| Delaware(State or other jurisdiction of incorporationor organization)                                                                                                                              |   | 51-05021250(I.R.S. Employer IdentificationNo.) |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|
|                                                                                                                                                                                               |   |                                           |
| Research Building, No.801 Wuzhong Road,Changzhou Science and Education Industrial Park,Wujin District,Changzhou, Jiangsu, People’s Republic of China(Address of principal executive offices) |   | 213164 (Zip Code)                         |

| Large accelerated filer   ̈ | Accelerated filer   | Non-accelerated filer   ̈ | Smaller reporting company  x |
|-------------------------------------------|-------------------------------|-----------------------------------------|----------------------------------------|
|                                      |                          | (Do not check if a smaller              |                                   |
|                                      |                          | reporting company)                      |                                   |

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|                           | Page                                                                                                              |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------|
| PART I - FINANCIAL INFORMATION |                                                                                                              |
|                           |                                                                                                              |   |
| ITEM 1.                        | FINANCIAL STATEMENTS                                                                                              | 1 |
|                           |                                                                                                              |   |
|                           | Consolidated Balance Sheet as of June 30, 2011 (unaudited) and December 31, 2010                                  | 2 |
|                           |                                                                                                              |   |
|                           | Unaudited Interim Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010 | 4 |
|                           |                                                                                                              |   |
|                           | Unaudited Interim Consolidated Statements of Cash Flows for the three and six months ended June 30, 2011 and 2010 | 5 |
|                           |                                                                                                              |   |
|                           | Unaudited Consolidated Statements of Stockholders’ Equity from January 1, 2010 to June 30, 2011             | 7 |
|                           |                                                                                                              |   |
|                           | Notes to the Unaudited Interim Consolidated Financial Statements                                                  | 8 |
|                           |                                                                                                              |   |
| ITEM 2.                        | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION                        | 31 |
|                           |                                                                                                              |   |
| ITEM 3.                        | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                                         | 42 |
|                           |                                                                                                              |   |
| ITEM 4.                        | CONTROLS AND PROCEDURES                                                                                           | 42 |
|                           |                                                                                                              |   |
| PART II - OTHER INFORMATION    |                                                                                                              |
|                           |                                                                                                              |   |
| ITEM 1.                        | LEGAL PROCEEDINGS                                                                                                 | 45 |
|                           |                                                                                                              |   |
| ITEM 1A.                       | RISK FACTORS                                                                                                      | 45 |
|                           |                                                                                                              |   |
| ITEM 2.                        | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                                       | 47 |
|                           |                                                                                                              |   |
| ITEM 3.                        | DEFAULTS UPON SENIOR SECURITIES                                                                                   | 47 |
|                           |                                                                                                              |   |
| ITEM 4.                        | REMOVED AND RESERVED                                                                                              | 47 |
|                           |                                                                                                              |   |
| ITEM 5.                        | OTHER INFORMATION                                                                                                 | 47 |
|                           |                                                                                                              |   |
| ITEM 6.                        | EXHIBITS                                                                                                          | 47 |
|                           |                                                                                                              |   |
| SIGNATURES                     |                                                                                                              | 48 |

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|                                                     |   | Notes    |   | June 30,2011 |        |   | December 31,2010 |   |
|----------------------------------------------------------|--------|----------|--------|-------------------|-------------|--------|-----------------------|--------|
|                                                     |   |     |   | (Unaudited)       |        |   |                  |   |
| ASSETS                                                   |   |     |   |              |        |   |                  |   |
| Current assets                                           |   |     |   |              |        |   |                  |   |
| Cash and cash equivalents                                |   | 2(i)     |   | $                 | 186,653     |   |                  | $      | 737,984 |   |
| Restricted cash                                          |   | 2(j)     |   |              | 241,122     |   |                  |   | 241,116 |   |
| Contract receivables, net                                |   | 2(h),(3) |   |              | 43,820,498  |   |                  |   | 43,812,422 |   |
| Costs and earnings in excess of billings                 |   |     |   |              | 3,279,765   |   |                  |   | 3,009,487 |   |
| Job disbursements advances                               |   |     |   |              | 4,255       |   |                  |   | 3,478 |   |
| Other receivables, net                                   |   | (4)      |   |              | 26,947,669  |   |                  |   | 23,308,127 |   |
| Inventories                                              |   | 2(g),(5) |   |              | 30,808      |   |                  |   | 30,117 |   |
| Deferred income taxes, current                           |   | (12)     |   |              | 112,622     |   |                  |   | 112,625 |   |
| Other current assets                                     |   |     |   |              | 273,057     |   |                  |   | 182,454 |   |
| Current assets held for sale                             |   |     |   |              | 43,008,476  |   |                  |   | 46,688,400 |   |
| Total current assets                                     |   |     |   |              | 117,904,925 |   |                  |   | 118,126,210 |   |
|                                                     |   |     |   |              |        |   |                  |   |   |   |
| Non-current assets                                       |   |     |   |              |        |   |                  |   |   |   |
| Plant and equipment, net                                 |   | 2(d),(6) |   |              | 1,840,179   |   |                  |   | 2,322,604 |   |
| Intangible Assets                                        |   | (7)      |   |              | 106,783     |   |                  |   | 167,223 |   |
| Goodwill                                                 |   | 2(f)     |   |              | 23,771,636  |   |                  |   | 23,771,636 |   |
| Other non-current assets                                 |   |     |   |              | 421,865     |   |                  |   | 414,980 |   |
| Investments in associates                                |   |     |   |              | 1,299,929   |   |                  |   | - |   |
| Long-term assets held for sale                           |   |     |   |              | 638,452     |   |                  |   | 598,580 |   |
|                                                     |   |     |   |              | 28,078,844  |   |                  |   | 27,275,023 |   |
| TOTAL ASSETS                                             |   |     |   | $                 | 145,983,769 |   |                  | $      | 145,401,233 |   |
|                                                     |   |     |   |              |        |   |                  |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY               |   |     |   |              |        |   |                  |   |   |   |
| Current liabilities                                      |   |     |   |              |        |   |                  |   |   |   |
| Short-term bank loans                                    |   | (8)      |   | $                 | 4,561,986   |   |                  | $      | 4,606,922 |   |
| Convertible Bond Payable due within one year, net        |   | (9)      |   |              | 23,322,000  |   |                  |   | 22,687,021 |   |
| Accounts payable                                         |   |     |   |              | 8,521,543   |   |                  |   | 8,706,583 |   |
| Billings over costs and estimated earnings               |   |     |   |              | 3,087,533   |   |                  |   | 2,955,309 |   |
| Amount due to shareholder                                |   | (17)     |   |              | 11,969,775  |   |                  |   | 13,592,883 |   |
| Other payables                                           |   | (10)     |   |              | 8,863,635   |   |                  |   | 2,777,422 |   |
| Business and other taxes payable                         |   |     |   |              | 149,994     |   |                  |   | 146,627 |   |
| Customers’ deposits                                |   |     |   |              | 208,436     |   |                  |   | 208,244 |   |
| Other Accruals                                           |   | (11)     |   |              | 9,126,338   |   |                  |   | 6,476,946 |   |
| Current liabilities associated with assets held for sale |   |     |   |              | 36,140,217  |   |                  |   | 40,483,030 |   |
| Total current liabilities                                |   |     |   |              | 105,951,457 |   |                  |   | 102,640,987 |   |

----

|                                                                                                                                            |   | Notes  |   | June 30,2011 |        |   | December 31,2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|-------------------|-------------|--------|-----------------------|--------|
|                                                                                                                                            |   |   |   | (Unaudited)       |        |   |                  |   |
| Non-current liabilities                                                                                                                         |   |   |   |              |        |   |                  |   |
| Long term bank loans                                                                                                                            |   | (8)    |   | $                 | 38,415      |   |                  | $      | 32,013 |   |
| Convertible bond payable, net                                                                                                                   |   | (9)    |   |              | 8,192,539   |   |                  |   | 6,304,242 |   |
|                                                                                                                                            |   |   |   |              | 8,230,954   |   |                  |   | 6,336,255 |   |
| TOTAL LIABILITIES                                                                                                                               |   |   |   | $                 | 114,182,411 |   |                  | $      | 108,977,242 |   |
|                                                                                                                                            |   |   |   |              |        |   |                  |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                      |   |   |   |              |        |   |                  |   |   |   |
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2011 and December 31, 2010         |   |   |   | $                 | -           |   |                  | $      | - |   |
|                                                                                                                                            |   |   |   |              |        |   |                  |   |   |   |
| Common stock, $0.001 par value, 100,000,000 shares authorized, 20,039,825 shares issued and outstanding at June 30, 2011 and December 31, 2010. |   |   |   |              | 20,040      |   |                  |   | 20,040 |   |
| Additional paid in capital                                                                                                                      |   |   |   |              | 43,880,995  |   |                  |   | 43,880,995 |   |
| Statutory reserves                                                                                                                              |   |   |   |              | 3,040,595   |   |                  |   | 3,040,595 |   |
| Accumulated other comprehensive income                                                                                                          |   | 2(t)   |   |              | 5,052,648   |   |                  |   | 1,572,840 |   |
| Retained earnings                                                                                                                               |   |   |   |              | (18,380,107 | )      |                  |   | (11,172,099 | ) |
| Total Company shareholders’ equity                                                                                                        |   |   |   |              | 33,614,171  |   |                  |   | 37,342,371 |   |
| Non-controlling interests                                                                                                                       |   |   |   |              | (1,812,813  | )      |                  |   | (918,380 | ) |
| TOTAL SHAREHOLDERS’ EQUITY                                                                                                                |   |   |   |              | 31,801,358  |   |                  |   | 36,423,991 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                |   |   |   | $                 | 145,983,769 |   |                  | $      | 145,401,233 |   |

