


30


**YINLIPS
      TECHNOLOGY, INC.**





**SIGNATURES**





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




Yinlips
                Technology, Inc.Date:
                November 19, 2008
            By:
            /s/
                Zhao ZifengZhao
                ZifengChief
                Executive Officer and Chairman of the BoardDate:
                November 19, 2008
            By:
            /s/
                Simon ZhangSimon
                ZhangChief
                Financial Officer




31




**Podium
        Technology Limited and Subsidiary**
 Consolidated
        Balance Sheets
 (In
        US
        Dollars)
 
 
 **September
                  30,**
              
              **December
                  31,****2008**
              
              **2007****(Unaudited)****Assets**Current
                  AssetsCash
                  and cash equivalent (Note 4)
              
              $
              16,888
              
              $
              256Accounts
                  receivable, net (Note 5)
              
              
              4,363,849
              
              
              -Inventories,
                  net (Note 6)
              
              
              1,971,967
              
              
              -Refundable
                  purchase price paid (Note 7)
              
              
              -
              
              
              -Deposit
                  paid for plant renovation (Note 8)
              
              
              12,757
              
              
              -**Total
                  current assets**
              
              
              6,365,461
              
              
              256Fixed
                  assets (Note 9)
              
              
              139,251
              
              
              -Other
                  receivables
              
              
              46,873
              
              
              -**Total
                  Assets**
              
              $
              6,551,585
              
              $
              256**Liabilities
                  & Shareholders' Equity**Current
                  LiabilitiesPayables
                  and accrued liabilities (Note 10)
              
              $
              1,156,429
              
              $
              -Short
                  term loans(Note 12)
              
              
              602,968
              
              
              -Various
                  taxes payable (Note 13)
              
              
              54,267
              
              
              -Wages
                  payable (Note 14)
              
              
              523,288
              
              
              -Corporate
                  taxes payable (Note 15)
              
              
              129,749
              
              
              -Due
                  to related parties (Note 11)
              
              
              2,741,777**Total
                  current liabilities**
              
              
              5,208,478**Commitments
                  and contingencies (Note 18)**
              
              
              -
              
              
              -**Shareholders'
                  Equity**Paid
                  in capital (Note 16)
              
              
              50,000
              
              
              50,000Share
                  subscription receivable
              
              
              0
              
              
              (47,492
              )Accumulated
                  other comprehensive income
              
              
              23,132
              
              
              (6
              )Restricted
                  earnings (Note 17)
              
              
              60,483
              
              
              0Retained
                  earnings (unrestricted)
              
              
              1,209,492
              
              
              (2,246
              )**Total
                  Shareholders' Equity**
              
              
              1,368,003
              
              
              256**Total
                  Liabilities & Shareholders' Equity**
              
              $
              6,551,585
              
              $
              256
  The
        accompanying notes are an integral part of these
        financial statements.
  
  **Podium
        Technology Limited and Subsidiary**
 Consolidated
        Statements of Operations
 (In
        US
        Dollars)
 
 
 **For
                  Nine Months Ended**
              
              **For
                  the period****September
                  30,**
              
              **Incepted
                  July3 and ended December 31****2008**
              
              **2007****(Unaudited)****Revenue**Sales
              
              $
              6,279,184
              
              $
              -Cost
                  of Goods Sold
              
              
              (4,842,938
              )
              
              -**Gross
                  Profit**
              
              
              1,436,246
              
              
              -Selling
                  Expenses
              
              
              160,562
              
              
              -Other
                  general and administrative
              
              
              151,327
              
              
              2,246Research
                  and development
              
              
              280,446
              
              
              -Depreciation
                  of property, plant and equipment
              
              
              44**Total
                  operating expenses**
              
              
              592,379
              
              
              2,246**Income
                  from operations**
              
              
              843,867
              
              
              (2,246
              )**Other
                  income (expenses)**
              
              
              
              
              
              -Interest
                  income (expense), net
              
              
              641
              
              
              -Penalty
                  on renovation contract
              
              
              (548
              )
              
              -Other
                  income (expense), net
              
              
              568,515**Total
                  other income (expenses)**
              
              
              568,608
              
              
              -**Income
                  before income taxes**
              
              
              1,412,475
              
              
              (2,246
              )Income
                  taxes (Note 12)
              
              
              (140,253
              )Net
                  income
              
              
              1,272,222
              
              
              (2,246
              )Other
                  Comprehensive Income:Foreign
                  currency translation adjustment (Note 13)
              
              
              23,138
              
              $
              (6
              )**Comprehensive
                  Income**
              
              $
              1,295,360
              
              
              (2,252
              )
 The
        accompanying notes are an integral part of
        these financial statements.
 
 1
  **Podium
        Technology Limited and Subsidiary**
 Consolidated
        Statements of Cash Flows
 (In
        US
        Dollars)
 
 
 **For
                  the period****Nine
                  months ended**
                **September
                  30,**
              
              **Incepted
                  July 3 and ended December 31,****2008**
              
              **2007****(Unaudited)**
              
              **(Unaudited)****Cash
                  Flows From Operating Activities**Net
                  Income
              
              $
              1,272,222
              
              $
              (2,246
              )Adjustments
                  to reconcile net income to netcash
                  provided (used) by operating activities:Depreciation
              
              
              7,580
              
              
              -Changes
                  in operating assets and liabilities:Accounts
                  receivable, net
              
              
              (286,283
              )
              
              -Deposit
                  paid for plant renovation
              
              
              622,951
              
              
              -Other
                  receivables
              
              
              (130,441
              )
              
              -Inventories,
                  net
              
              
              (779,133
              )
              
              -Accounts
                  payable and accrued liabilities
              
              
              (978,249
              )
              
              -Various
                  taxes payable
              
              
              (86,421
              )
              
              -Wages
                  payable
              
              
              52,028
              
              
              -Corporate
                  tax payable
              
              
              (81,917
              )
              
              -**Net
                  cash provided (used) by operating activities**
              
              
              (387,662
              )
              
              (2,246
              )**Cash
                  Flows From Investing Activities**Purchases
                  of property and equipment
              
              
              (144,402
              )
              
              -Investment
                  in subsidiary
              
              
              (2,790,285
              )
              
              -**Net
                  cash used by investing activities**
              
              
              (2,958,725
              )**Cash
                  Flows From Financing Activities**Short
                  term loans
              
              
              602,968
              
              
              -Share
                  subscription payment
              
              
              47,492
              
              
              2,508Due
                  to related parties
              
              
              2,668,050
              
              
              -**Net
                  cash provided (used) by financing activities**
              
              
              3,318,510
              
              
              2,508Effect
                  of exchange rate changes on cash
              
              
              20,111
              
              
              (6
              )**Net
                  increase (decrease) in cash and cash equivalents**
              
              $
              16,632
              
              $
              256**Cash
                  and cash equivalents, beginning of period**
              
              
              256
              
              
              -**Cash
                  and cash equivalents, end of period**
              
              
              16,888
              
              
              256-**Supplemental
                  disclosure information:**
              
              
              
              
              
              -Interest
                  expense paidIncome
                  taxes paid
              
              
              140,253
              
              
              -Acquisition
                  of subsidiary’s net assets considerationCash
                  paid
              
              $
              144,836
              
              
              -Due
                  to related parties
              
              
              2,657,166
              
              
              -Total
              
              $
              2,802,002
              
              
              -
  The
        accompanying notes are an integral part of these
        financial statements.
 2
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        1 -**  **Organization
        and Nature of Business**
  Podium
        Technology Limited (“PTL” or the “Company”) was established on July 3, 2007 in
        the British Virgin Islands and the registered office is located at OMC Chamers,
        P.O. Box 3215, Road Town, Tortolar, British Virgin Islands. On October 3,
        2007,
        PTL authorized and issued 50,000 shares at par value $1HKD to Mr. Wong Kowk
        Fu;
        director of PTL. Mr. Wong currently owns 100% of the common shares of PTL,
        an
        investment holding company.
  On
        December 27, 2007 PTL signed an Equity Transfer Agreement with Yinlips Digital
        Technology (Shenzhen) Co., Ltd. (“Yinlips”) , which was established in 2001, and
        is a Chinese hi-tech company. Yinlips’ business includes design, manufacture,
        and marketing of CRTs, LCDs, and a series of portable digital devices, including
        portable DVDs, Palm PCs, MP3s, Mp4s, PMPs, Mp4+Games, Game cards, and digital
        photo frames.
  On
        January 5, 2008, PTL and Yinlips agreed that the owners of Yinlips would
        transfer their 100% ownership in its registered capital of RMB 1 million
        to PTL.
        This agreement was approved by the Chinese authorities on January 16, 2008.
        The
        two parties also agreed upon that the first payment (10% of the total
        consideration) to be made on April 2008, and the rest of the payments will
        be
        made within the next six months. On April 29, 2008, PTL made its first payment
        of USD $14,893 to Yinlips’ owners and a subsequent payment of USD $122,943 on
        June 18, 2008. On that date, PTL acquired all of the outstanding equity of
        Yinlips and became a wholly-owned subsidiary when the full purchase price
        as
        originally approved by the Chinese authorities was paid. On June 11, 2008,
        the
        original Equity Transfer Agreement was restated among the Company and the
        owners
        of Yinlips to increase the purchase price to its assessed market value of
        RMB
        19,200,000. The payments for the residual purchase price will be made by
        the end
        of 2008.
  **Note
        2. Summary of Significant Accounting Policies**
  Basis
        of Presentation
 
 The
        accompanying consolidated financial statements of PTL have been prepared
        in
        accordance with accounting principles generally accepted in the United States
        of
        America.
 
 Basis
        of Consolidation
 
 The
        consolidated financial statements include the accounts of the Company and
        its
        subsidiary as of June 18, 2008. All significant inter-company transactions
        have
        been eliminated in the consolidation.
 
 Use
        of
        Estimates
 
 The
        preparation of the financial statements, in conformity with accounting
        principles generally accepted in the United States of America, requires
        management to make estimates and assumptions that affect the 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, and such differences may be material to the financial
        statements.
 
 Cash
        and Cash Equivalents
 
 Cash
        and
        cash equivalents includes cash on hand, cash on deposit with various financial
        institutions in the PRC, and all highly-liquid investments with original
        maturities of three months or less at the time of purchase. Banks and other
        financial institutions in the PRC do not provide insurance for funds held
        on
        deposit.
 
 Advertising
 
 Yinlips
        expenses advertising costs as incurred. Advertising is included in selling
        expenses for financial reporting.
 
 3
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (continued)**
 
 Foreign
        Currency Transactions and Translations
 
 The
        reporting currency for PTL and Yinlips are in U.S. dollar. PTL operates in
        Hong
        Kong and its functional currency is Hong Kong dollar. Yinlips operates in
        China
        and its functional currency is Renminbi. The financial statements are translated
        into U.S. dollars using period-end rates of exchange for assets and liabilities
        and average rates of exchange in the period for revenues and expenses.
        Translation gains and losses are recorded in accumulated other comprehensive
        income or loss as a component of shareholders’ equity. Net gains and losses
        resulting from foreign exchange transactions are included in other income.
 
 The
        exchange rates used for foreign currency translation were as follows (USD$1
        =
        RMB):.
 
