**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        DC 20549**
  FORM
        10-KSB/A
 
 x
              **ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE
                  ACT OF 1934**
  **For
        the fiscal year ended December 31, 2007**
  **OR**
  o
              **TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE
                  ACT OF 1934**
  **For
        the transition period from**  **_________
        to _________**
  **COMMISSION
        FILE NO.**  **000-51724**
  **CHINA
        BOTTLES, INC.**
  **(Formerly
        HUTTON HOLDINGS CORPORATION)**
 **(Name
        of Small Business Issuer in Its Charter)**
  **Nevada**
              
              **87-1578749******(State
                  or other jurisdiction of incorporation or organization)
              
              (I.R.S.
                  Employer Identification No.)
  **Huanghuahu
        Industrial Zone, Fogang County**
 **Guangdong
        Province, PRC 511675**
 (Address
        of principal executive offices) (Zip Code)
  **(86)
        763-4620777**
 Issuer’s
        telephone number:
  **Securities
        Registered Under Section 12(b) of the Exchange Act:**  **None.**
  **Securities
        Registered Under Section 12(g) of the Exchange Act:**  **Common
        Stock, par value $0.001**
  Check
        whether the issuer is not required to file reports pursuant to Section 13
        or
        15(d) of the Exchange Act.  ̈
  Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 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
  Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of registrant’s knowledge, in definitive proxy or information
        statements incorporated by reference in Part III of this form 10-KSB or any
        amendment to this Form 10-KSB. o
  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
        issuer’s revenues for the fiscal year ended December 31, 2007 were
        $22,501,627.
  The
        aggregate market value of the registrant’s Common Stock held by non-affiliates
        as of April 11, 2008 was $ 121,500,000.
  As
        of
        April 11, 2008 , the registrant had 75,000,000 shares of Common Stock ($
        0.001
        par value) issued and outstanding.
  Documents
        incorporated by reference: None.
  Transitional
        Small Business Disclosure Format (check one):   Yes o No o
  
  **TABLE
        OF CONTENTS**
  **Page****PART
                  I.**Item
                  1. Description of Business
              
              4Item
                  2. Description of Property
              
              9Item
                  3. Legal Proceedings
              
              9Item
                  4. Submission of Matters to a Vote of Security Holders
              
              10**PART
                  II.**Item
                  5. Market for Common Equity, Related Stockholder Matters and Issuer
                  Purchases of Equity Securities
              
              10Item
                  6. Management’s Discussion and Analysis or Plan of
                  Operation
              
              11Item
                  7. Financial Statements
              
              17Item
                  8. Changes in and Disagreements with Accountants on Accounting
                  and
                  Financial Disclosure
              
              17Item
                  8A. Controls and Procedures
              
              17Item
                  8B. Other Information
              
              17**PART
                  III.**Item
                  9. Directors, Executive Officers, Promoters and Control Persons,
                  Compliance with Section 16(a) of the Exchange Act
              
              18Item
                  10. Executive Compensation
              
              19Item
                  11. Security Ownership of Certain Beneficial Owners and Management
                  and
                  Related Stockholder Matters
              
              20Item
                  12. Certain Relationships and Related Transactions
              
              20Item
                  13. Exhibits
              
              21Item
                  14. Principal Accountant Fees and Services
              
              21**SIGNATURES**
              
              23
  2
  **This
        Form 10-KSB is being amended to revise and restate (i) the consolidated
        statements of income and comprehensive income to correct the reporting of
        basic
        and diluted earnings per share and basic and diluted weighted average shares
        outstanding; (ii)the consolidated statements of cash flows to reclassify
        certain
        items and to properly report the acquisition of three operating companies;
        (iii)
        the footnotes to the financial statements to provide additional disclosures
        regarding the acquisition of three operating companies and to provide pro
        forma
        financial statements and disclosures associated with these acquisitions;** **and
        (iv) the Statement of Changes in Stockholders Equity to correct the reporting
        of
        the business acquisitions the occurred during the year.**
  **PART
        I**
 
 **FORWARD
        LOOKING STATEMENTS**
 
 In
        this
        annual report references to " China Bottles ,"" the Company ,"  "we," "us,"
        and "our" refer to China Bottles, Inc. and its subsidiaries.
 
 This
        annual report contains certain forward-looking statements and for this purpose
        any statements contained in this annual report that are not statements of
        historical fact may be deemed to be forward-looking statements.  Without
        limiting the foregoing, words such as "may," "will," "expect," "believe,"
        "anticipate," "estimate" or "continue" or comparable terminology are intended
        to
        identify forward-looking statements.  These statements by their nature
        involve substantial risks and uncertainties, and actual results may differ
        materially depending on a variety of factors, many of which are not within
        our
        control.  These factors include but are not limited to economic conditions
        generally and in the markets in which China Bottles may participate, competition
        within China Bottles ’ chosen industry, technological advances and failure by us
        to successfully develop business relationships.
  3
  **ITEM
        1.**  **DESCRIPTION
        OF BUSINESS**
 
 **Business
        Development**
 
 **History**
 
 The
        Company was incorporated under the laws of the State of Nevada on February
        26,
        2001, as Geraco, Inc. On December 15 , 2004, the Company changed its name
        to
        Hutton Holdings Corporation. On April 3, 2008, the Company changed its name
        to
        China Bottles, Inc.
 
 On
        August
 26, 2007, we entered into an Agreement for Share Exchange (the
“Agreement”) with China Valley Development Limited, a British Virgin Islands
        company (“CVDL”) and Cai Yingren and Wu Wen, individually, the owners and
        shareholders of CVDL (the “Shareholders”)
 
 Pursuant
        to the terms of the Agreement, we acquired a 100% ownership interest in CVDL
        in
        exchange for the issuance to the Shareholders of 29,750,000 shares of
        common stock (the “Common Stock”) and 5,000,000 shares of Series A Preferred
        Stock (the “Series A Preferred Stock”). Each share of the Series A Preferred
        Stock was convertible into five shares of common Stock, subject to the
        availability of the shares of Common Stock. The share exchange took place
        according to the terms of the Agreement and in accordance with applicable
        law.  Immediately following completion of the transaction through the
        issuance of the e xchange s hares, we had a total of approximately 50,000,000
        shares of its common stock and 5,000,000 shares of Series A Preferred Stock
        issued and outstanding.  On April 3, 2008, we amended our Articles of
        Incorporation to increase the number of shares that we are authorized to
        issue
        to 175,000,000 shares of Common Stock and 25,000,000 shares of Preferred
        Stock.
  CVDL
        owns
        100% of the outstanding equity of Guozhu Holdings Limited, a Hong Kong company
        (“Guozhu”). Guozhu owns 100% of each of Fogang Guozhu Plastics Company Limited,
        Fogang Guozhu Blowing Equipment Company Limited and Guangdong Guozhu Precision
        Mold Company Limited (collectively, the “Guozhu Operating Companies”).
 
 On
        November 15, 2007, our Board of Directors acted by unanimous written consent
        to
        change our fiscal year end from June 30 to December 31. As a result of the
        interpretive guidelines, no transition report is required in connection with
        such change in fiscal year end.
 
 On
        April
        3, 2008, we filed an amendment to our Articles of Incorporation pursuant
        to
        which we changed our name to China Bottles, Inc and we increased our authorized
        capitalization to 200,000,000 shares, of which 175,000,000 are shares of
        Common
        Stock and 25,000,000 are shares of Preferred Stock.
  **Acquisition
        of Guozhu Group**
 
 We
        are a
        company with expertise in production of beverage bottle which mainly is made
        of
        PET (Polyethylene terephthalate), a type of plastic with desirable
        characteristics for packaging including clear and wide range of color and
        shape,
        tough, good resistance to heat, moisture, dilute acid, and recyclable. We
        produce, market and sell full range of beverage bottle production machineries
        including high speed injection molding machines, semi-automatic and high
        speed
        automatic plastics stretch blow molding machines, infrared ray perform heater,
        label heat shrinker and perform injection mold and blowing mold. We also
        provide
        bottle production service. We now are selling our machines using the brand
        name
“ ***Guo
        Zhu*** ”.
  Currently,
        we have about 385 full-time staff. We operate one production plant in Qingyuan
        City, Guangdong Province, a sales office in Beijing and a R&D center in
        Guangzhou City, PRC. In 2006, around 80% of our sales are contributed from
        China
        market. In addition to China, we are exporting our machines to more than
        ten
        countries including Japan, Germany, United Kingdom, Hong Kong, Taiwan, Korea,
        Australia, Russia, Vietnam, Brazil and countries in Middle East. Our target
        customers are drink and beverage companies and pharmaceutical companies and
        their packaging services providers including China Huiyuan Juice Group Limited,
        Nestle, Coca-Cola, Harbin Pharmaceutical Group, and Wahaha Group.
  4
 
 **Corporate
        Milestones**
  We
        are
        one of the leaders in the beverage packaging production industry in China.
        We
        started our operation in 1996. Certain of our milestones are illustrated
        in the
        table below:
  Milestone
              
              DateCommenced
                  the beverage bottle production business
              
              1993Commenced
                  the injection molds and blowing molds production services
              
              1995Produced
                  and marketed the first semi-automatic blowing machine
              
              1998Started
                  to export injection and blowing molds to overseas market
              
              2000Qualified
                  by Coca-Cola as PET bottle providers
              
              2000Started
                  to export semi-automatic blowing machine to overseas
                  market
              
              2002Qualified
                  by Coca-Cola as molds suppliers
              
              2004Produced
                  and marketed the first automatic blowing machine
              
              2004Started
                  to export automatic blowing machine to overseas market
              
              2005Produced
                  and marketed the first perform injection molding machine
              
              2006
  **Our
        Business**
 
 **General**
 
 Our
        business focus is PET bottle production in beverage production process. We
        provide three kinds of services and products for our customers:
 
 ·
              We
                  provide bottle production machineries so that our customer can
                  produce
                  bottles themselves;·
              We
                  provide perform injection mold and blow molds for our customers’ bottle
                  production machines; and·
              We
                  provide complete bottles production
                  services;
  **Principal
        Products and their Market**
 
 The
        table
        bellow illustrated the product lines and corresponding products we are producing
        and selling and their respective percentage of contribution to the turnover
        for
        the year of 2007.
 
 Plastic packaging machineries andProduct
                  lines
              
              supplementary
                  machineries
              
              Molds
                  Production
              
              Finished
                  Bottles productionSemi-automatic
                  blowing machine
              
              Multi-cavities
                  Perform injection
              
              PET
                  bottles for carbonatedmolds
              
              soft
                  drink, water and hot filledbeverages
                  such as juice andtea.Automatic
                  blowing machines
              
              Blowing
                  molds
              
              PP
                  bottles for pills and IVProducts
              
              
              
              
              
              injectionInjection
                  molding machinesPreform
                  HeaterNecking
                  CrystallizerLabel
                  Head ShrinkerPercentage
                  ofcontribution
                  to
              
              7.6%
              
              69.2%
              
              23.2%turnover
                  (2007)
  5
  **Market
        Overview**
 
 *Global
        Beverage Packaging Machinery Market*
 
 Beverage
        packaging is one of key application for packaging machines. In 2007, beverage
        packaging accounted for 20% of total global sales of packaging machinery,
        ranked
        second after food packaging which accounted for 40%.
 
 In
        term
        of geographical classification of global market of packaging machinery for
        2007,
        the Americas had the largest market share which was equivalent to 31.8% of
        the
        total market. China plus Japan and Europe occupied similar size of shares
        which
        were equal to 25.9% and 24.7% respectively. Asia-Pacific ranked the forth
        which
        owned a market share of 11.2%. Africa plus Middle East owned 3.5% and Russia
        with Central Asia owned the remaining 2.9%.
 
 It
        is
        expected that the global market for beverage packaging machinery is growing
        at
        an annual rate of around 3%. Following figure illustrates the global market
        size
        from 2003 to 2008.
  
  *(Source:
        SPG Media)*
 
 *Beverage
        Market and Packaging Trends*
 
 Packaged
        beverage is usually packed by four kinds of packaging material: carton, can,
        glass and PET. In 2003, these four kinds of packaging material accounts for
        98%
        of 870 billion units, the total consumption of the year, in which glass is
        the
        most popular kind of packing having 33% of market and Can ranked the second
        occupying 27%. However, from the research of marketers and players in the
        industry, PET is the most rapidly growing packaging material for beverages.
        It
        is expected that 41% of beverage sold in 2015 will be packaged in PET bottles
        which equal to 565 billion units. Following table lists the forecasted annual
        growth rate of these four kinds of packaging material in global beverage
        market.
  Carton
                
                Can
                
                Glass
                
                PETGrowth
                    Rate p.a.
                
                
                4
                %
                
                1
                %
                
                0
                %
                
                9
                %
  6
  PET
        outperforms other packaging material in popularity. Forecasted number of
        packaged beverage in different packaging material for the year 2003, 2007,
        2011
        and 2015 is shown in following figure.
  
 *(Source:
        PCI, Canadean, Mercer, GDA, Tetra, KRONES)*
  **Government
        Regulation**
 
 In
        relation to the design, development, manufacture and sale of plastic injection
        molding machines, Chinese government and PRC laws do not require any special
        and/or additional approvals, permissions or any other qualifications required
        except for the relevant business license.
 
