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| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             |
|--------|---------------------------------------------------------------------|
|   | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |                                                                |
|   | For the quarterly period ended September 30, 2011                   |
|   |                                                                |
|   | OR                                                                  |
|   |                                                                |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE            |
|   | SECURITIES EXCHANGE ACT OF 1934                                     |
|   |                                                                |
|   | For the transition period from ________________ to ________________ |

| Delaware                                                                                                     |   | 87-0438200          |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------|
| (State or other jurisdiction of                                                                              |   | (I.R.S. Employer    |
| incorporation or organization)                                                                               |   | Identification No.) |
|                                                                                                         |   |                |
| 6/F, Bldg 51, Rd 5, Qiongyu Blvd.Technology Park, Nanshan DistrictShenzhen, People’s Republic of China |   |   518057  |
| (Address of principal executive offices)                                                                     |   | (Zip Code)          |

| Large accelerated filer | o | Accelerated filer         | o |
|-------------------------|---|---------------------------|---|
| Non-accelerated filer   | o | Smaller Reporting Company | x |

| Class                                    |   | Outstanding at October 31, 2011 |
|------------------------------------------|--------|---------------------------------|
| Common Stock, $0.001 par value per share |   | 33,454,903 shares               |

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TABLE OF CONTENTS

| PART I - FINANCIAL INFORMATION                                                                      | 4      |
|-----------------------------------------------------------------------------------------------------|--------|
|                                                                                                |   |
| Item 1. Financial Statements                                                                        | 4      |
|                                                                                                |   |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31     |
|                                                                                                |   |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                             | 34     |
|                                                                                                |   |
| Item 4T. Controls and Procedures                                                               | 34     |
|                                                                                                |   |
| PART II - OTHER INFORMATION                                                                         | 36     |
|                                                                                                |   |
| Item 1. Legal Proceedings                                                                           | 36     |
|                                                                                                |   |
| Item 1A. Risk Factors                                                                               | 36     |
|                                                                                                |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 36     |
|                                                                                                |   |
| Item 3. Defaults Upon Senior Securities                                                             | 36     |
|                                                                                                |   |
| Item 4. (Removed and Reserved)                                                                      | 36     |
|                                                                                                |   |
| Item 5. Other Information                                                                           | 36     |
|                                                                                                |   |
| Item 6. Exhibits                                                                                    | 37     |
|                                                                                                |   |
| SIGNATURES                                                                                          | 38     |

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Table of Contents

 PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

|                                                                                          |   | September 30, 2011 |        |   | December 31, 2010 |   |
|-----------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                                                          |   | (Unaudited)        |        |   | (As Restated)     |   |
| ASSETS                                                                                        |   |               |        |   |              |   |
|                                                                                          |   |               |        |   |              |   |
| CURRENT ASSETS                                                                                |   |               |        |   |              |   |
|      Cash and cash equivalents                                       |   | $                  | 6,956,000   |   |              | $      | 4,524,000 |   |
|      Restricted cash                                                 |   |               | 94,749,000  |   |              |   | 32,059,000 |   |
|      Accounts receivable, net                                        |   |               | 60,207,000  |   |              |   | 45,686,000 |   |
|      Note receivable                                                 |   |               | 1,523,000   |   |              |   | - |   |
|      Inventories, net                                                |   |               | 37,129,000  |   |              |   | 14,631,000 |   |
|      Prepaid expenses and other current assets                       |   |               | 1,017,000   |   |              |   | 704,000 |   |
|      Deposit with suppliers                                          |   |               | 959,000     |   |              |   | 1,308,000 |   |
|           Total current assets              |   |               | 202,540,000 |   |              |   | 98,913,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| PROPERTY AND EQUIPMENT, NET                                                                   |   |               | 12,061,000  |   |              |   | 11,190,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| TOTAL ASSETS                                                                                  |   | $                  | 214,601,000 |   |              | $      | 110,103,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                    |   |               |        |   |              |   |   |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| CURRENT LIABILITIES                                                                           |   |               |        |   |              |   |   |   |
|      Accounts payable                                                |   | $                  | 8,553,000   |   |              | $      | 865,000 |   |
|      Customer deposits                                               |   |               | 1,172,000   |   |              |   | 107,000 |   |
|      Accrued expenses and other current liabilities                  |   |               | 954,000     |   |              |   | 709,000 |   |
|      Bank borrowings                                                 |   |               | 103,054,000 |   |              |   | 37,299,000 |   |
|      Collateralized bank advances                                    |   |               | 10,110,000  |   |              |   | - |   |
|      Capital lease obligations – current portion               |   |               | 793,000     |   |              |   | 756,000 |   |
|      Income and other taxes payable                                  |   |               | 2,437,000   |   |              |   | 1,712,000 |   |
|           Total current liabilities         |   |               | 127,073,000 |   |              |   | 41,449,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| LONG-TERM LIABILITIES                                                                         |   |               |        |   |              |   |   |   |
|      Capital lease obligations, net of current portion               |   |               | 679,000     |   |              |   | 845,000 |   |
|      Warrant Derivatives                                             |   |               | 358,000     |   |              |   | 1,692,000 |   |
|           Total long-term liabilities       |   |               | 1,037,000   |   |              |   | 2,537,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| TOTAL LIABILITIES                                                                             |   |               | 128,110,000 |   |              |   | 43,987,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                    |   |               |        |   |              |   |   |   |
|      Preferred stock, $0.001 par value, 5,000,000 shares authorized; |   |               |        |   |              |   |   |   |
|      no shares issued                                                |   |               | -           |   |              |   | - |   |
|      Common stock, $0.001 par value, 100,000,000 shares authorized;  |   |               |        |   |              |   |   |   |
|      33,454,903 shares and 28,570,859 shares issued and outstanding  |   |               |        |   |              |   |   |   |
|      as of September 30, 2011 and December 31, 2010, respectively    |   |               | 33,000      |   |              |   | 29,000 |   |
|      Additional paid-in capital                                      |   |               | 30,791,000  |   |              |   | 20,122,000 |   |
|      Retained earnings                                               |   |               |        |   |              |   |   |   |
|           Unappropriated                    |   |               | 49,464,000  |   |              |   | 42,303,000 |   |
|           Appropriated                      |   |               | 934,000     |   |              |   | 934,000 |   |
|      Accumulated other comprehensive income                          |   |               | 5,269,000   |   |              |   | 2,730,000 |   |
|           Total stockholders’ equity  |   |               | 86,491,000  |   |              |   | 66,116,000 |   |
|                                                                                          |   |               |        |   |              |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                              |   | $                  | 214,601,000 |   |              | $      | 110,103,000 |   |