 Period
                  Covered
              Balance
                  Sheet Date Rates
              Average
                  RatesYear
                  ended December 31, 2007
              7.29395
              7.59474Period
                  ended January 16, 2008
              7.23223
              7.26111Nine
                  months ended September 30, 2007
              7.49738
              7.65462Nine
                  months ended September 30, 2008
              6.83527
              6.97496
 The
        exchange rates used for foreign currency translation were as follows (HKD$1
        =
        USD):
 
 Period
                  Covered
              Balance
                  Sheet Date Rates
              Average
                  RatesYear
                  ended December 31, 2007
              0.12817
              0.12818Period
                  ended January 16, 2008
              0.12821
              0.12815Period
                  ended September 30,2008
              0.12872
              0.12825
 
 Comprehensive
        Income
 
 PTL
        and
        Yinlips have adopted Statement of Financial Accounting Standards No. 130
        (SFAS
        130), "Reporting Comprehensive Income", which establishes standards for the
        reporting and displaying of comprehensive income, its components and accumulated
        balances. Yinlips is disclosing this information on its Statement of
        Stockholders' Equity. Comprehensive income comprises equity except those
        resulting from investments by owners and distributions to owners.
 
 Allowance
        for doubtful accounts receivable
 
 The
        allowance for doubtful accounts is provided using a factor of 0.5‰ of the
        year-end or period-end total accounts receivable trade balances.
 
 Accounts
        Receivable
  Accounts
        receivable are carried at original invoice amount less an estimate made for
        doubtful accounts based on a review of all outstanding amounts periodically.
        Management’s judgment and estimates are made in connection with establishing the
        allowance for doubtful accounts. Specifically, Yinlips analyzes the aging
        of
        accounts receivable balances, historical bad debts, customer concentrations,
        customer credit-worthiness, current economic trends and changes in our customer
        payment terms, significant changes in customer concentration or payment terms,
        deterioration of customer credit-worthiness or weakening in economic trends
        that
        could have a significant impact on the collectability of receivables and
        its
        operating results. If the financial condition of its customers were to
        deteriorate, resulting in an impairment of their ability to make payments,
        additional allowances may be required.
 
 Inventories
  Inventories,
        which are primarily comprised of raw materials, packaging materials,
        work-in-progress, semi-assembled goods and finished goods, are stated at
        the
        lower of cost or net realizable value, using the first-in, first-out (“FIFO”)
        method. Cost is determined on the basis of a moving average costing method.
        Yinlips evaluates the need for reserves associated with obsolete, slow-moving
        and non-salable inventory by reviewing net realizable values on a periodic
        basis
        and uses specific identification method to make the reserves.
 
 4
 
 **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (continued)**
 
 Property
        and Equipment
  Property
        and equipment are recorded at cost and depreciated using the straight-line
        method, with an estimated 5% salvage value of original cost, over the estimated
        useful lives of the assets listed below.
  Expenditures
        for repairs and maintenance, if not to improve or extend the expected useful
        lives of the assets, are expensed as incurred while major replacements and
        improvements are capitalized.
 
 When
        property or equipment is retired or disposed of, the cost and accumulated
        depreciation are removed from the accounts, with any resulting gains or losses
        being included in net income or loss in the year of disposition.
 Building
              20
                  yearsMolds
              5
                  yearsMachinery
                  &Equipment
              5
                  yearsElectronic
                  Equipment
              5
                  yearsComputer
                  Software
              5
                  yearsComputer
                  Equipment
              5
                  yearsOffice
                  Equipment
              5
                  yearsOther
                  Equipment
              5
                  yearsAutomobiles
              5
                  yearsLeasehold
                  Improvement
              5
                  years
 
 Income
        Taxes
 
 PTL
        and
        Yinlips has adopted Statement of Financial Accounting Standards ("SFAS")
        No.
        109, "Accounting for Income Taxes", which requires Yinlips to recognize deferred
        tax liabilities and assets for the expected future tax consequences of events
        that have been recognized in the Yinlips’ financial statements or tax returns
        using the liability method. Under this method, deferred tax liabilities and
        assets are determined based on the temporary differences between the financial
        statements and tax basis of assets and liabilities using enacted tax rates
        in
        effect in the years in which the differences are expected to
        reverse.
 
 Business
        Combinations
 
 The
        Company adopted SFAS No. 141R, Business Combinations (SFAS No. 141R) issued
        by
        FASB on December 4, 2007. Under SFAS No. 141R requires the acquiring entity
        in a
        business combination to recognize all the assets acquired and liabilities
        assumed, establishes the acquisition date fair value as the measurement
        objective for all assets acquired and liabilities assumed, and requires the
        acquirer to expand disclosures about the nature and financial effect of the
        business combination. SFAS No. 141R is effective for business combinations
        for
        which the acquisition date is on or after the beginning of the first annual
        reporting period beginning on or after December 15, 2008. The company has
        disclosed such information in Note 3 of the financial statement.
 
 Goodwill
 
 The
        Company adopted SFAS No. 142, “Goodwill and Intangible Assets” (“SFAS 142”) on
        January 1, 2002. Under SFAS 142, goodwill is no longer amortized, but tested
        for
        impairment annually, or more frequently, if facts and circumstances warrant
        a
        review. The provisions of SFAS 142 require that a two-step test be performed
        to
        assess goodwill for impairment. First, the fair value of each reporting unit
        is
        compared to its carrying value. If the fair value exceeds the carrying value,
        goodwill is not impaired and no further testing is performed. The second
        step is
        performed if the carrying value exceeds the fair value. The implied fair
        value
        of the reporting unit’s goodwill must be determined and compared to the carrying
        value of the goodwill. If the carrying value of a reporting unit’s goodwill
        exceeds its implied fair value, an impairment loss equal to the difference
        will
        be recorded.
  5
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (continued)**
 
 Revenue
        Recognition
  Yinlips
        revenue is derived from the sale of products. Yinlips recognizes revenue
        from
        the sale of products in accordance with SAB 104. Under SAB 104, product revenue
        is recognized when persuasive evidence of an arrangement exists, delivery
        has
        occurred, the sale price is fixed or determinable, and collectibility is
        reasonably assured. In general, Yinlips recognizes revenue upon the shipment
        of
        goods. Yinlips does grant customers a right to return products. Such returns
        are
        recorded as incurred and have been immaterial for all the periods
        presented.
  Recently
        Issued Accounting Pronouncements
 
 In
        February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
        Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities”. SFAS No. 155, permits fair value re-measurement for any hybrid
        financial instrument that contains an embedded derivative that otherwise
        would
        require bifurcation, clarifies which interest-only strips and principal-only
        strips are not subject to the requirements of SFAS No. 133, establishes a
        requirement to evaluate interest in securitized financial assets to identify
        interests that are freestanding derivatives or that are hybrid financial
        instruments that contain an embedded derivative requiring bifurcation, clarifies
        that concentrations of credit risk in the form of subordination are not embedded
        derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
        qualifying special-purpose entity from holding a derivative financial instrument
        that pertains to a beneficial interest other than another derivative financial
        instrument. This statement is effective for all financial instruments acquired
        or issued after the beginning of the Yinlips’ first fiscal year that begins
        after September 15, 2006. The adoption of this statement did not have a material
        impact on the PTL’s consolidated financial position or results of
        operations.
 
 In
        March
        2006 FASB issued SFAS 156 “Accounting for Servicing of Financial Assets” this
        Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing
        of Financial Assets and Extinguishments of Liabilities, with respect to the
        accounting for separately recognized servicing assets and servicing liabilities.
        This Statement:
 ·
              Requires
                  an entity to recognize a servicing asset or servicing liability
                  each time
                  it undertakes an obligation to service a financial asset by entering
                  into
                  a servicing contract.·
              Requires
                  all separately recognized servicing assets and servicing liabilities
                  to be
                  initially measured at fair value, if practicable.·
              Permits
                  an entity to choose 'Amortization method' or ‘Fair value measurement
                  method’ for each class of separately recognized servicing assets and
                  servicing liabilities.·
              At
                  its initial adoption, permits a one-time reclassification of
                  available-for-sale securities to trading securities by entities
                  with
                  recognized servicing rights, without calling into question the
                  treatment
                  of other available-for-sale securities under Statement 115, provided
                  that
                  the available-for-sale securities are identified in some manner
                  as
                  offsetting the entity's exposure to changes in fair value of servicing
                  assets or servicing liabilities that a servicer elects to subsequently
                  measure at fair value.·
              Requires
                  separate presentation of servicing assets and servicing liabilities
                  subsequently measured at fair value in the statement of financial
                  position
                  and additional disclosures for all separately recognized servicing
                  assets
                  and servicing liabilities. An entity should adopt this Statement
                  as of the
                  beginning of its first fiscal year that begins after September
                  15,
                  2006.
 
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) ratified the provisions
        of Emerging Issues Task Force (“EITF”) Issue No. 06-3, “How Taxes Collected from
        Customers and Remitted to Governmental Authorities Should Be Presented in
        the
        Income Statement (That Is, Gross versus Net Presentation).” EITF Issue No. 06-3
        requires that the presentation of taxes within revenue-producing transactions
        between a seller and a customer, including but not limited to sales, use,
        value
        added, and some excise taxes, should be on either a gross (included in revenue
        and cost) or a net (excluded from revenue) basis. In addition, for any such
        taxes that are reported on a gross basis, a company should disclose the amounts
        of those taxes in interim and annual financial statements for each period
        for
        which an income statement is presented if those amounts are significant.
        The
        disclosure of those taxes can be done on an aggregate basis. EITF Issue No.
        06-3
        is effective for fiscal years beginning after December 15, 2006, which will
        be
        the Yinlips’ fiscal 2008. The adoption of EITF Issue No. 06-3 did not have a
        material impact on the PTL’s consolidated financial position or results of
        operations.
 
 6
 
 **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (continued)**
 
 In
        July
        2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for
        Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a
        company should recognize, measure, present and disclose in its financial
        statements uncertain tax positions that Yinlips has taken or expects to take
        on
        a tax return (including a decision whether to file or not to file a return
        in a
        particular jurisdiction). The accounting provisions of FIN No. 48 are effective
        for fiscal years beginning after December 15, 2006. The adoption of this
        Interpretation had no impact on the PTL’s consolidated financial position or
        results of operations.
 
 In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        (“SFAS”) No. 157, “Fair Value Measurements”, which establishes a framework for
        reporting fair value and expands disclosures about fair value measurements.
        SFAS
        No. 157 is effective for financial statements issued for fiscal years beginning
        after November 15, 2007 and interim periods within those fiscal years. The
        Company has adopted the standard effective January 1, 2008 for all financial
        assets and liabilities as required. The adoption of SFAS 157 is not material
        to
        the Company’s financial statements.
 
 In
        February 2007, the FASB issued Statement of Financial Accounting Standards
        No. 159, “The Fair Value Option for Financial Assets and Financial
        Liabilities-Including an amendment of FASB Statement No. 115,
        (“SFAS No. 159”). SFAS No. 159 permits entities to choose to
        measure many financial instruments and certain other items at fair value.
        Most
        of the provisions of this Statement apply only to entities that elect the
        fair
        value option. However, the amendment to FASB Statement No. 115, “Accounting
        for Certain Investments in Debt and Equity Securities,”
(“SFAS No. 115”), applies to all entities with available-for-sale and
        trading securities. SFAS No. 159 is effective for the Company’s
        consolidated financial statements for the annual reporting period beginning
        after November 15, 2007. The Company has not adopted the standard to
        measure its assets or liabilities at the fair value option.
 