 In
        certain provinces and cities, the provincial governments and the city government
        requires the beverage bottle manufactures acquired Food Hygiene Permits before
        they can sell these bottles or use these bottles for food and drinks containing
        usage.
 
 We
        carry
        on our business in an industry that is subject to PRC environmental protection
        laws and regulations. These laws and regulations require enterprises engaged
        in
        manufacturing and construction that may cause environmental waste to adopt
        effective measures to control and properly dispose of waste gases, waste
        water,
        industrial waste, dust and other environmental waste materials, as well as
        fee
        payments from producers discharging waste substances. Fines may be levied
        against producers causing pollution.
 
 **Business
        Strategies**
 
 We
        are in
        the leading position among the Chinese beverage packaging machinery companies.
        We are one of few China companies which can produce high speed automatic
        bottle
        blowing machines. We are also the only China company can produce all machines
        and components of both high speed bottle production line and semi-auto bottle
        production line including inject molding machine, injection and blowing molds,
        semi-automatic and high speed automatic blowing machine.
 
 By
        leverage our market leadership and the growth opportunity of the market,
        we
        adopt following strategies to grow our business:
 
 *Expanding
        production capacity*
 
 The
        demand for PET beverage bottle production machines is huge that the current
        supply level cannot fully match. The growth rate of demand of PET bottles
        is 9%
        per annum which is promising for the industry. We believe the growth rate
        of the
        global demand of PET beverage bottles in China is higher than that of global
        market. Our major growth strategy is to expand our production capacity to
        cope
        with the growth of market so that we can preserve our position in the industry.
        We are focusing to gather and acquire resources available inside or outside
        of
        our company to execute this strategy. We are refining our production process
        so
        as to speed up our product deliver time in order to increase the efficiency
        of
        working capital. In June 2007, we had secured a loan of US$1.07 million for
        working capital. We are also developing market with high profit margin to
        strength our financial performance for our growth.
 
 *Enhancing
        production efficiency and speed*
 
 The
        competition of the packaged beverage market is very keen. The Product
        development cycle of the beverage industry is getting short in order to act
        fast
        enough to match the competitors. The requirement from the beverage industry
        for
        fast delivery of production line including the packaging components becomes
        mandatory. The faster a vendor can deliver the business, the more likeness
        the
        vendor can gain the business.
  7
 
 In
        addition, faster delivery of products can enhance efficiency of working capital
        which is crucial for the expansion of production capacity.
 
 *Expanding
        overseas markets*
 
 While
        the
        Chinese market is very promising, the overseas market offers a better margin
        for
        our products. In addition, our business performance will be more stable if
        we
        can diversify our market in order to avoid any possible fluctuation in Chinese
        economy and market condition. We are expanding our percentage of sales in
        overseas market so as to increase our market coverage and improve our profit
        margin.
 
 *Continuing
        product development*
 
 Beverage
        packaging is a fast growth industry. The market is keeping required for faster
        and more sophisticated machineries to cope with the development. Technology
        and
        production development is one of our key focuses of business strategy in
        order
        to sustain our growth and success. In 2007, we setup a research and development
        center, with a prestige university in China, for our product development
        and
        enhance.
 
 **Marketing
        and Distribution**
 
 We
        market
        our products and update the market about our progress and breakthrough by
        participating the tradeshows and exhibitions related to beverage industry
        and
        bottle production industry. In 2007, we attended a number of tradeshows and
        exhibitions demonstrating the newest and killing products. We also organize
        plant visit for prospect to demonstrate the solutions we can provide. As
        beverage industry is a concentrated industry, this is proven to be the most
        effective way of marketing for us.
 
 As
        we are
        well known in the beverage industry in China, nearly all beverage companies
        contact our sales team or senior management directly to seek for solutions
        or
        products. Our sales team and the senior managements totally participate and
        manage the whole sales process. For overseas market, we mainly market their
        production through trading agents and export companies in China. In certain
        overseas markets, we also appoint local agent for order taking and after
        sales
        services.
 
 **Competition**
 
 We
        face
        different competition environment for its three business lines.
 
 *Beverage
        bottle production machinery*
 
 Our
        beverage bottle production machineries cover both high-end market and mid-end
        market.
 
 The
        high-mid production line mainly covers the production line composed of
        high-speed bottle blowing machines and high speed preform injection molding
        machines. For the high-end market, we have around 10 competitors in which
        most
        of them are foreign company. For this market, price-performance ratio,
        throughput of product, reliability and product delivery time and services
        support are key factors for competition. Because of the high entry barrier
        in
        capital investment and technology expertise and the higher demand over the
        supply in the market, the competition in this market is mild yet.
 
 There
        are
        hundreds of companies supping semi-automatic machinery in the mid-tier market.
        The competition in this market is keen. Players in this market mainly compete
        in
        price, reliability. As the result, only a few players with scale can be in
        the
        business. In the long run, the market will become an oligopoly.
 
 *Bottle
        production*
 
 This
        market has a large number of players with great variation in quality, scale
        of
        operation. Cost, technological expertise and ability of timely delivery is
        key
        factor in competition. We are the top-tier player in this business because
        of
        our quality and reputation and have stable business relation with big companies
        which are willing to pay premium for quality.
  8




*Injection
      and Blowing Molds production*





Key
      factors for competition in this market are technology expertise, timely delivery
      and durability of the product. The market is stratified and we are the leader
      in
      this industry and are one of three authorized molds suppliers of Coca-Cola
      Company. The competition in the tier we are in is mild as there are only a
      few
      players who can provide up to standard injection molds and blowing molds for
      mid
      to higher tier beverage and drinks companies.




**Employees**





Currently
      we have about 409 employees.





**Intellectual
      Property**





We
      own
      three patents related to designs of bottle blowing machines registered in China.
      All these patents will be expired 10 years after the patent registered date.
      Table below has summarized these three patents:





Item
            
            Patent Number
            
            Registered Date1
            
            ZL
                03 2 67574.7
            
            July
                16, 20032
            
            ZL
                03 2 67575.3
            
            July
                16, 20033
            
            ZL
                03 2 67576.3
            
            July
                16, 2003




We
      also
      have the rights to our trademark which composes of our logo and the Chinese
      words “ ***Guo
      Zhu*** ”
in
      China.




**ITEM
      2. DESCRIPTION OF PROPERTY**





**Property
      Owned and Leased**





We
      own
      one production plant with executive offices and rent two offices that one is
      a
      sales office and one is an R&D center. The following table has summarized
      real property we own or lease:




Item
            
            Address
            
            Leased/Owned1
            
            Huanghuahu
                Industrial Zone, Tangtang Town , Fogang County, Qingyuan City, Guangdong
                Province, PRC
            
            We
                possess a land use right2
            
            Rm
                C580, C521, 5/F., Wushan Technology Plaza, Wushan Road, Guangzhou,
                PRC
            
            Leased3
            
            Rm
                504, 249 Chashan Road, Guangzhou, PRC
            
            Leased




The
      period of land use right of item 1 will expire in 2053 at which time the
      property will be acquired by the State under PRC laws. The leasing period of
      item 2 and 3 will expire in 2010 and 2009 respectively. All leasing agreements
      are with customary Chinese leasing conditions.




**ITEM
      3. LEGAL PROCEEDINGS**





We
      are
      currently not involved in any litigation that we believe could have a material
      adverse effect on our financial condition or results of operations. There is
      no
      action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization or body pending
      or, to the knowledge of the executive officers of our company or any of our
      subsidiaries, threatened against or affecting our Company, our Common Stock,
      any
      of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers
      or directors in their capacities as such, in which an adverse decision could
      have a material adverse effect.


9


**ITEM
      4** **.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




On
      December 27, 2007 , the Board of Directors of the Company as well as the
      stockholders of a majority of the outstanding shares of the Company’s common and
      preferred stock approved by written consent, (i) the amendment of the Company’s
      Articles of Incorporation to increase the number of authorized shares of the
      capital stock of the Company to 200,000,000 shares, of which 175,000,000 shares
      were to be designated as Common Stock and 25,000,000 shares were to be
      designated as preferred stock (“Capital Increase Amendment”), and (ii) the
      amendment of the Company’s Articles of Incorporation to change the name of the
      Company to China Bottles, Inc (“Name Change Amendment”). On or about March 7,
      2008, the Company mailed to its stockholders, an Information Statement
      disclosing the approval of the Capital Increase Amendment and the Name Change
      Amendment. On April 3, 2008, the Company amended its Articles of Incorporation
      to change its name to China Bottles, Inc and to increase its authorized capital
      as described above.





**PART
      II**





**ITEM
      5.**  **MARKET
      FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES**





On
      March
      31 , 2005, our shares were cleared for trading on the National Association
      of
      Securities Dealers (NASD) Over-the-Counter Bulletin Board (OTCBB) under the
      symbol “HTTH”.





The
      aggregate market value of our common equity held by non-affiliates based upon
      the average bid and ask price of such common equity on April 11, 2008, as
      reported by OTCBB was approximately $ 121,500,000





We
      have not declared dividends on our Common Stock and do not anticipate paying
      dividends on our Common Stock in the foreseeable future. There were no reported
      bids for our Common Stocks during 2006 and the first quarter of
      2007.




**Year**
              
              **Period**
              
              
              **High**
              
              
              **Low**2006
              
              First
                  Quarter
              
              
              -
              
              
              -Second
                  Quarter
              
              
              -
              
              
              -Third
                  Quarter
              
              
              -
              
              
              -Fourth
                  Quarter
              
              
              -
              
              
              -2007
              
              First
                  Quarter
              
              
              -
              
              
              -Second
                  Quarter
              
              $
              6.00
              
              $
              6.00Third
                  Quarter
              
              
              6.00
              
              
              6.00Fourth
                  Quarter
              
              
              6.00
              
              
              6.002008
              
              First
                  Quarter
              
              $
              6.00
              
              $
              6.00





The
      source for the high and low closing bids quotations is the Bloomberg database
      and does not reflect inter-dealer prices. Such quotations are without retail
      mark-ups, mark-downs or commissions, and may not represent actual transactions
      and have not been adjusted for stock dividends or splits.





As
      of
      April 11, 2008, the Company had 75,000,000 shares of Common Stock issued and
      outstanding.





**Holders**





As
      of
      April 11, 2008, we have approximately 69 shareholders of record of holding
      75,000,000 shares of Common Stock.





As
      of the
      fiscal year ended December 31, 2007, we had 50,000,000 shares of Common Stock
      and 5,000,000 shares of Series A Preferred Stock issued and outstanding. Each
      share of Series A Preferred Stock was convertible into five (5) shares of Common
      Stock at the option of the holders, subject to the availability of Common
      Shares, at any time after their issue date. On April 3, 2008, the Company
      amended its Articles of Incorporation to increase the number of shares of Common
      Stock that it is entitled to issue from 50,000,000 shares to 175,000,000 shares
      and the number of shares of Preferred Stock that it is authorized to issue
      from
      10,000,000 shares to 25,000,000 shares. On April 11, 2008, 5,000,000 shares
      of
      Series A Preferred Stock held by China Water and Drinks Inc. were converted
      into
      25,000,000 shares of Common Stock.


10


**Dividends**





We
      have
      never declared or paid any cash dividends or distributions on our Common Stock.
      We currently intend to retain our future earnings to support operations and
      to
      finance future growth and expansion and, therefore, do not anticipate paying
      any
      cash dividends on our Common Stock in the foreseeable future.





**Transfer
      Agent and Registrar** .





Our
      transfer agent is Interwest Transfer Company, Inc., located at 1981 East Murray
      Holladay Road, Suite 100, P.O. Box 17136, Salt Lake City, UT 84117. Their
      telephone number is (801) 272-9294.





**Securities
      Authorized for Issuance Under Equity Compensation Plans**





None.





**Recent
      Sales of Unregistered Securities**





On
      August
      26, 2007, we entered into an Agreement for Share Exchange (the “Agreement”) with
      China Valley Development Limited, a British Virgin Islands company (the “CVDL”)
      and Cai Yingren and Wu Wen, individually, the owners and shareholders of CVDL
      (the “Shareholders”) pursuant to which we acquired a 100% ownership interest in
      CVDL from the Shareholders. In consideration for the acquisition of the shares
      of CVDL, we issued to Cai Yingren 19,337,500 shares of our Common Stock and
      3,250,000 shares of our Series A Preferred Stock, and to Wu Wen 10,412,500
      shares of our Common Stock and 1,750,000 shares of our Series A Preferred Stock.
      The issuance of the shares of Common Stock and shares of Series A Preferred
      Stock were issued pursuant to Regulation S in a transaction that was exempt
      from
      registration under the Securities Act of 1933, as amended.





On
      April
      11, 2008, China Water and Drinks, Inc, the holder of 5,000,000 shares of our
      Series A Preferred Stock converted such shares into 25,000,000 shares of Common
      Stock, The shares of Common Stock were issued pursuant to Regulation S in a
      transaction that was exempt from registration under the Securities Act of 1933,
      as amended.





**Issuer
      Purchase of Securities**





None.





**Off-Balance
      Sheet Arrangements**





None.