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|                                                                                                  |   | Three months ended September 30, |       |   | Nine months ended September 30, |   |
|-------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------|---------------------------------|--------|
|                                                                                                  |   | 2011                             |       |   | 2010                            |   |   | 2011 |   |   | 2010 |   |
|                                                                                                  |   |                             |       |   | (As Restated)                   |   |   |   |   |   | (As Restated) |   |
| NET SALES                                                                                             |   |                             |       |   |                            |   |   |   |   |   |   |   |
|      ECSS                                                                    |   | $                                | 35,112,000 |   |                            | $      | 36,727,000 |   |   | $ | 88,326,000 |   |   | $ | 99,512,000 |   |
|      ICM                                                                     |   |                             | 16,854,000 |   |                            |   | 19,024,000 |   |   |   | 42,531,000 |   |   |   | 38,723,000 |   |
|           Total net sales                           |   |                             | 51,966,000 |   |                            |   | 55,751,000 |   |   |   | 130,857,000 |   |   |   | 138,235,000 |   |
| COST OF SALES                                                                                         |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|      ECSS                                                                    |   |                             | 31,528,000 |   |                            |   | 29,816,000 |   |   |   | 76,637,000 |   |   |   | 81,540,000 |   |
|      ICM                                                                     |   |                             | 14,120,000 |   |                            |   | 15,755,000 |   |   |   | 35,779,000 |   |   |   | 31,843,000 |   |
|           Total cost of sales                       |   |                             | 45,648,000 |   |                            |   | 45,571,000 |   |   |   | 112,416,000 |   |   |   | 113,383,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| GROSS PROFIT                                                                                          |   |                             | 6,318,000  |   |                            |   | 10,180,000 |   |   |   | 18,441,000 |   |   |   | 24,852,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                                                                    |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|      Selling, general and administrative                                     |   |                             | 2,028,000  |   |                            |   | 2,123,000 |   |   |   | 6,494,000 |   |   |   | 6,261,000 |   |
|      Professional services                                                   |   |                             | 101,000    |   |                            |   | 193,000 |   |   |   | 595,000 |   |   |   | 694,000 |   |
|      Depreciation                                                            |   |                             | 502,000    |   |                            |   | 479,000 |   |   |   | 1,510,000 |   |   |   | 1,051,000 |   |
|      Stock compensation expense                                              |   |                             | -          |   |                            |   | 57,000 |   |   |   | - |   |   |   | 207,000 |   |
|      Stock option compensation amortization                                  |   |                             | 76,000     |   |                            |   | 110,000 |   |   |   | 265,000 |   |   |   | 328,000 |   |
|      Provision for bad debts (write back of allowance for doubtful accounts) |   |                             | 33,000     |   |                            |   | (236,000 | ) |   |   | 128,000 |   |   |   | (45,000 | ) |
|           Total operating expenses                  |   |                             | 2,740,000  |   |                            |   | 2,726,000 |   |   |   | 8,992,000 |   |   |   | 8,496,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| INCOME FROM OPERATIONS                                                                                |   |                             | 3,578,000  |   |                            |   | 7,454,000 |   |   |   | 9,449,000 |   |   |   | 16,356,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                                                                |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|      Interest expense                                                        |   |                             | (708,000   | )      |                            |   | (109,000 | ) |   |   | (1,813,000 | ) |   |   | (352,000 | ) |
|      Interest income                                                         |   |                             | 595,000    |   |                            |   | 41,000 |   |   |   | 1,379,000 |   |   |   | 145,000 |   |
|      Changes in fair values of warrant derivatives                           |   |                             | 536,000    |   |                            |   | 539,000 |   |   |   | 1,334,000 |   |   |   | 1,011,000 |   |
|      Other, net                                                              |   |                             | (344,000   | )      |                            |   | 9,000 |   |   |   | 396,000 |   |   |   | 16,000 |   |
|           Total other income, net                   |   |                             | 79,000     |   |                            |   | 480,000 |   |   |   | 1,296,000 |   |   |   | 820,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                                                                            |   |                             | 3,657,000  |   |                            |   | 7,934,000 |   |   |   | 10,745,000 |   |   |   | 17,176,000 |   |
|      Income tax expense                                                      |   |                             | (1,075,000 | )      |                            |   | (1,898,000 | ) |   |   | (3,583,000 | ) |   |   | (4,287,000 | ) |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME                                                                                            |   |                             | 2,582,000  |   |                            |   | 6,036,000 |   |   |   | 7,162,000 |   |   |   | 12,889,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME                                                                            |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|      Foreign currency translation gain                                       |   |                             | 891,000    |   |                            |   | 909,000 |   |   |   | 2,539,000 |   |   |   | 1,017,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                                                                                  |   | $                                | 3,473,000  |   |                            | $      | 6,945,000 |   |   | $ | 9,701,000 |   |   | $ | 13,906,000 |   |
|                                                                                                  |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| SHARE AND PER SHARE DATA                                                                              |   |                             |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|      Net income per share-basic                                              |   | $                                | 0.08       |   |                            | $      | 0.21 |   |   | $ | 0.22 |   |   | $ | 0.46 |   |
|      Weighted average number of shares-basic                                 |   |                             | 33,455,000 |   |                            |   | 28,558,000 |   |   |   | 32,363,000 |   |   |   | 28,126,000 |   |
|      Net income per share-diluted                                            |   | $                                | 0.08       |   |                            | $      | 0.21 |   |   | $ | 0.22 |   |   | $ | 0.45 |   |
|      Weighted average number of shares-diluted                               |   |                             | 33,478,000 |   |                            |   | 28,721,000 |   |   |   | 32,416,000 |   |   |   | 28,362,000 |   |

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|                                                                                                                                |   | Nine months ended September 30, |        |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                                                                                |   | 2011                            |        |   | 2010 |   |
|                                                                                                                                |   |                            |        |   | (As Restated) |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                |   |                            |        |   |   |   |
|      Net income                                                                                            |   | $                               | 7,162,000   |   |   | $ | 12,889,000 |   |
|      Adjustments to reconcile net income to cash used in operations:                                       |   |                            |        |   |   |   |   |   |
|           Depreciation - operating expenses                                       |   |                            | 1,510,000   |   |   |   | 1,051,000 |   |
|           Depreciation - cost of sales                                            |   |                            | 1,252,000   |   |   |   | - |   |
|           Stock compensation expense                                              |   |                            | -           |   |   |   | 207,000 |   |
|           Stock option compensation amortization                                  |   |                            | 265,000     |   |   |   | 328,000 |   |
|           Provision for bad debts (write back of allowance for doubtful accounts) |   |                            | 128,000     |   |   |   | (45,000 | ) |
|           Loss on disposal of property and equipment                              |   |                            | 18,000      |   |   |   | - |   |
|           Changes in fair values of warrant derivatives                           |   |                            | (1,334,000  | ) |   |   | (1,011,000 | ) |
|      Changes in operating assets and liabilities:                                                          |   |                            |        |   |   |   |   |   |
|           Accounts receivable                                                     |   |                            | (13,021,000 | ) |   |   | (16,578,000 | ) |
|           Note receivable                                                         |   |                            | (1,499,000  | ) |   |   | - |   |
|           Inventories                                                             |   |                            | (21,692,000 | ) |   |   | 3,187,000 |   |
|           Prepaid expenses and other current assets                               |   |                            | (291,000    | ) |   |   | 56,000 |   |
|           Deposit with suppliers                                                  |   |                            | 367,000     |   |   |   | (4,628,000 | ) |
|           Accounts payable                                                        |   |                            | 7,542,000   |   |   |   | (608,000 | ) |
|           Customer deposits                                                       |   |                            | 1,065,000   |   |   |   | (1,313,000 | ) |
|           Accrued expenses and other current liabilities                          |   |                            | 226,000     |   |   |   | 87,000 |   |
|           Income and other taxes payable                                          |   |                            | 657,000     |   |   |   | 1,696,000 |   |
|                Net cash used in operating activities     |   |                            | (17,645,000 | ) |   |   | (4,682,000 | ) |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                |   |                            |        |   |   |   |   |   |
|      Increase of restricted cash                                                                           |   |                            | (60,650,000 | ) |   |   | (3,129,000 | ) |
|      Purchase of property and equipment                                                                    |   |                            | (3,335,000  | ) |   |   | (3,385,000 | ) |
|      Proceed from disposal of property and equipment                                                       |   |                            | 9,000       |   |   |   | - |   |
|           Net cash used in investing activities                                   |   |                            | (63,976,000 | ) |   |   | (6,514,000 | ) |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                |   |                            |        |   |   |   |   |   |
|      Proceeds from issuance of common stock, net of cost                                                   |   |                            | 10,395,000  |   |   |   | 4,470,000 |   |
|      Proceeds from exercise of options, net of costs                                                       |   |                            | 15,000      |   |   |   | 22,000 |   |
|      Bank borrowings -  proceeds                                                                 |   |                            | 141,967,000 |   |   |   | 24,609,000 |   |
|      Bank borrowings -  repayments                                                               |   |                            | (78,470,000 | ) |   |   | (20,382,000 | ) |
|      Collateralized bank advances – proceeds                                                         |   |                            | 20,102,000  |   |   |   | - |   |
|      Collateralized bank advances – repayments                                                       |   |                            | (10,154,000 | ) |   |   | - |   |
|      Repayments of capital lease obligations                                                          |   |                            | (129,000    | ) |   |   | (647,000 | ) |
|           Net cash provided by financing activities                               |   |                            | 83,726,000  |   |   |   | 8,072,000 |   |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| EFFECT OF EXCHANGE RATE CHANGES                                                                                                     |   |                            | 327,000     |   |   |   | 190,000 |   |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                |   |                            | 2,432,000   |   |   |   | (2,934,000 | ) |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                                    |   |                            | 4,524,000   |   |   |   | 8,347,000 |   |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                                          |   | $                               | 6,956,000   |   |   | $ | 5,413,000 |   |
|                                                                                                                                |   |                            |        |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                                                    |   |                            |        |   |   |   |   |   |
|      Cash paid for interest                                                                                |   | $                               | 1,813,000   |   |   | $ | 352,000 |   |
|      Cash paid for income tax                                                                              |   | $                               | 2,540,000   |   |   | $ | 2,444,000 |   |
|      Equipment acquired under capital leases                                                               |   | $                               | -           |   |   | $ | 2,436,000 |   |