----

|                                              |   |   |   | Three months ended June 30, |       |   | Six months ended June 30, |   |
|---------------------------------------------------|--------|--------|--------|-------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                                              |   | Note   |   | 2011                                            |       |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                                              |   |   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Contract revenues earned                          |   | (12)   |   | $                                               | -          |   |                                          | $      | - |   |   | $ | - |   |   | $ | 5,631,832 |   |
| Cost of contract revenues earned                  |   |   |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | (961,937 | ) |
| Gross profit                                      |   |   |   | $                                               | -          |   |                                          | $      | - |   |   |   | - |   |   | $ | 4,669,895 |   |
| Selling, general and administrative expenses      |   |   |   |                                            | (1,584,351 | )      |                                          |   | (3,574,589 | ) |   |   | (3,187,519 | ) |   |   | (4,808,320 | ) |
| Loss from operations                              |   |   |   | $                                               | (1,584,351 | )      |                                          | $      | (3,574,589 | ) |   | $ | (3,187,519 | ) |   | $ | (138,425 | ) |
|                                              |   |   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                   |   |   |   |                                            | 221        |   |                                          |   | 10 |   |   |   | 665 |   |   |   | 80 |   |
| Interest expense                                  |   |   |   |                                            | (1,862,829 | )      |                                          |   | (1,729,275 | ) |   |   | (3,929,408 | ) |   |   | (3,355,356 | ) |
| Other income                                      |   |   |   |                                            | 51         |   |                                          |   | 1,338 |   |   |   | 6,984 |   |   |   | 8,852 |   |
| Other expenses                                    |   |   |   |                                            | (249,942   | )      |                                          |   | (115 | ) |   |   | (381,251 | ) |   |   | (804 | ) |
| Loss before taxation on Continuing Operations     |   |   |   | $                                               | (3,696,850 | )      |                                          | $      | (5,302,631 | ) |   | $ | (7,490,529 | ) |   | $ | (3,485,653 | ) |
| Income tax                                        |   | (13)   |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | 9,575 |   |
| Loss from Continuing Operations              |   |   |   | $                                               | (3,696,850 | )      |                                          | $      | (5,302,631 | ) |   | $ | (7,490,529 | ) |   | $ | (3,495,228 | ) |
| Discontinued Operation Income (Loss), net of tax  |   | (19)   |   |                                            | 326,608    |   |                                          |   | 1,970,744 |   |   |   | (611,275 | ) |   |   | (3,357,938 | ) |
| Net Loss                                          |   |   |   | $                                               | (3,370,242 | )      |                                          | $      | (3,331,887 | ) |   | $ | (8,101,804 | ) |   | $ | (6,853,166 | ) |
| Net loss attributable to non-controlling interest |   |   |   |                                            | 491,627    |   |                                          |   | 1,551 |   |   |   | 893,796 |   |   |   | 2,946 |   |
| Net Income Loss Attributable to the Company       |   |   |   | $                                               | (2,878,615 | )      |                                          | $      | 3,330,336 |   |   | $ | (7,208,008 | ) |   | $ | (6,850,220 | ) |
|                                              |   |   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Earnings Per Share                                |   |   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic-Net Loss                                    |   |   |   | $                                               | (0.14      | )      |                                          | $      | (0.24 | ) |   | $ | (0.36 | ) |   | $ | (0.50 | ) |
| -Loss from Continuing Operations                  |   |   |   |                                            | (0.16      | )      |                                          |   | (0.38 | ) |   |   | (0.33 | ) |   |   | (0.26 | ) |
| -Loss from non-controlling interest               |   |   |   |                                            | (0.02      | )      |                                          |   | (0.00 | ) |   |   | (0.04 | ) |   |   | (0.00 | ) |
| -Income(Loss) from Discontinued Operations        |   |   |   |                                            | 0.02       |   |                                          |   | 0.14 |   |   |   | (0.03 | ) |   |   | (0.24 | ) |
|                                              |   |   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Diluted- Net Loss                                 |   |   |   | $                                               | (0.14      | )      |                                          | $      | (0.24 | ) |   | $ | (0.36 | ) |   | $ | (0.50 | ) |
| - Loss from Continuing Operations                 |   |   |   |                                            | (0.16      | )      |                                          |   | (0.38 | ) |   |   | (0.33 | ) |   |   | (0.26 | ) |
| -Loss from non-controlling interest               |   |   |   |                                            | (0.02      | )      |                                          |   | (0.00 | ) |   |   | (0.04 | ) |   |   | (0.00 | ) |
| -Income(Loss) from Discontinued Operations        |   |   |   |                                            | 0.02       |   |                                          |   | 0.14 |   |   |   | (0.03 | ) |   |   | (0.24 | ) |
| Weighted Average Shares Outstanding               |   |   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| -Basic                                            |   |   |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,441 |   |
| -Diluted                                          |   |   |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,441 |   |

----

|                                                                  |   | Three months ended June 30, |       |   | Six months ended June 30, |   |
|-----------------------------------------------------------------------|--------|-------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                                                                  |   | 2011                                            |       |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
| Cash flows from operating activities                                  |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Net Loss                                                              |   | $                                               | (3,370,242 | )      |                                          | $      | (3,331,887 | ) |   | $ | (8,101,804 | ) |   | $ | (6,853,166 | ) |
|                                                                  |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued Operation Loss(Income), net of tax                       |   |                                            | (326,608   | )      |                                          |   | (1,970,744 | ) |   |   | 611,275 |   |   |   | 3,357,938 |   |
| Depreciation expense                                                  |   |                                            | 226,276    |   |                                          |   | - |   |   |   | 455,215 |   |   |   | 200,784 |   |
| Bad debt expense                                                      |   |                                            | -          |   |                                          |   | 18,667 |   |   |   | - |   |   |   | 212,420 |   |
| Amortization expenses on intangible assets                            |   |                                            | 8,224      |   |                                          |   | - |   |   |   | 16,727 |   |   |   | 9,612 |   |
| Amortization expenses on convertible bond discount                    |   |                                            | 1,168,917  |   |                                          |   | 1,094,048 |   |   |   | 2,561,691 |   |   |   | 2,005,054 |   |
| Stock compensation and options expenses                               |   |                                            | -          |   |                                          |   | 7,464 |   |   |   | - |   |   |   | 1,971,928 |   |
| Loss(Gain) on disposal of fixed assets                                |   |                                            | 863        |   |                                          |   | 72,918 |   |   |   | 36,036 |   |   |   | (4,004 | ) |
| Loss(Gain) on disposal of intangible assets                           |   |                                            | (1,992     | )      |                                          |   | (1,012 | ) |   |   | 43,713 |   |   |   | - |   |
| (Increase)/decrease in inventories                                    |   |                                            | (500       | )      |                                          |   | (7,730 | ) |   |   | (691 | ) |   |   | 557,423 |   |
| (Increase)/decrease in deferred tax assets                            |   |                                            | (77        | )      |                                          |   | - |   |   |   | 3 |   |   |   | - |   |
| Decrease in receivables                                               |   |                                            | (8,168,930 | )      |                                          |   | 6,110,359 |   |   |   | (7,751,425 | ) |   |   | 9,712,555 |   |
| Decrease in other assets                                              |   |                                            | -          |   |                                          |   | 509,807 |   |   |   | - |   |   |   | 1,300,624 |   |
| Increase/(decrease)  in payables                            |   |                                            | 8,882,991  |   |                                          |   | (2,671,434 | ) |   |   | 8,686,349 |   |   |   | (5,539,741 | ) |
| Cash Provided by operating activities – continuing operations   |   |                                            | (1,581,078 | )      |                                          |   | (169,544 | ) |   |   | (3,442,911 | ) |   |   | 6,931,427 |   |
| Cash Provided by operating activities – discontinued operations |   |                                            | 2,672,625  |   |                                          |   | 2,315,091 |   |   |   | 1,501,018 |   |   |   | 2,111,356 |   |
|                                                                  |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Net cash provided by/(used in) operating activities                   |   | $                                               | 1,091,547  |   |                                          | $      | 2,145,547 |   |   | $ | (1,941,893 | ) |   | $ | 9,042,783 |   |
|                                                                  |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities                                  |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Decrease/(increase) in restricted cash                                |   | $                                               | (172       | )      |                                          | $      | 5,507 |   |   | $ | (6 | ) |   | $ | 6,116 |   |
| Purchases of fixed assets                                             |   |                                            | (8,362     | )      |                                          |   | 13,256 |   |   |   | (8,826 | ) |   |   | 13,256 |   |
| Investments in associates                                             |   |                                            | (1,299,929 | )      |                                          |   | - |   |   |   | (1,299,929 | ) |   |   | - |   |
| Cash Used in investing activities – continuing operations       |   |                                            | (1,308,463 | )      |                                          |   | 18,763 |   |   |   | (1,308,761 | ) |   |   | 19,372 |   |
|                                                                  |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Cash Used in investing activities – discontinued operations     |   |                                            | (54,145    | )      |                                          |   | (1,098,865 | ) |   |   | (313,329 | ) |   |   | (90,174 | ) |
| Net cash provided/(used) in investing activities                      |   | $                                               | (1,362,608 | )      |                                          | $      | (1,080,102 | ) |   | $ | (1,622,090 | ) |   | $ | (70,802 | ) |

----

| Cash flows from financing activities                                                                  |   |   |       |   |   |   |       |   |   |   |       |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|
| Repayments of short-term loans                                                                        |   | $      | (41,682    | )      |   | $      | (11,863    | )      |   | $      | (44,937    | )      |   | $ | (17,580 | ) |
| Repayments of long-term loans                                                                         |   |   | (51,184    | )      |   |   | (19,435    | )      |   |   | (32,013    | )      |   |   | (38,824 | ) |
| Repayments of shareholder loan                                                                        |   |   | 1,473,080  |   |   |   | 474,240    |   |   |   | 1,056,143  |   |   |   | (6,949,222 | ) |
| Cash provided by financing activities – continuing operations                                   |   |   | 1,380,214  |   |   |   | 442,942    |   |   |   | 979,193    |   |   |   | (7,005,626 | ) |
| Cash provided by financing activities – discontinued operations                                 |   |   | (1,911,990 | )      |   |   | (1,312,268 | )      |   |   | (1,797,551 | )      |   |   | (2,132,604 | ) |
| Net cash provided in financing activities                                                             |   | $      | (531,776   | )      |   | $      | (869,326   | )      |   | $      | (818,358   | )      |   | $ | (9,138,230 | ) |
|                                                                                                  |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Net Increase/(Decrease) in Cash & Cash Equivalents for the Period – continuing operations   |   | $      | (1,509,327 | )      |   | $      | 292,161    |   |   | $      | (3,772,479 | )      |   | $ | (54,827 | ) |
| Net Increase/(Decrease) in Cash & Cash Equivalents for the Period – discontinued operations |   |   | 706,490    |   |   |   | (96,042    | )      |   |   | (609,862   | )      |   |   | (111,422 | ) |
| Net decrease in cash and cash equivalents  for the Period                                   |   |   | (802,837   | )      |   |   | 196,119    |   |   |   | (4,382,341 | )      |   |   | (166,249 | ) |
|                                                                                                  |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Effect of Currency Translation – continuing operations                                          |   |   | 261,173    |   |   |   | (134,435   | )      |   |   | 3,221,148  |   |   |   | (18,151 | ) |
| Effect of Currency Translation – discontinued operations                                        |   |   | 2,146,454  |   |   |   | 72,412     |   |   |   | 258,660    |   |   |   | 75,719 |   |
|                                                                                                  |   |   | 2,407,627  |   |   |   | (62,023    | )      |   |   | 3,479,808  |   |   |   | 57,568 |   |
|                                                                                                  |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash & Cash Equivalents at Beginning of Period - continuing operations                            |   |   | 1,434,807  |   |   |   | 267,059    |   |   |   | 737,984    |   |   |   | 497,763 |   |
| Cash & Cash Equivalents at Beginning of Period - discontinued operations                          |   |   | 187,862    |   |   |   | 230,289    |   |   |   | 3,392,008  |   |   |   | 242,362 |   |
|                                                                                                  |   |   | 1,622,669  |   |   |   | 497,348    |   |   |   | 4,129,992  |   |   |   | 740,125 |   |
|                                                                                                  |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash & Cash Equivalents at End of Period - continuing operations                                  |   |   | 186,653    |   |   |   | 424,785    |   |   |   | 186,653    |   |   |   | 424,785 |   |
| Cash & Cash Equivalents at End of Period - discontinued operations                                |   |   | 3,040,806  |   |   |   | 206,659    |   |   |   | 3,040,806  |   |   |   | 206,659 |   |
| Cash & Cash Equivalents at End of Period                                                          |   | $      | 3,227,459  |   |   | $      | 631,444    |   |   | $      | 3,227,459  |   |   | $ | 631,444 |   |
|                                                                                                  |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Other supplementary information:                                                                      |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash paid during the year for:                                                                        |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Interest paid                                                                                         |   | $      | 276        |   |   | $      | 150,359    |   |   | $      | 30,763     |   |   | $ | 1,410,359 |   |
| Income tax paid                                                                                       |   | $      | 5,121      |   |   | $      | 9,575      |   |   | $      | 7,719      |   |   | $ | 9,575 |   |