 On
        December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in
        Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 requires all
        entities to report noncontrolling (minority) interests in subsidiaries as
        equity
        in the consolidated financial statements. The statement establishes a single
        method of accounting for changes in a parent’s ownership interest in a
        subsidiary that do not result in deconsolidation and expands disclosures
        in the
        consolidated financial statements. SFAS No. 160 is effective for fiscal years
        beginning after December 15, 2008 and interim periods within those fiscal
        years.
        We have not yet determined the impact of the adoption of SFAS No. 160 on
        our
        consolidated financial statements and footnote disclosures.
  In
        March 2008, the FASB issued SFAS 161, “Disclosures about Derivative
        Instruments and Hedging Activities”. The new standard is intended to improve
        financial reporting about derivative instruments and hedging activities by
        requiring enhanced disclosures to enable investors to better understand their
        effects on an entity’s financial position, financial performance, and cash
        flows. It is effective for financial statements issued for fiscal years and
        interim periods beginning after November 15, 2008, with early application
        encouraged. PTL is currently evaluating the impact of adopting SFAS 161 on
        its
        consolidated financial statements.
  7
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        3 - Business Combinations and Acquisitions**
 
 On
        June
        18, 2008, PTL acquired all of the outstanding equity of Yinlips and became
        a
        wholly-owned subsidiary when the full purchase price as originally approved
        by
        the Chinese authorities was paid. The results of Yinlips’ operations have been
        included in the consolidated financial statements since that date. On June
        11,
        2008, the original Equity Transfer Agreement was restated among the Company
        and
        the owners of Yinlips to increase the purchase price to its assessed market
        value of RMB 19,200,000. The aggregated purchase price was RMB 19,200,000
        (USD
        $2,802,002), including RMB 1 million (USD $120,967) of registered capital
        which
        was financed with a combination of cash and debt issuance. The transaction
        was
        accounted for using the purchase method of accounting in accordance with
        SFAS
        141R, Business Combinations.
  Yinlips
        Digital Technology (Shenzhen) Co., Ltd. (“Yinlips”) was established in 2001, and
        is a Chinese hi-tech company. Yinlips’ business includes design, manufacture,
        and marketing of CRTs, LCDs, and a series of portable digital devices, including
        portable DVDs, Palm PCs, MP3s, Mp4s, PMPs, Mp4+Games, Game cards, and digital
        photo frames.
  The
        fair
        value of assets acquired and liabilities assumed consist of the
        following:
 Net
                  assets on book
              
              Negativegoodwill
              
              Net
                  assets
                acquired
                  at fair
                valueCurrent
                  assets
              
              $
              6,384,744
              
              $
              (466,920
              )
              $
              5,917,824Fixed
                  assets
              
              
              803,221
              
              
              (803,221
              )
              
              -Other
                  assets
              
              
              16,434
              
              
              -
              
              
              16,434Total
                  assets acquired
              
              
              7,204,399
              
              
              (1,270,141
              )
              
              5,934,258Current
                  Liabilities
              
              
              (3,132,018
              )
              
              -
              
              
              (3,132,018
              )Total
                  liabilities assumed
              
              
              (3,132,018
              )
              
              -
              
              
              (3,132,018
              )Foreign
                  Currency Translation
              
              
              -
              
              
              -
              
              
              (238
              )Net
                  assets acquired
              
              $
              4,072,381
              
              $
              (1,270,141
              )
              $
              2,802,002
 
 The
        negative goodwill is allocated as follows:
 Fixed
                  assets
              
              $
              803,221Allowance
                  for doubtful accounts
              
              
              322,360Allowance
                  for obsolete inventories
              
              
              94,303Refundable
                  purchase price paid
              
              
              50,257Foreign
                  currency translation adjustment
              
              
              238Total
              
              $
              1,270,379
 
 The
        acquisition consideration comprised of the following:
 Cash
                  paid per original agreement
              
              $
              144,836Amount
                  due per restated agreement
              
              
              2,657,166Total
                  purchase price
              
              $
              2,802,002
 
 **Pro
        Forma Financial Statements**
 
 The
        pro
        forma financial reflects the pro forma results of operations for the nine
        months
        ended September 30, 2008 and the year ended December 31,2007, as if the Company
        had completed the acquisition of Yinlips’ net assets as of Jan 1, 2007. The pro
        forma results are not necessarily indicative of either future results of
        our
        operations or results that might have been achieved had the acquisition actually
        occurred since the beginning of 2007.
 For
                  nine months ended
              
              For
                  year endedSeptember
                  30, 2008
              
              December
                  31, 2007Sales
              
              $
              17,829,169
              
              $
              21,304,717Cost
                  of goods sold
              
              
              13,865,754
              
              
              16,883,580Net
                  income (loss)
              
              $
              1,837,830
              
              $
              2,320,545
  8
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        4 - Cash and Cash Equivalents**
 
 Cash
        and
        Cash Equivalents consist of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007Cash
                  on hand
              
              $
              14,012
              
              $
              51Cash
                  in bank
              
              
              2,876
              
              
              205Total
              
              $
              16,888
              
              $
              256
 
 **Note
        5 - Accounts Receivable**
 
 Accounts
        receivable consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007Accounts
                  receivable
              
              $
              4,837,823
              
              $
              -Allowance
                  for doubtful accounts
              
              
              (473,974
              )
              
              -Total
              
              $
              4,363,849
              
              $
              -
 
 The
        provision for bad debts increased by $459,768 in the nine months ended September
        30, 2008, as follows:
 
 September
                  30,
              
              December
                  31,2008
              
              2007Beginning
                  of year
              
              $
              14,206
              
              $
              -Current
                  period additions
              
              
              459,768
              
              
              -End
                  of period
              
              $
              473,974
              
              $
              -
 *Additional
        increase in provision for bad debts is due to business combination &
acquisition of Yinlips. (Note 3)
 
 **Note
        6 - Inventories**
 
 Inventory
        consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007Raw
                  materials
              
              $
              2,167,565
              
              $
              -Finished
                  goods
              
              
              651,502
              
              
              -Less:
                  allowance for obsolete inventories
              
              
              (847,100
              )
              
              -Total
              
              $
              1,971,967
              
              $
              -
 
 Management
        uses the specific identification method to provide an allowance for obsolete
        or
        slow-moving inventory items, including finished goods and raw materials.
        The
        allowance for obsolescence increased by $761,968 in the nine months ended
        September 30, 2008 as follows:
 September
                  30,
              
              December
                  31,2008
              
              2007Beginning
                  of year
              
              $
              85,132
              
              $
              -Additions
              
              
              761,968
              
              
              -End
                  of year
              
              $
              847,100
              
              $
              -
 *Additional
        increase in allowance for obsolescence is due to business combination and
        acquisition of Yinlips. (Note 3)
 
 9
 
 **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        7 - Refundable Purchase Price Paid**
 
 The
        Company intends to acquire a digital technology company for which they paid
        RMB
        5,771,000 ($791,204) as a deposit. On December 31, 2007, the Company disclosed
        that this business combination was expected to be completed on June 30, 2008.
        If
        the transaction is not completed on time the deposit will be fully refunded.
        However, on May 10, 2008, the two parties decided to delay the deal closing
        date
        to the end of August 2008 due to change of the operation circumstances from
        both
        the Company and the acquired. On July 19, 2008, both parties renegotiated
        and
        signed a refund agreement in which the digital technology company agreed
        to
        refund RMB3,000,000 (Approximately $439,000) on September 15, 2008 and RMB
        2,771,000 (Approximately $405,000) on October 5, 2008 unless the merger goes
        forward. By September 30, 2008, the Company had received $517,477 refund
        and the
        balance of $273,727 will be paid in October 2008.
 .
 **Note
        8 - Deposit Paid for Plant Renovation**
 
 In
        the
        third quarter of 2007, the Company signed a contract for new plant renovation
        and paid a deposit of RMB 5,000,000 (USD $685,500). The contract was terminated
        in January 2008 because of new environmental regulations enforced by the
        local
        government which prohibits the establishment of a plant within the designated
        area. The Company then entered an agreement with the original contractor
        to pay
        a penalty of RMB 300,000 ($42,552) and the rest of the deposit would be refunded
        by the end of March 31, 2008. The Company has the intention to continue with
        the
        plant renovation for its business expansion therefore renegotiated and signed
        a
        supplemental agreement on March 25, 2008 and agreed upon a plan to resolve
        the
        paid-in deposit. On July 19, 2008, the two parties amended the supplemental
        agreement and decided that the contractor to refund RMB 2,500,000 (Approximately
        $365,000) on September 20, 2008 and RMB 2,200,000 (Approximately $322,000)
        on
        October 10, 2008 unless the renovation begins. By September 30, 2008, the
        Company had received $  578,701
        refund and the balance of $  106,799
        will be paid in October, 2008.
 
 
 **Note
        9- Fixed Assets**
 
 Fixed
        assets consist of the following:
 
 September
                  30,
              
              December
                  31,2008
              
              2007Molds
              
              $
              146,128
              
              $
              -Office
                  equipment
              
              
              858
              
              
              -Accumulated
                  Depreciation
              
              
              (7,735
              )
              
              -Total
                  Fixed Assets - Net
              
              $
              139,251
              
              $
              -
 
 The
        depreciation expense is $7,580 for the nine month ended September 30,
        2008.
 
 September
                  30,
              
              December
                  31,2008
              
              2007Cost
                  of goods sold
              
              $
              7,536
              
              $
              -Operating
                  expenses
              
              
              44
              
              
              -Total
              
              
              7,580
              
              
              -
  10
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 
 **Note
        10 - Payables and Accrued Liabilities**
 
 Payables
        and accrued liabilities consist of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007Accounts
                  payable
              
              $
              798,743
              
              $
              -Accrued
                  liabilities
              
              
              144,087
              
              
              -Other
                  payables
              
              
              213,598
              
              
              -Total
              
              $
              1,156,429
              
              $
              -
 
 **Note
        11 - Due to Related Parties**
 
 Guo
        Mingguo, Vice President of the company, made a payment $73,150 to the
        suppliers.
 
 On
        January 5, 2008, PTL and Yinlips agreed that the owners of Yinlips would
        transfer their 100% ownership in its registered capital of RMB 1 million
        to PTL.
        This agreement was approved by the Chinese authorities on January 16, 2008.
        The
        two parties also agreed upon that the first payment (10% of the total
        consideration) to be made on April 2008, and the rest of the payments will
        be
        made within the next six months. On April 29, 2008, the company made its
        first
        payment of USD $14,893 to Yinlips’ owners, and a subsequent payment of USD
        $122,943 on June 18, 2008. On June 11, 2008, PTL decided to acquire all of
        the
        outstanding equity of Yinlips pursuant to the Equity Transfer Agreement and
        restated among the Company and the owners of Yinlips at its assessed market
        value of RMB 19,200,000. The payments for the residual purchase price in
        the
        amount of USD $2,668,152 (RMB 18,200,000) will be made by the end of
        2008.
 