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| Plant and machinery               | 2 to 5 Years |
|-----------------------------------|--------------|
| Motor vehicles                    | 5 Years      |
| Furniture, fixtures and equipment | 2 to 5 Years |
| Leasehold improvements            | 1 to 5 Years |

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|                |   | Quoted Pricesin ActiveMarkets forIdentical Assets(Level 1) |    |   | SignificantOtherObservableInputs(Level 2) |   |    | SignificantUnobservableInputs (Level 3) |   |   | Total   |   |
|---------------------|--------|------------------------------------------------------------|---------|--------|-------------------------------------------|--------|---------|----------------------------------------------|--------|--------|---------|--------|
|  2010 Warrants |   | $                                                          | — |   |                                      | $      | — |                                         |   | $      | 358,000 |   |   | $ | 358,000 |   |

|                                      |   | Three months ended September 30, 2011 |      |    | Nine months ended September 30, 2011 |   |
|-------------------------------------------|--------|---------------------------------------|-----------|---------|--------------------------------------|--------|
|                                      |   |                                  |      |    |                                 |   |
| Beginning Balance                         |   | $                                     | 894,000   |    |                                 | $      | 1,692,000 |   |
| Net gain included in earnings             |   |                                  | (536,000  | )  |                                 |   | (1,334,000 | )  |
| Balance at September 30, 2011             |   | $                                     | 358,000   |    |                                 | $      | 358,000 |   |
|                                      |   |                                  |      |    |                                 |   |   |   |
|                                      |   |                                  |      |    |                                 |   |   |   |
|                                      |   | Three months ended September 30, 2010 |      |    | Nine months ended September 30, 2010 |   |
|                                      |   | (As Restated)                         |      |    | (As Restated)                        |   |
|                                      |   |                                  |      |    |                                 |   |   |   |
| Beginning Balance                         |   | $                                     | 1,832,000 |    |                                 | $      | - |   |
| Fair value of 2010 warrants at issue date |   |                                  | -         |    |                                 |   | 2,304,000 |   |
| Net gain included in earnings             |   |                                  | (539,000  | )  |                                 |   | (1,011,000 | )  |
| Balance at September 30, 2010             |   | $                                     | 1,293,000 |    |                                 | $      | 1,293,000 |   |

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|                                     |   | 2011       |    |   | 2010      |   |
|------------------------------------------|--------|------------|---------|--------|-----------|--------|
|                                     |   |       |    |   |      |   |
| Closing price of stock on reporting date |   | $          | 0.55    |   |      | $      | 1.98 |   |
| Risk-free interest rate (1)    |   |       | 0.98%   |   |      |   | 1.17% |   |
| Dividend yield (2)                       |   |       | 0.00%   |   |      |   | 0.00% |   |
| Volatility factor              |   |       | 172.16% |   |      |   | 131.65% |   |
| Expected life (3)                        |   | 3.43 years |    |   | 4.4 years |   |

|   | (1) | The risk-free interest rate was determined by management using the U.S. Treasury zero-coupon yield over the contractual term of the option on date of grant. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Management determined the dividend yield to be 0% based upon its expectation that the Company will not make any near term change to its policy of retaining all earnings available to pay dividends for the foreseeable future. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Expected life is remaining contractual life of the warrants. |
|--------|-----|--------------------------------------------------------------|

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|                                                                            |   | As of September 30, 2010 |       |
|---------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                            |   | As Previously Recorded   |       |   | As Restated |   |
|                                                                            |   |                     |       |   |   |   |
| TOTAL ASSETS                                                                    |   | $                        | 83,611,000 |   |   | $ | 83,611,000 |   |
|                                                                            |   |                     |       |   |   |   |   |   |
| Total current liabilities                                                       |   | $                        | 22,891,000 |   |   | $ | 22,891,000 |   |
|                                                                            |   |                     |       |   |   |   |   |   |
| LONG-TERM LIABILITIES                                                           |   |                     |       |   |   |   |   |   |
|      Capital lease obligations, net of current portion |   |                     | 1,144,000  |   |   |   | 1,144,000 |   |
|      Warrant Derivatives                               |   |                     | -          |   |   |   | 1,293,000 |   |
|                                                                            |   |                     |       |   |   |   |   |   |
| TOTAL LIABILITIES                                                               |   | $                        | 24,035,000 |   |   | $ | 25,329,000 |   |
|                                                                            |   |                     |       |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                      |   |                     |       |   |   |   |   |   |
|      Additional paid-in capital                        |   | $                        | 22,321,000 |   |   | $ | 20,017,000 |   |
|      Retained earnings                                 |   |                     |       |   |   |   |   |   |
|           Unappropriated      |   | $                        | 34,603,000 |   |   | $ | 35,614,000 |   |
|                                                                            |   |                     |       |   |   |   |   |   |
| Total stockholders’ equity                                                |   | $                        | 59,576,000 |   |   | $ | 58,282,000 |   |
|                                                                            |   |                     |       |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                |   | $                        | 83,611,000 |   |   | $ | 83,611,000 |   |