**ITEM
      6.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS**





The
      following is management's discussion and analysis of certain significant factors
      which have affected our financial position and operating results during the
      periods included in the accompanying consolidated financial statements, as
      well
      as information relating to the plans of our current management. This report
      includes forward-looking statements. Generally, the words "believes,"
      "anticipates," "may," "will," "should," "expect," "intend," "estimate,"
      "continue," and similar expressions or the negative thereof or comparable
      terminology are intended to identify forward-looking statements. Such statements
      are subject to certain risks and uncertainties, including the matters set forth
      in this report or other reports or documents we file with the SEC from time
      to
      time, which could cause actual results or outcomes to differ materially from
      those projected. Undue reliance should not be place on these forward-looking
      statements which speak only as of the date hereof. We undertake no obligation
      to
      update these forward-looking statements.





The
      following discussion and analysis should be read in conjunction with our
      consolidated financial statements and the related notes thereto and other
      financial information contained elsewhere in this Form 10-KSB.





We
      are
      engaged in the business of manufacturing and selling plastic packaging machines,
      precision molds and PET finished bottles. Our products are primarily marketed
      and sold in the PRC.


11


We
      currently has the capacity to produce approximately 90 units of blowing machines
      per year, 350 units of perform molds and 4,500 units of blowing molds per year
      and we have 12 production lines for PET finished bottles.





During
      2008, the Company intends to focus on expanding market penetration for our
      products based on our position in the growing China market, favorable cost
      structure as compared to overseas suppliers, focus on product innovation and
      customer relationships. In order to support this growth we plan to invest in
      new
      production facilities in Northern China and upgrade our existing production
      lines to enhance their efficiency. The Company is evaluating financing
      alternatives to meet the capital expenditures and working capital required
      to
      meet these goals, including the issuance of equity and debt.





The
      Company also intends to establish an R&D center in Guangzhou City in 2008 so
      as to attract more talented researchers and engineers and enhance the
      competitiveness of our products. Our R&D projects include initiatives that
      will seek to:





(1)    
      Increase the production speed for Automated Circle Blowing Machine to 1500
      bottles per hour;


(2)    
      Develop a Direct-line Machine;


(3)    
      Redesign the appearance of current machines;


(4)    
      Develop a mold for bottle caps;


(5)    
      Improve of appearance of molds, etc.




The
      Company plans to implement Hybrid Build-to-Order (BTO) and Build-to-Stock (BTS)
      production models that we expect will improve production efficiencies. China
      Bottles expects to improve its product delivery time and shorten its sales
      cycles with a BTO production model. The Company will begin production when
      sales
      orders are committed allowing greater control in production planning and
      improving production efficiency and potentially enhancing profit
      margins.




We
      also
      plan to locate our sales headquarters in Beijing to increase visibility and
      penetrate the North China and international market. Locating in Beijing has
      the
      potential to enhance our market share by enhancing our business relationships
      with both domestic and international clients.




**Significant
      Accounting Policies and Management Estimates**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our consolidated 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, liabilities, revenues
      and
      expenses, and related disclosure of contingent assets and liabilities. On an
      on-going basis, we evaluate our estimates based on historical experience and
      on
      various other assumptions that are believed to be reasonable under the
      circumstances, the results of which form the 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. The policies discussed below are considered by
      management to be critical to an understanding of our financial
      statements.




Our
      significant accounting policies are summarized in Note 3 to our financial
      statements. While all these significant accounting policies impact its financial
      condition and results of operations, we view certain of these policies as
      critical. Policies determined to be critical are those policies that have the
      most significant impact on our consolidated financial statements and require
      management to use a greater degree of judgment and estimates. Actual results
      may
      differ from those estimates. Our management believes that given current facts
      and circumstances, it is unlikely that applying any other reasonable judgments
      or estimate methodologies would cause an adverse effect on our consolidated
      results of operations, financial position or liquidity for the periods presented
      in this report.





*Revenue
      recognition*




Revenue
      represents the invoiced value of goods sold recognized upon the delivery of
      goods to the customers. We generally recognize product revenue when persuasive
      evidence of an arrangement exists, delivery has occurred or services have been
      rendered, the price fee is fixed or determinable, and collectibility is
      reasonably assured.


12


*Income
      taxes*





Provision
      for income and other related taxes have been provided in accordance with the
      tax
      rates and laws in effect in the PRC.





Income
      tax expense is computed based on pre-tax income included in the consolidated
      statements of operations. Deferred income taxes are provided for the net tax
      effects of temporary differences between the carrying amounts of assets and
      liabilities for financial reporting purposes and the amounts used for income
      tax
      purposes. A valuation allowance is provided for deferred tax assets if there
      is
      a strong likelihood the items will expire before its benefits are realized
      or if
      its future utilization is uncertain.





*Inventories*





Inventories
      are stated at the lower of cost or net realizable value, which is based on
      estimated selling prices less any further costs expected to be incurred for
      completion and disposal. Cost of raw materials is calculated using the weighted
      average method. Finished goods costs are determined using the weighted average
      method and comprise direct materials, direct labor and an appropriate proportion
      of overhead.





**Results
      of Operations**





Our
      operating results are presented on a consolidated basis for the year ended
      December 31, 2007, as compared to the year ended December 31,
      2006.




**Revenue**





Sales
      revenue increased from $0 in 2006 to $22,501,627 for the year ended December
      31,
      2007.




The
      increase in revenue was mainly due to the new business of bottle production
      machinery, mold and bottle production service acquired in late August 2007.
      The
      new business has a much large scale of business and thus generated much larger
      revenue.





**Cost
      of goods sold and gross profit**





Cost
      of
      goods sold for the year ended December 31, 2007 was $15,933,826 compared to
      $0
      of the year ended December 31, 2006. The increase of cost of good for year
      ended
      December 31, 2007 as compared the previous year was a result of acquisition
      of a
      new business that generated revenue from sales.




Gross
      profit was $6,567,801 for the year ended December 31, 2007 compared to $0 in
      2006. This increase was contributed by the increase of revenue after acquisition
      of new business in August 2007.




Gross
      profit as a percentage of net revenues was 29.2% for the year of
      2007.




**Expenses**




*Selling
      and distribution expenses*




Selling
      and marketing expenses, including distribution expenses, increased from $0
      for
      the year ended December 31, 2006 to $357,184 for the year ended December 31,
      2007. The main components of the expenses consist of exhibition fees and freight
      charges, constituting 23% and 19%, respectively, for selling and distribution
      expenses for the year.





The
      increase in the selling and marketing expenses is primary due to the increase
      in
      participating exhibitions and the increase of marketing activities and sales
      personnel after acquiring the new business in late August 2007.




*General
      and administrative expenses*




General
      and administrative expenses increased from $2,090 for the year ended December
      31, 2006 to $1,646,483 for the year ended December 31, 2007, an increase of
      $1,644,393. The most significant item for the year ended December 31, 2007
      was
      legal and professional fees, constituting 70% of the total of general and
      administrative expenses. Such fees were primarily incurred for acquiring new
      business in late August 2007.


13


*Finance
      costs*





Finance
      costs increased from $0 for the year ended December 31, 2006 to $66,541 for
      the
      year ended December 31, 2007. The costs were mainly for interest incurred during
      2007 from the short-term bank loans.





**Income/(loss)
      before tax and provision for taxation**





Income
      before tax was $5,135,989 for the year ended December 31, 2007 compared to
      a
      loss of $2,090 for the year ended December 31, 2006. The increase was mainly
      due
      to the increase in revenue from the new business acquired in August
      2007.





Provision
      for taxation for the year ended December 31, 2007 was $1,392,122, compared
      to $0
      for the year ended December 31, 2006. The Company’s effective tax rate for the
      year ended December 31, 2007 was 27%.




**Net
      income**





Net
      income for the year ended December 31, 2007 was $3,743,867, compared to a loss
      of $2,090 from in 2006. The increase was mainly due to the increase in revenue
      and hence net income from the new business acquired in August 27, 2007. Net
      margin for the year ended December 31, 2007 was 16.7%.





**Liquidity
      and capital resources**





*Cash*





Our
      cash
      balance as of December 31, 2007, was $1,375,786 compared with our cash balance
      of $0 as of December 31, 2006. The increase was mainly attributable to net
      cash
      received through acquisition of the new business in late August
      2007.





*Cash
      Flow*





Our
      cash
      inflows from operations during the year ended December 31, 2007 amounted to
      $737,710. The increase in cash flow was due primarily to increases in account
      receivable, inventories, prepaid expenses and other receivable.





Our
      cash
      outflows used in investing activities amounted to $ 3,895,239 for the year
      ended
      December 31, 2007. During the year, we purchased equipment and land use right
      for our expansion of production capacity.





Our
      cash
      inflows from financing activities amounted to $ 4,133,956 for the year ended
      December 31, 2007. During the year, we received two short-term bank loans and
      obtained addition cash through the acquisition in August 2007.





*Working
      Capital*





Our
      working capital as of December 31, 2007 was $2,633,599 as compared to a net
      working capital deficit of $2,090 as of December 31, 2006, primarily due to
      the
      addition cash obtained through the acquisition in August 2007.





We
      currently generate our cash flow through our operations. We believe that our
      cash flow generated from operations will be sufficient to sustain operations
      for
      at least the next 12 months. There is no identifiable expansion plan as of
      December 31, 2007, but from time to time, we may identify new expansion
      opportunities for which there will be a need for use of cash.




**Results
      of Operations (for the pro forma results as stated in Note 18 to the financial
      statements)**




The
      following table summarizes the results of our operations during the year periods
      ended December 31, 2007 and 2006, and provides information regarding the dollar
      and percentage increase or (decrease) from the year period ended December 31,
      2007 to the one-year period ended December 31, 2006.




Year
                ended December 31,2007
            
            2006
            
            Increase
            
            %
                increaseRevenue
            
            $
            42,371,011
            
            $
            26,098,660
            
            
            16,272,351
            
            
            62
            %Cost
                of Goods Sold
            
            
            28,625,056
            
            
            18,649,269
            
            
            9,975,787
            
            
            53
            %Gross
                Profit
            
            
            13,745,955
            
            
            7,449,391
            
            
            6,296,564
            
            
            85
            %Sales
                and Marketing Expenses
            
            
            1,047,086
            
            
            1,008,354
            
            
            38,732
            
            
            4
            %General
                and Administrative Expenses
            
            
            1,583,227
            
            
            562,468
            
            
            1,020,759
            
            
            181
            %Total
                Operating Expenses
            
            
            2,630,313
            
            
            1,570,822
            
            
            1,059,491
            
            
            67
            %Income
                from Operation
            
            
            11,115,642
            
            
            5,878,569
            
            
            5,237,073
            
            
            89
            %Other
                Income (expense)
            
            
            717,682
            
            
            735,736
            
            
            (18,054
            )
            
            (2
            )%Interest
                Income (expense)
            
            
            (95,017
            )
            
            (27,888
            )
            
            (67,129
            )
            
            241
            %Income
                before Income Tax
            
            
            11,738,307
            
            
            6,586,417
            
            
            5,151,890
            
            
            78
            %Provision
                for Taxes
            
            
            2,727,625
            
            
            2,072,331
            
            
            655,294
            
            
            32
            %Net
                income
            
            
            9,010,682
            
            
            4,514,086
            
            
            4,496,596
            
            
            100
            %




14




*Revenues*





Sales
      revenue increased from $26,098,660 for the year of 2006 to $42,371,011 for
      the
      year of 2007, an increase of 16,272,351 or 62% to that of the year 2006.





The
      increase in revenue was mainly due to the increase in market acceptance of
      our
      products, particular in those high-end products and the growing demand from
      the
      booming drink and beverage industry in China. In the period, middle sized or
      above bottle drinks production companies continued to upgrade their production
      lines to high speed machines in order to satisfy the growing demand of bottles
      drinks in the consumer market in China.





*Cost
      of goods sold and gross profit*




Cost
      of
      goods sold for the year ended December 31, 2007 was $28,625,056, an increase
      of
      $9,975,787 or 53% compared to $18,649,269 of the same period in 2006. The
      increase of cost of good sold for the year of 2007 as compared that of 2006
      was
      a result of increase in sales.




Our
      gross
      profit increased $6,296,564, or 85%, to $13,745,955 for the year ended December
      31, 2007 from $7,449,391 during the same period in 2006. Gross profit as a
      percentage of revenue was 32% for the year of 2007, an increase of 4% from
      28%
      during the same period in 2006. Such increase was mainly contributed by the
      introduction of new blowing machines with enhanced features in the third quarter
      of 2007 which has a higher gross margin because of higher selling prices with
      similar costs structures as models.





*Sales
      and marketing*




Selling
      and marketing expenses, including distribution expenses increased from
      $1,008,354 in the year of 2006 to $1,047,086 in the year of 2007, or an increase
      of 38,732.





The
      selling and marketing expenses is similar in the year of 2007 and 2006. The
      selling and marketing expenses for the year of 2007 mainly consisted of
      advertising, marketing and exhibition cost and traveling expenses.





*General
      and Administrative*




General
      and administrative expenses increased from $562,468 in the year of 2006 to
      $1,583,227 in the year of 2007, or an increase of 1,020,759.