 **Note
        12 - Short Term Loans**
 
 On
        May
        30, 2008, PTL was indebted for two bridge notes from Midsouth Investment
        and
        Trillion Investment. The principal amounts on the notes are $300,000 each
        and
        are secured by various assets and properties of the company. The term of
        the
        notes bear interest at the rate of 12 percent per annum, compounded annually
        with a six months term. A warrant was issued to each lender to purchase
        conversions shares of the Company. The warrant is exercisable for that number
        of
        conversion shares determined by dividing the Warrant Coverage Amount (50%
        of the
        principal amount of the note) by the Conversion Price prior to May 30, 2013.
        The
        fair market value of the warrant is equal to 0.01% of the principal amount
        of
        the note to which it relates.
 
 **Note
        13 - Various Taxes Payable**
 
 Various
        taxes payable consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007Value-added
                  taxes (VAT) payable:
              
              $
              52,180
              
              $
              -Other
                  misc. taxes/levies
              
              
              2,087
              
              
              -Total
              
              $
              54,267
              
              $
              -
 
 The
        other
        misc taxes/levies included City development levies and Educational levies.
        The
        City development levies and Educational levies are respectively 1% and 3%
        of
        last month VAT.
 
 11
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        14 - Wages Payable**
 
 The
        wages
        payable consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007Wages
                  payable
              
              $
              117,565
              
              $
              -Benefits
                  payable
              
              
              405,723
              
              
              -Total
              
              $
              523,288
              
              $
              -
 
 **Note
        15 - Corporate Tax Payable**
 
 As
        a
        manufacturing enterprise established in Shenzhen, PRC, Yinlips was entitled
        to a
        preferential Enterprise Income Tax (”EIT”) rate. Since 2008, the local
        government has increased the EIT rate from 15% to 18%. Yinlips is currently
        applying for the High-Tech Enterprise title. If the application is approved
        by
        the local government, Yinlips will have a tax holiday of 2 years 100% exemption
        starting from the first profitable year, and followed by 3 years of 50% tax
        deduction, and after that, Yinlips will have to pay corporate income taxes
        at
        normal EIT rate.
 
 The
        corporate income tax expense and payable are as follows:
 September
                  30,
              
              December
                  31,2008
              
              2007Corporate
                  income tax expense paid
              
              $
              10,504
              
              $
              -Corporate
                  income tax payable
              
              $
              129,749
              
              $
              -
 
 The
        tax
        authority of the PRC Government conducts periodic and ad hoc tax filing reviews
        on business enterprises operating in the PRC after those enterprises had
        completed their relevant tax filings, hence the Yinlips’ tax filings in the PRC
        may not be finalized. It is therefore uncertain as to whether the PRC tax
        authority may take different views about the Yinlips’ tax filings which may lead
        to additional tax liabilities.
 
 A
        reconciliation between the income tax computed at the U.S. statutory rate
        and
        the Company’s provision for income tax is as follows:
 September
                  30,
              
              December
                  31,2008
              
              2007U.S.
                  statutory rate
              
              
              34
              %
              
              34
              %Foreign
                  income not recognized in the U.S.
              
              
              -34
              %
              
              -34
              %PRC
                  preferential enterprise income tax rate
              
              
              18
              %
              
              15
              %Provision
                  for income tax
              
              
              18
              %
              
              15
              %
  12
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        16 - Shareholders’ Equity**
 
 **Issuance
        of Common Stock**
 
 Yinlips
        was authorized to issue 50,000 shares of common stock with par value of $1.00.
        In October 2007, Yinlips issued 50,000 shares to Wong Kowk Fu at par value
        subject to a share subscription agreement. The Subscription Receivable balances
        as of September 30, 2008 and December 31, 2007 are as follows:
 
 September
                  30,
              
              December
                  31,2008
              
              2007Share
                  subscription receivable
              
              $
              0
              
              $
              (47,492
              )
 
 **Warrants**
 
 On
        May
        30, 2008, PTL was indebted for two bridge notes from Midsouth Investment
        and
        Trillion Investment. A warrant was issued to each lender to purchase conversions
        shares of the Company. The warrant is exercisable for that number of conversion
        shares determined by dividing the Warrant Coverage Amount (50% of the principal
        amount of the note) by the Conversion Price prior to May 30, 2013. The fair
        market value of the warrant is equal to 0.01% of the principal amount of
        the
        note to which it relates.
 
 **Note
        17 -** **Statutory
        Reserves**
 
 As
        stipulated by the relevant laws and regulations for enterprises operating
        in the
        PRC, Yinlips is required to make annual appropriations to a statutory surplus
        reserve fund that is to allocate total 15% its profits after taxes, as
        determined in accordance with the PRC accounting standards applicable to
        Yinlips, to a statutory surplus reserve until such reserves reach 50% of
        the
        registered capital of Yinlips. The management made appropriation of $60,843
        for
        this surplus reserve in 2008. This amount is the 50% of the registered capital
        of Yinlips. Yinlips does not need to make this surplus reserve any more until
        increasing the registered capital.
 
 **Note
        18 -** **Commitments
        and Contingencies**
 
 **Operating
        Lease Commitments**
 
 Yinlips
        has entered into several tenancy agreements in respect to the plant and the
        office. As of March 31, 2007 the Yinlips commitment of minimum lease payments
        under these non-cancelable operating leases for the next five years and
        thereafter are as follows:
 Years
              
              
              Amounts2008
              
              $
              44,5402009
              
              
              37,8932010
              
              
              22,1052011Thereafter$
              104,538
 Total
        rental expenses for the nine months ended September 30, 2008 amounted to
        $72,217
        respectively.
  13
  **Podium
        Technology Limited and Subsidiary**
 Notes
        to
        Consolidated Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 
 **Note
        18 -** **Commitments
        and Contingencies (continued)**
 
 **Refundable
        Purchase Price Paid**
 
 The
        Company intends to acquire a digital technology company for which they paid
        RMB
        5,771,000 ($791,204) as a deposit. On December 31, 2007, the Company disclosed
        that this business combination was expected to be completed on June 30, 2008.
        If
        the transaction is not completed on time the deposit will be fully refunded.
        However, on May 10, 2008, the two parties decided to delay the deal closing
        date
        to the end of August 2008 due to change of the operation circumstances from
        both
        the Company and the acquired. On July 19, 2008, both parties renegotiated
        and
        signed a refund agreement in which the digital technology company agreed
        to
        refund RMB3,000,000 (Approximately $439,000) on September 15, 2008 and RMB
        2,771,000 (Approximately $405,000) on October 5, 2008 unless the merger goes
        forward. By September 30, 2008, the Company had received $517,477 refund
        and the
        balance of $273,727 will be paid in October,2008 according to the agreement
        between the two sides.
 
 **Deposit
        Paid for Plant Renovation**
 
 In
        the
        third quarter of 2007, the Company signed a contract for new plant renovation
        and paid a deposit of RMB 5,000,000 (USD $685,500). The contract was terminated
        in January 2008 because of new environmental regulations enforced by the
        local
        government which prohibits the establishment of a plant within the designated
        area. The Company then entered an agreement with the original contractor
        to pay
        a penalty of RMB 300,000 ($42,552) and the rest of the deposit would be refunded
        by the end of March 31, 2008. The Company has the intention to continue with
        the
        plant renovation for its business expansion therefore renegotiated and signed
        a
        supplemental agreement on March 25, 2008 and agreed upon a plan to resolve
        the
        paid-in deposit. On July 19, 2008, the two parties amended the supplemental
        agreement and decided that the contractor to refund RMB 2,500,000 (Approximately
        $365,000) on September 20, 2008 and RMB 2,200,000 (Approximately $322,000)
        on
        October 10, 2008 unless the renovation begins. By September 30, 2008, the
        Company had received $578,701 refund. The balance of $106,799 will be paid
        in
        October, 2008 according to the agreement between the two sides.
 **Business
        Combinations and Acquisitions of Yinlips**
 
 On
        January 5, 2008, PTL and Yinlips agreed that the owners of Yinlips would
        transfer their 100% ownership in its registered capital of RMB 1 million
        to PTL.
        This agreement was approved by the Chinese authorities on January 16, 2008.
        The
        two parties also agreed upon that the first payment (10% of the total
        consideration) to be made on April 2008, and the rest of the payments will
        be
        made within the next six months. On April 29, 2008, the company made its
        first
        payment of $14,893 to Yinlips’ owners, and a subsequent payment of $122,943 on
        June 18, 2008. On June 11, 2008, PTL decided to acquire all of the outstanding
        equity of Yinlips pursuant to the Equity Transfer Agreement and restated
        among
        the Company and the owners of Yinlips at its assessed market value of RMB
        19,200,000. The payments for the residual purchase price in the amount of
        $2,668,152 (RMB 18,200,000) will be made by the end of 2008.
 
 **Note
        19 - Current Vulnerability Due to Certain Concentrations**
 
 Yinlips’
        operations are all carried out in the PRC. Accordingly, Yinlips’ business,
        financial condition and results of operations may be influenced by the
        political, economic and legal environments in the PRC, and by the general
        state
        of the PRC’s economy.
 
 Yinlips’
        operations in the PRC are subject to specific considerations and significant
        risks not typically associated with companies in the North America and Western
        Europe. These include risks associated with, among others, the political,
        economic and legal environments and foreign currency exchange. Yinlips’ results
        may be adversely affected by changes in governmental policies with respect
        to
        laws and regulations, anti-inflationary measures, currency conversion and
        remittance abroad, and rates and methods of taxation, among other
        things.
 