|                                          | Three months ended September 30, 2010 |   |
|-----------------------------------------------|---------------------------------------|--------|
|                                          | As Previously Recorded                |   | As Restated |   |
|                                          |                                  |   |   |   |
| Changes in fair values of warrant derivatives |                                  | $      | - |   |   | $ | 539,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Total other (expense) income, net             |                                  | $      | (59,000 | ) |   | $ | 480,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                    |                                  | $      | 7,395,000 |   |   | $ | 7,934,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| NET INCOME                                    |                                  | $      | 5,497,000 |   |   | $ | 6,036,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                          |                                  | $      | 6,406,000 |   |   | $ | 6,945,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Net income per share-basic                    |                                  | $      | 0.19 |   |   | $ | 0.21 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Net income per share-diluted                  |                                  | $      | 0.19 |   |   | $ | 0.21 |   |
|                                          |                                  |   |   |   |   |   |   |   |
|                                          |                                  |   |   |   |   |   |   |   |
|                                          | Nine months ended September 30, 2010  |   |
|                                          | As Previously Recorded                |   | As Restated |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Changes in fair values of warrant derivatives |                                  | $      | - |   |   | $ | 1,011,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Total other (expense) income, net             |                                  | $      | (191,000 | ) |   | $ | 820,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                    |                                  | $      | 16,165,000 |   |   | $ | 17,176,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| NET INCOME                                    |                                  | $      | 11,878,000 |   |   | $ | 12,889,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| COMPREHENSIVE INCOME                          |                                  | $      | 12,895,000 |   |   | $ | 13,906,000 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Net income per share-basic                    |                                  | $      | 0.42 |   |   | $ | 0.46 |   |
|                                          |                                  |   |   |   |   |   |   |   |
| Net income per share-diluted                  |                                  | $      | 0.42 |   |   | $ | 0.45 |   |

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Table of Contents

|                                          |   | Nine months ended September 30, 2010 |       |
|-----------------------------------------------|--------|--------------------------------------|------------|
|                                          |   | As Previously Recorded               |       |   | As Restated |   |
|                                          |   |                                 |       |   |   |   |
| NET INCOME                                    |   | $                                    | 11,878,000 |   |   | $ | 12,889,000 |   |
|                                          |   |                                 |       |   |   |   |   |   |
| Changes in fair values of warrant derivatives |   |                                 | -          |   |   |   | (1,011,000 | ) |
|                                          |   |                                 |       |   |   |   |   |   |
|                                          |   | $                                    | 11,878,000 |   |   | $ | 11,878,000 |   |
|                                          |   |                                 |       |   |   |   |   |   |
| Net cash used in operating activities         |   | $                                    | (4,682,000 | ) |   | $ | (4,682,000 | ) |

|                                  |   | September 30, 2011 |       |   | December 31, 2010 |   |
|---------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                  |   | (Unaudited)        |       |   |              |   |
|                                  |   |               |       |   |              |   |
| Accounts receivable                   |   | $                  | 61,011,000 |   |              | $      | 46,362,000 |   |
| Less: allowance for doubtful accounts |   |               | 804,000    |   |              |   | 676,000 |   |
| Accounts receivable, net              |   | $                  | 60,207,000 |   |              | $      | 45,686,000 |   |

|                                     |   | September 30, 2011 |       |   | December 31, 2010 |   |
|------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                     |   | (Unaudited)        |       |   |              |   |
|                                     |   |               |       |   |              |   |
| Raw materials and goods for resale       |   | $                  | 26,455,000 |   |              | $      | 14,335,000 |   |
| Work-in-progress                         |   |               | 314,000    |   |              |   | - |   |
| Finished goods                           |   |               | 10,360,000 |   |              |   | 296,000 |   |
|                                     |   | $                  | 37,129,000 |   |              | $      | 14,631,000 |   |
| Less: allowance for obsolete inventories |   |               | -          |   |              |   | - |   |
| Inventories, net                         |   | $                  | 37,129,000 |   |              | $      | 14,631,000 |   |

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|   | · | Letter of credit facility with China Construction Bank in the amount of $13,278,000 to support our component sales and services business.  Restricted cash balances are required as security for draws against the facility.  The facility renews each year and is available through January 2012. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Letter of credit facility with Industrial Bank in the amount of $50,000,000 to support our business.  Restricted cash balances are required as security for draws against the facility.  The facility is available through March, 2012. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Letter of credit facility with Bank of Ningbo in the amount of $7,000,000 to support our electronics product manufacturing and sales business.  Restricted cash balances are required as security for draws against the facility.  The facility renews each year and is available through July 2012. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Letter of credit facility with Bank of Shanghai in the amount of $4,704,000 to support our electronics product manufacturing and sales business.  Restricted cash balances are required as security for draws against the facility.   In addition, the bank requires third party guarantees from a subsidiary, SinoHub Electronics Shenzhen, Ltd. and the unlimited personal guaranty of an executive officer and his spouse.  The facility renews each year and is available through October 2012. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Letter of credit facility with Bank of Jiangsu in the amount of $15,329,000 to support our electronics product manufacturing and sales business.  Restricted cash balances are required as security for draws against the facility.  In addition, the bank requires third party guarantees from two subsidiaries, SinoHub Electronics Shenzhen, Ltd. and Topology Communication Technology (Shenzhen) Ltd. and an executive officer.  The facility renews each year and is available through July 2012. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |      |          |   | Interest rate |   |   | September 30, |   |   | December 31, |   |
|-------------------------|-----------|---------------|--------|---------------|--------|--------|---------------|--------|--------|--------------|--------|
|                    | From date | Maturity date |   | (per year)    |   |   | $             | 2011   |   |         | $      | 2010 |   |
| Notes payable to a bank | June-10   | May-11        |   |          | 5.65%  |   |          |   | -      |         |   |   | 1,512,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 634,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 536,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 1,140,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 505,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 484,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 1,800,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 847,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 1,805,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 352,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 342,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 5,022,000 |   |
| Notes payable to a bank | July-10   | June-11       |   |          | 5.38%  |   |          |   | -      |         |   |   | 362,000 |   |