The
      increase in general and administrative expenses in the year of 2007 compared
      to
      that of 2006 was mainly due to the expansion of operation which led to the
      increase in staff cost, traveling and entertainment and due to the listing
      exercise done in August 2007 and its continuous obligation which incurred more
      legal and professional costs. The general and administrative expenses for the
      year of 2007 mainly consisted of staff cost, traveling and entertainment and
      legal and professional cost.





*Income
      before income tax and income taxes expenses*




Income
      before income tax was $11,738,307 for the year of 2007 compared to $6,586,417
      for the year of 2006, representation an increase of $5,151,890. The increase
      was
      mainly due to the increase in revenue.





Provision
      for taxation for the year of 2007 was $2,727,625, compared to $2,072,331 for
      the
      year ended December 31, 2006. The Company’s effective tax rate for the year of
      2007 was 23.2%.





*Net
      income*




Net
      income for the year of 2007 was $9,010,682, representing an increase of
      $4,496,596 from the same period in 2006. The increase was mainly due to the
      increase in revenue and hence net income because of the increase in sale of
      automatic blowing machines and the molds because of the increasing demand of
      bottle packaging machinery by drinks and beverage industry. Net margin for
      the
      year of 2007 was 21.3%





*Off-Balance
      Sheet Arrangements*





We
      do not
      have any off-balance sheet arrangements.


15


*Inflation*





Inflation
      has not had a material impact on our business and we do not expect inflation
      to
      have an impact on our business in the near future.





*Currency
      Exchange Fluctuations*





All
      of
      the Company’s revenues and a majority of its expenses for the year ended
      December 31, 2007 were denominated in Renminbi (“RMB”), the currency of China,
      and were converted into US dollar at the exchange rate of 7.6172 to 1. In the
      third quarter of 2005, RMB began to rise against the US dollar. There can be
      no
      assurance that RMB to US dollar exchange rates will remain stable. A devaluation
      of RMB relative to the US dollar would adversely affect our business,
      consolidated financial condition and results of operations. We do not engage
      in
      currency hedging.


16


**ITEM
      7. FINANCIAL STATEMENTS**




Reference
      is made to pages F-1 through F-15 comprising a portion of this annual
      report on Form 10-KSB.





**ITEM
      8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE**




As
      approved by the Company’s Board of Directors on July 18, 2007, the accounting
      firm of Madsen & Associates CPA’s, Inc. (“Madsen”) was engaged to take over
      the audit responsibilities from Robison, Hill &Co. (“Robison”) and Robison
      was dismissed on that same date.





During
      the Company's two most recent fiscal years and any subsequent interim period
      prior to the engagement of Madsen, the Company (or someone on its behalf) has
      not consulted with Madsen, or any other auditor, regarding any accounting or
      audit concerns, to include, but not by way of limitation, those stated in Item
      304(a)(2) of Regulation S-B.





Robison
      had been appointed on January 31, 2006 as the Company’s independent
      auditor.





During
      the period that Robison served as the Company’s independent auditor and through
      the date of dismissal, the Company has not had any disagreements with Robison,
      whether resolved or not resolved, on any matter of accounting principals or
      practices, financial statement disclosure, or auditing scope or procedure,
      which, if not resolved to said accountants' satisfaction, would have caused
      it
      to make reference to the subject matter of the disagreements(s) in connection
      with its report.





The
      Company has provided the information required to comply with Item 304(a)(3)
      of
      Regulation S-B to Robison and requested that Robison furnish it with a letter
      addressed to the Securities and Exchange Commission stating whether it agrees
      with the above statements.





**ITEM 8A.
      CONTROLS AND PROCEDURES**




We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our reports filed pursuant to the
      Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
      and reported within the time periods specified in the SEC’s rules, regulations
      and related forms, and that such information is accumulated and communicated
      to
      our principal executive officer and principal financial officer, as appropriate,
      to allow timely decisions regarding required disclosure.




We,
      under
      the supervision of our chief executive officer and chief financial officer,
      carried out an evaluation of the effectiveness of the design and operation
      of
      its disclosure controls and procedures as of December 31, 2007. Based upon
      that
      evaluation, management, including our chief executive officer and chief
      financial officer, concluded that our disclosure controls and procedures were
      effective in alerting it in a timely manner to information relating to us
      required to be disclosed in this report.




During
      our fiscal year ended December 31, 2007, there were no significant changes
      in
      our internal controls over financial reporting that have materially affected,
      or
      are reasonably likely to materially affect our internal controls over financial
      reporting.




**ITEM 8B.
      OTHER INFORMATION**




Not
      applicable.




17







**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
      WITH
      SECTION 16(a) OF THE EXCHANGE ACT**




The
      table
      below sets forth the names and ages of our directors and executive officers
      as
      of March 31, 2008.





**Name**
            
            **Age**
            
            **Position Held**
            
            **Experience**Yingren CAI
            
            62
            
            Founder and Chairman
            
            -
                Over 30 years of experience in sales and marketing of plastic products
                and
                machinery
              
              -
                Established Zhu Jiang Plastics Industrial Company and served as general
                manager
              
              -
                Founded and managed all three operating subsidiariesChonghui
                ZHAO
            
            41
            
            Chief
                Executive Officer,
              Chief
                Financial Officer
            
            -
                Over 17 years of experience in technology and production of plastic
                machinery and mold, beverage packaging plant management and sales
                and
                marketing of beverage packaging solutions
              
              -
                Graduated from South China University of Technology, majored in Machinery
                in Chemical IndustryWen
                WU
            
            51
            
            Director
            
            -
                Over 20 years of experience in plant management, machinery and molding
                production.
              
              -
                Responsible for the strategic development, administrative and financial
                operation of the CompanyLei
                Shan LEUNG
            
            48
            
            Director
            
            -
                  Has twenty-nine years of experience in the trading industry and
                sales management.
              
              -
                  Since 2002, Ms. Leung has served the Company as a consultant to
                develop new customers and to formulate and implement marketing
                strategy.




Our
      executive officers are appointed annually by the Board of Directors. Our
      directors serve a term of one year or until their successors are elected and
      duly qualified. The executive officers serve a term until their death,
      resignation or removal by the Board of Directors or election of their respective
      successors. In addition, there were no arrangements or understanding between
      any
      executive officer and any other person pursuant to which any person was selected
      as an executive officer.




**Family
      Relationships**




There
      are
      no family relationships between any of directors or executive
      officers.




**Audit
      Committee**




We
      have
      not established an audit committee of the Board of Directors. Currently, our
      entire Board of Directors serves as our audit committee. We do not currently
      have a financial expert on our Board of Directors.




**No
      Other Committees**




We
      have
      not established compensation, nominating executive or any other committees
      of
      the Board of Directors.




**Code
      of Ethics**




We
      have
      not adopted a Code of Business Conduct and Ethics (the “Code”) that applies to
      our directors and employees, including our principal executive officer,
      principal financial officer, principal accounting officer and controller, or
      persons performing similar functions.


18




**Changes
      in Director Nomination Process for Stockholders**




None.





**Compliance
      with Section 16(A) of the Exchange Act**




Based
      solely upon a review of Forms 3 and 4 and amendments thereto furnished to us
      pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934 during
      our
      most recent fiscal year and Forms 5 and amendments thereto furnished to us
      with
      respect to our most recent fiscal year, neither Chonghui Zhao, our Chief
      Executive Officer and Chief Financial Officer, Lei Shan Leung, one of our
      directors nor China Water and Drinks Inc., the holder of 48% of our outstanding
      common stock have filed Forms 3, 4 and 5 on a timely basis as required
      by Section 16(a) of the Securities Exchange Act of 1934, as
      amended.




We
      are
      aware of the following transactions with respect to China Water and Drinks
      Inc.:




(i)
            On
                August 31, 2007, China Water and Drinks Inc. acquired 11,000,000
                shares of
                our Common Stock and 5,000,000 shares of our Series A Preferred
                Stock.




(ii)
            On
                April 11, 2008, China Water and Drinks Inc. acquired 25,000,000 shares
                of
                our Common Stock upon conversion of the 5,000,000 shares of our Series
                A
                Preferred Stock.




**Committees
      of the Board of Directors**  ****





As
      of
      December 31, 2007, our Board of Directors did not have any standing
      committees.




**ITEM
      10. EXECUTIVE COMPENSATION**





Set
      forth
      below is Summary Compensation Table





**SUMMARY
      COMPENSATION TABLE**





Name &
              Principal
              Position
            
            Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Stock
              Awards
              ($)
            
            Option
              Awards
              ($)
            
            Non-Equity
              Incentive Plan
              Compensation
              ($)
            
            Change in
              Pension value
              and
              Nonqualified
              deferred
              compensation
              earnings
              ($)
            
            All other
              Compensation
              ($)
            
            Total
              ($)Chonghui
            
            
            2007
            
            
            26,256
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            26,256ZHAO
            
            
            2006
            
            
            5,262
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            5,262CEO,
                CFOWen
                WU
            
            
            2007
            
            
            6,232
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            6,232Director
            
            
            2006
            
            
            6,314
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            6,314Yingren
            
            
            2007
            
            
            6,537
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            6,537CAI
            
            
            2006
            
            
            6,314
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            6,314ChairmanLei
                Shan
            
            
            2007
            
            
            -
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            -LEUNG
            
            
            2006
            
            
            -
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            
            
            
            N/A
            
            
            -Director




19





**Item
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDERS MATTERS**





The
      following table sets forth as of April 11, 2008, certain information regarding
      the beneficial ownership of our common stock, by each person known by us to
      be
      the beneficial owner of more than 5% of our outstanding shares of common stock,
      each of our directors, each of our named executive officers, and all executive
      officers and directors as a group. Under the SEC rules, beneficial ownership
      includes any shares as to which the individual has the sole or shared voting
      power or investment power. In addition, beneficial ownership includes any shares
      that the individual has the right to acquire within 60 days . Unless otherwise
      indicated, each person listed below has sole investment and voting power (or
      shares such powers with his or her spouse).




Name and Address of Beneficial Owner
            
            Number of Shares of
              Common Stock
              Beneficially Owned
            
            Percentage of Class (1)China Water and Drinks Inc.
              Unit
                607, 6/F, Concordia Plaza,
              1
                Science Musuem Road,
              Tsimshatsui
                East, Kowloon, Hong Kong
            
            36,000,000
            
            48%Sze
                Tang Li
              Flat
                G, 8/FL Tower 3
              The
                Waterfront 1 Auston Rd.
              West
                TST, Hong Kong
            
            
            4,765,500
            (2)
            
            6.35
            %Cai
                Yingren, Director
              2/F,
                142 Xue Zhong Road,
              Xue
                Xiu District,
              Guangzhou
                F40000, Peoples’ Republic of China
            
            
            12,187,500
            
            
            16.25
            %Wu
                Wen
              10
                Cheng Bo Street,
              Dian
                Bai Ju Sui Dong Zhen,
              Guangzhou
                F4000, Peoples’ Republic of China
            
            
            6,562,500
            
            
            8.75
            %Xue
                Fei Chun
              No
                551 Hutou Hill Village,
              Chengdoug
                Street Wenling City,
              Zhejiang
                Province, Peoples’ Republic of China
            
            
            5,900,000
            
            
            7.86
            %Jiang
                Chu
              No
                103-1-1 Chiuandong Road,
              Liujiaxia
                District,
              Yongjing
                County,
              Gansu
                Province, Peoples’ Republic of China
            
            
            5,900,000
            
            
            7.86
            %Chong
                Hui Zhao, Chief Executive Officer and Chief Finance Officer
              Huanghuahu
                Industrial Zone,
              Fogang
                County, 511675
              Guangdong
                Province, Peoples’ Republic of China
            
            
            -
            
            
            -Leung
                Lei Shan
              Huanghuahu
                Industrial Zone,
              Fogang
                County, 511675
              Guangdong
                Province, Peoples’ Republic of China
            
            
            -
            
            
            -Totally
                held by Directors and Executive Officers (four
                individuals)
            
            
            18,750,000
            
            
            25
            %




(1)
            Based
                on a total of 75,000,000 shares of Common Stock outstanding on March
                31,
                2008.





(2)
            Of
                the 4,765,000 shares beneficially owned by Sze Tang Li, (i) 2,479,000
                of
                such shares are held by IBroader Development Limited, of which Mr.
                Li is
                the sole owner and (ii) 2,286,500 of such shares are held by IPacific
                Asset Management Limited, of which Mr. Li is the sole
                owner.





**I** **TEM
      12. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS**





There
      has
      not been since January 1, 2007 nor is there currently pending any transaction
      or
      series of similar transactions to which we were or are to be a party in which
      the amount involved exceeded $120,000 and in which any director, executive
      officer, holder of more than 5% of our Common Stock or any member of the
      immediate family of any of these persons had or will have a direct or indirect
      material interest other than the following.:





On
      August
      26, 2007, we entered into and consummated an Agreement for Share Exchange with
      China Valley Development Limited (“CVDL”) and Cai Yingren and Wu Wen,
      individually, as the owners and shareholders of CVDL (the “Shareholders”).
      Pursuant to the terms of the Agreement we acquired a 100% ownership interest
      in
      CVDL in exchange for the issuance to the Shareholders of 29,750,000 shares
      of Common Stock and 5,000,000 shares of Series A Preferred Stock.