 
 **Note
        20 -Subsequent Events**
 
 On
        October 17, 2008, the Company was acquired by SRKP 17, Inc., which is a
        development stage company, incorporated under the laws of the State of Delaware
        on December 7, 2006, pursuant to a Share and Warrant Exchange Agreement.
        In
        consideration, the SRKP 17, Inc. will issue an aggregate of 65,795 shares
        of the
        its common stock, $0.0001 par value and warrants to purchase 300,000 its
        shares
        to the shareholders of the Company. As a result of this transaction, the
        Company
        became a wholly-owned subsidiary of SRKP 17, Inc. On October 20, 2008, SRKP
        17,
        Inc. changed its name from SRKP 17, Inc. to Yinlips Technology, Inc.
  14




**Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Balance
        Sheets
 (In
        US
        Dollars)
 
 **September
                  30,**
              
              **December
                  31,****2008**
              
              **2007**
              
              **2007**
              
              **2006****(Unaudited)**
              
              **(Unaudited)****Assets**Current
                  AssetsCash
                  and cash equivalents (Note 3)
              
              $
              16,141
              
              $
              7,316
              
              $
              20,287
              
              $
              21,832Accounts
                  receivable, net (Note 4)
              
              
              4,738,661
              
              
              1,731,120
              
              
              2,020,275
              
              
              1,479,870Inventories,
                  net (Note 5)
              
              
              2,728,223
              
              
              1,039,026
              
              
              1,622,372
              
              
              955,021Refundable
                  purchase price paid (Note 6)
              
              
              273,727
              
              
              769,736
              
              
              791,204
              
              
              -Plant
                  renovation deposit (Note 7)
              
              
              106,799
              
              
              666,900
              
              
              685,500
              
              
              -**Total
                  current assets**
              
              
              7,863,551
              
              
              4,214,098
              
              
              5,139,638
              
              
              2,456,723Fixed
                  assets, net (Note 8)
              
              
              1,629,040
              
              
              1,450,692
              
              
              1,503,192
              
              
              1,359,048****Other
                  receivables
              
              
              16,473
              
              
              24,008
              
              
              15,437
              
              
              2,129**Total
                  Assets**
              
              $
              9,509,064
              
              $
              5,688,798
              
              $
              6,658,267
              
              $
              3,817,900**Liabilities
                  and Shareholders' Equity**Current
                  LiabilitiesAccounts
                  payable and accrued liabilities (Note 9)
              
              $
              1,156,428
              
              $
              1,504,683
              
              $
              1,120,591
              
              $
              1,097,725Various
                  taxes payable (Note 10)
              
              
              54,267
              
              
              61,433
              
              
              81,277
              
              
              55,835Wages
                  payable (Note 11)
              
              
              523,288
              
              
              305,220
              
              
              368,594
              
              
              184,175Corporate
                  taxes payable (Note 12)
              
              
              129,749
              
              
              91,011
              
              
              195,041
              
              
              184,511Due
                  to related parties (Note 13)
              
              
              518,625
              
              
              -
              
              
              -
              
              
              7,913**Total
                  current liabilities**
              
              
              2,382,357
              
              
              1,962,347
              
              
              1,765,503
              
              
              1,530,159**Commitments
                  and contingencies**(Note
                  16)
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Shareholders'
                  Equity**Paid-in
                  capital (Note 14)
              
              
              120,967
              
              
              120,967
              
              
              120,967
              
              
              120,967Accumulated
                  other comprehensive income
              
              
              694,586
              
              
              192,488
              
              
              328,092
              
              
              73,234Restricted
                  earnings (Note 15)
              
              
              70,881
              
              
              70,881
              
              
              70,881
              
              
              70,881Retained
                  earnings (unrestricted)
              
              
              6,240,273
              
              
              3,342,115
              
              
              4,372,824
              
              
              2,022,659**Total
                  Shareholders' Equity**
              
              
              7,126,707
              
              
              3,726,451
              
              
              4,892,764
              
              
              2,287,741**Total
                  Liabilities and Shareholders' Equity**
              
              $
              9,509,064
              
              $
              5,688,798
              
              $
              6,658,267
              
              $
              3,817,900
  The
        accompanying notes are an integral part of these financial
        statements.
 
 
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Statements
        of Operations
 (In
        US
        Dollars)
 
 **For
                  Three Months Ended**
              
              **For
                  Nine Months Ended****September
                  30,**
              
              **September
                  30,****2008**
              
              **2007**
              
              **2008**
              
              **2007****(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)**
              
              **(Unaudited)****Revenue**Sales
              
              $
              5,509,358
              
              $
              5,033,171
              
              $
              17,829,169
              
              $
              14,305,912Cost
                  of goods sold
              
              
              (4,244,747
              )
              
              (4,062,013
              )
              
              (13,865,754
              )
              
              (11,607,047
              )**Gross
                  Profit**
              
              
              1,264,611
              
              
              971,158
              
              
              3,963,415
              
              
              2,698,865Selling
                  Expenses
              
              
              144,176
              
              
              112,943
              
              
              469,995
              
              
              325,439General
                  and administrative
              
              
              93,578
              
              
              63,693
              
              
              411,118
              
              
              137,536Research
                  and development
              
              
              246,521
              
              
              216,078
              
              
              716,818
              
              
              640,929Depreciation
                  of property, plant and equipment
              
              
              19,291
              
              
              15,046
              
              
              56,726
              
              
              44,503**Total
                  operating expenses**
              
              
              503,566
              
              
              407,760
              
              
              1,654,657
              
              
              1,148,407**Income
                  from operations**
              
              
              761,045
              
              
              563,398
              
              
              2,308,758
              
              
              1,550,458**Other
                  income (expenses)**Interest
                  income (expense), net
              
              
              531
              
              
              523
              
              
              1,256
              
              
              1,793Penalty
                  on renovation contract
              
              
              (459
              )
              
              -
              
              
              (43,011
              )
              
              -Other
                  income (expense), net
              
              
              (36
              )
              
              (89
              )
              
              -
              
              
              50**Total
                  other income (expenses)**
              
              
              36
              
              
              434
              
              
              (41,755
              )
              
              1,843**Income
                  before income taxes**
              
              
              761,081
              
              
              563,832
              
              
              2,267,003
              
              
              1,552,301Income
                  taxes (Note 12)
              
              
              (122,929
              )
              
              (84,575
              )
              
              (399,554
              )
              
              (232,845
              )Net
                  income
              
              
              638,152
              
              
              479,257
              
              
              1,867,449
              
              
              1,319,456Other
                  Comprehensive Income:Foreign
                  currency translation adjustment
              
              
              15,035
              
              
              49,616
              
              
              366,494
              
              
              119,254**Comprehensive
                  Income**
              
              $
              653,187
              
              $
              528,873
              
              $
              2,233,943
              
              $
              1,438,710
  The
        accompanying notes are an integral part of these financial
        statements.
  1
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Statements
        of Cash Flows
 (In
        US
        Dollars)
 
 **For
                  Nine Months Ended**
              
              **For
                  Years Ended****September
                  30,**
              
              **December
                  31,****2008**
              
              **2007**
              
              **2007**
              
              **2006****Cash
                  Flows From Operating Activities**
              
              **(Unaudited)**
              
              **(Unaudited)**Net
                  Income
              
              $
              1,867,449
              
              $
              1,319,456
              
              $
              2,350,165
              
              $
              1,415,307Adjustments
                  to reconcile net income to netcash
                  provided (used) by operating activities:Depreciation
              
              
              147,890
              
              
              111,647
              
              
              152,660
              
              
              87,326Changes
                  in operating assets and liabilities:Accounts
                  receivable, net
              
              
              (2,718,386
              )
              
              (251,250
              )
              
              (540,405
              )
              
              (829,557
              )Refundable
                  purchase price paid
              
              
              517,477
              
              
              (769,736
              )
              
              (791,204
              )
              
              -Plant
                  renovation deposit
              
              
              578,701
              
              
              (666,900
              )
              
              (685,500
              )
              
              -Other
                  receivables
              
              
              (1,036
              )
              
              (21,879
              )
              
              (13,308
              )
              
              (270
              )Inventories,
                  net
              
              
              (1,105,851
              )
              
              (84,005
              )
              
              (667,351
              )
              
              (482,038
              )Accounts
                  payable and accrued liabilities
              
              
              35,837
              
              
              406,958
              
              
              22,866
              
              
              420,828Various
                  taxes payable
              
              
              (27,010
              )
              
              5,598
              
              
              25,442
              
              
              24,219Wages
                  payable
              
              
              154,694
              
              
              121,045
              
              
              184,419
              
              
              103,335Corporate
                  tax payable
              
              
              (65,292
              )
              
              (93,500
              )
              
              10,530
              
              
              151,970**Net
                  cash provided (used) by operating activities**
              
              
              (615,527
              )
              
              77,434
              
              
              48,314
              
              
              891,120**Cash
                  Flows From Investing Activities**Purchases
                  of property and equipment
              
              
              (172,730
              )
              
              (151,230
              )
              
              (209,275
              )
              
              (906,717
              )**Net
                  cash used by investing activities**
              
              
              (172,730
              )
              
              (151,230
              )
              
              (209,275
              )
              
              (906,717
              )**Cash
                  Flows From Financing Activities**Due
                  to related parties
              
              
              518,625
              
              
              (7,913
              )
              
              (7,913
              )
              
              (2,518
              )**Net
                  cash provided (used) by financing activities**
              
              
              518,625
              
              
              (7,913
              )
              
              (7,913
              )
              
              (2,518
              )Effect
                  of exchange rate changes on cash
              
              
              265,486
              
              
              67,193
              
              
              167,329
              
              
              23,396**Net
                  increase (decrease) in cash and cash equivalents**
              
              
              (4,146
              )
              
              (14,516
              )
              
              (1,545
              )
              
              5,281**Cash
                  and cash equivalents, beginning of period**
              
              
              20,287
              
              
              21,832
              
              
              21,832
              
              
              16,551**Cash
                  and cash equivalents, end of period**
              
              $
              16,141
              
              $
              7,316
              
              $
              20,287
              
              $
              21,832**Supplemental
                  disclosure information:**Interest
                  expense paid
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Income
                  taxes paid
              
              $
              269,804
              
              $
              141,834
              
              $
              411,155
              
              $
              249,760
 
 2
  The
        accompanying notes are an integral part of these financial
        statements.
 **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Statements
        of Changes in Shareholders’ Equity and Comprehensive Income
 (In
        US
        Dollars)
   Paid
                  in
                Capital
              
              
              Retained
                Earnings
              
              
              Retained
                Earnings
                Restricted
              
              
              Accumulated
                Other
                  Comprehensive
                Income
              
              
              Total
              
              
              Comprehensive
                Income**Balance
                  at December 31, 2005**
              
              $
              120,967
              
              $
              607,352
              
              $
              70,881
              
              $
              14,928
              
              $
              814,128Net
                  income for the year
              
              
              -
              
              
              1,415,307
              
              
              -
              
              
              -
              
              
              1,415,307
              
              $
              1,415,307Foreign
                  currency translationadjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              58,306
              
              
              58,306
              
              
              58,306Comprehensive
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              1,473,613**Balance
                  at December 31, 2006**
              
              
              120,967
              
              
              2,022,659
              
              
              70,881
              
              
              73,234
              
              
              2,287,741Net
                  income for the year
              
              
              -
              
              
              2,350,165
              
              
              -
              
              
              -
              
              
              2,350,165
              
              $
              2,350,165Foreign
                  currency translationadjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              254,858
              
              
              254,858
              
              
              254,858Comprehensive
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              2,605,023**Balance
                  at December 31, 2007**
              
              
              120,967
              
              
              4,372,824
              
              
              70,881
              
              
              328,092
              
              
              4,892,764Net
                  income for 9 monthsended
                  S**eptember
                  30**,
                  2008
              
              
              -
              
              
              1,867,449
              
              
              -
              
              
              -
              
              
              1,867,451
              
              $
              1,867,449Foreign
                  currency translationadjustment
              
              
              -
              
              
              -
              
              
              -
              
              
              366,494
              
              
              366,494
              
              
              366,494Comprehensive
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              $
              2,233,943**Balance
                  at September 30, 2008**
              
              $
              120,967
              
              $
              6,240,273
              
              $
              70,881
              
              $
              694,586
              
              $
              7,126,709
  The
        accompanying notes are an integral part of these
        financial statements.
  3
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        1 -**  **Organization
        and Nature of Business**
  Yinlips
        Digital Technology (Shenzhen) Co., Ltd. (“Yinlips”, or “the Company”) was
        established in 2001, and is a Chinese hi-tech company. The Company’s business
        includes design, manufacture, and marketing of CRTs, LCDs, and a series of
        portable digital devices, including portable DVDs, Palm PCs, MP3s, Mp4s,
        PMPs,
        Mp4+ Games, Game cards, and digital photo frames. Yinlips also accepts ODM
        and
        OEM orders from the United States, Europe, South America, and Southeast
        Asia.
  On
        December 27, 2007, the Company signed an Equity Transfer Agreement with Podium
        Technology Limited (“PTL”). On January 5, 2008, the two parties agreed that the
        owners of Yinlips would transfer their 100% ownership in its registered capital
        of RMB 1 million to PTL. This Agreement was approved by the Chinese authorities
        on January 16, 2008.
  Podium
        Technology Limited (“PTL”) was established on July 3, 2007 in the British Virgin
        Islands and the registered office is located at OMC Chamers, P.O. Box 3215,
        Road
        Town, Tortolar, British Virgin Islands. PTL authorized 50,000 shares, par
        value
        $1 per share. On October 3, 2007, PTL issued 50,000 shares at par value to
        Mr.
        Wong Kowk Fu, the director of PTL. Mr. Wong holds 100% of the shares of PTL,
        an
        investment holding company that had no subsidiary before this transaction.
  On
        June
        18, 2008, PTL completed the acquisition of Yinlips and became wholly-owned
        subsidiary of PTL.
  **Note
        2 - Summary of Significant Accounting Policies**
 
 Basis
        of Presentation
 
 The
        accompanying financial statements of the Company have been prepared in
        accordance with accounting principles generally accepted in the United States
        of
        America.
 