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| Notes payable to a bank | July-10                | June-11      |   |   | 5.38%  |   |   |        | -           |   |   |       | 993,000    |   |
|-------------------------|------------------------|--------------|--------|--------|--------|--------|--------|-------------|-------------|--------|--------|------------|------------|--------|
| Notes payable to a bank | July-10                | June-11      |   |   | 5.38%  |   |   |        | -           |   |   |       | 480,000    |   |
| Notes payable to a bank | July-10                | June-11      |   |   | 5.38%  |   |   |        | -           |   |   |       | 736,000    |   |
| Notes payable to a bank | July-10                | June-11      |   |   | 5.38%  |   |   |        | -           |   |   |       | 1,001,000  |   |
| Notes payable to a bank | July-10                | June-11      |   |   | 5.38%  |   |   |        | -           |   |   |       | 1,443,000  |   |
| Notes payable to a bank | July-10                | June-11      |   |   | 5.38%  |   |   |        | -           |   |   |       | 702,000    |   |
| Notes payable to a bank | November-10            | October-11   |   |   | 5.84%  |   |   |        | -           |   |   |       | 756,000    |   |
| Notes payable to a bank | December-10            | November-11  |   |   | 6.12%  |   |   |        | -           |   |   |       | 756,000    |   |
| Notes payable to a bank | December-10            | November-11  |   |   | 5.38%  |   |   |        | -           |   |   |       | 5,815,000  |   |
| Notes payable to a bank | December-10            | December-11  |   |   | 5.38%  |   |   |        | -           |   |   |       | 4,044,000  |   |
| Notes payable to a bank | December-10            | December-11  |   |   | 5.50%  |   |   |        | -           |   |   |       | 5,232,000  |   |
|                    |                   |         |   |   |   |   |   |        |        |   |   |       |       |   |
| Notes payable to a bank | April-11               | October-11   |   |   | 4.06%  |   |   |        | 6,579,000   |   |   |       | -          |   |
| Notes payable to a bank | July-11                | October-11   |   |   | 3.00%  |   |   |        | 2,955,000   |   |   |       | -          |   |
| Notes payable to a bank | July-11                | October-11   |   |   | 2.48%  |   |   |        | 2,050,000   |   |   |       | -          |   |
| Notes payable to a bank | October-10             | October-11   |   |   | 5.84%  |   |   |        | 781,000     |   |   |       | -          |   |
| Notes payable to a bank | April-11               | October-11   |   |   | 3.73%  |   |   |        | 373,000     |   |   |       | -          |   |
| Notes payable to a bank | July-11                | October-11   |   |   | 2.30%  |   |   |        | 3,316,000   |   |   |       | -          |   |
| Notes payable to a bank | April-11               | October-11   |   |   | 4.43%  |   |   |        | 364,000     |   |   |       | -          |   |
| Notes payable to a bank | April-11               | October-11   |   |   | 4.43%  |   |   |        | 330,000     |   |   |       | -          |   |
| Notes payable to a bank | November-10            | November-11  |   |   | 6.12%  |   |   |        | 781,000     |   |   |       | -          |   |
| Notes payable to a bank | May-11                 | November-11  |   |   | 4.43%  |   |   |        | 394,000     |   |   |       | -          |   |
| Notes payable to a bank | May-11                 | November-11  |   |   | 6.44%  |   |   |        | 1,562,000   |   |   |       | -          |   |
| Notes payable to a bank | May-11                 | November-11  |   |   | 4.34%  |   |   |        | 586,000     |   |   |       | -          |   |
| Notes payable to a bank | August-11              | November-11  |   |   | 2.50%  |   |   |        | 2,027,000   |   |   |       | -          |   |
| Notes payable to a bank | August-11              | November-11  |   |   | 2.80%  |   |   |        | 504,000     |   |   |       | -          |   |
| Notes payable to a bank | November-10            | November-11  |   |   | 3.00%  |   |   |        | 6,006,000   |   |   |       | -          |   |
| Notes payable to a bank | August-11              | December-11  |   |   | 3.00%  |   |   |        | 797,000     |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 3.00%  |   |   |        | 1,475,000   |   |   |       | -          |   |
| Notes payable to a bank | August-11              | December-11  |   |   | 7.63%  |   |   |        | 1,336,000   |   |   |       | -          |   |
| Notes payable to a bank | December-10            | December-11  |   |   | 3.00%  |   |   |        | 4,177,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 3.00%  |   |   |        | 2,988,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 2.90%  |   |   |        | 967,000     |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 3.03%  |   |   |        | 3,737,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 3.60%  |   |   |        | 3,395,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 3.00%  |   |   |        | 3,388,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | December-11  |   |   | 3.00%  |   |   |        | 2,374,000   |   |   |       | -          |   |
| Notes payable to a bank | January-11             | January-12   |   |   | 3.00%  |   |   |        | 3,556,000   |   |   |       | -          |   |
| Notes payable to a bank | July-11                | January-12   |   |   | 2.80%  |   |   |        | 1,029,000   |   |   |       | -          |   |
| Notes payable to a bank | July-11                | January-12   |   |   | 2.80%  |   |   |        | 1,984,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | March-12     |   |   | 7.02%  |   |   |        | 2,343,000   |   |   |       | -          |   |
| Notes payable to a bank | April-11               | April-12     |   |   | 3.00%  |   |   |        | 2,672,000   |   |   |       | -          |   |
| Notes payable to a bank | April-11               | April-12     |   |   | 3.00%  |   |   |        | 5,072,000   |   |   |       | -          |   |
| Notes payable to a bank | May-11                 | May-12       |   |   | 3.00%  |   |   |        | 1,583,000   |   |   |       | -          |   |
| Notes payable to a bank | May-11                 | May-12       |   |   | 3.00%  |   |   |        | 10,185,000  |   |   |       | -          |   |
| Notes payable to a bank | May-11                 | May-12       |   |   | 3.00%  |   |   |        | 1,573,000   |   |   |       | -          |   |
| Notes payable to a bank | June-11                | June-12      |   |   | 3.00%  |   |   |        | 3,198,000   |   |   |       | -          |   |
| Notes payable to a bank | June-11                | June-12      |   |   | 3.00%  |   |   |        | 1,608,000   |   |   |       | -          |   |
| Notes payable to a bank | June-11                | June-12      |   |   | 3.00%  |   |   |        | 3,534,000   |   |   |       | -          |   |
| Notes payable to a bank | June-11                | June-12      |   |   | 3.00%  |   |   |        | 2,332,000   |   |   |       | -          |   |
| Notes payable to a bank | June-11                | June-12      |   |   | 3.00%  |   |   |        | 1,152,000   |   |   |       | -          |   |
| Notes payable to a bank | January-11             | June-12      |   |   | 3.00%  |   |   |        | 2,514,000   |   |   |       | -          |   |
| Notes payable to a bank | August-11              | August-12    |   |   | 3.00%  |   |   |        | 1,368,000   |   |   |       | -          |   |
| Notes payable to a bank | August-11              | August-12    |   |   | 3.00%  |   |   |        | 1,227,000   |   |   |       | -          |   |
| Notes payable to a bank | September-11           | September-12 |   |   | 4.31%  |   |   |        | 2,017,000   |   |   |       | -          |   |
| Notes payable to a bank | April-11               | October-11   |   |   | 3.55%  |   |   |        | 504,000     |   |   |       | -          |   |
| Notes payable to a bank | April-11               | October-11   |   |   | 4.05%  |   |   |        | 361,000     |   |   |       | -          |   |
|                    |                   |         |   |   |   |   |   |        |        |   |   |       |       |   |
|                    |                   |         |   |   |   |   |   | $           | 103,054,000 |   |   | $          | 37,299,000 |   |
|                    | Less : current portion |         |   |   |   |   |   | 103,054,000 |        |   |   | 37,299,000 |       |
|                    | Long -term portion     |         |   |   |   |   | $      | -           |        |   | $      | -          |       |

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Table of Contents

|                                |   | September 30, 2011 |      |   | December 31, 2010 |   |
|-------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                |   | (Unaudited)        |      |   |              |   |
|                                |   |               |      |   |              |   |
| Gross capital lease obligations     |   | $                  | 1,472,000 |   |              | $      | 1,601,000 |   |
| Less: current portion               |   |               | 793,000   |   |              |   | 756,000 |   |
| Long-term capital lease obligations |   | $                  | 679,000   |   |              | $      | 845,000 |   |

| (1) | Rental Lease Commitment |
|-----|-------------------------|

----

Table of Contents

| Fiscal year ending December 31, |   |   |      |
|---------------------------------|--------|--------|-----------|
| 2011                            |   | $      | 351,000   |   |
| 2012                            |   |   | 1,214,000 |   |
| 2013                            |   |   | 331,000   |   |
| 2014                            |   |   | 50,000    |   |
| 2015                            |   |   | 12,000    |   |
|                            |   | $      | 1,958,000 |   |