----

|                                                       |   | TotalNumber of shares |       |   | Commonstock |   |   | Additional paidin capital |   |   | Statutoryreserves |   |   | Accumulated othercomprehensive income |      |   | Retained earnings |   |       | Non-controllingInterest |   |   | Total       |   |
|-----------------------------------------------------------------|--------|---------------------------------|------------|--------|-------------|--------|--------|-------------------------------------|--------|--------|-------------------|--------|--------|-------------------------------------------------|-----------|--------|------------------------|--------|------------|-------------------------|--------|--------|-------------|--------|
| Balance, January 1, 2010                                        |   |                            | 13,314,825 |   |        | $      | 13,315 |                                |   | $      | 26,535,818        |   |   | $                                               | 3,040,595 |   |                   | $      | 3,868,437  |                    |   | $      | 11,131,084  |   |   | $ | (26,389 | ) |   | $ | 44,562,860 |   |
| Net Loss including non-controlling interests                    |   |                            |       |   |        |   |   |                                |   |   |              |   |   |                                            |      |   |                   |   |       |                    |   |   | (22,303,183 | )      |   |   | (891,991 | ) |   |   | (23,195,174 | ) |
| Additional Paid-in Capital from grant of employee stock options |   |                            |       |   |        |   |   |                                |   |   | 19,902            |   |   |                                            | -         |   |                   |   | -          |                    |   |   | -           |   |   |   | - |   |   |   | 19,902 |   |
| Value of stocks grant to employees                              |   |                            | 475,000    |   |        |   | 475    |                                |   |   | 1,956,525         |   |   |                                            | -         |   |                   |   | -          |                    |   |   | -           |   |   |   | - |   |   |   | 1,957,000 |   |
| Value of stocks to acquire New Crown                            |   |                            | 6,250,000  |   |        |   | 6,250  |                                |   |   | 15,368,750        |   |   |                                            | -         |   |                   |   | -          |                    |   |   | -           |   |   |   | - |   |   |   | 15,375,000 |   |
| Foreign currency translation adjustment                         |   |                            | -          |   |        |   | -      |                                |   |   | -                 |   |   |                                            | -         |   |                   |   | (2,295,597 | )                       |   |   | -           |   |   |   | - |   |   |   | (2,295,597 | ) |
| Balance, December 31, 2010                                      |   |                            | 20,039,825 |   |        | $      | 20,040 |                                |   | $      | 43,880,995        |   |   | $                                               | 3,040,595 |   |                   | $      | 1,572,840  |                    |   | $      | (11,172,099 | )      |   | $ | (918,380 | ) |   | $ | 36,423,991 |   |
|                                                            |   |                            |       |   |        |   |   |                                |   |   |              |   |   |                                            |      |   |                   |   |       |                    |   |   |        |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2011                                        |   |                            | 20,039,825 |   |        | $      | 20,040 |                                |   | $      | 43,880,995        |   |   | $                                               | 3,040,595 |   |                   | $      | 1,572,840  |                    |   | $      | (11,172,099 | )      |   | $ | (918,380 | ) |   | $ | 36,423,991 |   |
| Net loss including non-controlling interests                    |   |                            | -          |   |        |   | -      |                                |   |   | -                 |   |   |                                            | -         |   |                   |   | -          |                    |   |   | (7,208,008  | )      |   |   | (894,433 | ) |   |   | (8,102,441 | ) |
| Foreign currency translation adjustment                         |   |                            | -          |   |        |   | -      |                                |   |   | -                 |   |   |                                            | -         |   |                   |   | 3,479,808  |                    |   |   | -           |   |   |   | - |   |   |   | 3,479,808 |   |
| Balance, JUNE 30, 2011                                          |   |                            | 20,039,825 |   |        | $      | 20,040 |                                |   | $      | 43,880,995        |   |   | $                                               | 3,040,595 |   |                   | $      | 5,052,648  |                    |   | $      | (18,380,107 | )      |   | $ | (1,812,813 | ) |   | $ | 31,801,358 |   |

|                                    |   | Comprehensive                                   |       |   | Comprehensive                          |   |        |        |   |
|-----------------------------------------|--------|-------------------------------------------------|------------|--------|----------------------------------------|--------|-------------|-------------|--------|
|                                    |   | Income for the Three Months |       |   | Income for the Year     |   |        | Accumulated |   |
|                                    |   | Ended June 30, 2011              |       |   | Ended December 31, 2010 |   |        | Total       |   |
| Net Income                              |   | $                                               | (7,208,008 | )      |                                   | $      | (22,303,183 | )           |   | $ | (29,511,191 | ) |
| Foreign Currency Translation Adjustment |   |                                            | 3,479,808  |   |                                   |   | (2,295,597  | )           |   |   | 1,184,211 |   |
|                                    |   | $                                               | (3,728,200 | )      |                                   | $      | (24,598,780 | )           |   | $ | (28,326,980 | ) |

----

| 1.  | ORGANIZATION AND PRINCIPAL ACTIVITIES |
|----------|---------------------------------------|

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

|   | (a) | Method of accounting |
|--------|-----|----------------------|

----

|   | (b) | Consolidation |
|--------|-----|---------------|

| Name of Company                                  |   | Place ofIncorporation |   | Attributable Equityinterest % |
|------------------------------------------------------------|--------|----------------------------|--------|-----------------------------------------|
| Full Art International Limited                             |   | Hong Kong                  |   | 100                                     |
| Zhuhai King Glass Engineering Co., Ltd.                    |   | PRC                        |   | 100                                     |
| Zhuhai King General Glass Engineering Technology Co., Ltd. |   | PRC                        |   | 100                                     |
| King General Engineering (HK) Limited                      |   | Hong Kong                  |   | 100                                     |
| KGE Building System Limited                                |   | Hong Kong                  |   | 100                                     |
| KGE Australia Pty Limited                                  |   | Australia                  |   | 55                                      |
| Zhuhai Xiangzhou District Career Training School      |   | PRC                        |   | 72                                      |
| Faith Mount International Limited                          |   | Hong Kong                  |   | 100                                     |
| Techwell Engineering Limited                               |   | Hong Kong                  |   | 100                                     |
| Techwell International Limited                             |   | Macau                      |   | 100                                     |
| Techwell Building System (Shenzhen) Co., Ltd.              |   | PRC                        |   | 100                                     |
| CAE Building Systems, Inc.                                 |   | USA                        |   | 100                                     |
| Techwell International S.E.A.                              |   | Singapore                  |   | 100                                     |
| China Architectural Engineering (Shenzhen) Co., Ltd.       |   | PRC                        |   | 60                                      |
| CAE Building Systems (Singapore) Pte Ltd                   |   | Singapore                  |   | 100                                     |
| New Crown Technology Limited                               |   | Hong Kong                  |   | 60                                      |
| Shanghai ConnGame Network Ltd.                             |   | PRC                        |   | 60                                      |

|   | (c) | Use of estimates |
|--------|-----|------------------|

|   | (d) | Plant and equipment |
|--------|-----|---------------------|

| Motor vehicle                  | 5 years      |
|--------------------------------|--------------|
| Machinery and equipment        | 5 - 10 years |
| Furniture and office equipment | 5 years      |
| Building                       | 20 years     |

----

|   | (e) | Accounting for the impairment of long-lived assets |
|--------|-----|----------------------------------------------------|

|   | (f) | Goodwill and Intangible Assets |
|--------|-----|--------------------------------|

|   | (g) | Inventories |
|--------|-----|-------------|

|   | (h) | Contracts receivables |
|--------|-----|-----------------------|

----

|   | (i) | Cash and cash equivalents |
|--------|-----|---------------------------|

|   | (j) | Restricted cash |
|--------|-----|-----------------|

|   | (k) | Earnings (Loss) per share |
|--------|-----|---------------------------|

|   | (l) | Revenue and cost recognition |
|--------|-----|------------------------------|

|   | a. | Earned Revenue is the amount of gross profit earned on a contract for a period plus the costs incurred on the contract during the period. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Cost of Earned Revenue is the cost incurred during the period, excluding the cost of materials not unique to a contract that have not been used for the contract. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | c. | Gross Profit Earned on a contract is computed by multiplying the total estimated gross profit on the contract by the percentage of completion. The excess of that amount over the amount of gross profit reported in prior periods is the earned gross profit that should be recognized in the income statement for the current period. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (m) | Income taxes |
|--------|-----|--------------|

|   | · | Zhuhai King Glass Engineering Co., Limited (“Zhuhai KGE”) and Zhuhai King General Glass Engineering Technology Co., Limited (“Zhuhai KGGET”) are located in Zhuhai and were subject to the PRC corporation income tax rate of 18% in 2008 and 20% in 2009. In accordance to China’s Enterprise Income Tax Law (“EIT Law”) effective from January 1, 2008, the tax rate for these two subsidiaries will be gradually increased 25% in 2012. The Company anticipates that as a result of the EIT law, its income tax provision will increase, which could adversely affect Zhuhai KGE’s financial condition and results of operations. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | China Architectural Engineering (Shenzhen) Co., Ltd. is located in Shenzhen and is subject to a 20% income tax rate that will be gradually increased to the uniform rate of 25% by 2012 as according to the new EIT law. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Full Art International Limited, King General Engineering (HK) Limited, and KGE Building System Limited are subject to a Hong Kong profits tax rate of 16.5%. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Techwell Engineering Limited is subject to a Hong Kong profits tax rate of 16.5%. Techwell International Limited is a Macau registered company and therefore is subject to Macau profits tax rate of 12%.  Techwell Building System (Shenzhen) Co. Limited is located in Shenzhen and is subject to PRC corporate income tax rate of 20% in 2009 that will be gradually increased to the uniform rate of 25% by 2012 as according to the new EIT law. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company is subject to United States Tax according to Internal Revenue Code Sections 951 and 957. |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | The Company, after a reverse-merger on October 17, 2006, revived to be an active business enterprise because of the operations with subsidiaries in the PRC and Hong Kong. [ Based on the consolidated net income for the six-month period ended June 30, 2011, the Company shall be taxed at the 34% tax rate.] |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Techwell Engineering Limited has established a branch in Dubai, which has zero corporate income tax rate. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | New Crown Technology Limited is subject to a Hong Kong profits tax rate of 16.5%. |
|--------|--------|-----------------------------------------------------------------------------------|