The
      Company does not currently have any independent directors.


20





**I** **TEM
      13. EXHIBITS**




The
      following exhibits are included as part of this report:





**Exhibit**
              **Number**
            
            **Exhibit
                Description**2.1
            
            Majority
                Stock Purchase Agreement dated May 24, 2007 (incorporated by reference
                to
                the Company’s Form 8-K dated May 29, 2007)2.2
            
            Agreement
                for Share Exchange dated August 26, 2007 (incorporated by reference
                to the
                Company’s Form 8-K dated August 31, 2007)4.1
            
            Articles
                of Incorporation (incorporated by reference to the Company’s Form SB-2
                dated August 9, 2001)4.2
            
            By-Laws
                (incorporated by reference to the Company’s to the Company’s Form SB-2
                dated August 9, 2001))4.3
            
            Certificate
                of Designation (incorporated by reference to the Company’s Form 8-K/A
                dated August 26, 2007)4.4
            
            Certificate
                of Amendment to the Company’s Articles of Incorporation (incorporated by
                reference to the Company’s Form 8-K/A dated January 25,
                2005)4.5
            
            Certificate
                of Amendment to the Company’s Articles of Incorporation (incorporated by
                reference to the Company’s Schedule 14C Information Statement dated March
                7, 2008)31.1
            
            Sarbanes
                Oxley Section 302 Certification of Chief Executive Officer and Chief
                Financial Officer32.1
            
            Sarbanes
                Oxley Section 906 Certification of Chief Executive Officer and Chief
                Financial Officer





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**




With
      respect to the fiscal year ended December 31, 2007, the aggregate audit
      fees billed by our independent registered public accounting firm, Madsen, for
      professional services were as follows:




**Fiscal Year**
            
            **Audit**
            
            **Other audit**
              **related**
            
            **Tax**
            
            **All other**2007
            
            $
            88,500
            
            $
            -
            
            
            -
            
            
            -





**Audit
      Fees**





During
      the fiscal year ended December 31, 2007, the fees for our principal accountant
      were $88,500 , which was composed of $6,110 for quarterly reviews, $73,690
      for
      the preparation of this annual report on Form 10-KSB, and $8,700 f or the audit
      of the financial statements filed with the current report on Form 8-K filed
      with
      the SEC.





**Audit
      Related Fees**





During
      the fiscal year ended December 31, 2007, our principal accountant did not render
      assurance and related services reasonably related to the performance of the
      audit or review of financial statements.





**Tax
      Fees**




During
      the fiscal year ended December 31, 2007, our principal accountant did not render
      services to us for tax compliance, tax advice and tax planning.





**All
      Other Fees**





During
      the fiscal year ended December 31, 2007, there were no fees billed for products
      and services provided by the principal accountant other than those set forth
      above.


21




During
      the fiscal years ended December 31, 2006 and 2007, the aggregate audit fees
      billed by our former independent registered public accounting firm, Robison,
      for
      professional services were as follows:





**Fiscal Year**
            
            **Audit**
            
            **Other audit**
              **related**
            
            **Tax**
            
            **All other**June 30,
                2006
            
            $
            23,250
            
            $
            -
            
            
            -
            
            
            -June
                30, 2007
            
            $
            8,195
            
            $
            -
            
            
            -
            
            
            -




**Audit
      Fees**




This
      category includes aggregate fees billed by our independent auditors for the
      audit of our annual financial statements on Form 10-KSB, audit or management’s
      assessment and effectiveness of internal controls over financial reporting,
      review of financial statements included in our quarterly reports on Form 10-QSB
      and services that are normally provided by the auditor in connection with
      statutory and regulatory filings for those fiscal years.




**Audit
      Related Fees**




This
      category consists of services by our independent auditors that are reasonably
      related to the performance of the audit or review of our financial statements
      and are not reported above under Audit Fees. This category includes accounting
      consultations on transaction and proposed transaction related
      matters.




**Tax
      Fees**




This
      category consists of professional services rendered for tax compliance and
      preparation of our corporate tax returns and other tax advice.




**All
      Other Fees**




There
      are
      no other fees to disclose.




All
      of
      the fees paid for the fiscal years ended December 31, 2006 and 2007, described
      above were pre-approved by the Board of Directors.




**Policy
      on Pre-Approval of Services Performed by Independent Registered Public
      Accounting Firm**




The
      Board
      of Director’s policy is to pre-approve all audit and permissible non-audit
      services provided by the independent auditors. These services may include audit
      services, audit-related services, tax services and other services. The audit
      committee may also pre-approve particular services on a case-by-case
      basis.


22




**SIGNATURES**





In
      accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has
      caused this Report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized on the 20 th day of
      August, 2008.





Date:
      August 20, 2008




**CHINA
                BOTTLES, INC.**By:
            /s/
                Chonghui Zhao
                **Chonghui
                Zhao
              Chief
                Executive Officer and
              Chief
                Financial Officer
              (Principal
                Executive, Accounting
              and
                Financial Officer)




In
      accordance with the Exchange Act, this Report has been signed by the following
      persons on behalf of the Registrant in the capacities and on the dates
      indicated.





Date:
      August 20, 2008





/s/
              Chonghui ZhaoChonghui
                Zhao
              Chief
                Executive Officer and
              Chief
                Financial Officer
              (Principal
                Executive, Accounting
              and
                Financial Officer)




Date:
                August 20, 2008/s/
                Yingren CaiYingren
                CaiDirectorDate:
                August 20, 2008/s/
                Wen WuWen
                WuDirectorDate:
                August 20, 2008Lei
                Shan LeungDirector




23





**CHINA
      BOTTLES, INC. AND SUBSIDIARIES**


(Formerly
      Hutton Holdings Corporation)





INDEX
      TO
      FINANCIAL STATEMENTS





REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            F-2CONSOLIDATED
                BALANCE SHEETS AS OF DECEMBER 31, 2007 AND 2006
            F-3CONSOLIDATED
                STATEMENTS OF INCOME & COMPREHENSIVE INCOME FOR THE YEARS ENDED
                DECEMBER 31, 2007 AND 2006
            F-4CONSOLIDATED
                STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY AS AT DECEMBER 31, 2007 AND
                2006
            F-5CONSOLIDATED
                STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
                2006
            F-6NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS
            F-7


F-1




Board
      of
      Directors


China
      Bottles, Inc. and Subsidiaries


(Formerly
      Hutton Holdings Corporation)





**REPORT
      OF INDEPENDENT REGISTERED ACCOUNTING FIRM**





We
      have
      audited the accompanying consolidated balance sheets of China Bottles, Inc.
      and
      Subsidiaries (Formerly Hutton Holdings Corporation) as of December 31, 2007
      and
      2006 and the consolidated statements of income, stockholders’ equity and cash
      flows for the years then ended. These consolidated financial statements are
      the
      responsibility of the Company’s management. Our responsibility is to express an
      opinion on these consolidated financial statements based on our
      audit.





We
      conducted our audit in accordance with auditing standards of the Public Company
      Accounting Oversight Board (“PCAOB”). Those standards require that we plan and
      perform an audit to obtain reasonable assurance whether the financial statements
      are free of material misstatement. The Company is not required to have, nor
      were
      we engaged to perform, an audit of its internal control over financial
      reporting. Our audit included consideration of internal control over financial
      reporting as a basis for designing audit procedures that are appropriate in
      the
      circumstances, but not for the purpose of expressing an opinion on the
      effectiveness of the company’s internal control over financial reporting.
      Accordingly, we express no such opinion. An audit also includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used,
      significant estimates made by management and evaluating the overall financial
      statement presentation. We believe that our audits provide a reasonable basis
      for our opinion.





The
      financial statements have been restated to correct an accounting error in the
      reporting of a business combination that occurred during the year. The
      restatement adjustments are outlined in Note 19 to the financial
      statements.





In
      our
      opinion, these consolidated financial statements referred to above present
      fairly, in all material aspects, the consolidated financial position of the
      Company as of December 31, 2007 and 2006, and the consolidated results of its
      operations and cash flows for the years then ended, in conformity with
      accounting principles generally accepted in the United States of
      America.





/s/Madsen
      & Associates CPA’s, Inc.


Madsen
      & Associates CPA’s, Inc.


April
      12,
      2008, except Note 19 which is dated August 18, 2008


Salt
      Lake
      City, Utah


F-2




**CONSOLIDATED
      FINANCIAL STATEMENTS**





CHINA
      BOTTLES, INC. AND SUBSIDIARIES


(Formerly
      Hutton Holdings Corporation)


CONSOLIDATED
      BALANCE SHEETS





(Restated)
              December
                31,
              2007
            
            December
                31, 2006**ASSETS**CURRENT
                ASSETSCash
                and cash equivalent
            
            
            1,375,786
            
            $
            -Accounts
                receivable, net of allowance for doubtful accounts
            
            
            1,494,539
            
            
            -Inventories
            
            
            6,737,712
            
            
            -Prepaid
                expenses and other receivables
            
            
            2,112,535
            
            
            -Total
                current assets
            
            
            11,720,572PROPERTY,
                PLANT & EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
            
            
            3,636,505
            
            
            -LAND
                USE RIGHTS, NET OF ACCUMULATED AMORTIZATION
            
            
            229,689
            
            
            -**TOTAL
                ASSETS**
            
            $
            15,586,766
            
            $
            -**LIABILITIES
                AND STOCKHOLDERS’ EQUITY****LIABILITIES**CURRENT
                LIABILITIESShort-term
                bank loans
            
            
            1,777,389
            
            $
            -Accounts
                payable
            
            
            1,244,801
            
            
            -Accrued
                expenses and other payables
            
            
            904,791
            
            
            2,090Amount
                due to a related party
            
            
            3,508,083
            
            
            -Customers
                deposits
            
            
            650,652
            
            
            -Taxes
                payable
            
            
            1,001,257
            
            
            -Total
                current liabilities
            
            
            9,086,973
            
            
            2,090**TOTAL
                LIABILITIES**
            
            $
            9,086,973
            
            $
            2,090**COMMITMENTS****STOCKHOLDERS’
                EQUITY**Preferred
                stock, Par value $0.001; 25,000,000 shares authorized; $0.001 par
                value;
                5,000,000 shares issued and outstanding on December 31, 2007
            
            $
            5,000
            
            $
            50,000Common
                stock, Par value $0.001; 175,000,000 shares authorized; $0.001 par
                value;
                50,000,000 shares issued and outstanding on December 31, 2007
            
            
            50,000
            
            
            (50,000
            )Additional
                paid in capital
            
            
            2,301,567
            
            
            -Retained
                earnings (Accumulated deficit)
            
            
            3,743,867
            
            
            (2,090
            )Other
                comprehensive income
            
            
            399,359
            
            
            -**TOTAL
                STOCKHOLDERS’ EQUITY**
            
            
            6,499,793
            
            $
            (2,090
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            
            15,586,766
            
            $
            -




See
      accompanying notes to the consolidated financial statements


F-3


CHINA
      BOTTLES, INC. AND SUBSIDIARIES


(Formerly
      Hutton Holdings Corporation)


CONSOLIDATED
      STATEMENTS OF INCOME &


COMPREHENSIVE
      INCOME


(RESTATED)





For the Year Ended December 31,2007
            
            2006REVENUE
            
            $
            22,501,627
            
            $
            -COST
                OF SALES
            
            
            15,933,826
            
            
            -GROSS
                MARGIN
            
            
            6,567,801
            
            
            -EXPENSESGeneral
                & administrative
            
            
            1,646,483
            
            
            2,090Sales
                & distribution
            
            
            357,184
            
            
            -TOTAL
                OPERATING EXPENSES
            
            
            2,003,667
            
            
            2,090OPERATING
                INCOME/(LOSS)
            
            
            4,564,134
            
            
            (2,090
            )OTHER
                INCOME (EXPENSE)Sales
                of scarps
            
            
            275,363
            
            
            -Sales
                of parts
            
            
            298,865
            
            
            -Miscellaneous
            
            
            64,168
            
            
            -INTEREST
                EXPENSE
            
            
            (66,541
            )
            
            -INCOME/(LOSS)
                BEFORE TAXES
            
            
            5,135,989
            
            
            (2,090
            )PROVISION
                FOR TAXATION
            
            
            1,392,122
            
            
            -NET
                INCOME/(LOSS)
            
            $
            3,743,867
            
            $
            (2,090
            )OTHER
                COMPREHENSIVE INCOMEGain
                on Foreign Exchange Translation
            
            
            399,359
            
            
            -COMPREHENSIVE
                INCOME/(LOSS)
            
            $
            4,143,226
            
            $
            (2,090
            )NET
                INCOME PER SHARE BASIC
            
            $
            0.08
            
            $
            N/AWEIGHTED
                AVERAGE SHARES BASIC
            
            
            50,000,000
            
            
            N/ANET
                INCOME PER SHARE DILUTED
            
            $
            0.06
            
            $
            N/AWEIGHTED
                AVERAGE SHARES DILUTED
            
            
            75,000,000
            
            
            N/A





See
      accompanying notes to the consolidated financial statements


F-4


CHINA
      BOTTLES, INC. AND SUBSIDIARIES


(Formerly
      Hutton Holdings Corporation)


CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDER EQUITY


FOR
      THE
      YEARS ENDED DECEMBER 31, 2007


(RESTATED)





AccumulatedPreferred
                stock
            
            Common
                stock
            
            Additional
            
            
            
            OtherShares
            
            Par
              value
            
            Shares
            
            Par value
            
            Paid
                in
              Capital
            
            Retained
              Earnings
            
            ComprehensiveIncome
            
            TotalBalance
                at August 15, 2007, date of inception of private company
            
            
            -
            
            $
            -
            
            
            29,750,000
            
            
            29,750
            
            $
            -
            
            $
            -
            
            
            -
            
            $
            29,750Recapitalization
                & acquisition of private company
            
            
            5,000,000
            
            $
            5,000
            
            
            20,250,000
            
            $
            20,250
            
            $
            2,301,567
            
            $
            -
            
            $
            -
            
            
            2,326,817Foreign
                currency translation gain
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            399,359
            
            
            399,359Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,743,867
            
            
            -
            
            
            3,743,867**BALANCE
                AT December 31, 2007**
            
            
            5,000,000
            
            $
            5,000
            
            
            50,000,000
            
            $
            50,000
            
            $
            2,301,567
            
            $
            3,743,867
            
            $
            399,359
            
            $
            6,499,793




See
      accompanying notes to the consolidated financial statements.