| (2) | Capital Leases Commitment |
|-----|---------------------------|

| Fiscal year ending December 31,              |   |   |      |
|----------------------------------------------|--------|--------|-----------|
|                                         |   |   |      |
| 2011                                         |   | $      | 154,000   |   |
| 2012                                         |   |   | 925,000   |   |
| 2013                                         |   |   | 463,000   |   |
|                                         |   |   | 1,542,000 |   |
| Less: Interest                               |   |   | 70,000    |   |
|                                         |   |   | 1,472,000 |   |
| Less: Current portion                        |   |   | 793,000   |   |
| Capital lease obligation – Non-current |   | $      | 679,000   |   |

| (3) | Capital Commitment |
|-----|--------------------|

|                                                |   | Three months ended September 30, |       |
|-----------------------------------------------------|--------|----------------------------------|------------|
|                                                |   | 2011                             |       |   | 2010 |   |
|                                                |   |                             |       |   | (As Restated) |   |
|                                                |   |                             |       |   |   |   |
| Net income for basic and diluted earnings per share |   | $                                | 2,582,000  |   |   | $ | 6,036,000 |   |
|                                                |   |                             |       |   |   |   |   |   |
| Weighted average shares used in basic computation   |   |                             | 33,455,000 |   |   |   | 28,558,000 |   |
| Effect of dilutive stock options and warrants       |   |                             | 23,000     |   |   |   | 163,000 |   |
| Weighted average shares used in diluted computation |   |                             | 33,478,000 |   |   |   | 28,721,000 |   |
|                                                |   |                             |       |   |   |   |   |   |
| Earnings per share:                                 |   |                             |       |   |   |   |   |   |
| Basic                                               |   | $                                | 0.08       |   |   | $ | 0.21 |   |
| Diluted                                             |   | $                                | 0.08       |   |   | $ | 0.21 |   |

----

Table of Contents

|                                                |   | Nine months ended September 30, |       |
|-----------------------------------------------------|--------|---------------------------------|------------|
|                                                |   | 2011                            |       |   | 2010 |   |
|                                                |   |                            |       |   | (As Restated) |   |
|                                                |   |                            |       |   |   |   |
| Net income for basic and diluted earnings per share |   | $                               | 7,162,000  |   |   | $ | 12,889,000 |   |
|                                                |   |                            |       |   |   |   |   |   |
| Weighted average shares used in basic computation   |   |                            | 32,363,000 |   |   |   | 28,126,000 |   |
| Effect of dilutive stock options and warrants       |   |                            | 53,000     |   |   |   | 236,000 |   |
| Weighted average shares used in diluted computation |   |                            | 32,416,000 |   |   |   | 28,362,000 |   |
|                                                |   |                            |       |   |   |   |   |   |
| Earnings per share:                                 |   |                            |       |   |   |   |   |   |
| Basic                                               |   | $                               | 0.22       |   |   | $ | 0.46 |   |
| Diluted                                             |   | $                               | 0.22       |   |   | $ | 0.45 |   |

| September 30, 2011  |   | December 31, 2010 |
|---------------------|--------|-------------------|
|                |   |              |   |   |   |   |   | Average |   |   |   |   |   |   |   |   |   | Average |
|                |   |              |   |   |   |   |   | Remaining |   |   |   |   |   |   |   |   |   | Remaining |
|                |   |              | Number |   |   | Number |   | Contractual |   |   |   |   | Number |   |   | Number |   | Contractual |
| Exercise Price |   |              | Outstanding |   |   | Exercisable |   | Life |   | Exercise Price |   |   | Outstanding |   |   | Exercisable |   | Life |
| $                   | 3.00   |              |   |   | 2,649,069 |   |   |   | 1,211,740 |   | 1.95years |   | $ | 3.00 |   |   |   | 1,211,740 |   |   |   | 1,211,740 |   | 2.69 years |
| $                   | 3.11   |              |   |   | 853,433 |   |   |   | 853,433 |   | 3.93years |   | $ | 3.25 |   |   |   | 891,670 |   |   |   | 816,670 |   | 4.66 years |
| $                   | 3.25   |              |   |   | 75,000 |   |   |   | 75,000 |   | 1.34years |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total               |   |              |   | 3,577,502 |   |   |   | 2,140,173 |   |   |   | Total |   |   |   | 2,103,410 |   |   |   | 2,028,410 |   |   |

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| Expected               | Expected   | Dividend | Risk Free     | Grant Date    |
|------------------------|------------|----------|---------------|---------------|
| Life                   | Volatility | Yield    | Interest Rate | Fair Value    |
|                   |       |     |          |          |
| The 2000 ISOP5 years   | 175%       | 0%       | 2.5%          | $0.09 - $0.19 |
|                   |       |     |          |          |
| The 2008 ISOP1-5 years | 83% - 121% | 0%       | 0.3% - 2.5%   | $0.47 - $2.79 |

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|                                      |   | Number of   |      |   | Weighted- |   |
|-------------------------------------------|--------|-------------|-----------|--------|-----------|--------|
|                                      |   | Options     |      |   | Average   |   |
|                                      |   | Outstanding |      |   | Exercise  |   |
|                                      |   |        |      |   | Price     |   |
|                                      |   |        |      |   |      |   |
| Balance at December 31, 2009              |   |        | 1,263,978 |   |      | $      | 2.01 |   |
| Granted                                   |   |        | 563,496   |   |      |   | 2.73 |   |
| Forfeited                                 |   |        | (571,687  | )      |      |   | - |   |
| Exercised                                 |   |        | (194,589  | )      |      |   | 0.47 |   |
| Balance at December 31, 2010              |   |        | 1,061,198 |   |      |   | 2.50 |   |
| Granted                                   |   |        | 98,361    |   |      |   | 2.71 |   |
| Forfeited                                 |   |        | (75,796   | )      |      |   | - |   |
| Exercised                                 |   |        | (17,464   | )      |      |   | 1.13 |   |
| Balance at March 31, 2011                 |   |        | 1,066,299 |   |      |   | 2.56 |   |
| Granted                                   |   |        | -         |   |      |   | - |   |
| Forfeited                                 |   |        | (262,389  | )      |      |   | - |   |
| Exercised                                 |   |        | (75,483   | )      |      |   | 0.21 |   |
| Balance at June 30, 2011                  |   |        | 728,427   |   |      |   | 2.74 |   |
| Granted                                   |   |        | -         |   |      |   | - |   |
| Forfeited                                 |   |        | (50,900   | )      |      |   | - |   |
| Exercised                                 |   |        | -         |   |      |   | - |   |
| Balance at September 30, 2011             |   |        | 677,527   |   |      | $      | 2.81 |   |
| Options exercisable on September 30, 2011 |   |        | 196,185   |   |      | $      | 2.93 |   |