----

|   | · | Shanghai ConnGame Network Ltd. is located in Shanghai and is subject to a 25% income tax rate. |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | (n) | Advertising |
|--------|-----|-------------|

|   | (o) | Research and development |
|--------|-----|--------------------------|

|   | (p) | Retirement benefits |
|--------|-----|---------------------|

|   | (q) | Selling, general and administrative expenses |
|--------|-----|----------------------------------------------|

|   | (r) | Foreign currency translation |
|--------|-----|------------------------------|

|                                             |   | 06/30/2011 |   |   | 03/31/2011 |   |   | 12/31/2010 |   |   | 06/30/2010 |   |   | 03/31/2010 |   |
|--------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
| Year/quarter end RMB : US$ exchange rate         |   |       | 6.4635 |   |       |   | 6.5701 |       |   |   | 6.6118     |   |   |       | 6.8086 |   |   |   | 6.8361 |   |
| Average yearly/quarterly RMB : US$ exchange rate |   |       | 6.5399 |   |       |   | 6.5894 |       |   |   | 6.7788     |   |   |       | 6.8335 |   |   |   | 6.8360 |   |
|                                             |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |   |   |   |   |
| Year/quarter end HKD : US$ exchange rate         |   |       | 7.7834 |   |       |   | 7.7887 |       |   |   | 7.7832     |   |   |       | 7.7847 |   |   |   | 7.7647 |   |
| Average yearly/quarterly HKD : US$ exchange rate |   |       | 7.7824 |   |       |   | 7.7879 |       |   |   | 7.7695     |   |   |       | 7.7794 |   |   |   | 7.7639 |   |
|                                             |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |   |   |   |   |
| Year/quarter end AED : US$ exchange rate         |   |       | 3.6732 |   |       |   | 3.6734 |       |   |   | 3.6737     |   |   |       | 3.6737 |   |   |   | 3.6739 |   |
| Average yearly/quarterly AED : US$ exchange rate |   |       | 3.6730 |   |       |   | 3.6736 |       |   |   | 3.6737     |   |   |       | 3.6737 |   |   |   | 3.6736 |   |

|   | (s) | Statutory reserves |
|--------|-----|--------------------|

----

|   | (t) | Comprehensive income |
|--------|-----|----------------------|

|   | (u) | Discontinued Operations |
|--------|-----|-------------------------|

|   | (v) | Going Concern |
|--------|-----|---------------|

|  3. | CONTRACT RECEIVABLES |
|----------|----------------------|

| As of June 30, 2011 |   | Continuing |       |   | Discontinued |   |
|-----------------------------------------|--------|------------|------------|--------|--------------|--------|
|                                    |   | Operations |       |   | Operations   |   |
| Contract receivables                    |   | $          | 43,821,101 |   |         | $      | 39,565,273 |   |
| Less: Allowance for doubtful accounts   |   |       | (603       | )      |         |   | (5,658,879 | ) |
| Net                                     |   | $          | 43,820,498 |   |         | $      | 33,906,394 |   |

| Allowance for Doubtful Accounts |   | Continuing |   |   | Discontinued |   |
|------------------------------------------------|--------|------------|--------|--------|--------------|--------|
|                                           |   | Operations |   |   | Operations   |   |
| Beginning balance                              |   | $          | -      |   |         | $      | 5,531,953 |   |
| Add: Allowance created                         |   |       | 603    |   |         |   | 126,926 |   |
| Less: Written off against allowance            |   |       | -      |   |         |   | - |   |
| Ending balance                                 |   | $          | 603    |   |         | $      | 5,658,879 |   |

| As of December 31, 2010 |   | Continuing |       |   | Discontinued |   |
|---------------------------------------------|--------|------------|------------|--------|--------------|--------|
|                                        |   | Operations |       |   | Operations   |   |
| Contract receivables                        |   | $          | 43,812,422 |   |         | $      | 43,159,743 |   |
| Less: Allowance for doubtful accounts       |   |       | -          |   |         |   | (5,531,953 | ) |
| Net                                         |   | $          | 43,812,422 |   |         | $      | 37,627,790 |   |

| Allowance for Doubtful Accounts |   | Continuing |   |   | Discontinued |   |
|------------------------------------------------|--------|------------|--------|--------|--------------|--------|
|                                           |   | Operations |   |   | Operations   |   |
| Beginning balance                              |   | $          | -      |   |         | $      | 6,642,386 |   |
| Add: Allowance created                         |   |       | -      |   |         |   | 5,973,576 |   |
| Less: Written off against allowance            |   |       | -      |   |         |   | (7,084,009 | ) |
| Ending balance                                 |   | $          | -      |   |         | $      | 5,531,953 |   |

----

| 4.  | OTHER RECEIVABLES |
|----------|-------------------|

| As of June 30, 2011                                                  |   | ContinuingOperations |       |   | DiscontinuedOperations |   |
|------------------------------------------------------------------------------------------|--------|----------------------|------------|--------|------------------------|--------|
| Due from sellers of Techwell, the subsidiary (1)                                         |   | $                    | 11,437,945 |   |                   | $      | - |   |
| Due from Kangbao Electrical Company Limited (Kangbao) , a related party  (2)   |   |                 | -          |   |                   |   | 614,119 |   |
| Drawdown of advance payment and performance bonds by client of the projects in Dubai (3) |   |                 | 9,380,167  |   |                   |   | - |   |
| Other related parties receivables                                                        |   |                 | 4,569,244  |   |                   |   | 58,870 |   |
| Deposits for site operations of projects in PRC                                          |   |                 | -          |   |                   |   | 2,484,177 |   |
| Other                                                                                    |   |                 | 1,560,313  |   |                   |   | 1,177,798 |   |
|                                                                                     |   |                 |       |   |                   |   |   |   |
| Total                                                                                    |   | $                    | 26,947,669 |   |                   | $      | 4,334,964 |   |

| As of December 31, 2010                                                                  |   | ContinuingOperations |       |   | DiscontinuedOperations |   |
|------------------------------------------------------------------------------------------|--------|----------------------|------------|--------|------------------------|--------|
| Due from sellers of Techwell, the subsidiary (1)                                         |   | $                    | 11,362,494 |   |                   | $      | - |   |
| Due from Kangbao Electrical Company Limited (Kangbao) , a related party  (2)   |   |                 | 1,169,876  |   |                   |   | - |   |
| Drawdown of advance payment and performance bonds by client of the projects in Dubai (3) |   |                 | 9,380,408  |   |                   |   | - |   |
| Other related parties receivables                                                        |   |                 | 703,539    |   |                   |   | - |   |
| Deposits for site operations of projects in PRC                                          |   |                 | -          |   |                   |   | 3,049,100 |   |
| Other                                                                                    |   |                 | 691,810    |   |                   |   | - |   |
|                                                                                     |   |                 |       |   |                   |   |   |   |
| Total                                                                                    |   | $                    | 23,308,127 |   |                   | $      | 3,049,100 |   |

| (1) | On November 6, 2007, the Company, through Full Art International, Ltd. (“Full Art”), acquired all of the issued and outstanding shares in the capital of Techwell Engineering Limited, a limited liability company incorporated in Hong Kong (“Techwell”) pursuant to a Stock Purchase Agreement (the “Agreement”) dated November 6, 2007, entered into by and among Ng Chi Sum and Yam Mei Ling (each a “Shareholder” and collectively, the “Shareholders”), the Company and Full Art.  Pursuant to the terms and conditions of the Agreement, the Shareholders agreed that each of them would pay any and all accounts receivables of Techwell if not paid by the customers within 24 months of the acquisition date.  The 24 month period had expired.  The amount due and payable from the Shareholders is included in the other receivable due from sellers of Techwell. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| (2) | The amount mainly represents the purchases advances to Kangbao Electrical Company Limited (Kangbao) for the supplies of materials for the projects of the Company. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| (3) | The Company believes that the client of the Dubai projects did not have proper grounds for the drawdown of the advance payment and performance bonds which the company issued for the projects.  The Company also believes that the client should not be entitled to the drawdown and is now proceeding the claim back of the amount. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | INVENTORIES |
|----|-------------|

| As of June 30, 2011    |   | ContinuingOperations |   |   | DiscontinuedOperations |   |
|------------------------|--------|----------------------|--------|--------|------------------------|--------|
| Raw materials at sites |   | $                    | 30,808 |   |                   | $      | 232,380 |   |

----

| As of December 31, 2010 |   | ContinuingOperations |   |   | DiscontinuedOperations |   |
|-------------------------|--------|----------------------|--------|--------|------------------------|--------|
| Raw materials at sites  |   | $                    | 30,117 |   |                   | $      | - |   |

| 6. | PROPERTY, PLANT AND EQUIPMENT |
|----|-------------------------------|

| As of June 30, 2011                       |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|-------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
|                                      |   |                 |      |   |                   |   |
| At cost                                   |   |                 |      |   |                   |   |
| Motor vehicle                             |   | $                    | 593,963   |   |                   | $      | 334,018 |   |
| Machinery and equipment                   |   |                 | 1,187,063 |   |                   |   | 1,338,076 |   |
| Furniture, software and office            |   |                 | -         |   |                   |   | -  |   |
| Equipment                                 |   |                 | 1,224,816 |   |                   |   | 1,040,479 |   |
| Leasehold improvement                     |   |                 | 1,024,306 |   |                   |   | - |   |
|                                      |   | $                    | 4,030,148 |   |                   | $      | 2,712,573 |   |
|                                      |   |                 |      |   |                   |   |   |   |
| Less: Accumulated depreciation            |   |                 |      |   |                   |   |   |   |
| Motor vehicle                             |   | $                    | 441,959   |   |                   | $      | 344,362 |   |
| Machinery and equipment                   |   |                 | 729,041   |   |                   |   | 1,047,631 |   |
| Furniture, software, and office equipment |   |                 | 586,201   |   |                   |   | 695,552 |   |
| Leasehold improvement                     |   |                 | 432,768   |   |                   |   | - |   |
|                                      |   | $                    | 2,189,969 |   |                   | $      | 2,087,545 |   |
|                                      |   |                 |      |   |                   |   |   |   |
|                                      |   | $                    | 1,840,179 |   |                   | $      | 625,028 |   |

| As of December 31, 2010 |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|---------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
|                                        |   |                 |      |   |                   |   |
| At cost                                     |   |                 |      |   |                   |   |
| Motor vehicle                               |   | $                    | 623,192   |   |                   | $      | 271,792 |   |
| Machinery and equipment                     |   |                 | 1,160,438 |   |                   |   | 1,304,176 |   |
| Furniture, software and office              |   |                 |      |   |                   |   |   |   |
| Equipment                                   |   |                 | 1,305,000 |   |                   |   | 1,069,777 |   |
| Leasehold improvement                       |   |                 | 1,004,538 |   |                   |   | - |   |
|                                        |   | $                    | 4,093,168 |   |                   | $      | 2,645,745 |   |
|                                        |   |                 |      |   |                   |   |   |   |
| Less: Accumulated depreciation              |   |                 |      |   |                   |   |   |   |
| Motor vehicle                               |   | $                    | 398,449   |   |                   | $      | 344,637 |   |
| Machinery and equipment                     |   |                 | 654,680   |   |                   |   | 995,126 |   |
| Furniture, software, and office equipment   |   |                 | 488,492   |   |                   |   | 707,992 |   |
| Leasehold improvement                       |   |                 | 228,943   |   |                   |   | - |   |
|                                        |   | $                    | 1,770,564 |   |                   | $      | 2,047,755 |   |
|                                        |   |                 |      |   |                   |   |   |   |
|                                        |   | $                    | 2,322,604 |   |                   | $      | 597,990 |   |