 On
        June
        18, 2008, PTL completed the acquisition of Yinlips and became wholly-owned
        subsidiary of PTL. The accompanying financial statements of the Company are
        these of Yinlips only.
 
 Use
        of
        Estimates
 
 The
        preparation of the financial statements, in conformity with accounting
        principles generally accepted in the United States of America, requires
        management to make estimates and assumptions that affect the 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, and such differences may be material to the financial
        statements.
 
 Cash
        and Cash Equivalents
 
 Cash
        and
        cash equivalents includes cash on hand, cash on deposit with various financial
        institutions in the PRC, and all highly-liquid investments with original
        maturities of three months or less at the time of purchase. Banks and other
        financial institutions in the PRC do not provide insurance for funds held
        on
        deposit.
 
 Advertising
 
 The
        Company expenses advertising costs as incurred. Advertising is included in
        selling expenses for financial reporting.
 
 Foreign
        Currency Transactions and Translations
 
 The
        Company’s reporting currency is the U.S. dollar. The company operates in China
        and uses Renminbi as its functional currency. The financial statement is
        translated into U.S. dollars using period-end rates of exchange for assets
        and
        liabilities and average rates of exchange in the period for revenues and
        expenses. Translation gains and losses are recorded in accumulated other
        comprehensive income or loss as a component of shareholders’ equity. Net gains
        and losses resulting from foreign exchange transactions are included in other
        income.
  4
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (continued)**
 
 The
        exchange rates used for foreign currency translation were as follows (USD$1
        =
        RMB)
 
 Period
                  Covered
              Balance
                  Sheet Date Rates
              Average
                  RatesYear
                  ended December 31, 2006
              7.79750
              7.96369Year
                  ended December 31, 2007
              7.29395
              7.59474Nine
                  months ended September 30, 2007
              7.49738
              7.65462Nine
                  months ended September 30, 2008
              6.83527
              6.97496
 
 Comprehensive
        Income
 
 The
        Company has adopted Statement of Financial Accounting Standards No. 130 (SFAS
        130), "Reporting Comprehensive Income", which establishes standards for the
        reporting and displaying of comprehensive income, its components and accumulated
        balances. The Company is disclosing this information on its Statement of
        Stockholders' Equity. Comprehensive income comprises equity except those
        resulting from investments by owners and distributions to owners.
 
 Allowance
        for doubtful accounts receivable
 
 The
        allowance for doubtful accounts is provided using a factor of 0.5% of the
        year-end or period-end total accounts receivable trade balances.
 
 Accounts
        Receivable
  Accounts
        receivable are carried at original invoice amount less an estimate made for
        doubtful accounts based on a review of all outstanding amounts periodically.
        Management’s judgment and estimates are made in connection with establishing the
        allowance for doubtful accounts. Specifically, the Company analyzes the aging
        of
        accounts receivable balances, historical bad debts, customer concentrations,
        customer credit-worthiness, current economic trends and changes in our customer
        payment terms, significant changes in customer concentration or payment terms,
        deterioration of customer credit-worthiness or weakening in economic trends
        that
        could have a significant impact on the collectability of receivables and
        its
        operating results. If the financial condition of its customers were to
        deteriorate, resulting in an impairment of their ability to make payments,
        additional allowances may be required.
 
 Inventories
  Inventories,
        which are primarily comprised of raw materials, packaging materials,
        work-in-progress, semi-assembled goods and finished goods, are stated at
        the
        lower of cost or net realizable value, using the first-in, first-out (“FIFO”)
        method. Cost is determined on the basis of a moving average costing method.
        The
        Company evaluates the need for reserves associated with obsolete, slow-moving
        and non-salable inventory by reviewing net realizable values on a periodic
        basis
        and uses specific identification method to make the reserves.
  Research
        and Development Costs
 Research
        and development costs are expensed to operation as incurred. The Company
        has
        spent $716,818, $ 640,929,, $867,903, and $236,041 on research and development
        for the six months ended September 30, 2008 and 2007, and the years ended
        December 31, 2007 and 2006, respectively.
 
 Property
        and Equipment
  Property
        and equipment are recorded at cost and depreciated using the straight-line
        method, with an estimated 5% salvage value of original cost, over the estimated
        useful lives of the assets listed below.
  Expenditures
        for repairs and maintenance, if not to improve or extend the expected useful
        lives of the assets, are expensed as incurred while major replacements and
        improvements are capitalized.
  When
        property or equipment is retired or disposed of, the cost and accumulated
        depreciation are removed from the accounts, with any resulting gains or losses
        being included in net income or loss in the year of disposition.
  5
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (continued)**
 
 Building
              20
                  yearsMolds
              5
                  yearsMachinery
                  &Equipment
              5
                  yearsElectronic
                  Equipment
              5
                  yearsComputer
                  Software
              5
                  yearsComputer
                  Equipment
              5
                  yearsOffice
                  Equipment
              5
                  yearsOther
                  Equipment
              5
                  yearsAutomobiles
              5
                  yearsLeasehold
                  Improvement
              5
                  years
 
 Income
        Taxes
 
 The
        Company has adopted Statement of Financial Accounting Standards ("SFAS")
        No.
        109, "Accounting for Income Taxes", which requires the Company to recognize
        deferred tax liabilities and assets for the expected future tax consequences
        of
        events that have been recognized in the Company's financial statements or
        tax
        returns using the liability method. Under this method, deferred tax liabilities
        and assets are determined based on the temporary differences between the
        financial statements and tax basis of assets and liabilities using enacted
        tax
        rates in effect in the years in which the differences are expected to
        reverse.
 
 Goodwill
 
 The
        Company adopted SFAS No. 142, “Goodwill and Intangible Assets” (“SFAS 142”) on
        January 1, 2002. Under SFAS 142, goodwill is no longer amortized, but tested
        for
        impairment annually, or more frequently, if facts and circumstances warrant
        a
        review. The provisions of SFAS 142 require that a two-step test be performed
        to
        assess goodwill for impairment. First, the fair value of each reporting unit
        is
        compared to its carrying value. If the fair value exceeds the carrying value,
        goodwill is not impaired and no further testing is performed. The second
        step is
        performed if the carrying value exceeds the fair value. The implied fair
        value
        of the reporting unit’s goodwill must be determined and compared to the carrying
        value of the goodwill. If the carrying value of a reporting unit’s goodwill
        exceeds its implied fair value, an impairment loss equal to the difference
        will
        be recorded. The Company does not have Goodwill and Intangible Assets since
        2005.
  Revenue
        Recognition
  The
        company revenue is derived from the sale of products. The Company recognizes
        revenue from the sale of products in accordance with SAB 104. Under SAB 104,
        product revenue is recognized when persuasive evidence of an arrangement
        exists,
        delivery has occurred, the sale price is fixed or determinable, and
        collectability is reasonably assured. In general, the Company recognizes
        revenue
        upon the shipment of goods. The Company does grant customers a right to return
        products. Such returns are recorded as incurred and have been immaterial
        for all
        the periods presented.
  Recently
        Issued Accounting Pronouncements
 
 In
        February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
        Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities”. SFAS No. 155, permits fair value re-measurement for any hybrid
        financial instrument that contains an embedded derivative that otherwise would
        require bifurcation, clarifies which interest-only strips and principal-only
        strips are not subject to the requirements of SFAS No. 133, establishes a
        requirement to evaluate interest in securitized financial assets to identify
        interests that are freestanding derivatives or that are hybrid financial
        instruments that contain an embedded derivative requiring bifurcation, clarifies
        that concentrations of credit risk in the form of subordination are not embedded
        derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
        qualifying special-purpose entity from holding a derivative financial instrument
        that pertains to a beneficial interest other than another derivative financial
        instrument. This statement is effective for all financial instruments acquired
        or issued after the beginning of the Company’s first fiscal year that begins
        after September 15, 2006. The adoption of this statement did not have a material
        impact on the Company’s financial position or results of
        operations.
  6
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (Continued)**
 
 In
        March
        2006 FASB issued SFAS 156 “Accounting for Servicing of Financial Assets” this
        Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing
        of Financial Assets and Extinguishments of Liabilities, with respect to the
        accounting for separately recognized servicing assets and servicing liabilities.
        This Statement:
 
 ·
              Requires
                  an entity to recognize a servicing asset or servicing liability
                  each time
                  it undertakes an obligation to service a financial asset by entering
                  into
                  a servicing contract.·
              Requires
                  all separately recognized servicing assets and servicing liabilities
                  to be
                  initially measured at fair value, if practicable.·
              Permits
                  an entity to choose 'Amortization method' or ‘Fair value measurement
                  method’ for each class of separately recognized servicing assets and
                  servicing liabilities.·
              At
                  its initial adoption, permits a one-time reclassification of
                  available-for-sale securities to trading securities by entities
                  with
                  recognized servicing rights, without calling into question the
                  treatment
                  of other available-for-sale securities under Statement 115, provided
                  that
                  the available-for-sale securities are identified in some manner
                  as
                  offsetting the entity's exposure to changes in fair value of servicing
                  assets or servicing liabilities that a servicer elects to subsequently
                  measure at fair value.·
              Requires
                  separate presentation of servicing assets and servicing liabilities
                  subsequently measured at fair value in the statement of financial
                  position
                  and additional disclosures for all separately recognized servicing
                  assets
                  and servicing liabilities. An entity should adopt this Statement
                  as of the
                  beginning of its first fiscal year that begins after September
                  15,
                  2006.
 The
        adoption of this statement did not have a material impact on the Company’s
        financial position or results of operations.
 