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| Outstanding Options at September 30, 2011 |     | Exercisable Options |
|-------------------------------------------|----------|---------------------|
|                                      |     |                |   |   |   |   |   |   |   |   |
| Range of                                  |     | Number              |   | Weighted |   | Weighted |   | Number |   | Weighted |
| Exercise Price                            |     | Average             | Average |   | Average |
|                                      |     | Remaining           | Exercise |   | Exercise |
|                                      |     | Contractual         | Price |   | Price |
|                                    |   | Life                |   |   |   |
| $0.20 - $1.02                             |     | 30,423              |   | 6.18years |   | $0.20 |   | 20,266 |   | $0.20 |
| $2.21 - $2.48                             |     | 207,553             |   | 4.01years |   | $2.32 |   | 47,795 |   | $2.46 |
| $2.62 - $3.00                             |     | 267,651             |   | 5.01years |   | $2.74 |   | 46,072 |   | $2.77 |
| $3.92 - $4.36                             |     | 171,900             |   | 8.01years |   | $3.97 |   | 82,052 |   | $3.97 |
| Total                                     |     | 677,527             |   |   |   |   |   | 196,185 |   | $2.93 |
|                                      |     |                |   |   |   |   |   |   |   |   |
|                                      |     |                |   |   |   |   |   |   |   |   |
| Outstanding Options at December 31, 2010  |     | Exercisable Options |
|                                      |     |                |   |   |   |   |   |   |   |   |
| Range of                                  |     | Number              |   | Weighted |   | Weighted |   | Number |   | Weighted |
| Exercise Price                            |     | Average             | Average |   | Average |
|                                      |     | Remaining           | Exercise |   | Exercise |
|                                      |     | Contractual         | Price |   | Price |
|                                      |   | Life                |   |   |   |
| $0.10 - $1.02                             |     | 167,114             |   | 7.1 years |   | $0.44 |   | 92,708 |   | $0.39 |
| $2.21 - $3.00                             |     | 700,684             |   | 5.9 years |   | $2.58 |   | 145,453 |   | $2.40 |
| $3.92 - $4.36                             |     | 193,400             |   | 8.8 years |   | $3.97 |   | 61,467 |   | $3.93 |
| Total                                     |     | 1,061,198           |   |   |   |   |   | 299,628 |   | $2.09 |

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|     |   | 2011   |      |   | 2010          |   |
|----------|--------|--------|-----------|--------|---------------|--------|
|     |   |   |      |   | (As Restated) |   |
|     |   |   |      |   |          |   |
| Current  |   | $      | 1,075,000 |   |          | $      | 1,898,000 |   |
| Deferred |   |   | -         |   |          |   | - |   |
|     |   | $      | 1,075,000 |   |          | $      | 1,898,000 |   |

|                                  |   | 2011   |      |   |   |   |   | 2010          |   |   |      |   |
|---------------------------------------|--------|--------|-----------|--------|--------|--------|--------|---------------|--------|--------|-----------|--------|
|                                  |   |   |      |   |   |   |   | (As Restated) |   |   |      |   |
|                                  |   |   |      |   |   |   |   |          |   |   |      |   |
| Income before income taxes            |   | $      | 3,658,000 |   |   |   | 100%   |          |   | $      | 7,934,000 |   |   |   | 100% |   |
|                                  |   |   |      |   |   |   |   |          |   |   |      |   |   |   |   |   |
| China income taxes at statutory rate  |   | $      | 914,500   |   |   |   | 25%    |          |   | $      | 1,983,500 |   |   |   | 25% |   |
| Operating loss carried forward        |   |   | 197,080   |   |   |   | 5%     |          |   |   | 152,520   |   |   |   | 2% |   |
| China qualified income tax exemptions |   |   | (36,580   | )      |   |   | (1%)   |          |   |   | (238,020  | )      |   |   | (3% | )  |
| Income tax expense                    |   | $      | 1,075,000 |   |   |   | 29%    |          |   | $      | 1,898,000 |   |   |   | 24% |   |

|     |   | 2011   |      |   | 2010          |   |
|----------|--------|--------|-----------|--------|---------------|--------|
|     |   |   |      |   | (As Restated) |   |
|     |   |   |      |   |          |   |
| Current  |   | $      | 3,583,000 |   |          | $      | 4,287,000 |   |
| Deferred |   |   | -         |   |          |   | - |   |
|     |   | $      | 3,583,000 |   |          | $      | 4,287,000 |   |

|                                  |   | 2011   |       |   |   |   |   | 2010          |   |   |       |   |
|---------------------------------------|--------|--------|------------|--------|--------|--------|--------|---------------|--------|--------|------------|--------|
|                                  |   |   |       |   |   |   |   | (As Restated) |   |   |       |   |
|                                  |   |   |       |   |   |   |   |          |   |   |       |   |
| Income before income taxes            |   | $      | 10,745,000 |   |   |   | 100%   |          |   | $      | 17,176,000 |   |   |   | 100% |   |
|                                  |   |   |       |   |   |   |   |          |   |   |       |   |   |   |   |   |
| China income taxes at statutory rate  |   | $      | 2,686,250  |   |   |   | 25%    |          |   | $      | 4,294,000  |   |   |   | 25% |   |
| Operating loss carried forward        |   |   | 1,004,200  |   |   |   | 9%     |          |   |   | 508,280    |   |   |   | 3% |   |
| China qualified income tax exemptions |   |   | (107,450   | )      |   |   | (1%)   |          |   |   | (515,280   | )      |   |   | (3%) |   |
| Income tax expense                    |   | $      | 3,583,000  |   |   |   | 33%    |          |   | $      | 4,287,000  |   |   |   | 25% |   |

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|                                    |   | Customer A |   |   | Customer B |   |   | Customer C |   |
|-----------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
|                                    |   |       |   |   |       |   |   |       |   |
| For nine months endedSeptember 30, 2011 |   |       | 29%    |   |       |   | 22%    |       |   |   | 12% |   |

|                                                                     |   | For three months ended September 30, |       |
|--------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                     |   | 2011                                 |       |   | 2010 |   |
| Revenues from external customers:                                        |   |                                 |       |   |   |   |
| ECSS                                                                     |   | $                                    | 35,112,000 |   |   | $ | 36,727,000 |   |
| ICM                                                                      |   |                                 | 16,855,000 |   |   |   | 19,024,000 |   |
|                                                                     |   | $                                    | 51,967,000 |   |   | $ | 55,751,000 |   |
| Depreciation:                                                            |   |                                 |       |   |   |   |   |   |
| ECSS                                                                     |   | $                                    | 235,000    |   |   | $ | 401,000 |   |
| ICM                                                                      |   |                                 | 267,000    |   |   |   | 78,000 |   |
|                                                                     |   | $                                    | 502,000    |   |   | $ | 479,000 |   |
| Stock compensation expense:                                              |   |                                 |       |   |   |   |   |   |
| ECSS                                                                     |   | $                                    | -          |   |   | $ | 48,000 |   |
| ICM                                                                      |   |                                 | -          |   |   |   | 9,000 |   |
|                                                                     |   | $                                    | -          |   |   | $ | 57,000 |   |
| Stock option compensation amortization:                                  |   |                                 |       |   |   |   |   |   |
| ECSS                                                                     |   | $                                    | 72,000     |   |   | $ | 92,000 |   |
| ICM                                                                      |   |                                 | 4,000      |   |   |   | 18,000 |   |
|                                                                     |   | $                                    | 76,000     |   |   | $ | 110,000 |   |
| Provision for bad debts: (write back of allowance for doubtful accounts) |   |                                 |       |   |   |   |   |   |
| ECSS                                                                     |   | $                                    | 15,000     |   |   | $ | (197,000 | ) |
| ICM                                                                      |   |                                 | 18,000     |   |   |   | (39,000 | ) |
|                                                                     |   | $                                    | 33,000     |   |   | $ | (236,000 | ) |
| Interest income:                                                         |   |                                 |       |   |   |   |   |   |
| ECSS                                                                     |   | $                                    | 317,000    |   |   | $ | 33,000 |   |
| ICM                                                                      |   |                                 | 278,000    |   |   |   | 8,000 |   |
|                                                                     |   | $                                    | 595,000    |   |   | $ | 41,000 |   |
| Interest expense:                                                        |   |                                 |       |   |   |   |   |   |
| ECSS                                                                     |   | $                                    | 312,000    |   |   | $ | 89,000 |   |
| ICM                                                                      |   |                                 | 396,000    |   |   |   | 20,000 |   |
|                                                                     |   | $                                    | 708,000    |   |   | $ | 109,000 |   |

| Income taxes expenses:  |   |   |      |   |   |   |
|-------------------------|--------|--------|-----------|--------|--------|--------|
| ECSS                    |   | $      | 542,000   |   |   | $      | 1,393,000 |   |
| ICM                     |   |   | 533,000   |   |   |   | 505,000 |   |
|                    |   | $      | 1,075,000 |   |   | $      | 1,898,000 |   |
| Income from operations: |   |   |      |   |   |   |   |   |
| ECSS                    |   | $      | 2,811,000 |   |   | $      | 5,197,000 |   |
| ICM                     |   |   | 767,000   |   |   |   | 2,257,000 |   |
|                    |   | $      | 3,578,000 |   |   | $      | 7,454,000 |   |