----

| 7. | INTANGIBLE ASSETS |
|----|-------------------|

| As of June 30, 2011 |   | ContinuingOperations |    |   | DiscontinuedOperations |   |
|-----------------------------------------|--------|----------------------|---------|--------|------------------------|--------|
|                                    |   |                 |    |   |                   |   |
| At cost                                 |   |                 |    |   |                   |   |
| Intangible Assets                       |   | $                    | 161,933 |   |                   | $      | 1,207 |   |
| Less: Accumulated amortization          |   |                 | 55,150  |   |                   |   | 1,207 |   |
|                                    |   | $                    | 106,783 |   |                   | $      | - |   |

| As of December 31, 2010 |   | ContinuingOperations |    |   | DiscontinuedOperations |   |
|---------------------------------------------|--------|----------------------|---------|--------|------------------------|--------|
|                                        |   |                 |    |   |                   |   |
| At cost                                     |   |                 |    |   |                   |   |
| Intangible Assets                           |   | $                    | 250,786 |   |                   | $      | 1,180 |   |
| Less: Accumulated amortization              |   |                 | 83,563  |   |                   |   | 590 |   |
|                                        |   | $                    | 167,223 |   |                   | $      | 590 |   |

| 8. | LOANS |
|----|-------|

|   | A. | SHORT-TERM BANK LOANS |
|--------|----|-----------------------|

| As of June 30, 2011                                                                                            |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
| ABN Amro N.V. Overdraft in Current Account at interest rate at 6.5% per annum                                                      |   |                 | -         |   |                   |   | 1,712,677 |   |
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
| ABN Amro N.V. Temporary Loan for the drawing of performance and advance payment bonds at interest rate at Bank's Cost of Fund + 6% |   |                 | 4,529,974 |   |                   |   | - |   |
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
| Automobile capital lease obligation (hire purchase),amount due within one year, last installment due November 9, 2012              |   |                 | 32,012    |   |                   |   | - |   |
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
|                                                                                                                               |   | $                    | 4,561,986 |   |                   | $      | 1,712,677 |   |

| As of December 31, 2010                                                                                        |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
| ABN Amro N.V. Overdraft in Current Account at interest rate at 6.5% per annum                                                      |   |                 | -         |   |                   |   | 1,674,263 |   |
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
| ABN Amro N.V. Temporary Loan for the drawing of performance and advance payment bonds at interest rate at Bank's Cost of Fund + 6% |   |                 | 4,530,090 |   |                   |   | - |   |
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
| Automobile capital lease obligation (hire purchase),amount due within one year, last installment due November 9, 2012              |   |                 | 76,832    |   |                   |   | - |   |
|                                                                                                                               |   |                 |      |   |                   |   |   |   |
|                                                                                                                               |   | $                    | 4,606,922 |   |                   | $      | 1,674,263 |   |

----

|   | B. | LONG-TERM BANK LOANS |
|--------|----|----------------------|

| Continuing Operations                                                                                        |   | June 30,2011 |   |   | December 31,2010 |   |
|-------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-----------------------|--------|
|                                                                                                              |   |              |   |   |                  |   |
| Automobile capital lease obligation (hire purchase),amount due to DBS Bank, last installment due November 9, 2012 |   |              | 38,415 |   |                  |   | 32,013 |   |
|                                                                                                              |   |              |   |   |                  |   |   |   |
|                                                                                                              |   | $                 | 38,415 |   |                  | $      | 32,013 |   |

| 9. | CONVERTIBLE BONDS AND BOND WARRANTS |
|----|-------------------------------------|

|   | (a) | $10,000,000 Variable Rate Convertible Bonds due in 2012 |
|--------|-----|---------------------------------------------------------|

|   | (b) | $20,000,000 12% Convertible Bonds due in 2011 |
|--------|-----|-----------------------------------------------|

|  Continuing Operations                              |   | June30, 2011 |       |   | December31, 2010 |   |
|---------------------------------------------------------------|--------|-------------------|------------|--------|-----------------------|--------|
|                                                          |   |              |       |   |                  |   |
| Convertible Bonds Payable                                     |   | $                 | 28,000,000 |   |                  | $      | 28,000,000 |   |
| Less: Interest discount – Warrants                      |   |              | (3,305,938 | )      |                  |   | (3,305,938 | ) |
| Less: Interest discount – Beneficial conversion feature |   |              | (1,882,404 | )      |                  |   | (1,882,404 | ) |
| Less: Bond discount                                           |   |              | (760,069   | )      |                  |   | (760,069 | ) |
| Accretion of interest discount                                |   |              | 9,462,950  |   |                  |   | 6,939,674 |   |
|                                                          |   |              |       |   |                  |   |   |   |
| Total Convertible Bonds Payable, Net                          |   | $                 | 31,514,539 |   |                  | $      | 28,991,263 |   |

----

|  Continuing Operations                      |   | June30, 2011 |       |   | December31, 2010 |   |
|-------------------------------------------------------|--------|-------------------|------------|--------|-----------------------|--------|
|                                                  |   |              |       |   |                  |   |
| Convertible Bonds Payable – current portion     |   | $                 | 23,322,000 |   |                  | $      | 22,687,021 |   |
| Convertible Bonds Payable – non-current portion |   |              | 8,192,539  |   |                  |   | 6,304,242 |   |
| Total Convertible Bonds Payable, Net                  |   | $                 | 31,514,539 |   |                  | $      | 28,991,263 |   |

----

| 10. | OTHER PAYABLES |
|-----|----------------|

|  As June 30, 2011                           |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|-----------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
| Advances received from clients of construction projects         |   | $                    | 99,110    |   |                   | $      | 5,377,169 |   |
| Advances received from clients other than construction projects |   |                 | -         |   |                   |   | - |   |
| Staff and disbursement payable                                  |   |                 | 5,952,187 |   |                   |   | 123,328 |   |
| Others                                                          |   |                 | 2,812,338 |   |                   |   | 160,419 |   |
| Total                                                           |   | $                    | 8,863,635 |   |                   | $      | 5,660,916 |   |

|  As December 31, 2010                       |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|-----------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
| Advances received from clients of construction projects         |   | $                    | -         |   |                   | $      | 8,032,690 |   |
| Advances received from clients other than construction projects |   |                 | 2,184,418 |   |                   |   | - |   |
| Staff and disbursement payable                                  |   |                 | 178,370   |   |                   |   | 151,245 |   |
| Others                                                          |   |                 | 414,634   |   |                   |   | 1,035 |   |
| Total                                                           |   | $                    | 2,777,422 |   |                   | $      | 8,184,970 |   |

| 11. | OTHER ACCRUALS |
|-----|----------------|

| As of June 30,2011                      |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|---------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
| Accruals for interests on convertible bonds       |   | $                    | 4,455,464 |   |                   | $      | - |   |
| Accruals for interests on short-term bank loan    |   |                 | 524,977   |   |                   |   | - |   |
| Accruals for materials costs of projects in Dubai |   |                 | 2,105,579 |   |                   |   | - |   |
| Others                                            |   |                 | 2,040,318 |   |                   |   | 446,259 |   |
| Total                                             |   | $                    | 9,126,338 |   |                   | $      | 446,259 |   |

| As of December 31,2010                  |   | ContinuingOperations |      |   | DiscontinuedOperations |   |
|---------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
| Accruals for interests on convertible bonds       |   | $                    | 3,145,768 |   |                   | $      | - |   |
| Accruals for interests on short-term bank loan    |   |                 | -         |   |                   |   | 342,614 |   |
| Accruals for materials costs of projects in Dubai |   |                 | 2,025,311 |   |                   |   | - |   |
| Others                                            |   |                 | 1,305,867 |   |                   |   | - |   |
| Total                                             |   | $                    | 6,476,946 |   |                   | $      | 342,614 |   |

| 12. | CONTRACT REVENUES EARNED |
|-----|--------------------------|

----

| Continuing Operations |   | Three months ended June, |   |   | Six months ended June 30, |   |
|----------------------------|--------|-----------------------------------------|--------|--------|-----------------------------------------------|--------|
|                       |   | 2011                                    |   |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                       |   |                                    |   |   |                                          |   |   |   |   |   |   |   |
| Billed                     |   | $                                       | -      |   |                                          | $      | - |   |   | $ | - |   |   | $ | 5,012,659 |   |
| Unbilled                   |   |                                    | -      |   |                                          |   | - |   |   |   | - |   |   |   | 619,173 |   |
|                       |   | $                                       | -      |   |                                          | $      | - |   |   | $ | - |   |   | $ | 5,631,832 |   |

| Discontinued operation  |   | Three months ended June, |      |   | Six months ended June 30, |   |
|-----------------------------------|--------|-----------------------------------------|-----------|--------|-----------------------------------------------|--------|
|                              |   | 2011                                    |      |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                              |   |                                    |      |   |                                          |   |   |   |   |   |   |   |
| Billed                            |   | $                                       | -         |   |                                          | $      | 5,587,098 |   |   | $ | 6,867,898 |   |   | $ | 11,400,303 |   |
| Unbilled                          |   |                                    | 8,705,881 |   |                                          |   | 121,319 |   |   |   | 10,669,248 |   |   |   | 148,405 |   |
|                              |   | $                                       | 8,705,881 |   |                                          | $      | 5,708,417 |   |   | $ | 17,537,146 |   |   | $ | 11,548,708 |   |

| 13. | INCOME TAXES |
|-----|--------------|

----

|                                                   |   | June 30, 2011 |       |   | June 30, 2010 |   |
|--------------------------------------------------------|--------|-------------------------|------------|--------|-------------------------|--------|
| Continuing income before taxes:                        |   |                    |       |   |                    |   |
| -U.S.                                                  |   | $                       | (4,363,568 | )      |                    | $      | (6,394,768 | ) |
| -Singapore                                             |   |                    | (64        | )      |                    |   | (7,977 | ) |
| -China                                                 |   |                    | (2,595,741 | )      |                    |   | (260,849 | ) |
| -Australia                                             |   |                    | (7,613     | )      |                    |   | (6,548 | ) |
| -Hong Kong                                             |   |                    | (399,802   | )      |                    |   | 3,123,890 |   |
| -Dubai                                                 |   |                    | (121,620   | )      |                    |   | 62,877 |   |
| -Macau                                                 |   |                    | (2,122     | )      |                    |   | (2,278 | ) |
| Total continuing income (loss)  before taxes |   |                    | (7,490,529 | )      |                    |   | (3,485,653 | ) |
|                                                   |   |                    |       |   |                    |   |   |   |
| Discontinued Operation Income (Loss)                   |   |                    | (604,194   | )      |                    |   | (3,357,938 | ) |
| Total income(loss) before taxes                        |   |                    | (8,094,723 | )      |                    |   | (6,843,591 | ) |
| Provision for taxes expense/(benefit):                 |   |                    |       |   |                    |   |   |   |
| Current:                                               |   |                    |       |   |                    |   |   |   |
|                                                   |   |                    |       |   |                    |   |   |   |
| -U.S. Federal                                          |   |                    | -          |   |                    |   | - |   |
| -U.S. State                                            |   | $                       | -          |   |                    | $      | 9,575 |   |
| Provision for taxes from continuing operations         |   |                    | -          |   |                    |   | 9,575 |   |
|                                                   |   |                    |       |   |                    |   |   |   |
| Provision for taxes from discontinued operations       |   |                    | -          |   |                    |   | - |   |
|                                                   |   |                    |       |   |                    |   |   |   |
| Currency effect                                        |   | $                       | -          |   |                    |   | - |   |
|                                                   |   |                    |       |   |                    | $      | 9,575 |   |
|                                                   |   |                    |       |   |                    |   |   |   |
| Deferred:                                              |   |                    |       |   |                    |   |   |   |
| -U.S. Federal                                          |   |                    | -          |   |                    |   | 9,575 |   |
| -Hong Kong                                             |   |                    | -          |   |                    |   | - |   |
| -Currency Effect                                       |   |                    | -          |   |                    |   |   |   |
|                                                   |   |                    |       |   |                    |   |   |   |
| Total provision for taxes                              |   | $                       | -          |   |                    | $      | 9,575 |   |
| Effective tax rate                                     |   |                    | 0.00       | %      |                    |   | (0.14 | )% |

| Continuing Operations      | June 30, 2011 |   | June 30, 2010 |   |
|--------------------------------------|-------------------------|--------|-------------------------|--------|
|                                 |                    |   |                    |   |
| Deferred tax assets                  |                    |   |                    |   |   |   |
| Net operating loss                   |                    | $      | 112,622                 |   |   | $ | 112,603 |   |
|                                 |                    |   | 112,622                 |   |   |   | 112,603 |   |
| Valuation allowance                  |                    |   |                    |   |   |   | - |   |
| Total deferred tax assets            |                    |   | 112,622                 |   |   |   | 112,603 |   |
| Deferred tax liabilities             |                    |   |                    |   |   |
| Total deferred tax liabilities       |                    |   | -                       |   |   |   | - |   |
| Net deferred tax assets              |                    |   | 112,622                 |   |   |   | 112,603 |   |
| Reported as:                         |                    |   |                    |   |   |
| Current deferred tax assets          |                    |   | 112,622                 |   |   |   | 112,603 |   |
| Non-current deferred tax assets      |                    |   | -                       |   |   |   | - |   |
| Non-current deferred tax liabilities |                    |   | -                       |   |   |   | - |   |
| Net deferred taxes                   |                    | $      | 112,622                 |   |   | $ | 112,603 |   |