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) ratified the provisions
        of Emerging Issues Task Force (“EITF”) Issue No. 06-3, “How Taxes Collected from
        Customers and Remitted to Governmental Authorities Should Be Presented in
        the
        Income Statement (That Is, Gross versus Net Presentation).” EITF Issue No. 06-3
        requires that the presentation of taxes within revenue-producing transactions
        between a seller and a customer, including but not limited to sales, use,
        value
        added, and some excise taxes, should be on either a gross (included in revenue
        and cost) or a net (excluded from revenue) basis. In addition, for any such
        taxes that are reported on a gross basis, a company should disclose the amounts
        of those taxes in interim and annual financial statements for each period
        for
        which an income statement is presented if those amounts are significant.
        The
        disclosure of those taxes can be done on an aggregate basis. EITF Issue No.
        06-3
        is effective for fiscal years beginning after December 15, 2006, which will
        be
        the Company’s fiscal 2008. The adoption of EITF Issue No. 06-3 did not have a
        material impact on the Company’s consolidated results of operations or financial
        position.
 
 In
        July
        2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for
        Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a
        company should recognize, measure, present and disclose in its financial
        statements uncertain tax positions that the company has taken or expects
        to take
        on a tax return (including a decision whether to file or not to file a return
        in
        a particular jurisdiction). The accounting provisions of FIN No. 48 are
        effective for fiscal years beginning after December 15, 2006. The adoption
        of
        this Interpretation had no impact on the Company’s financial position or results
        of operations.
 
 In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        (“SFAS”) No. 157, “Fair Value Measurements”, which establishes a framework for
        reporting fair value and expands disclosures about fair value measurements.
        SFAS
        No. 157 is effective for financial statements issued for fiscal years beginning
        after November 15, 2007 and interim periods within those fiscal years. The
        Company has adopted the standard effective January 1, 2008 for all financial
        assets and liabilities as required. The adoption of SFAS 157 is not material
        to
        the Company’s financial statements.
 
 In
        February 2007, the FASB issued Statement of Financial Accounting Standards
        No. 159, “The Fair Value Option for Financial Assets and Financial
        Liabilities-Including an amendment of FASB Statement No. 115,
        (“SFAS No. 159”). SFAS No. 159 permits entities to choose to
        measure many financial instruments and certain other items at fair value.
        Most
        of the provisions of this Statement apply only to entities that elect the
        fair
        value option. However, the amendment to FASB Statement No. 115, “Accounting
        for Certain Investments in Debt and Equity Securities,”
(“SFAS No. 115”), applies to all entities with available-for-sale and
        trading securities. SFAS No. 159 is effective for the Company’s
        consolidated financial statements for the annual reporting period beginning
        after November 15, 2007. The Company has not adopted the standard to
        measure its assets or liabilities at the fair value option.
  7
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        2 - Summary of Significant Accounting Policies (Continued)**
 
 On
        December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in
        Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 requires all
        entities to report noncontrolling (minority) interests in subsidiaries as
        equity
        in the consolidated financial statements. The statement establishes a single
        method of accounting for changes in a parent’s ownership interest in a
        subsidiary that do not result in deconsolidation and expands disclosures
        in the
        consolidated financial statements. SFAS No. 160 is effective for fiscal years
        beginning after December 15, 2008 and interim periods within those fiscal
        years.
        We have not yet determined the impact of the adoption of SFAS No. 160 on
        our
        consolidated financial statements and footnote disclosures.
  On
        December 4, 2007, the FASB issued SFAS No. 141R, Business Combinations (SFAS
        No.
        141R). SFAS No. 141R requires the acquiring entity in a business combination
        to
        recognize all the assets acquired and liabilities assumed, establishes the
        acquisition date fair value as the measurement objective for all assets acquired
        and liabilities assumed, and requires the acquirer to expand disclosures
        about
        the nature and financial effect of the business combination. SFAS No. 141R
        is
        effective for business combinations for which the acquisition date is on
        or
        after the beginning of the first annual reporting period beginning on or
        after
        December 15, 2008. We have not yet determined the impact of the adoption
        of SFAS
        No. 141R on our consolidated financial statements and footnote
        disclosures.
 
 In
        March 2008, the FASB issued SFAS 161, “Disclosures about Derivative
        Instruments and Hedging Activities”. The new standard is intended to improve
        financial reporting about derivative instruments and hedging activities by
        requiring enhanced disclosures to enable investors to better understand their
        effects on an entity’s financial position, financial performance, and cash
        flows. It is effective for financial statements issued for fiscal years and
        interim periods beginning after November 15, 2008, with early application
        encouraged. The Company is currently evaluating the impact of adopting SFAS
        161
        on its consolidated financial statements.
 
 **Note
        3 - Cash and Cash Equivalents**
 
 Cash
        and
        Cash Equivalents consist of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Cash
                  on hand
              
              $
              13,960
              
              $
              3,497
              
              $
              4,256
              
              $
              10,555Cash
                  in bank
              
              
              2,181
              
              
              3,819
              
              
              16,031
              
              
              11,277Total
              
              $
              16,141
              
              $
              7,316
              
              $
              20,287
              
              $
              21,832
 
 **Note
        4 - Accounts Receivable**
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Accounts
                  receivable
              
              $
              4,753,820
              
              $
              1,738,866
              
              $
              2,034,481
              
              $
              1,487,317Allowance
                  for doubtful accounts
              
              
              (15,159
              )
              
              (7,745
              )
              
              (14,206
              )
              
              (7,447
              )Total
              
              $
              4,738,661
              
              $
              1,731,120
              
              $
              2,020,275
              
              $
              1,479,870
 
 Accounts
        receivable consists of the following:
 
 The
        provision for bad debts increased by $953, $298 , $6,759 and $4,170 for the
        Nine
        month ended September 30, 2008 and 2007, and the years ended December 31,
        2007
        and 2006, respectively, as follows:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Beginning
                  of year
              
              $
              14,206
              
              $
              7,447
              
              $
              7,447
              
              $
              3,277Addition
              
              
              953
              
              
              298
              
              
              6,759
              
              
              4,170End
                  of year
              
              $
              15,159
              
              $
              7,745
              
              $
              14,206
              
              $
              7,447
 
 8
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        5 - Inventories**
 
 Inventory
        consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Raw
                  materials
              
              $
              2,167,565
              
              $
              423,394
              
              $
              467,658
              
              $
              446,370WIP
              
              
              
              
              
              508,259
              
              
              504,698
              
              
              -Finished
                  goods
              
              
              651,503
              
              
              190,195
              
              
              735,148
              
              
              585,107Semi-assembled
                  goods
              
              
              -
              
              
              -
              
              
              -
              
              
              3,181Less:
                  Allowance for obsolete inventories
              
              
              (90,845
              )
              
              (82,822
              )
              
              (85,132
              )
              
              (79,637
              )Total
              
              $
              2,728,223
              
              $
              1,039,026
              
              $
              1,622,372
              
              $
              955,021
 
 Management
        uses the specific identification method to provide an allowance for obsolete
        or
        slow-moving inventory items, including finished goods and raw materials.
        The
        allowance for obsolescence increased by $5,713, $3,185, $5,495 and $60,294 for
        the
        Nine month ended September 30, 2008 and 2007, and the years ended December
        31,
        2007 and 2006, respectively.
 
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Beginning
                  of year
              
              $
              85,132
              
              $
              79,637
              
              $
              79,637
              
              $
              19,343Additions
              
              
              5,713
              
              
              3,185
              
              
              5,495
              
              
              60,294End
                  of year
              
              $
              90,845
              
              $
              82,822
              
              $
              85,132
              
              $
              79,637
 
 **Note
        6 - Refundable Purchase Price Paid**
 
 The
        Company intends to acquire a digital technology company for which they paid
        RMB
        5,771,000 ($791,204) as a deposit. On December 31, 2007, the Company disclosed
        that this business combination was expected to be completed on June 30, 2008.
        If
        the transaction is not completed on time the deposit will be fully refunded.
        However, on May 10, 2008, the two parties decided to delay the deal closing
        date
        to the end of August 2008 due to change of the operation circumstances from
        both
        the Company and the acquired. On July 19, 2008, both parties renegotiated
        and
        signed a refund agreement in which the digital technology company agreed
        to
        refund RMB3,000,000 (Approximately $439,000) on September 15, 2008 and RMB
        2,771,000 (Approximately $405,000) on October 5, 2008 unless the merger goes
        forward. As of September 30, 2008, the Company has received $517,477 refund
        and
        the balance of $273,727 will be paid in October 2008.
  **Note
        7 - Deposit Paid for Plant Renovation**
 
 In
        the
        third quarter of 2007, the Company signed a contract for new plant renovation
        and paid a deposit of RMB 5,000,000 (USD $685,500). The contract was terminated
        in January 2008 because of new environmental regulations enforced by the
        local
        government which prohibits the establishment of a plant within the designated
        area. The Company then entered an agreement with the original contractor
        to pay
        a penalty of RMB 300,000 ($42,552) and the rest of the deposit would be refunded
        by the end of March 31, 2008. The Company has the intention to continue with
        the
        plant renovation for its business expansion therefore renegotiated and signed
        a
        supplemental agreement on March 25, 2008 and agreed upon a plan to resolve
        the
        paid-in deposit. On July 19, 2008, the two parties amended the supplemental
        agreement and decided that the contractor to refund RMB 2,500,000 (Approximately
        $365,000) on September 20, 2008 and RMB 2,200,000 (Approximately $322,000)
        on
        October 10, 2008 unless the renovation begins. As of September 30, 2008,
        the
        Company has received $  578,701
        refund and the balance of $  106,799
        will be paid in October 2008.
  9
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        8 - Fixed Assets**
 Fixed
        assets consist of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Building
              
              $
              888,853
              
              $
              810,358
              
              $
              832,958
              
              $
              779,190Molds
              
              
              310,155
              
              
              76,827
              
              
              130,519
              
              
              70,905Machinery
                  and Equipments
              
              
              670,613
              
              
              611,390
              
              
              628,442
              
              
              452,348Computer
                  software
              
              
              4,170
              
              
              2,934
              
              
              3,016
              
              
              2,822Office
                  equipment
              
              
              52,590
              
              
              44,041
              
              
              47,547
              
              
              41,705Automobiles
              
              
              86,844
              
              
              79,174
              
              
              81,383
              
              
              73,583Leasehold
                  improvements
              
              
              128,744
              
              
              117,374
              
              
              120,648
              
              
              109,089Total
                  Fixed Assets - Cost
              
              
              2,141,969
              
              
              1,742,098
              
              
              1,844,513
              
              
              1,529,642Accumulated
                  Depreciation
              
              
              (512,929
              )
              
              (291,406
              )
              
              (341,321
              )
              
              (170,594
              )Total
                  Fixed Assets - Net
              
              $
              1,629,040
              
              $
              1,450,692
              
              $
              1,503,192
              
              $
              1,359,048
 
 The
        depreciation expenses are $147,890, $111,647, $152,660 and $87,326 for the
        Nine
        month ended September 30,, 2008 and 2007, and the years ended December 31,
        2007
        and 2006, respectively.
 