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|                                                                                                           |   | For nine months ended September 30, |        |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|
|                                                                                                           |   |                                | 2011        |   |   |   | 2010 |   |
| Revenues from external customers:                                                                              |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 88,326,000  |   |   | $ | 99,512,000 |   |
| ICM                                                                                                            |   |                                | 42,531,000  |   |   |   | 38,723,000 |   |
|                                                                                                           |   | $                                   | 130,857,000 |   |   | $ | 138,235,000 |   |
| Depreciation:                                                                                                  |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 951,000     |   |   | $ | 879,000 |   |
| ICM                                                                                                            |   |                                | 559,000     |   |   |   | 172,000 |   |
|                                                                                                           |   | $                                   | 1,510,000   |   |   | $ | 1,051,000 |   |
| Stock compensation expense:                                                                                    |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | -           |   |   | $ | 173,000 |   |
| ICM                                                                                                            |   |                                | -           |   |   |   | 34,000 |   |
|                                                                                                           |   | $                                   | -           |   |   | $ | 207,000 |   |
| Stock option compensation amortization:                                                                        |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 162,000     |   |   | $ | 274,000 |   |
| ICM                                                                                                            |   |                                | 103,000     |   |   |   | 54,000 |   |
|                                                                                                           |   | $                                   | 265,000     |   |   | $ | 328,000 |   |
| Provision for bad debts: (write back of allowance for doubtful accounts)                                       |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 60,000      |   |   | $ | (38,000 | ) |
| ICM                                                                                                            |   |                                | 68,000      |   |   |   | (7,000 | ) |
|                                                                                                           |   | $                                   | 128,000     |   |   | $ | (45,000 | ) |
| Interest income:                                                                                               |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 846,000     |   |   | $ | 118,000 |   |
| ICM                                                                                                            |   |                                | 533,000     |   |   |   | 27,000 |   |
|                                                                                                           |   | $                                   | 1,379,000   |   |   | $ | 145,000 |   |
| Interest expense:                                                                                              |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 1,057,000   |   |   | $ | 287,000 |   |
| ICM                                                                                                            |   |                                | 756,000     |   |   |   | 65,000 |   |
|                                                                                                           |   | $                                   | 1,813,000   |   |   | $ | 352,000 |   |
| Income taxes expenses:                                                                                         |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 2,197,000   |   |   | $ | 3,149,000 |   |
| ICM                                                                                                            |   |                                | 1,386,000   |   |   |   | 1,138,000 |   |
|                                                                                                           |   | $                                   | 3,583,000   |   |   | $ | 4,287,000 |   |
| Income from operations:                                                                                        |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 5,286,000   |   |   | $ | 11,403,000 |   |
| ICM                                                                                                            |   |                                | 4,163,000   |   |   |   | 4,953,000 |   |
|                                                                                                           |   | $                                   | 9,449,000   |   |   | $ | 16,356,000 |   |
|                                                                                                           |   |                                |        |   |   |   |   |   |
| Total amount of income from operations is consistent with the condensed consolidated statements of operations. |   |
|                                                                                                           |   |                                |        |   |   |   |   |   |
| Addition to property and equipment:                                                                            |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 2,514,000   |   |   | $ | 2,271,000 |   |
| ICM                                                                                                            |   |                                | 821,000     |   |   |   | 1,114,000 |   |
|                                                                                                           |   | $                                   | 3,335,000   |   |   | $ | 3,385,000 |   |
|                                                                                                           |   |                                |        |   |   |   |   |   |
|                                                                                                           |   | As of September 30,2011             |        |   | As of December 31, 2010 |   |
| Total segment assets:                                                                                          |   |                                |        |   |   |   |   |   |
| ECSS                                                                                                           |   | $                                   | 83,596,000  |   |   | $ | 64,887,000 |   |
| ICM                                                                                                            |   |                                | 131,005,000 |   |   |   | 45,216,000 |   |
|                                                                                                           |   | $                                   | 214,601,000 |   |   | $ | 110,103,000 |   |

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|                   |   | September 30, 2011 |        |   | December 31, 2010 |   |
|------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                   |   | (Unaudited)        |        |   |              |   |
|                   |   |               |        |   |              |   |
| Restricted cash - loan |   | $                  | 9,604,000   |   |              | $      | 3,016,000 |   |
| Restricted cash - NDF  |   |               | 85,145,000  |   |              |   | 29,043,000 |   |
| Total Restricted cash  |   | $                  | 94,749,000  |   |              | $      | 32,059,000 |   |
|                   |   |               |        |   |              |   |   |   |
| Bank borrowings - loan |   | $                  | 17,909,000  |   |              | $      | 8,256,000 |   |
| Bank borrowings - NDF  |   |               | 85,145,000  |   |              |   | 29,043,000 |   |
| Total Bank borrowings  |   | $                  | 103,054,000 |   |              | $      | 37,299,000 |   |

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

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Item 1A.  Risk Factors

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.  Defaults Upon Senior Securities

Item 4.  (Removed and Reserved)

Item 5.  Other Information

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| Item6.Exhibit No.                                                                                                                                                                                 |    | Title of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 31.1                                                                                                                                                                                                   |         | Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended*                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 31.2                                                                                                                                                                                                   |         | Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended*                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|  32.1                                                                                                                                                                                             |         | Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Executive Officer)**                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|  32.2                                                                                                                                                                                             |         | Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Financial Officer)**                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                   |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|  101                                                                                                                                                                                              |         | The following financial statements from the Quarterly Report on Form 10-Q of SinoHub, Inc. for the quarter ended September 30, 2011 formatted in XBRL: (i) Condensed Consolidated Balance Sheets (unaudited), (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited), (iii) Condensed Consolidated Statements of Cash Flows (unaudited), and (iv) Notes to Condensed Consolidated Financial Statements (unaudited), tagged as blocks of text.*** |

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SIGNATURES

|                    | SINOHUB, INC. |                       |
|-------------------------|---------------|----------------------------|
|                    |          |                       |   |
| Date: February 28, 2012 | By:           | /s/ Henry T. Cochran  |   |
|                    |          | Henry T. Cochran           |   |
|                    |          | Chief Executive Officer    |   |

| Date: February 28, 2012 | By:    | /s/ Li De Hai                                                       |   |
|-------------------------|--------|---------------------------------------------------------------------|--------|
|                    |   | Li De Hai                                                           |   |
|                    |   | Chief Financial Officer(Principal Financial and Accounting Officer) |   |

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