----

|                                   |   | June 30, 2011 |   |   | June 30, 2010 |   |
|----------------------------------------|--------|-------------------------|--------|--------|-------------------------|--------|
| U.S. federal statutory income tax rate |   |                    | 34.00  | %      |                    |   | 34.00 | % |
| Lower rates in PRC, net                |   |                    | -10.00 | %      |                    |   | -10.00 | % |
| Accruals in foreign jurisdictions      |   |                    | -0.00  | %      |                    |   | -0.14 | % |
| Effect operation losses                |   |                    | -25.00 | %      |                    |   | -25.00 | % |
|                                   |   |                    | -0.25  | %      |                    |   | -0.29 | % |

| Continuing Operations                                   |   | June 30, 2011 |       |   | June 30, 2010 |   |
|--------------------------------------------------------------|--------|-------------------------|------------|--------|-------------------------|--------|
| Income/(loss) before tax                                     |   | $                       | (7,490,529 | )      |                    | $      | (3,495,229 | ) |
| Taxes at the applicable  income tax rates          |   |                    | -          |   |                    |   | 9,575 |   |
| Miscellaneous non taxable income and non-deductible expenses |   |                    | -          |   |                    |   | - |   |
|                                                         |   |                    |       |   |                    |   |   |   |
| Current income tax expense                                   |   | $                       | -          |   |                    | $      | 9,575 |   |

| 14. | QUARTERLY INFORMATION |
|-----|-----------------------|

| As of June 30,2011 |   | ContinuingOperations |   |   | DiscontinuedOperations |   |
|-----------------------------------|--------|----------------------|--------|--------|------------------------|--------|
| Contract revenues earned          |   | $                    | -      |   |                   | $      | 17,537 |   |
| Income / (loss) from operations   |   |                 | (7,491 | )      |                   |   | (612 | ) |
| Net earnings (loss)               |   |                 | (7,208 | )      |                   |   | (612 | ) |
| Net earnings / (loss) per share:  |   |                 |   |   |                   |   |   |   |
| Basic and Diluted                 |   | $                    | (0.36  | )      |                   | $      | (0.03 | ) |

| As of June 30,2010 |   | ContinuingOperations |   |   | DiscontinuedOperations |   |
|-----------------------------------|--------|----------------------|--------|--------|------------------------|--------|
| Contract revenues earned          |   | $                    | 5,632  |   |                   | $      | 11,549 |   |
| Income / (loss) from operations   |   |                 | (3,486 | )      |                   |   | (3,358 | ) |
| Net earnings (loss)               |   |                 | (3,492 | )      |                   |   | (3,358 | ) |
| Net earnings / (loss) per share:  |   |                 |   |   |                   |   |   |   |
| Basic and Diluted                 |   | $                    | (0.50  | )      |                   | $      | (0.24 | ) |

----

| 15. | SEGMENT INFORMATION |
|-----|---------------------|

| Results of Operations              |   | Continuing Operations |   |   | DiscontinuedOperations |   |
|----------------------------------------------|--------|----------------------------|--------|--------|------------------------|--------|
| For the six months ended |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2011                      |   | Asia                       |   |   | Middle East       |   |   | United States |   |   | Total |   |   |   |   |
| Sales                                        |   | $                          | -      |   |                   | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | 17,537 |   |
| Cost of Sales                                |   |                       | -      |   |                   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,959 |   |
| Gross Profit                                 |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   | 578 |   |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                           |   |                       | 2,613  |   |                   |   | 122 |   |   |   | 453 |   |   |   | 3,188 |   |   |   | 1,168 |   |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expenses)                      |   |                       | (346   | )      |                   |   | - |   |   |   | (3,957 | ) |   |   | (4,303 | ) |   |   | (14 | ) |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings before Taxes                        |   |                       | (2,959 | )      |                   |   | (122 | ) |   |   | (4,410 | ) |   |   | (7,491 | ) |   |   | (604 | ) |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxes                                        |   |                       | -      |   |                   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                   |   | $                          | (2,959 | )      |                   |   | (122 | ) |   |   | (4,410 | ) |   |   | (7,491 | ) |   | $ | (611 | ) |

| Financial Position            |   | Continuing Operations |   |   | DiscontinuedOperations |   |
|------------------------------------|--------|----------------------------|--------|--------|------------------------|--------|
| At                                 |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2011            |   | Asia                       |   |   | Middle East       |   |   | United States |   |   | Total |   |   |   |   |
| Current Assets                     |   | $                          | 33,250 |   |                   | $      | 40,130 |   |   | $ | 1,516 |   |   | $ | 74,896 |   |   | $ | 43,008 |   |
| Non Current Assets                 |   |                       | 26,966 |   |                   |   | 413 |   |   |   | 62 |   |   |   | 27,441 |   |   |   | 638 |   |
| Total Assets                       |   |                       | 60,216 |   |                   |   | 40,543 |   |   |   | 1,578 |   |   |   | 102,337 |   |   |   | 43,646 |   |
|                               |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current Liabilities                |   |                       | 31,997 |   |                   |   | 9,136 |   |   |   | 28,679 |   |   |   | 69,812 |   |   |   | 36,140 |   |
| Total Long Term Liabilities        |   |                       | 38     |   |                   |   | - |   |   |   | 8,193 |   |   |   | 8,231 |   |   |   | - |   |
| Total Liabilities                  |   |                       | 32,035 |   |                   |   | 9,136 |   |   |   | 36,872 |   |   |   | 78,043 |   |   |   | 36,140 |   |
|                               |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Assets                         |   |                       | 28,181 |   |                   |   | 31,407 |   |   |   | (35,294 | ) |   |   | 24,294 |   |   |   | 7,506 |   |
|                               |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Liabilities & Net Assets |   |                       | 60,216 |   |                   |   | 40,543 |   |   |   | 1,578 |   |   |   | 102,337 |   |   |   | 43,646 |   |

----

| Results of Operations              |   | Continuing Operations |   |   | DiscontinuedOperations |   |
|----------------------------------------------|--------|----------------------------|--------|--------|------------------------|--------|
| For the six months ended |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2010                      |   | Asia                       |   |   | Middle East       |   |   | United States |   |   | Total |   |   |   |   |
| Sales                                        |   | $                          | 5,266  |   |                   | $      | 365 |   |   | $ | - |   |   | $ | 5,631 |   |   | $ | 11,549 |   |
| Cost of Sales                                |   |                       | 856    |   |                   |   | 106 |   |   |   | - |   |   |   | 962 |   |   |   | 14,320 |   |
| Gross Profit                                 |   |                       | 4,410  |   |                   |   | 259 |   |   |   | - |   |   |   | 4,669 |   |   |   | (2,771 | ) |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                           |   |                       | 4,154  |   |                   |   | 197 |   |   |   | 457 |   |   |   | 4,808 |   |   |   | 1,260 |   |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expenses)                      |   |                       | 2,017  |   |                   |   | 1 |   |   |   | (5,365 | ) |   |   | (3,347 | ) |   |   | 674 |   |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings before Taxes                        |   |                       | 2,273  |   |                   |   | 63 |   |   |   | (5,822 | ) |   |   | (3,486 | ) |   |   | (3,357 | ) |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxes                                        |   |                       | 10     |   |                   |   | - |   |   |   | - |   |   |   | 10 |   |   |   | - |   |
|                                         |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                   |   | $                          | 2,263  |   |                   |   | 63 |   |   |   | (5,822 | ) |   |   | (3,496 | ) |   | $ | (3,357 | ) |

| Financial Position            |   | Continuing Operations |   |   | DiscontinuedOperations |   |
|------------------------------------|--------|----------------------------|--------|--------|------------------------|--------|
| At                                 |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010        |   | Asia                       |   |   | Middle East       |   |   | United States |   |   | Total |   |   |   |   |
| Current Assets                     |   | $                          | 27,940 |   |                   | $      | 42,254 |   |   | $ | 1,244 |   |   | $ | 71,438 |   |   | $ | 46,688 |   |
| Non Current Assets                 |   |                       | 26,128 |   |                   |   | 465 |   |   |   | 83 |   |   |   | 26,676 |   |   |   | 599 |   |
| Total Assets                       |   |                       | 54,068 |   |                   |   | 42,719 |   |   |   | 1,327 |   |   |   | 98,114 |   |   |   | 47,287 |   |
|                               |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current Liabilities                |   |                       | 24,963 |   |                   |   | 9,630 |   |   |   | 27,566 |   |   |   | 62,159 |   |   |   | 40,483 |   |
| Total Long Term Liabilities        |   |                       | -      |   |                   |   | - |   |   |   | 6,336 |   |   |   | 6,336 |   |   |   | - |   |
| Total Liabilities                  |   |                       | 24,963 |   |                   |   | 9,630 |   |   |   | 33,902 |   |   |   | 68,495 |   |   |   | 40,483 |   |
|                               |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Assets(liabilities)            |   |                       | 29,105 |   |                   |   | 33,089 |   |   |   | (32,575 | ) |   |   | 29,619 |   |   |   | 6,804 |   |
|                               |   |                       |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Liabilities & Net Assets |   |                       | 54,068 |   |                   |   | 42,719 |   |   |   | 1,327 |   |   |   | 98,114 |   |   |   | 47,287 |   |

| 16. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| For the years ended December 31, |   | ContinuingOperations |    |
|-----------------------------------------------------------|--------|----------------------|---------|
| 2011                                                      |   |                 | 138,562 |   |
| 2012                                                      |   |                 | 265,577 |   |
| 2013                                                      |   |                 | -       |   |
|                                                      |   | $                    | 404,139 |   |