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Cost
                  of goods sold
              
              $
              73,559
              
              $
              49,900
              
              $
              125,191
              
              $
              55,558Operating
                  expenses
              
              
              77,331
              
              
              61,747
              
              
              27,469
              
              
              31,768Total
              
              $
              147,890
              
              $
              111,647
              
              $
              152,660
              
              $
              87,326
 
 **Note
        9 - Payables and Accrued Liabilities**
 
 Payables
        and accrued liabilities consist of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Accounts
                  payable
              
              $
              798,743
              
              $
              950,425
              
              $
              978,777
              
              $
              1,027,283Accrued
                  liabilities
              
              
              144,087
              
              
              80,693
              
              
              100,684
              
              
              68,646Other
                  payables
              
              
              213,598
              
              
              473,566
              
              
              41,130
              
              
              1,796Total
              
              $
              1,156,428
              
              $
              1,504,683
              
              $
              1,120,591
              
              $
              1,097,725
 
 
 **Note
        10 - Various Taxes Payable**
 
 Various
        taxes payable consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Value-added
                  taxes (VAT) payable
              
              $
              52,180
              
              $
              57,720
              
              $
              80,115
              
              $
              41,230Business
                  taxes
              
              
              
              
              
              
              
              
              -
              
              
              11,542Other
                  miscellaneous taxes/levies
              
              
              2,087
              
              
              3,713
              
              
              1,162
              
              
              3,063Total
              
              $
              54,267
              
              $
              61,433
              
              $
              81,277
              
              $
              55,835
 
 The
        other
        misc taxes/levies included City development levies and Educational levies.
        The
        City development levies and Educational levies are respectively 1% and 3%
        of
        last month VAT.
 
 10
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        11 - Wages Payable**
 
 The
        wage
        payable consists of the following:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Wages
                  payable
              
              $
              117,565
              
              $
              98,080
              
              $
              106,773
              
              $
              60,496Benefits
                  payable
              
              
              405,723
              
              
              207,140
              
              
              261,821
              
              
              123,679Total
              
              $
              523,288
              
              $
              305,220
              
              $
              368,594
              
              $
              184,175
 
 **Note
        12 - Income Tax**
 
 As
        a
        manufacturing enterprise established in Shenzhen, PRC, the Company was entitled
        to a preferential Enterprise Income Tax (”EIT”) rate. Since 2008, the local
        government has increased the EIT rate from 15% to 18%. The company is currently
        applying for the High-Tech Enterprise title. If the application is approved
        by
        the local government, the Company will have a tax holiday of 2 years 100%
        exemption starting from the first profitable year, and followed by 3 years
        of
        50% tax deduction, and after that, the Company will have to pay corporate
        income
        taxes at normal EIT rate.
 
 The
        provision for taxes on earnings consists of:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Current
                  income taxes expense:PRC
                  Enterprises Income Tax
              
              $
              399,554
              
              $
              232,845
              
              $
              411,155
              
              $
              249,760United
                  States Federal Income Tax
              
              
              -
              
              
              
              
              
              -
              
              
              -Total
              
              $
              399,554
              
              $
              232,845
              
              $
              411,155
              
              $
              249,760
 
 A
        reconciliation between the income tax computed at the U.S. statutory rate
        and
        the Company’s provision for income tax is as follows:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006U.S.
                  statutory rate
              
              
              34
              %
              
              34
              %
              
              34
              %
              
              34
              %Foreign
                  income not recognized in the U.S.
              
              
              -34
              %
              
              -34
              %
              
              -34
              %
              
              -34
              %PRC
                  preferential enterprise income tax rate
              
              
              18
              %
              
              15
              %
              
              15
              %
              
              15
              %Provision
                  for income tax
              
              
              18
              %
              
              15
              %
              
              15
              %
              
              15
              %
 
 The
        corporate income tax payables are as follows:
 September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Corporate
                  income tax payable
              
              $
              129,749
              
              $
              91,011
              
              $
              195,041
              
              $
              184,511
 
 The
        tax
        authority of the PRC Government conducts periodic and ad hoc tax filing reviews
        on business enterprises operating in the PRC after those enterprises had
        completed their relevant tax filings, hence the Company’s tax filings in the PRC
        may not be finalized. It is therefore uncertain as to whether the PRC tax
        authority may take different views about the Company’s tax filings which may
        lead to additional tax liabilities.
 
 **Note
        13 - Due to related parties**
 
 For
        the
        Nine months ended September 30, 2008, PTL paid an auditing fee of $100,000
        on
        behalf of Yinlips.
 Guo
        Mingguo, Vice President of the Company, paid $73,150 to the suppliers.
 The
        Company borrowed $345,475 from PTL as working capital without
        interest.
 
 11
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        14 - Paid In Capital**
 
 The
        owners and their corresponding ownership interests are summarized as
        follows:
  September
                  30,
              
              December
                  31,2008
              
              2007
              
              2007
              
              2006Zhao,
                  Zifong
              
              
              
              
              $
              $
                  114,919
              
              $
              114,919
              
              $
              91,935Zhang,
                  Weichang
              
              
              
              
              
              6,048
              
              
              6,048
              
              
              29,032Podium
                  Technology Limited
              
              
              120,967Total
              
              $
              120,967
              
              $120,967
              120,967
              
              $
              120,967
              
              $
              120,967
 
 On
        April
        9, 2007, Zhang, Weichang sold 19% of the Company's ownership that currently
        owned by him to Zhao, Taishen at $25,213. After this transaction, the ownership
        changed to Zhao, Zifong (AKA Zhao, Taishen) for 95% and Zhang, Weichang for
        5%.
        In January 2008, Zhao, Zifong (AKA Zhao, Taishen), who owned 95% of the
        company’s ownership, and Zhang, Weichang, who owned 5% of the company’s
        ownership, sold all their ownership of the Company to Podium Technology Limited
        with total proceeds of RMB 1 million. On June 18, 2008, Podium Technology
        Limited completed the acquisition of Yinlips.
 
 **Note
        15 -** **Statutory
        Reserves**
 
 As
        stipulated by the relevant laws and regulations for enterprises operating
        in the
        PRC, the Company is required to make annual appropriations to a statutory
        surplus reserve fund that is to allocate total 15% its profits after taxes,
        as
        determined in accordance with the PRC accounting standards applicable to
        the
        Company, to a statutory surplus reserve until such reserves reach 50% of
        the
        registered capital of the Company. The management made appropriation of $70,881
        for this surplus reserve in 2005. This amount is over the 50% of the registered
        capital of the Company. The company does not need to make this surplus reserve
        any more until increasing the registered capital.
 
 **Note
        16 -** **Commitments
        and Contingencies**
 
 **Operating
        Lease Commitments**
 
 As
        of the
        balance sheet date, the Company has entered into several tenancy agreements
        in
        respect to the plant and the office. As of March 31, 2007 the Company’s
        commitments for minimum lease payments under these non-cancelable operating
        leases for the next five years and thereafter are as follows:
 Commitments
                  payable2008
              
              $
              44,5402009
              
              
              37,8932010
              
              
              22,1052011Thereafter$
              104,538
 Total
        rental expenses are $72,217, $55,696 , $101,444, and $170,688 for the Nine
        months ended September 30, 2008 and 2007, and year ended December 31, 2007
        and
        2006, respectively.
 
 **Transaction
        with Podium Technology Limited**
 
 The
        owners of the Company signed the Equity Transfer Agreement with Podium
        Technology Limited on December 27, 2007 and agreed to sell 100% ownership
        to
        Podium Technology Limited. Podium Technology Limited (“PTL”) was established on
        July 3, 2007 in British Virgin Islands and is an investment holding company.
        The
        transfer price is base on the negotiation between the two parties in the
        Company’s registered capital, RMB one million. This agreement has approved by
        Shenzhen authorities in January, 2008. The two parties agreed that the first
        payment, 10% of the total consideration, will be in April 2008 and the rest
        of
        the purchase price will pay in six months. On April 29, 2008, PTL paid $14,893
        to Yinlips’ owners and on June 18, 2008, paid $122,943. After these payments,
        PTL fully paid the necessary consideration. As of June 18, 2008, PTL completed
        the acquisition of Yinlips and the Company became wholly-owned subsidiary
        of
        PTL.
  12
  **Yinlips
        Digital Technology (Shenzhen) Co., Ltd.**
 Notes
        to
        Financial Statements
 (Amounts
        and disclosures at and for the nine months ended September 30, 2008 and 2007
        are
        unaudited)
 
 **Note
        16 -** **Commitments
        and Contingencies (Continued)**
 
 **Refundable
        Purchase Price Paid**
 
 The
        Company intends to acquire a digital technology company for which they paid
        RMB
        5,771,000 ($791,204) as a deposit. On December 31, 2007, the Company disclosed
        that this business combination was expected to be completed on June 30, 2008.
        If
        the transaction is not completed on time the deposit will be fully refunded.
        However, on May 10, 2008, the two parties decided to delay the deal closing
        date
        to the end of August 2008 due to change of the operation circumstances from
        both
        the Company and the acquired. On July 19, 2008, both parties renegotiated
        and
        signed a refund agreement in which the digital technology company agreed
        to
        refund RMB3,000,000 (Approximately $439,000) on September 15, 2008 and RMB
        2,771,000 (Approximately $405,000) on October 5, 2008 unless the merger goes
        forward. As of September 30, 2008, the Company had received $517,477 refund
        and
        the balance of $273,727 will be paid on October 2008 according to the agreement
        between the two sides.
 
 
 
 **Deposit
        Paid for Plant Renovation**
 
 In
        the
        third quarter of 2007, the Company signed a contract for new plant renovation
        and paid a deposit of RMB 5,000,000 (USD $685,500). The contract was terminated
        in January 2008 because of new environmental regulations enforced by the
        local
        government which prohibits the establishment of a plant within the designated
        area. The Company then entered an agreement with the original contractor
        to pay
        a penalty of RMB 300,000 ($42,552) and the rest of the deposit would be refunded
        by the end of March 31, 2008. The Company has the intention to continue with
        the
        plant renovation for its business expansion therefore renegotiated and signed
        a
        supplemental agreement on March 25, 2008 and agreed upon a plan to resolve
        the
        paid-in deposit. On July 19, 2008, the two parties amended the supplemental
        agreement and decided that the contractor to refund RMB 2,500,000 (Approximately
        $365,000) on September 20, 2008 and RMB 2,200,000 (Approximately $322,000)
        on
        October 10, 2008 unless the renovation begins. As of September 30, 2008,
        the
        Company had received $578,701 refund. The balance of $106,799 will be paid
        in
        October 2008 according to the agreement between the two sides.
 
 
 **Note
        17 - Current Vulnerability Due to Certain Concentrations**
 
 The
        Company’s operations are all carried out in the PRC. Accordingly, the Company’s
        business, financial condition and results of operations may be influenced
        by the
        political, economic and legal environments in the PRC, and by the general
        state
        of the PRC’s economy.
 
 The
        Company’s operations in the PRC are subject to specific considerations and
        significant risks not typically associated with companies in the North America
        and Western Europe. These include risks associated with, among others, the
        political, economic and legal environments and foreign currency exchange.
        The
        Company’s results may be adversely affected by changes in governmental policies
        with respect to laws and regulations, anti-inflationary measures, currency
        conversion and remittance abroad, and rates and methods of taxation, among
        other
        things.
 
 13