F-5




CHINA
      BOTTLES, INC. AND SUBSIDIARIES


(Formerly
      Hutton Holdings Corporation)


CONSOLIDATED
      STATEMENTS OF CASH FLOWS


(RESTATED)





For the Year Ended December 31,2007
            
            2006(Unaudited)**Cash
                Flows From Operating Activities:**Net
                income/(loss)
            
            $
            3,743,867
            
            $
            (2,090
            )Adjustments
                to reconcile net income to net cash used by operating
                activities:Depreciation
            
            
            27,015
            
            
            -Amortization
                of land use rights
            
            
            2,030
            
            
            -Changes
                in operating Assets and liabilities:
            
            
            
            
            
            -Decrease
                in accounts receivable
            
            
            3,916,665
            
            
            -Increase
                in inventories
            
            
            (118,370
            )
            
            -Decrease
                in prepaid expenses and other receivable
            
            
            1,502,982
            
            
            -Decrease
                in accounts payable
            
            
            (2,335,533
            )
            
            -Decrease
                in customers deposits
            
            
            (4,876,537
            )
            
            -Decrease
                in accrued expenses and other payables
            
            
            (6,846,650
            )
            
            2,090Decrease
                in notes payable
            
            
            (46,386
            )
            
            -Decrease
                in taxes payable
            
            
            (2,372,611
            )
            
            -Net
                cash used in operating activities
            
            
            (7,403,528
            )
            
            -**Cash
                Flows From Investing Activities:**Acquisition
                of Fogang companies, net of cash acquired of $5,239,664
            
            
            -Purchase
                of property, plant and equipment
            
            
            (460,206
            )
            
            -Purchase
                of land use right
            
            
            (33,370
            )
            
            -Net
                cash used in investing activities
            
            
            (493,576
            )
            
            -**Cash
                Flows From Financing Activities:**Proceeds
                from bank loans
            
            
            717,126
            
            
            -Increase
                in amount due to a related party
            
            
            3,508,083
            
            
            -Decrease
                in amount due from a director
            
            
            321,158
            
            
            -Cash
                acquired in Fogang acquisition
            
            
            5,239,664
            
            
            -Net
                cash provided from financing activities
            
            
            9,786,031
            
            
            -**Net
                increase in cash**
            
            
            1,888,927
            
            
            --**Effect
                of foreign exchange rate changes**
            
            
            (513,141
            )
            
            -**Cash
                at Beginning of Period**
            
            
            -
            
            
            -**Cash
                at the End of Period**
            
            $
            1,375,786
            
            $
            -**Supplemental
              Disclosures of Cash Flow Information**Cash
                paid for interest
            
            $
            -Cash
                paid for income taxes
            
            $
            -**Supplemental
              Disclosures of Non-Cash Investing and Financing
              Activities**Capital
                contribution by assumption of liabilities
            
            $
            2,301,567




See
      accompanying notes to the consolidated financial statements




F-6




CHINA
      BOTTLES, INC. AND SUBSIDIARIES


(Formerly
      Hutton Holdings Corporation)


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
      31, 2007




**NOTE
      1 - PRINCIPAL ACTIVITIES AND ORGANIZATION**





China
      Bottles, Inc. (“the Company”) is engaged in production of beverage bottle which
      mainly is made of PET, a type of plastic with desirable characteristic for
      packaging including clear and wide range of color and shape, tough, good
      resistance to heat, moisture, dilute acid, and recyclable. The Company produces,
      markets and sells full range of beverage bottle production machineries including
      high speed injection molding machines, semi-automatic and high speed automatic
      plastics stretch blow molding machines, infrared ray perform heater, label
      heat
      shrinker and perform injection mold and blowing mold.





The
      Company was incorporated under the laws of the State of Nevada on February
      26,
      2001, as Geraco, Inc. On December 15, 2004, the Company changed its name to
      Hutton Holdings Corporation. On April 3, 2008, the Company changed its name
      to
      China Bottles, Inc.





The
      Company entered into a share exchange agreement on August 26, 2007, with China
      Valley Development Limited (“CDVL”), a British Virgin Islands company, to
      acquire a 100% ownership interest in CVDL.





**NOTE
      2 -**  **BASIS
      OF PRESENTATION**





The
      consolidated financial statements include the accounts of The Company and all
      its subsidiaries (“The Group”). All material inter-company accounts and
      transactions have been eliminated. The consolidated financial statements are
      prepared in accordance with generally accepted accounting principles used in
      the
      United States of America.





**NOTE**  **3
      -**  **PRINCIPLES
      OF CONSOLIDATION**  **AND
      BUSINESS COMBINATIONS**





Business
      Combinations and Acquisitions





The
      Company was incorporated under the laws of the State of Nevada on February
      26,
      2001, as Geraco, Inc. On December 15, 2004, the Company changed its name to
      Hutton Holdings Corporation.





On
      August
      27, 2007, the Company entered into and closed an Agreement for Share Exchange
      with China Valley Development Limited, a British Virgin Islands company
      (“CVDL”), Cai Yingren and Wu Wen, individually, the owners and shareholders of
      CVDL. The Company acquired 100% ownership interest in CVDL from Cai Yingren
      and
      Wu Wen at a consideration of 29,750,000 shares of our common stock and 5,000,000
      shares of preferred stock. The Agreement for Share Exchange resulted in a change
      of control of the Company. For accounting purposes such share exchange was
      treated as an acquisition of the Company by, and a re-capitalization of, CVDL.
      CVDL is the accounting acquirer and the results of its operations carry over
      under reverse merger accounting.





On
      August
      16, 2007 CVDL acquired a 100% equity interest in Guozhu Holdings Limited. This
      acquisition was accounted for as a reverse merger with Guozhu Holdings being
      the
      accounting acquirer and effected a recapitalization of Ghozhu Holdings Limited.
      After the transaction, Guozhu continued its operations under the name of China
      Valley Development Limited.





Ghozhu
      Holdings Limited was formed in August of 2007 and prior to the business
      combination with CVDL described above, Ghozhu acquired a 100% equity interest
      in
      three operating companies located in the PRC (Peoples Republic of China). The
      acquisitions of these three operating companies have been accounted for under
      the purchase method of accounting following guidelines and methods outlined
      in
      SFAS 141 “Business Combinations”. The companies acquired by Ghozhu which are
      included in the consolidated statements of Hutton as of December 31, 2007 are
      listed below:





Fogang
      Guozhu Plastics Company Ltd.


Fogang
      Guozhu Blowing Equipment Company Ltd (through Excellent Frame Investments,
      Ltd,
      a 100% subsidiary of Guozhu Holdings)


Fogagn
      Guozhu Precision Mold Co. Ltd




These
      companies are engaged in the manufacturing of beverage bottle production
      equipment as well as providing molds and bottle production services for a
      variety of customers. The accompanying consolidated financial statements include
      the accounts of these operating companies. All significant intercompany balances
      and transactions have been eliminated.




F-7





*The
      details of the acquisitions made by the Company are noted
      below:*





*Acquisition
      of Fogang Guozhu Plastics Company Limited (“Guozhu Plastics”)*





On
      August
      16, 2007, Guozhu Holdings Limited, a wholly-owned subsidiary of the Company,
      acquired 100% of the equity of Guozhu Plastics for a total cash consideration
      of
      $1,910,934. Guozhu Plastics produces beverage bottle and is located in Fogang,
      (southern) PRC.





The
      following table represents the preliminary allocation of the acquisition cost
      to
      the net assets acquired based on their respective estimated fair values at
      the
      date of acquisition. The purchase price allocation is subject to
      refinement.





Cash
                and cash equivalents
            
            $
            51,925Accounts
                receivable
            
            
            323,006Inventories
            
            
            298,751Prepayments,
                deposits and other receivables
            
            
            1,274,666Plant
                and equipment
            
            
            1,333,833Land
                use right
            
            
            198,345TOTAL
                ASSETS PURCHASED
            
            
            3,480,526Accounts
                payables
            
            
            244,613Amount
                due to a director
            
            
            176,519Customers
                deposits
            
            
            345,705Other
                payables and accrued expenses
            
            
            548,788Taxes
                payable
            
            
            253,967TOTAL
                LIABILITIES ASSUMED
            
            
            1,569,592TOTAL
                CONSIDERATION
            
            $
            1,910,934





*Acquisition
      of Fogang Guozhu Blowing Equipment Company Limited (“Guozhu Blowing
      Equipment”)*





On
      August
      16, 2007, Excellent Fame Investments Limited, a wholly-owned subsidiary of
      the
      Company, acquired 100% of the equity of Guozhu Blowing Equipment for a total
      cash consideration of $2,771,971. Guozhu Blowing Equipment produces beverage
      bottle production machineries and is located in Fogang, (southern)
      PRC.





The
      following table represents the preliminary allocation of the acquisition cost
      to
      the net assets acquired based on their respective estimated fair values at
      the
      date of acquisition. The purchase price allocation is subject to
      refinement.





Cash
                and cash equivalents
            
            $
            5,077,865Accounts
                receivable
            
            
            1,698,712Inventories
            
            
            4,176,139Prepayments,
                deposits and other receivables
            
            
            2,677,906Plant
                and equipment
            
            
            438,244TOTAL
                ASSETS PURCHASED
            
            
            14,068,866Accounts
                payables
            
            
            1,985,651Amount
                due to a director
            
            
            630,506Customers
                deposits
            
            
            3,074,490Notes
                payable
            
            
            46,386Other
                payables and accrued expenses
            
            
            2,108,724Short
                term loan
            
            
            1,060,257Taxes
                payable
            
            
            2,390,881TOTAL
                LIABILITIES ASSUMED
            
            
            11,296,895TOTAL
                CONSIDERATION
            
            $
            2,771,971





*Acquisition
      of Fogang Guozhu Precision Mold Company Limited (“Guozhu Precision
      Mold”)*





On
      August
      16, 2007, Guozhu Holdings Limited, a wholly-owned subsidiary of the Company,
      acquired 100% of the equity of Guozhu Precision Mold for a total cash
      consideration of $3,439,909. Guozhu Precision Mold produces perform injection
      mold and blowing mold and is located in Fogang, (southern) PRC.





The
      following table represents the preliminary allocation of the acquisition cost
      to
      the net assets acquired based on their respective estimated fair values at
      the
      date of acquisition. The purchase price allocation is subject to
      refinement.





Cash
                and cash equivalents
            
            $
            109,874Accounts
                receivable
            
            
            3,389,457Amount
                due from a director
            
            
            1,128,181Inventories
            
            
            2,144,417Prepayments,
                deposits and other receivables
            
            
            1,373,320Plant
                and equipment
            
            
            1,428,432TOTAL
                ASSETS PURCHASED
            
            
            9,573,681Accounts
                payables
            
            
            1,335,443Customers
                deposits
            
            
            2,106,964Other
                payables and accrued expenses
            
            
            2,691,365TOTAL
                LIABILITIES ASSUMED
            
            
            6,133,772TOTAL
                CONSIDERATION
            
            $
            3,439,909


Subsequent
        to the execution of the purchase agreement, the Company negotiated a net
        settlement of the total purchase consideration through the assumption of
        certain
        liabilities of the target companies. The total consideration paid through
        this
        net settlement was $2,301,567 and is reflected in the financial statements
        as a
        contribution of equity to the Company.




F-8




**NOTE**  **4
      - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





(a)
            Economic
                and Political Risk





The
      Group’s major operations are conducted in China (“PRC”). Accordingly, the
      political, economic, and legal environments in the PRC, as well as the general
      state of the PRC’s economy may influence the Group’s business, financial
      condition, and results of operations.




The
      Group’s major operations in the PRC are subject to special considerations and
      significant risks not typically associated with companies in North America
      and
      Western Europe. These include risks associated with, among others, the
      political, economic, and legal environment. The Group’s results may be adversely
      affected by changes in governmental policies with respect to laws and
      regulations, anti-inflationary measures, and rates and methods of taxation,
      among other things.