----

----

| 17. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

----

| 18. | EARNINGS (LOSS) PER SHARE |
|-----|---------------------------|

|                                                                                           |   | Three months ended June 30, |       |   | Six months ended June 30, |   |
|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                                                                                           |   | 2011                                            |       |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Basic Earnings Per Share Numerator                                                             |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Net Loss                                                                                       |   | $                                               | (3,370,242 | )      |                                          |   | (3,331,887 | ) |   |   | (8,101,804 | ) |   |   | (6,853,166 | ) |
| Net loss attributable to non-controlling interest                                              |   |                                            | (491,627   | )      |                                          |   | (1,551 | ) |   |   | (893,796 | ) |   |   | (2,946 | ) |
| Loss from owner of the Company                                                                 |   |                                            | (2,878,615 | )      |                                          |   | (3,330,336 | ) |   |   | (7,208,008 | ) |   |   | (6,850,220 | ) |
| Income (Loss) from Discontinued Operations                                                     |   |                                            | 326,608    |   |                                          |   | 1,970,744 |   |   |   | (611,275 | ) |   |   | (3,357,938 | ) |
| Less:                                                                                          |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Preferred Dividends                                                                            |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Loss Available to owner of the Company                                                         |   |                                            | (2,878,615 | )      |                                          |   | (3,330,336 | ) |   |   | (7,208,008 | ) |   |   | (6,850,220 | ) |
| Loss from Continuing Operations Available to owner of the Company                              |   |                                            | (3,205,223 | )      |                                          |   | (5,301,080 | ) |   |   | (6,596,733 | ) |   |   | (3,492,282 | ) |
| Loss from Continuing Operations Available to non-controlling interest                          |   |                                            | (491,627   | )      |                                          |   | (1,551 | ) |   |   | (893,796 | ) |   |   | (2,946 | ) |
| Income(Loss) from Discontinued Operations Available to owner of the Company                    |   |                                            | 326,608    |   |                                          |   | 1,970,744 |   |   |   | (611,275 | ) |   |   | (3,357,938 | ) |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Share Numerator                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Loss Available to owner of the Company Stockholders                                            |   |                                            | (2,878,615 | )      |                                          |   | (3,330,336 | ) |   |   | (7,208,008 | ) |   |   | (6,850,222 | ) |
| Loss from Continuing Operations Available to owner of the Company                              |   |                                            | (3,205,223 | )      |                                          |   | (5,301,080 | ) |   |   | (6,596,733 | ) |   |   | (3,492,282 | ) |
| Loss from Continuing Operations Available to non-controlling interest                          |   |                                            | (491,627   | )      |                                          |   | (1,551 | ) |   |   | (893,796 | ) |   |   | (2,946 | ) |
| Income(Loss) from Discontinued Operations Available to owner of the Company                    |   |                                            | 326,608    |   |                                          |   | 1,970,744 |   |   |   | (611,275 | ) |   |   | (3,357,938 | ) |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Add:                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Preferred Dividends                                                                            |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Loss Available to owner of the Company on Converted Basis                                      |   |                                            | (2,878,615 | )      |                                          |   | (3,330,336 | ) |   |   | (7,208,008 | ) |   |   | (6,850,222 | ) |
| Loss from Continuing Operations Available to owner of the Company on Converted Basis           |   |                                            | (3,205,223 | )      |                                          |   | (5,301,080 | ) |   |   | (6,596,733 | ) |   |   | (3,492,282 | ) |
| Loss from Continuing Operations Available to non-controlling interest on Converted Basis       |   |                                            | (491,627   | )      |                                          |   | (1,551 | ) |   |   | (893,796 | ) |   |   | (2,946 | ) |
| Income (Loss) from Discontinued Operations Available to Common Stockholders on Converted Basis |   |                                            | 326,608    |   |                                          |   | 1,970,744 |   |   |   | (611,275 | ) |   |   | (3,357,938 | ) |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Original Shares:                                                                               |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,411 |   |
| Additions from Actual Events                                                                   |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of Common Stock                                                                       |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Basic Weighted Average Shares Outstanding                                                      |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,411 |   |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive Shares:                                                                               |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Additions from Potential Events                                                                |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Conversion of Preferred Stock                                                                  |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Diluted Weighted Average Shares Outstanding:                                                   |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,411 |   |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Earnings Per Share                                                                             |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic-Net (Loss)                                                                               |   | $                                               | (0.14      | )      |                                          | $      | (0.24 | ) |   | $ | (0.36 | ) |   | $ | (0.50 | ) |
| -Loss from Continuing Operations                                                               |   |                                            | (0.16      | )      |                                          |   | (0.38 | ) |   |   | (0.33 | ) |   |   | (0.26 | ) |
| -Loss from non-controlling interest                                                            |   |                                            | (0.02      | )      |                                          |   | (0.00 | ) |   |   | (0.04 | ) |   |   | (0.00 | ) |
| -Income(Loss) from Discontinued Operations                                                     |   |                                            | 0.02       |   |                                          |   | 0.14 |   |   |   | (0.03 | ) |   |   | (0.24 | ) |
|                                                                                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Diluted- Net Income/(Loss)                                                                     |   | $                                               | (0.14      | )      |                                          | $      | (0.24 | ) |   | $ | (0.36 | ) |   | $ | (0.50 | ) |
| - Loss from Continuing Operations                                                              |   |                                            | (0.16      | )      |                                          |   | (0.38 | ) |   |   | (0.33 | ) |   |   | (0.26 | ) |
| -Loss from non-controlling interest                                                            |   |                                            | (0.02      | )      |                                          |   | (0.00 | ) |   |   | (0.04 | ) |   |   | (0.00 | ) |
| -Income(Loss) from Discontinued Operations                                                     |   |                                            | 0.02       |   |                                          |   | 0.14 |   |   |   | (0.03 | ) |   |   | (0.24 | ) |
| Weighted Average Shares Outstanding                                                            |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| -Basic                                                                                         |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,441 |   |
| -Diluted                                                                                       |   |                                            | 20,039,825 |   |                                          |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,441 |   |

----

| 19. | DISCONTINUED OPERATIONS |
|-----|-------------------------|

| Discontinued Operations                           |   | 6/30/2011 |       |   | 6/30/2010 |   |
|---------------------------------------------------|--------|-----------|------------|--------|-----------|--------|
| For the period ended                              |   |      |       |   |      |   |
|                                              |   |      |       |   |      |   |
| Sales                                             |   | $         | 17,537,146 |   |      | $      | 11,548,708 |   |
| Cost of Sales                                     |   |      | 16,959,132 |   |      |   | 14,320,048 |   |
| Gross Profit ( Loss)                              |   |      | 578,014    |   |      |   | (2,771,340 | ) |
|                                              |   |      |       |   |      |   |   |   |
| Operating Expenses                                |   |      | 1,168,440  |   |      |   | 1,260,253 |   |
| Other Income (Expenses)                           |   |      | (13,768    | )      |      |   | 673,512 |   |
|                                              |   |      |       |   |      |   |   |   |
| Earnings before Taxes                             |   |      | (604,194   | )      |      |   | (146,837 | ) |
|                                              |   |      |       |   |      |   |   |   |
| Taxes                                             |   |      | 7,719      |   |      |   | - |   |
|                                              |   |      |       |   |      |   |   |   |
| Net Loss including non-controlling interest       |   |      | (611,912   | )      |      |   | (3,358,081 | ) |
| Net Loss attributable to non-controlling interest |   |      | 637        |   |      |   | 144 |   |
|                                              |   |      |       |   |      |   |   |   |
| Net Income                                        |   | $         | (611,275   | )      |      | $      | (3,357,937 | ) |

----

| Financial Position            |   | June 30, 2011 |       |   | December 31, 2010 |   |
|------------------------------------|--------|-------------------------|------------|--------|-----------------------------|--------|
| At                                 |   |                    |       |   |                        |   |
|                               |   |                    |       |   |                        |   |
| Current Assets                     |   | $                       | 43,008,476 |   |                        | $      | 46,688,400 |   |
| Non Current Assets                 |   |                    | 638,452    |   |                        |   | 598,580 |   |
| Total Assets                       |   |                    | 43,646,928 |   |                        |   | 47,286,980 |   |
|                               |   |                    |       |   |                        |   |   |   |
| Current Liabilities                |   |                    | 36,140,217 |   |                        |   | 40,483,030 |   |
| Total Long Term Liabilities        |   |                    | -          |   |                        |   | - |   |
| Total Liabilities                  |   |                    | 36,140,217 |   |                        |   | 40,483,030 |   |
|                               |   |                    |       |   |                        |   |   |   |
| Net Assets                         |   |                    | 7,506,711  |   |                        |   | 6,803,950 |   |
|                               |   |                    |       |   |                        |   |   |   |
| Total Liabilities & Net Assets |   |                    | 43,646,928 |   |                        |   | 47,286,980 |   |

| 20. | SUBSEQUENT EVENTS |
|-----|-------------------|

----

|   | · | Our acquisition of a majority ownership interest in Shanghai ConnGame Network Co. Ltd. in August 2010; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | Our ability to successfully complete and commercialize online games under development; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | Our ability to compete in the highly competitive online interactive entertainment industry; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | Our ability to incur the substantial up-front expenditures needed for development of MMORPG products requires. |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to integrate and maintain internal controls after our acquisition of ConnGame; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | Our dependence on government contracts and government sponsored contracts; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Fluctuation and unpredictability of costs related to our products and services; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Changes in the laws of the PRC that affect our operations; |
|--------|--------|------------------------------------------------------------|

|   | · | Our failure to meet or timely meet contractual performance standards and schedules; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Adverse capital and credit market conditions; |
|--------|--------|-----------------------------------------------|

|   | · | Any occurrence of epidemic diseases and other cross-region infectious diseases; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Reduction or reversal of our recorded revenue or profits due to “percentage of completion” method of accounting; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increasing provisions for bad debt related to our accounts receivable; |
|--------|--------|------------------------------------------------------------------------|

|   | · | Our dependence on the steel and aluminum markets; |
|--------|--------|---------------------------------------------------|

|   | · | Exposure to product liability and defect claims; |
|--------|--------|--------------------------------------------------|