(b)
            Cash
                and Cash Equivalents





The
      Group
      considers all highly liquid investments purchased with original maturities
      of
      three months or less to be cash equivalents. The Group maintains bank accounts
      in Hong Kong and China through its wholly owned subsidiaries.





(c)
            Accounts
                Receivable





Trade
      receivables are recognized and carried at the original invoice amount less
      allowance for any uncollectible amounts. An estimate for doubtful accounts
      is
      made when collection of the full amount is no longer probable. Bad debts are
      written off as incurred. The Group did not have provided an allowance for
      doubtful accounts for the year ended December 31, 2007. There were bad debts
      $7,436 incurred for the year ended December 31, 2007.





(d)
            Inventories





Inventories
      consisting of raw materials, work-in-progress, and finished goods are stated
      at
      the lower of cost or net realizable value. Finished goods are comprised of
      direct materials, direct labor and a portion of overhead. Inventory costs are
      calculated using a weighted average method of accounting.





(e)
            Property,
                Plant and Equipment





Property,
      plant and equipment are carried at cost less accumulated depreciation. The
      cost
      of maintenance and repairs is charged to the statement of income as incurred,
      whereas significant renewals and betterments are capitalized. The cost and
      the
      related accumulated depreciation of assets sold or otherwise retired are
      eliminated from the accounts and any gain or loss is included in the statement
      of income.





(f)
            Land
                Use Rights





According
      to the law of PRC, the government owns all the land in PRC. Companies or
      individuals are authorized to possess and use the land only through land use
      rights granted by the PRC government for 50 years.





Land
      use
      rights represent the cost for purchasing the right to use the leasehold land
      for
      the production facilities of Fogang Guozhu Plastics Co. Ltd. It is stated at
      cost less amortization. Land use rights are being amortized using the
      straight-line method over the lease term of 50 years.





Amortization
      expense was $17,811 and $0 for the years ended December 31, 2007 and 2006,
      respectively.


F-9







(g)
            Depreciation
                and Amortization





The
      Group
      provides for depreciation of plant and equipment principally by use of the
      straight-line method for financial reporting purposes. Plant and equipment
      are
      depreciated to its residual value over the following estimated useful
      lives:





Building
            
            10
                yearsFurniture
                and fixtures
            
            5
                yearsMachinery
                and
                equipment
            
            5
                to 10 yearsMotor
                vehicles
            
            5
                to 10 years





(h)
            Accounting
                for the Impairment of Long-Lived
                Assets





The
      long-lived assets held and used by the Group are reviewed for impairment
      whenever events or changes in circumstances indicate that the carrying amount
      of
      assets may not be recoverable. It is reasonably possible that these assets
      could
      become impaired as a result of technology or other industry changes.
      Determination of recoverability of assets to be held and used is by comparing
      the carrying amount of an asset to future net undiscounted cash flows to be
      generated by the assets. If such assets are considered to be impaired, the
      impairment to be recognized is measured by the amount by which the carrying
      amount of the assets exceeds the fair value of the assets. Assets to be disposed
      of are reported at the lower of the carrying amount or fair value less costs
      to
      sell. There were no impairments of long-lived assets for the year ended 31,
      2007
      and 2006.




(i)
            Income
                Tax




The
      Group
      has adopted the provisions of statements of Financial Accounting Standards
      No.
      109, "Accounting for Income Taxes," which incorporates the use of the asset
      and
      liability approach of accounting for income taxes. The Group allows for
      recognition of deferred tax benefits in future years. Under the asset and
      liability approach, deferred taxes are provided for the net tax effects of
      temporary differences between the carrying amounts of assets and liabilities
      for
      financial reporting purposes and the amounts used for income tax purposes.
      A
      valuation allowance is provided for deferred tax assets if it is more likely
      than not these items will either expire before the Group is able to realize
      their benefits, or that future realization is uncertain.





In
      accordance with the relevant tax laws and regulations of PRC and Hong Kong,
      the
      corporation income tax rate applicable ranges from 17.5% to 33%. At times
      generally accepted accounting principles requires the Group to recognize certain
      income and expenses that do not conform to the timing and conditions allowed
      by
      the PRC. The Group incurred income tax expense of $88,490 and $0 for the years
      ended 31, 2007 and 2006, respectively.





(j)
            Fair
                Value of Financial Instruments





The
      carrying amounts of the Group's cash, accounts receivable, accounts payable
      and
      accrued expenses approximate fair value because of the short maturity of these
      items. Term debt secured by various properties have interest rates attached
      to
      them commensurate with the finance market at the time and management believes
      approximate fair values in the short as well as the long term. It is currently
      not practicable to estimate the fair value of the other debt obligations because
      these note agreements contain unique terms, conditions, covenants and
      restrictions which were negotiated at arm's length with the Group's lenders,
      and
      there is no readily determinable similar instrument on which to base an estimate
      of fair value. Accordingly, no computation or adjustment to fair value has
      been
      determined.


F-10





(k)
            Revenue
                Recognition





Revenue
      represents the invoiced value of goods sold recognized upon the shipment of
      goods to customers. Revenue is recognized when all of the following criteria
      are
      met:





a)
            Persuasive
                evidence of an arrangement exists,b)
            Delivery
                has occurred or services have been rendered,c)
            The
                seller's price to the buyer is fixed or determinable,
                andd)
            Collectibility
                is reasonably assured.





(l)
            Earnings
                Per Share





Basic
      earnings per share is computed by dividing income available to common
      shareholders by the weighted-average number of common shares outstanding during
      the period. Diluted earnings per share is computed similar to basic earnings
      per
      share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      As of December 30, 2007, the Company has 5,000,000 shares of Series A
      Convertible Preferred Stock issued and outstanding and each share of Preferred
      Stock is convertible into 5 shares of the Company’s common stock.





(m)
            Use
                of Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States 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 the reported amounts of revenues and expenses during the
      reporting period. Actual results may differ from those estimates.





(n)
            Retirement
                Benefits





The
      country of PRC mandates companies to contribute funds into the national
      retirement system, which benefits qualified employees based on where they were
      born within the country. The Group pays the required payment of qualified
      employees of the Group as a payroll tax expense. Very few employees in the
      Group
      fall under the mandatory conditions requiring the Group to pay as a payroll
      tax
      expense into the retirement system of the PRC. The Group provides no other
      retirement benefits to its employees.





(o)
            Comprehensive
                Income





Comprehensive
      income is defined to include all changes in equity except those resulting from
      investments by owners and distributions to owners. Among other disclosures,
      all
      items that are required to be recognized under current accounting standards
      as
      components of comprehensive income are required to be reported in a financial
      statement that is presented with the same prominence as other financial
      statements. Comprehensive income includes net income and the foreign currency
      translation gain, net of tax.




F-11





(p)
            Foreign
                Currency Translation





The
      accompanying consolidated financial statements are presented in United States
      dollars (US$). The functional currency of the Group is the Renminbi (RMB) and
      Hong Kong dollar (HK$). Capital accounts of the consolidated financial
      statements are translated into US$ from RMB and HK$ at their historical exchange
      rates when the capital transactions occurred. Assets and liabilities are
      translated at the exchange rates as of balance sheet date. Income and
      expenditures are translated at the average exchange rate of the year. The
      translation rates are as follows:





2007
            
            2006Year
                end RMB : US$ exchange rate
            
            
            7.314
            
            
            7.818Average
                RMB : US$ exchange rate for the year
            
            
            7.617
            
            
            7.982Year
                end HK$ : US$ exchange rate
            
            
            7.805
            
            
            7.780Average
                HK$ : US$ exchange rate for the year
            
            
            7.803
            
            
            7.769





The
      RMB
      is not freely convertible into foreign currency and all foreign exchange
      transactions must take place through authorized institutions. No representation
      is made that the RMB amounts could have been, or could be, converted into US$
      at
      the rates used in translation.





(q)
            Recent
                Accounting Pronouncements





The
      Group
      does not expect that the adoption of other recent accounting pronouncements
      will
      have a material impact on its financial statements.




**NOTE**  **5
      - ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR DOUBTFUL
      ACCOUNTS**





2007Accounts
                receivable
            
            $
            1,502,268Less:
                Allowance for doubtful accounts
            
            
            7,729Accounts
                receivable, net
            
            $
            1,494,539




N **OTE**  **6
      - INVENTORIES**





Inventories
      consisting of raw materials and finished goods are stated at the lower of
      weighted average cost or market value. Inventories are bottled water and its
      raw
      material to manufacture the bottles.





Inventories
      as of December 31, 2007 is summarized as follows:





2007Raw
                materials
            
            $
            2,610,014Work-in-progress
            
            
            1,518,235Finished
                goods
            
            
            2,609,463Total
            
            $
            6,737,712




F-12





**NOTE
      7 - PREPAID EXPENSES AND OTHER RECEIVABLES**





Prepaid
      expenses consist of payments and deposits made by the Group to third parties
      in
      the normal course of business operations. These payments are made for the
      purchase of goods and services that are used by the Group for its current
      operations.




2007Prepaid
                expenses
            
            $
            961,514Other
                receivables
            
            
            1,151,021Total
            
            $
            2,112,535





The
      Group
      evaluates the amounts recorded as prepaid expenses and other receivables on
      a
      periodic basis and records a charge to the current operations of the Group
      when
      the related expense has been incurred or when the amounts reported as other
      receivables is no longer deemed to be collectible by the Group.





**NOTE
      8 - PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED
      DEPRECIATION**





Property,
      plant and equipment of the Group consist primarily of manufacturing facilities
      and equipment owned and operated by the Group’s wholly owned subsidiaries in
      China. Property, plant and equipment as of December 31, 2007 are summarized
      as
      follows:





2007At
                cost:Buildings
            
            $
            1,277,126Machinery
                and equipment
            
            
            3,637,524Motor
                vehicles
            
            
            324,416Furniture
                & fixtures
            
            
            219,6955,458,761Less:
                Accumulated depreciationBuildings
            
            $
            157,660Machinery
                and equipment
            
            
            1,440,136Motor
                vehicles
            
            
            152,434Furniture
                & fixtures
            
            
            72,0261,822,256Property,
                plant and equipment, net
            
            $
            3,636,505





Depreciation
      expense for the years ended December 31, 2007 and 2006 was $27,015 and $0,
      respectively.


F-13





**NOTE
      9 - LAND USE RIGHTS, NET OF ACCUMULATED AMORTIZATION**





Land
      use
      rights of the Group are being amortized using the straight-line method over
      the
      lease term of 50 years.





2007At
                cost
            
            
            140,824Addition
                during the year
            
            $
            80,681Transfer
                from construction in progress
            
            
            30,079251,584Less:
                Accumulated amortization
            
            
            21,895Land
                use rights, net
            
            $
            229,689





Amortization
      expense for the years ended December 31, 2007 and 2006 was $21,895 and $0,
      respectively.





Amortization expense for the next 5 years end thereafter is as
      follows:





Year
                Ending December 31,2008
            
            $
            4,1322009
            
            
            4,1322010
            
            
            4,1322011
            
            
            4,1322012
            
            
            4,132Thereafter
            
            
            209,029$
            229,689




**NOTE
      10 - ACCRUED EXPENSES AND OTHER PAYABLES**





Other
      payables consist of amounts owed by the Group to various entities that are
      incurred by the Group outside of the normal course of business operations.
      These
      liabilities do not carry any interest rate and are paid within 12 months.
      Customer deposits consist of advance payments made by customers for the purchase
      of products from the Group.





Accrued
      expenses and other payables as of December 31, 2007 are summarized as
      follows:





2007Accrued
                expenses
            
            $
            197,761Other
                payables
            
            
            707,030Total
            
            $
            904,791


F-14





**NOTE
      11 - SHORT-TERM BANK LOANS**





All
      the
      short-term bank loans are repayable within 12 months and are
      unsecured.




Short-term
      loans are summarized as follows:




Due
                date
            
            Interest rate per annum
            
            2007June
                27, 2008
            
            
            8.541
            %
            $
            1,093,790September
                19, 2008
            
            
            8.748
            %
            $
            683,599





**NOTE
      12 - INCOME TAX**





(a)
      Enterprise Income Tax ("EIT")





In
      accordance with the relevant tax laws and regulations of Hong Kong and PRC,
      the
      statutory corporate income tax rates are 17.5% for Hong Kong and 33% in PRC
      for
      the year of 2007. The enterprise income tax rates applicable to the Group for
      the years ended December 31, 2007 and 2006 were as follows:





2007
            
            2006Fogang
                Guozhu Plastics Co. Ltd.
            
            
            33
            %
            
            33
            %Fogang
                Guozhu Blowing Equipment Co. Ltd.
            
            
            33
            %
            
            33
            %Guangdong
                Guozhu Precision Mold Co. Ltd
            
            
            33
            %
            
            33
            %





The
      Group’s tax expense differs from the “expected” tax expense as
      follows:




2007
            
            2006Computed
                “expected” tax expense
            
            $
            1,392,122
            
            $
            -Permanent
                expenses
            
            
            -
            
            
            -Income
                tax expense
            
            $
            1,392,122
            
            $
            -





The
      provision for income tax for the years ended December 31, 2007 and 2006 are
      summarized as follows:




2007
            
            2006Current
            
            $
            1,392,122
            
            $
            -Deferred
            
            
            -
            
            
            -Total
                income tax expenses
            
            $
            1,392,122
            
            $
            -





(b)
      Value
      Added Tax ("VAT")





There
      is
      no VAT under current tax laws in Hong Kong.





In
      accordance with the current tax laws in the PRC, the VAT rate for the PRC
      subsidiaries for export sales is 8.5% to 10% and domestic sales is 17%. VAT
      is
      levied at 17% on the invoiced value of sales and is payable by the purchaser.
      The Group is required to remit the VAT it collects to the tax authority, but
      may
      offset this tax liability from the VAT for the taxes that it has paid on
      eligible purchases. The VAT payable have been accrued and reflected as taxes
      payable in the accompanying consolidated balance sheets.


F-15




**NOTE
      13 - RELATED PARTY TRANSACTIONS**





Due
      to a
      related party represented mainly advances from 2 related parties as of December
      31, 2007 for the purposes of working capital. The amounts are unsecured,
      interest-free and repayable within 12 months.




**NOTE**  **14
      - PREFERRED STOCK**





The
      Company has 25,000,000 shares of Series A Convertible Preferred Stock
      authorized. The Company has 5,000,000 shares of Series A Convertible Preferred
      Stock issued and outstanding at $0.001 par value per share (the “Preferred
      Stock”).





On
      August
      26, 2007, the Company entered into an Agreement for Share Exchange with China
      Valley Development Limited, a British Virgin Islands company (“CVDL”) and Cai
      Yingren and Wu Wen, individually, the owners and shareholders of CVDL to
      acquired 100% ownership interest in CVDL from Cai Yingren and Wu Wen at a
      consideration of 29,750,000 shares of our Common Stock and 5,000,000 shares
      of
      Preferred Stock. Each share of Preferred Stock is convertible into 5 shares
      of
      the Company’s Common Stock, par value $.001 per share. As of December 31, 2007,
      none of the shares of Preferred Stock was converted into common shares of the
      Company.





**NOTE**  **15
      - COMMON STOCK**





The
      Company has 175,000,000 shares of Common Stock authorized. The Company has
      50,000,000 shares of Common Stock issued and outstanding at $0.001 par value
      per
      share.





On
      August
      26, 2007, the Company entered into an Agreement for Share Exchange with China
      Valley Development Limited, a British Virgin Islands company (“CVDL”) and Cai
      Yingren and Wu Wen, individually, the owners and shareholders of CVDL to
      acquired 100% ownership interest in CVDL from Cai Yingren and Wu Wen at a
      consideration of 29,750,000 shares of our Common Stock and 5,000,000 shares
      of
      Preferred Stock. Immediately following completion and as of December 31, 2007,
      the Company had a total of approximately 50,000,000 shares of Common Stock
      issued and outstanding.




**NOTE
      16 - COMMITMENTS**




The
      Company has capital commitments for $256,206 as of December 31,
      2007.




The
      Company entered into unconditional purchase commitments for raw materials,
      packing materials and advertising for $0 within one year as of December 31,
      2007.




As
      of
      December 31, 2007, the Company had remaining outstanding commitments with
      respect to its non-cancelable operating leases for its office amounted to
      $14,083 within one year and $23,792 over one year.




**NOTE
      17 - SUBSEQUENT EVENTS**





1.
            On
                April 3, 2008, the Company increased the number of authorized shares
                of
                preferred stock to 25,000,000 and increased the number of authorized
                shares of common stock to 150,000,000 and the Company changed its
                name to
                China Bottles, Inc.





2.
            On
                April 11, 2008, 5,000,000 shares of issued and outstanding preferred
                stock
                were converted into 25,000,000 shares of the Company’s common stock.





**NOTE
      18 - PRO FORMA FINANCIAL STATEMENTS – BUSINESS
      ACQUISITIONS**





As
      indicated in Note 3 above the Company acquired three separate operating
      companies in August of 2007. The following pro forma financial statements are
      presented to report the operations of the Company as if the acquisition had
      occurred on the first day of the reporting period.





On
      August
      16, 2007 China Valley Development Limited, a British Virgin Islands company
      (“CVDL”) acquired 100% equity interest of Fogang Guozhu Plastics Co. Ltd.,
      Fogang Guozhu Blowing Equipment Co. Ltd. and Fogang Guozhu Precision Mold Co.
      Ltd. through acquisition of 100% equity of Guozhu Holdings Limited, a Hong
      Kong
      company (“Guozhu Holdings”) These three subsidiaries were acquired by Guozhu
      Holdings in 2007 in three separate transactions and were accounted for using
      the
      purchase method of accounting. The controlling ownership of Guozho Holdings
      did
      not change when these subsidiaries were acquired. These three companies have
      been consolidated with the Company as of August 16, 2007 following guidelines
      of
      GAAP and following the purchase price accounting methods for business
      combinations as outlined in SFAS 141 “Business Combinations”.


F-16





On
      August
      27, 2007, the Company acquired 100% ownership interest in CVDL. For accounting
      purposes such share exchange was treated as an acquisition of the Company by,
      and a re-capitalization of, CVDL. CVDL is the accounting acquirer and the
      results of its operations carry over under reverse merger
      accounting.





The
      following tables show supplemental information of the results of operations
      of
      the Company on a pro forma basis for the year ended December 31, 2006 and 2007
      as if the acquisitions of Guozhu Holdings (and hence Fogang Guozhu Plastics
      Co.
      Ltd., Fogang Guozhu Blowing Equipment Co. Ltd. and Fogang Guozhu Precision
      Mold
      Co. Ltd.) by CVDL had been completed at January 1, 2006 and 2007,
      respectively.




The
      pro
      forma financial information does not necessarily reflect the results that would
      have occurred if the acquisitions had been in effect for the periods presented.
      In addition, they are not intended to be a projection of future results. The
      pro
      forma calculations do not reflect any synergies that might be achieved from
      combining the operations.


F-17





**HUTTION
      HOLDINGS CORPORATION**


UNAUDITED
      PRO-FORMA COMBINED STATEMENT OF OPERATIONS


FOR
      THE
      YEAR ENDED DECEMBER 31, 2006





Hutton
              Historical
            
            China
              Valley
              Historical
            
            Guozhu
              Holding
              Historical
            
            Pro forma
              Adjustment
            
            Pro forma
              CombinedREVENUE
            
            $
            311,039
            
            $
            -
            
            $
            25,787,621
            
            $
            -
            
            $
            26,098,660COST
                OF SALES
            
            
            148,452
            
            
            -
            
            
            18,500,817
            
            
            -
            
            
            18,649,269GROSS
                MARGIN
            
            
            162,587
            
            
            -
            
            
            7,286,804
            
            
            -
            
            
            7,449,391EXPENSESSales
                and marketing
            
            
            181,078
            
            
            -
            
            
            827,276
            
            
            -
            
            
            1,008,354General
                and administrative
            
            
            (9,450
            )
            
            -
            
            
            571,918
            
            
            -
            
            
            562,468TOTAL
                EXPENSES
            
            
            171,628
            
            
            -
            
            
            1,399,194
            
            
            -
            
            
            1,570,822OPERATING
                LOSS / INCOME
            
            
            (9,041
            )
            
            -
            
            
            5,887,610
            
            
            -
            
            
            5,878,569OTHER
                INCOME
            
            
            -
            
            
            -
            
            
            735,736
            
            
            -
            
            
            735,736INTEREST
                INCOME / EXPENSES
            
            
            89
            
            
            -
            
            
            (27,977
            )
            
            -
            
            
            (27,888
            )LOSS
                / INCOME BEFORE TAXES
            
            
            (8,952
            )
            
            -
            
            
            6,595,369
            
            
            -
            
            
            6,586,417PROVISION
                FOR TAXATION
            
            
            -
            
            
            -
            
            
            2,072,331
            
            
            -
            
            
            2,072,331NET
                LOSS / INCOME
            
            
            (8,952
            )
            
            -
            
            
            4,523,038
            
            
            -
            
            
            4,514,086OTHER
                COMPREHENSIVE INCOMEGain
                on Foreign Exchange Translation
            
            
            -
            
            
            -
            
            
            190,546
            
            
            -
            
            
            190,546COMPREHENSIVE
                LOSS / INCOME
            
            $
            (8,952
            )
            $
            -
            
            $
            4,713,584
            
            $
            -
            
            $
            4,704,632





*  Guozhu
      Holding historical includes the unaudited financials of the operations of Fogang
      Guozhu Plastics Co. Ltd., Fogang Guozhu Blowing Equipment Co. Ltd. and Fogang
      Guozhu Precision Mold Co. Ltd. in the reporting period


F-18


**HUTTION
      HOLDINGS CORPORATION**


UNAUDITED
      PRO-FORMA COMBINED STATEMENT OF OPERATIONS


FOR
      THE
      YEAR ENDED DECEMBER 31, 2007





Hutton
              Historical
            
            China
              Valley
              Historical
            
            Guozhu
              Holding
              Historical (*)
            
            Pro forma
              Adjustment
            
            Pro forma
              CombinedREVENUE
            
            $
            37,746
            
            $
            -
            
            $
            42,333,465
            
            $
            -
            
            $
            42,371,011COST
                OF SALES
            
            
            19,760
            
            
            -
            
            
            28,605,296
            
            
            -
            
            
            28,625,056GROSS
                MARGIN
            
            
            17,986
            
            
            -
            
            
            13,727,969
            
            
            -
            
            
            13,745,955EXPENSESSales
                and marketing
            
            
            2,008
            
            
            -
            
            
            1,045,078
            
            
            -
            
            
            1,047,086General
                and administrative
            
            
            68,290
            
            
            -
            
            
            1,514,937
            
            
            -
            
            
            1,583,227TOTAL
                EXPENSES
            
            
            70,298
            
            
            -
            
            
            2,560,015
            
            
            -
            
            
            2,630,313OPERATING
                LOSS / INCOME
            
            
            (52,312
            )
            
            -
            
            
            11,167,954
            
            
            -
            
            
            11,115,642OTHER
                INCOME
            
            
            59,346
            
            
            -
            
            
            658,336
            
            
            -
            
            
            717,682INTEREST
                INCOME / EXPENSES
            
            
            (289
            )
            
            -
            
            
            (94,728
            )
            
            -
            
            
            (95,017
            )LOSS
                / INCOME BEFORE TAXES
            
            
            6,745
            
            
            -
            
            
            11,731,562
            
            
            -
            
            
            11,738,307PROVISION
                FOR TAXATION
            
            
            -
            
            
            -
            
            
            2,727,625
            
            
            -
            
            
            2,727,625NET
                LOSS / INCOME
            
            
            6,745
            
            
            -
            
            
            9,003,937
            
            
            -
            
            
            9,010,682OTHER
                COMPREHENSIVE INCOMEGain
                on Foreign Exchange Translation
            
            
            -
            
            
            -
            
            
            368,933
            
            
            -
            
            
            368,933COMPREHENSIVE
                LOSS / INCOME
            
            $
            6,745
            
            $
            -
            
            $
            9,372,870
            
            $
            -
            
            $
            9,379,615





*  Guozhu
      Holding historical includes the unaudited financials of the operations of Fogang
      Guozhu Plastics Co. Ltd., Fogang Guozhu Blowing Equipment Co. Ltd. and Fogang
      Guozhu Precision Mold Co. Ltd. in the reporting period




**NOTE
      19 – RESTATEMENT OF FINANCIAL STATEMENTS AND
      FOOTNOTES**




The
      Income Statement for the year ended December 31, 2007 has been restated to
      reflect a change in the Basic and Diluted Earnings Per Share and the Diluted
      Weighted Average Shares Outstanding.  Prior to the restatement, the Company
      had reported that the Basic and Dilutive Earnings Per Share and the Basic and
      Dilutive Weighted Average Shares Outstanding were the same amounts.  The
      Company had not included the conversion feature associated with the issuance
      of
      the Preferred Stock.  The effects of the restatement are indicated in the
      table below.




Adjustment
            
            
            Restated
                Amounts
            
            
            As
                Originally
              Reported
            
            
            RestatementBasic
                Earnings per share
            
            $
            0.08
            
            $
            0.08
            
            
            -Diluted
                earnings per share
            
            $
            0.06
            
            $
            0.08
            
            
            -Basic
                Weighted Average Shares Outstanding
            
            
            50,000,000
            
            
            50,000,000
            
            
            -Diluted
                Weighted Average Shares Outstanding
            
            
            75,000,000
            
            
            50,000,000
            
            
            25,000,000




The
      Statement of Cash Flows has been restated to make reclassifications in the
      amounts reported and to report the acquisitions of the three operating companies
      (note 3) as Cash Flows Used In Investing Activities.




The
      footnotes to the financial statements have been restated to provide additional
      disclosures relating to the acquisition of the three operating companies (note
      3) in accordance with SFAS No. 141 and to provide pro forma financial
      information with regards to these business acquisitions.




The
      Statement of Changes in Stockholders Equity has been restated to correct the
      method of reporting for capital contributed to the Company and for the
      recapitalization of the Company through a reverse merger
      acquisition.


F-19