|   | · | Our ability to obtain all necessary government certifications and/or licenses to conduct our business; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | Expenses and costs related to our issuance of our bonds and bond warrants; and |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | The cost of complying with current and future governmental regulations and the impact of any changes in the regulations on our operations. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | Online Games—ConnGame expects to launch its first game in Q3 2011 and another game in Q4 2011, subject to successful testing |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Network Gaming and Home Decoration—We intend to develop a platform to provide services on home decoration through an interactive style, develop online games to provide to architects, other professionals, and individual consumers the ability to design and interact with other users. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Construction consulting—We intend to continue to conduct our construction consultancy services within China. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Construction  design services—We believe that we will be able to utilize the technical skills and expertise of ConnGame to provide unique consulting services for the design and fabrication projects globally, with such services to include real-time and interactive capabilities. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Under the Waiver Agreement, we agreed to pay the Bondholders the interest on the Bonds in the amount of approximately $3.84 million on scheduled dates, of which we made a payment of approximately $1.26 million on March 31, 2010 and $1.32 million on April 15, 2010. Under the terms of the waiver, we agreed that we would pay to the bondholders all outstanding interests in arrears on the Bonds, plus all other applicable interest up until the payment date, within 30 days after the closing of the issuance of the shares to acquire ConnGame, but which in any event, would not be later than September 30, 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We also agreed to repay an overdraft facility in the amount of approximately $4.91 million on three scheduled dates. We made payment of approximately one-half of this amount and agreed to pay all unsettled amounts, which include all outstanding principal and interest amounts, within 30 days after the closing of the issuance of the Shares, but which in any event, would not be later than September 30, 2010. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | We also agreed that we will not repay or prepay any debt prior to its currently scheduled due date until we make all of the payments specified in the Waiver and the Bonds have been redeemed in full and that any new indebtedness incurred by us for the purpose of repaying the overdraft facility shall (i) not exceed the outstanding amount due and payable under the overdraft facility and (ii) be subordinated to all amount owed under the Bonds (the “Waiver Covenants”). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                               |   | For Three Months Ended June 30,                                       |       |   | For Six Months Ended June 30, |   |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------|------------|--------|--------------------------------------------------------|--------|
|                                               |   | 2011                                                                                           |       |   | 2010                                                   |   |   | 2011 |   |   | 2010 |   |
|                                               |   | (in thousands, except for share and per share amounts) |       |
|                                               |   |                                                                                           |       |
| Contract revenues earned                           |   | $                                                                                              | -          |   |                                                   | $      | - |   |   | $ | - |   |   | $ | 5,631 |   |
| Cost of contract revenues earned                   |   |                                                                                           | -          |   |                                                   |   | - |   |   |   | - |   |   |   | (961 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                       |   | $                                                                                              | -          |   |                                                   | $      | - |   |   | $ | - |   |   | $ | 4,670 |   |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expenses       |   |                                                                                           | (1,584     | )      |                                                   |   | (3,575 | ) |   |   | (3,188 | ) |   |   | (4,808 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                               |   | $                                                                                              | (1,584     | )      |                                                   | $      | (3,575 | ) |   | $ | (3,188 | ) |   | $ | (138 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                    |   |                                                                                           | -          |   |                                                   |   | - |   |   |   | 1 |   |   |   | - |   |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expenses                                  |   |                                                                                           | (1,863     | )      |                                                   |   | (1,729 | ) |   |   | (3,930 | ) |   |   | (3,355 | ) |
|                                               |   |                                                                                           | -          |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Other expenses                                     |   |                                                                                           | (250       | )      |                                                   |   | - |   |   |   | (381 | ) |   |   | (1 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Other income                                       |   |                                                                                           | -          |   |                                                   |   | 1 |   |   |   | 7 |   |   |   | 9 |   |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Loss before taxes on Continuing Operations         |   | $                                                                                              | (3,697     | )      |                                                   | $      | (5,303 | ) |   | $ | (7,491 | ) |   | $ | (3,485 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax                                         |   |                                                                                           | -          |   |                                                   |   | - |   |   |   | - |   |   |   | (10 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from Continuing Operations                    |   |                                                                                           | (3,697     | )      |                                                   |   | (5,303 | ) |   |   | (7,491 | ) |   |   | (3,495 | ) |
| Discontinued Operation Income (Loss),net of tax    |   |                                                                                           | 327        |   |                                                   |   | 1,971 |   |   |   | (611 | ) |   |   | (3,358 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                           |   |                                                                                           | (3,370     | )      |                                                   |   | (3,332 | ) |   |   | (8,102 | ) |   |   | (6,853 | ) |
| Net loss attributable to non-controlling interests |   |                                                                                           | 492        |   |                                                   |   | 2 |   |   |   | 894 |   |   |   | 3 |   |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss attributable to the Company               |   | $                                                                                              | (2,878     | )      |                                                   | $      | (3,330 | ) |   | $ | (7,208 | ) |   | $ | (6,850 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings / (Loss) per share:                       |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Basic-Net Loss                                     |   | $                                                                                              | (0.14      | )      |                                                   | $      | (0.24 | ) |   | $ | (0.36 | ) |   | $ | (0.05 | ) |
| -Loss from Continuing Operations                   |   | $                                                                                              | (0.16      | )      |                                                   | $      | (0.38 | ) |   | $ | (0.33 | ) |   | $ | (0.26 | ) |
| - loss attributable to non-controlling interests   |   | $                                                                                              | (0.02      | )      |                                                   | $      | (0.00 | ) |   | $ | (0.04 | ) |   | $ | (0.00 | ) |
| -Income(Loss) form Discontinued Operations         |   | $                                                                                              | 0.02       |   |                                                   | $      | 0.14 |   |   | $ | (0.03 | ) |   | $ | (0.24 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted-Net Loss                                   |   | $                                                                                              | (0.14      | )      |                                                   | $      | (0.24 | ) |   | $ | (0.36 | ) |   | $ | (0.05 | ) |
| -Loss from Continuing Operations                   |   | $                                                                                              | (0.16      | )      |                                                   | $      | (0.38 | ) |   | $ | (0.33 | ) |   | $ | (0.26 | ) |
| - loss attributable to non-controlling interests   |   | $                                                                                              | (0.02      | )      |                                                   | $      | (0.00 | ) |   | $ | (0.04 | ) |   | $ | (0.00 | ) |
| -Income(Loss) form Discontinued Operations         |   | $                                                                                              | 0.02       |   |                                                   | $      | 0.14 |   |   | $ | (0.03 | ) |   | $ | (0.24 | ) |
|                                               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding:               |   |                                                                                           |       |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   |                                                                                           | 20,039,825 |   |                                                   |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,441 |   |
| Diluted                                            |   |                                                                                           | 20,039,825 |   |                                                   |   | 13,789,219 |   |   |   | 20,039,825 |   |   |   | 13,736,441 |   |

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|   | · | It takes approximately one month for our client to collect the payment application from contractors for the contract work completed. |
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|   | · | Thereafter, it takes approximately one to two months for the verification, agreement and certification of work completed, with timing to largely depend on whether there is disagreement in the calculation of certified value between the parties. |
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|   | · | Moreover, if it is the case that the application is to finalize the project account, it may take up to three months. |
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|   | · | Additionally, in the event that the client is not the owner of the project, it normally requires an additional one to two months for processing and obtaining the funds from the owner. |
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|   | · | One to two months the client to pay the contractors. |
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|   | 1. | Techwell lacked the technical expertise and processes to ensure compliance with our policies and did not maintain adequate controls with respect to (a) timely updating engineering budget and analysis, (b) coordination and communication between Corporate Accounting and Engineering Staffs, and (c) timely review and analysis of corporate journals recorded in the consolidation process. |
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|   | 2. | Techwell did not maintain a sufficient complement of personnel with an appropriate knowledge and skill to comply with our specific engineering financial accounting and reporting requirements and low materiality thresholds. This was evidenced by a number of documents missing or not matching with the records and contributed to the adjustment of financial results. As evidenced by the significant number and magnitude of out-of-period adjustments identified from Techwell during the period-end closing process, management has concluded that the controls over the period-end financial reporting process were not operating effectively. Specifically, controls were not effective to ensure that significant accounting estimates and other adjustments were appropriately reviewed, analyzed, and monitored on a timely basis. |
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|   | 3. | Techwell did not comply with our authorization policy. This was evidenced by a number of expenses incurred without appropriate authorization. This material weakness resulted in an unauthorized and significant increase of expenses, which significantly impacted our operating results. |
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|   | 1. | We are seeking to improve supervision, education, and training of our accounting staff. We are also considering engaging third-party financial consultants to review and analyze our financial statements and assist us in improving our reporting of financial information. |
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|   | 2 | Management intends to hire additional personnel with technical knowledge, experience and training in the application of generally accepted accounting principles commensurate with our financial reporting and U.S. GAAP requirements. |
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|   | 3. | We will continue to monitor the effectiveness of these improvements. We are also considering working with outside consultants in assessing and improving our internal controls and procedures when necessary. |
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|   | 4. | An internal SOX 404 task force was set up in order to help the company strengthening its controls and procedures on the financial reporting. |
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|   | 5. | In September 2009, we hired a new Vice President of Finance who was later appointed as our Acting Chief Financial Officer in November 2009. This person served as the sensible financial officer of our company until his resignation in September 2010. |
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|   | 6. | In December 2009, our then-Acting Chief Financial Officer lead an extensive review of the controls and procedures of our company and developed a detailed remediation and implementation plan for Sarbanes-Oxley Act of 2002 Section 404 compliance to be carried out starting in 2010. |
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|   | 7. | The remediation and implementation plan is being carried out which including the drafting up of the details internal control documents for SOX compliance. With the additions of new subsidiaries recently, the company currently is considering to further develop the internal controls and procedures in responses to the new group structure. |
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|   | 1. | On January 14, 2009, the board of directors of Techwell passed a board resolution to replace management of Techwell. We have appointed a new general manager to Techwell, as well as three experienced project managers to the Dubai Metro project. |
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|   | 2. | Management has initiated a Sarbanes-Oxley Act of 2002 Section 404 Compliance Assistance Project, which is intended to meet all requirements required by SEC in our company and all of our subsidiaries. We engaged a consulting firm to assist in the set-up of project and our staff thereafter continued with its implementation. |
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|   | 3. | We have established a dedicated and qualified internal control and audit team to implement the policies and procedures to the standard of a US public company. |
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|   | 4. | In June 2009, we reorganized and restructured Techwell’s Corporate Accounting by (a) modifying the reporting structure and establishing clear roles, responsibilities, and accountability, (b) hiring skilled technical accounting personnel to address our accounting and financial reporting requirements, and (c) assessing the technical accounting capabilities in the operating units to ensure the right complement of knowledge, skills, and training. |
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|   | 5. | In 2009, we also reorganized and restructured the budgeting process by (a) centralizing the procurement function to our company to ensure budgets and analyses of Techwell are timely prepared and properly reviewed; (b) implementing new policies and procedures to ensure that appropriate communication and collaboration protocols among our Engineering, Procurement and Corporate Accounting departments; and (c) hiring the necessary technical procurement personnel to support complex procurement activities. We have hired two experienced technical procurement managers and expect to increase the headcount in the purchase department in the future if necessary. |
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|   | 6. | We strengthened the period-end closing procedures of our operating subsidiaries by (a) requiring all significant estimate transactions to be reviewed by Corporate Accounting, (b) ensuring that account reconciliations and analyses for significant financial statement accounts are reviewed for completeness and accuracy by qualified accounting personnel, (c) implementing a process that ensures the timely review and approval of complex accounting estimates by qualified accounting personnel and subject matter experts, where appropriate, and (d) developing better monitoring controls at Corporate Accounting and the operating units. |
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|   | 7. | In September 2009, we hired a new Vice President of Finance who was later appointed as our Acting Chief Financial Officer in November 2009. We believe that the addition of this person will assist the strengthening of the controls and procedures of our company. |
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|   | 8. | In December 2009, our Acting Chief Financial Officer lead an extensive review of the controls and procedures of our company and developed a detailed remediation and implementation plan for Sarbanes-Oxley Act of 2002 Section 404 compliance to be carried out starting in 2010, which is currently underway. With the additions of new subsidiaries recently, the company currently is considering to further develop the internal controls and procedures in responses to the new group structure. |
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| ITEM 1. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 1A. | RISK FACTORS |
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| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
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| ITEM 4. | REMOVED AND RESERVED |
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| ITEM 5. | OTHER INFORMATION |
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| ITEM 6. | EXHIBITS |
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| 31.1 | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 |
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| 31.2 | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. |
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| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
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|         | CHINA CGAME, INC.(Registrant) |
|--------------|-------------------------------|
|         |                          |   |
| Aug 19, 2011 | By:                           | /s/  Zhixin (Steven) Xing |
|         |                          | Zhixin (Steven) Xing |
|         |                          | Chief Executive Officer |
|         |                          |   |
| Aug 19, 2011 | By:                           | /s/  Qin (Andy) Lu |
|         |                          | Qin (Andy) Lu |
|         |                          | Acting Chief Financial Officer |

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